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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
FRMO CORP.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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FRMO CORP.
Notice of Annual Meeting of Shareholders
July 19, 2001
3 PM Local Time
Dear Fellow Shareholder:
You are cordially invited to attend FRMO Corp's Annual Shareholders'
Meeting, which will be held on Thursday, July 19, 2001 at 3:00 PM at the 25th
floor conference room, 99 Park Avenue (at 40th Street), New York, NY 10016. The
meeting is being held for the following purposes:
1. To elect a Board of Directions to hold office until the next
Annual Meeting of Shareholders or until their respective
successors have been elected or appointed.
2. To transact such other business as may properly come before
the annual meeting or any adjournment of the meeting.
These items are more fully described in the following pages, which are
made part of this notice. Only shareholders of record on the books of the
Company at the close of business on June 11, 2001 will be entitled to vote at
the annual meeting.
PLEASE ASSIST THE COMPANY AND ENSURE THAT YOUR VOTE IS RECORDED, BY
SIGNING AND RETURNING YOUR PROXY AS SOON AS POSSIBLE EVEN IF YOU PLAN TO ATTEND
THE ANNUAL MEETING. IF YOU DO ATTEND, YOU MAY VOTE IN PERSON AND THE PROXY WILL
BE SUPERSEDED BY THE VOTE YOU CAST AT THE MEETING.
Lester Tanner, Secretary
For the Board of Directors
New Rochelle, NY
June 20, 2001
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FRMO CORP.
271 NORTH AVENUE
NEW ROCHELLE, NY 10801
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
June 20, 2001
This Proxy Statement is being furnished to the Shareholders (the
"Shareholders") of FRMO Corp. a Delaware corporation (the "Company"), in
connection with the solicitation of proxies by the Board of Directors for use at
the Annual Meeting of Shareholders (the "Meeting") of the Company to be held on
July 19, 2001 and at any adjournments thereof.
At the Meeting, Shareholders will be asked:
1. To elect seven directors,
2. To transact such other business as may properly come before
the Meeting or any adjournments of the Meeting.
June 11, 2001 is the record date (the "Record Date") for the
determination of the holders of the Company's common shares, par value $.001 per
share (the "Common Shares") entitled to notice of and to vote at the Meeting.
Each such Shareholder will be entitled to one vote for each Common Share held on
all matters to come before the Meeting and may vote in person or by proxy
authorized in writing. At the close of business on June 11, 2001, there were
36,080,003 Common Shares entitled to vote.
This Proxy Statement and the accompanying form of proxy are first being
sent to holders of the Common Shares on or about June 20, 2001.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material can also be obtained at prescribed rates by
writing to the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. Such information may also be
accessed electronically by means of the Commissions's home page on the Internet
(http://www.sec.gov.).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (File No. 0-29346) with
the Commission are incorporated by reference into this Proxy Statement:
The Company's Annual Report (Form 10-K) for the fiscal year
ended February 28, 2001 which is a part of the Annual Report
sent to Shareholders with this Proxy Statement.
All documents and reports subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Proxy Statement and prior to the date of the Meeting shall be deemed to be
incorporated by reference in this Proxy Statement and to be a part hereof from
the date of filing of such documents or reports.
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THE MEETING
DATE, TIME AND PLACE
The Meeting will be held on Thursday, July 19, 2001 at 3:00 P.M., local
time, at the 25th floor conference room, 99 Park Avenue (at 40th Street), New
York, New York 10016.
MATTERS TO BE CONSIDERED
At the Meeting, Shareholders will be asked to elect seven directors.
The Board of Directors knows of no matters that are to be brought before the
Meeting other than as set forth in the Notice of Meeting. If any other matters
properly come before the Meeting, the persons named in the enclosed form of
proxy or their substitutes will vote in accordance with their best judgment on
such matters.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE
Shareholders as of the Record Date (i.e., the close of business on June
11, 2001) are entitled to notice of and to vote at the Meeting. As of the Record
Date, there were 36,080,003 Common Shares outstanding and entitled to vote, with
each share entitled to one vote.
REQUIRED VOTES
Under Delaware law, the affirmative vote of the holders of a plurality
of the Common Shares voted at the Meeting is required to elect each director.
Consequently, only shares that are voted in favor of a particular nominee will
be counted toward such nominee's achievement of a plurality. Shares present at
the Meeting that are not voted for a particular nominee (including broker
non-votes) will not be counted toward such nominee's achievement of a plurality.
VOTING AND REVOCATION OF PROXIES
Shareholders are requested to complete, date, sign and promptly return
the accompanying form of proxy in the enclosed envelope. Common Shares
represented by properly executed
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proxies received by the Company and not revoked will be voted in accordance with
the specifications, if any, made in the proxy. If not otherwise specified in the
proxy, the shares will be voted for election of each nominee for director named
herein.
If any other matters are properly presented at the Meeting for
consideration, including among other things, consideration of a motion to
adjourn the Meeting to another time and/or place (including, without limitation,
for the purpose of soliciting additional proxies), the persons named in the
enclosed form of proxy and acting thereunder will have discretion to vote on
such matters in accordance with their best judgment.
Any proxy signed and returned by a Shareholder may be revoked at any
time before it is voted by filing with the Secretary of the Company, at the
address of the Company set forth herein, written notice of such revocation or a
duly executed proxy bearing a later date or by attending the Meeting and voting
in person. Attendance at the Meeting will not in and of itself constitute
revocation of a proxy.
PROXY SOLICITATION
The Company will bear the costs of solicitation of proxies for the
Meeting. In addition to solicitation by mail, directors, officers and regular
employees of the Company may solicit proxies from Shareholders by telephone,
telegram, personal interview or otherwise. Such directors, officers and
employees will not receive additional compensation, but may be reimbursed for
out-of-pocket expenses in connection with such solicitation. Brokers, nominees,
fiduciaries and other custodians have been requested to forward soliciting
material to the beneficial owners of Common Shares held of record by them, and
such custodians will be reimbursed for their reasonable expenses.
MARKET PRICES AND DIVIDEND POLICY
The Common Shares of the Company are traded on the NASDAQ Bulletin
Board under the symbol FRMO. On January 23, 2001 the Company's former
subsidiary, MFC Development Corp., was spun off to FRMO's shareholders and it
trades under the symbol MFCD on the NASDAQ Bulletin Board. See page 10 for
market prices of the Company's Common Stock. The Company has never paid a cash
dividend on its Common Stock and there is no present intention to declare a cash
dividend in the future.
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ELECTION OF DIRECTORS
Seven directors will be elected at this year's annual meeting. Each
director will serve until the next annual meeting or until he is succeeded by
another qualified director who has been elected. We will vote your shares as you
specify when providing your proxy. If you do not specify how you want your
shares voted when you provide your proxy, we will vote them for the election of
all the nominees listed below. The Board of Directors recommends a vote FOR the
nominees set forth below, each of whom was first elected to the new FRMO Corp.
after the spin-off and recapitalization on January 23, 2001. The following
information about the nominees was provided by the nominees.
MURRAY STAHL: Age 47. Mr. Stahl is Chairman of the Board and Chief
Executive Officer of the Company. He co-founded
Horizon Research Group, a subsidiary of Horizon Asset
Management, Inc., in 1995 and is currently the
Portfolio Manager of The New Paradigm Fund. Prior to
1995 Mr. Stahl was with Bankers Trust Company for 16
years as a portfolio manager and research analyst.
STEVEN BREGMAN: Age 42. Mr. Bregman is President and Chief Operating
Officer of the Company. He co-founded Horizon
Research Group in 1995 and is currently the Portfolio
Manager of The Middle East Growth Fund. Prior to 1995
Mr. Bregman was with Bankers Trust for 9 years, where
he was an Investment Officer in the Bank's Private
Clients Group.
PETER DOYLE: Age 39. Mr. Doyle is a co-founder of Horizon Research
Group and also Kinetics Asset Management, Inc. in
1996 where he is Chief Investment Strategist for the
Kinetics family of mutual funds. Prior to 1996 Mr.
Doyle was with Bankers Trust Company for 9 years,
where he was an Investment Officer. .
LAWRENCE J. GOLDSTEIN: Age 65. Mr. Goldstein is the General Partner of Santa
Monica Partners, L.P.,a private investment fund, he
founded in 1982. Prior thereto he was First Vice
President of Drexel Burnham Lambert and a General
Partner (Security Analyst and Fund Manager) of its
predecessor Burnham & Company for 23 years. He is a
director of Starstruck, Ltd. (ASE: KAP) since 1984.
ALLAN KORNFELD: Age 63. Mr. Kornfeld is currently an Independent
Consultant on financial matters and a Director at M &
A London, LLC of New York City which provides
corporate development services to mid-range public
and private companies. He is a certified public
accountant and attorney. He was an accountant and
audit partner at Ernst & Young from 1960-1975, a
comptroller, Vice President and Senior Vice President
of Ametek, Inc. (NYSE) from 1975-1986 and then Chief
Financial Officer and Executive Vice President of
Ametek from 1986-1994. Mr. Kornfeld is currently a
director of MFC Development Corp.
DAVID MICHAEL: Age 63. Mr. Michael is President of David Michael &
Co., P.C., Certified Public Accountants. He has been
a certified public accountant practicing as a partner
in independent public accounting firms for more than
25 years and as the President of David Michael & Co.,
P.C. since 1983. He is a director of the Del Global
Technologies Corp (NASDAQ : DGTC) since 1986 and MFC
Development Corp.
LESTER TANNER: Age 77. Mr. Tanner is President and a director of MFC
Development Corp. Prior to August 1, 2000 he
practiced law as a partner in his law firm for more
than 30 years with a concentration in corporate, real
estate and financial matters. He is Secretary of the
Company.
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INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND BOARD COMMITTEES
SHAREHOLDER NOMINATIONS
A Shareholder entitled to vote in the election of directors may
nominate one or more persons for election as directors at the meeting if written
notice of such Shareholder's intent to make such nomination has been given to
the Company, not less than five days prior to the meeting date. Such notice
shall set forth the name and address of the Shareholder and his or her nominee,
a representation that the Shareholder is entitled to vote at such meeting and
intends to nominate such person, a description of all arrangements or
understandings between the Shareholder and each nominee, such other information
as would be required to be included in a proxy statement soliciting proxies for
the election of such Shareholder's nominee, and the consent of each nominee to
serve as a director of the Company if so elected. The Company may require any
proposed nominee to furnish such other information as may reasonably be required
to determine the eligibility of such proposed nominee to serve as a director of
the Company.
MEETINGS AND COMMITTEES
Since January 23, 2001, the Board of Directors held two meetings at
which all directors were present. The Board of Directors has a standing
Executive Committee, Audit Committee and Compensation Committee.
The Executive Committee exercises the authority of the Board of
Directors in the management of the business of the Company at such times as the
full Board of Directors is unavailable. The Executive Committee, which met once
since January 23, 2001, currently consists of Messrs. Bregman (Chair), Stahl and
Doyle.
The Audit Committee met twice since January 23, 2001 and currently
consists of Messrs. Michael (Chair), Kornfeld and Tanner. The Report of the
Audit Committee is included in this Proxy Statement.
The Compensation Committee reviews the compensation, benefits and stock
options for the Company's executive and key personnel and makes recommendations
to the Board of Directors. The Compensation Committee which has held no meetings
currently consists of Messrs. Stahl (Chair), Bregman and Goldstein.
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PRESENT BENEFICIAL OWNERSHIP OF COMMON SHARES
The table below is as of May 12, 2001 and shows the beneficial
ownership of the Company's Common Shares by (i) each person who, to the
knowledge of the Company, is the beneficial owner of more than 5% of the
outstanding Common Shares (the Company's only class of voting securities), (ii)
each executive officer and director and (iii) all executive officers and
directors of the Company as a group.
NAME POSITION SHARES PERCENT
---- -------- ------ -------
Murray Stahl(a)(c) Chairman, CEO, Director 6,693,120 18.6%
Steven Bregman(a)(c) President, COO, Director 6,693,120 18.6%
Peter Doyle(a)(d) Vice President, Director 3,640,320 10.1%
Lester Tanner(a)(b) Secretary, Director 3,945,790 10.9%
Victor Brodsky (c) Treasurer, CFO 22,400 --
Lawrence J. Goldstein (a)(d) Director 1,800,000 5.0%
Allan Kornfeld(d) Director 1,000 --
David Michael(d) Director 10,000 --
John Meditz(a)(b) -- 6,693,120 18.6%
Thomas C. Ewing(a)(d) -- 3,453,120 9.6%
FRMO Control Group and all executive
officers and directors as a group (10 persons) 34,659,193 96.1%
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(a) The FRMO Control Group owns 34,545,790 shares consisting of the
32,918,590 shares owned by Messrs. Stahl, Bregman, Doyle, Tanner, Goldstein,
Meditz and Ewing shown above; 1,146,240 shares owned by Catherine Bradford and
480,960 shares owned by Katherine Ewing. Messrs. Brodsky, Kornfeld and Michael
together own 33,400 shares. Horizon Research Group, an affiliate of the Chairman
and President of the Company, owns 80,003 shares which are included above in the
total of 34,659,193 shares.
(b) Includes shares owned by entities managed by Lester Tanner which
are owned by him, his children and his wife. His address is 271 North Avenue,
New Rochelle, NY 10801.
(c) The address of Messrs. Stahl, Bregman and Brodsky at the Company is
271 North Avenue, New Rochelle, NY 10801.
(d) The address of Messrs. Doyle, Meditz and Ewing is 342 Madison
Avenue, New York, NY 10017. Address for other persons are: Lawrence J. Goldstein
1865 Palmer Avenue, Larchmont, N.Y. 10538; Allan Kornfeld 5 Patterson Place,
Newtown Square, PA 19073; David Michael 7 Penn Plaza, New York, NY 10001. Mr.
Goldstein is the General Partner of Santa Monica Partners, LP, a private fund
which owns 218,000 shares of the Company.
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EXECUTIVE COMPENSATION
The Company has not paid any compensation to any officer in the fiscal
year ended February 28, 2001 and does not expect to pay any compensation to any
officer in the current fiscal year.
COMPENSATION POLICY
The Company's compensation for any officer after February 28, 2002 is
expected to consist of a base salary and annual bonus compensation. Salary and
bonus payments will be discretionary with the Board of Directors and will be
designed to reward current and past performance.
The Company's policy will emphasize performance-based compensation.
Accordingly, a significant percentage of annual compensation may consist of
bonus compensation. This ensures that compensation reflects the individual's
specific contributions to the success of the Company. Bonus compensation is
determined on the basis of the directors' subjective assessment of an
executive's performance and not on any specific formula.
The Company may issue stock options to officers or directors who do not
own as much as one percent of the Company's outstanding stock. Stock options are
designed to provide strong incentive for superior long-term performance and are
directly linked to shareholders' interests because the value of the awards will
increase or decrease based upon the future price of the Common Shares. The
Company may also adopt a Stock Option Plan designed to secure the services of
persons capable of filling key management positions. The amount of stock options
awarded will not be based on any specific formula, but rather on a subjective
assessment of the person's performance by the Board of Directors.
The Company believes that, as it grows, its compensation program will
enable it to attract, motivate and retain senior management by providing a
competitive total compensation opportunity based on performance.
COMPENSATION OF DIRECTORS
The Company has not paid compensation to any director in the fiscal
year ended February 28, 2001 and has made no arrangement to pay directors' fees
in the current fiscal year. Only Allan Kornfeld and David Michael, among the
present directors, will be eligible to receive stock options under the Company's
policy of not granting options to any officer or director who already owns as
much as 1% of the Company's outstanding stock.
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INDEMNIFICATION
The Company maintains an indemnification insurance policy covering all
directors and officers of the Company and its named subsidiaries. No claims have
been made and no payments were received under the Company's indemnification
insurance.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's new start on January 23, 2001 and its recapitalization by
the purchase of 34,200,000 shares of common stock by the FRMO Control Group,
defined above at page 7, on January 23, 2001 are described in the accompanying
Annual Report (Form 10-K) for the fiscal year ended February 28, 2001 (the
"Annual Report") at pages 1-3 thereof.
In January 2001 the Company signed a consulting agreement with Lawrence
J. Goldstein, the manager of the Santa Monica Partners, L.P., whereby he will
pay $21,600 per year to the Company for access to consultations with the
Company's personnel designated by Murray Stahl and Steven Bregman. Mr. Goldstein
is a director and shareholder of the Company.
In March 2001 the Company acquired the research service fees that
Horizon Research Group was entitled to receive from The New Paradigm Fund in
exchange for 80,003 shares of the Company's Common Stock. In May 2001 the
Company acquired the research service fees that Horizon Research Group was
entitled to receive from The Middle East Growth Fund in exchange for 3,456
shares of the Company's common stock. Murray Stahl, Steven Bregman and Peter
Doyle, officers, directors and the shareholders of the Company, are shareholders
of the corporation which owns the Horizon Research Group. See page 5 of the
Annual Report.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Based solely upon a review of the copies of such forms
furnished to the Company and written representations from the Company's
executive officers, directors and greater than 10% beneficial shareholders, the
Company believes that since the effective date of the Company's Registration
Statement Pursuant to Section 12(g) of The Securities Exchange Act of 1934, all
persons subject to the reporting requirements of Section 16(a) filed the
required reports on a timely basis.
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SHAREHOLDER INFORMATION
The Company's common stock has traded on the NASDAQ Bulletin Board
(symbol FRMO) for only a few months since the spin-off on January 23, 2001.
Between January 23, 2001 and May 21, 2001 the high bid price was $1.20 per share
and the low bid price was $0.75 per share. On May 21, 2001 the high bid was
$1.20 per share and the low price at which the stock was offered on NASDAQ BB
was $1.30 per share.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee is comprised solely of independent directors and
operates under a written charter adopted by the Board of Directors, a copy of
which is attached to this Proxy Statement as Exhibit A. The Committee reviews
and assesses the adequacy of its charter on an annual basis. As described more
fully in its charter, the purpose of the Audit Committee is to assist the Board
of Directors in its general oversight of the company's financial reporting,
internal control and audit functions. Management is responsible for the
preparation, presentation and integrity of the Company's financial statements,
accounting and financial reporting principles, internal controls and procedures
designed to ensure compliance with accounting standards, applicable laws and
regulations. Holtz Rubenstein & Co., LLP, the company's independent auditing
firm, is responsible for performing an independent audit of the consolidated
financial statements in accordance with generally accepted auditing standards.
The Audit Committee's functions are not intended to duplicate the
activities of management and the independent auditor. The Committee serves a
board-level oversight role, in which it provides advice and direction to
management and the auditors on the basis of the information it receives and the
experience of the Committee's members in business, financial and accounting
matters. Among other matters, the Audit Committee monitors the performance of
the Company's auditors, including the audit scope and auditor independence. The
Audit Committee and the Board have ultimate authority and responsibility to
select, evaluate and, when appropriate, replace the Company's independent
auditor.
The Committee has reviewed and discussed the consolidated financial
statements with management and the independent auditor. Management represented
to the Committee that the Company's consolidated financial statements were
prepared in accordance with generally accepted accounting principles. The
Company's independent auditor provided the Committee with the disclosures
required by Independence Standards Board Standard No. 1, "Independence
Discussions with Audit Committees." The Committee discussed with the independent
auditor that firm's independence.
Following the Committee's discussions with management and the
independent auditor, the Committee recommended that the Board of Directors
include the audited consolidated financial
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statements in the Company's annual report on Form 10-K for the year ended
February 28, 2001. A representative of Holtz Rubenstein & Co., LLP will be
present at the Annual Meeting and will be available to respond to appropriate
questions and to make such statements as the representative may desire.
AUDIT COMMITTEE: DAVID MICHAEL (CHAIR), ALLAN KORNFELD, LESTER TANNER.
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the fiscal
year ended February 28, 2001 is being furnished to Shareholders concurrently
herewith.
PROPOSALS BY SHAREHOLDERS
Proposals that Shareholders wish to include in the Company's Proxy
Statement and form of proxy for presentation at the Company's 2002 Annual
Meeting of Shareholders, presently scheduled to be held on July 18, 2002, must
be received by the Company at 271 North Avenue, New Rochelle, NY 10801,
Attention of Lester Tanner, Secretary, no later than March 26, 2002.
June 20, 2001 By Order of the Board of Directors
Murray Stahl
Chairman and Chief Executive Officer
Steve Bregman
President and Chief Operating Officer
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EXHIBIT A
FRMO CORP.
AUDIT COMMITTEE CHARTER
ROLE AND INDEPENDENCE
The audit committee of the Board of Directors assists the Board in fulfilling
its responsibility for oversight of the quality and integrity of the
accounting, auditing, and reporting practices of the Corporation and other such
duties as directed by the Board. The membership of the Committee shall consist
of at least three directors who are generally knowledgeable in financial and
auditing matters, including at least one member with accounting or related
financial management expertise. Each member shall be free of any relationship
that, in the opinion of the Board, would interfere with his or her individual
exercise of independent judgment, and shall meet the director independence
requirements for serving on audit committees as set forth in the corporate
governance standards of the NASDAQ. The Committee is expected to maintain free
and open communication, including private executive sessions at least annually,
with the Corporation's independent accountants and the management of the
Corporation. In discharging this oversight role, the Committee is empowered to
investigate any matter brought to its attention, with full power to retain
outside counsel or other experts for this purpose.
The Board of Directors shall appoint one member of the Audit Committee as
Chairperson. He or she shall be responsible for leadership of the Committee,
including preparing the agenda, presiding over the meetings, making the
Committee assignments and reporting to the Board of Directors. The Chairperson
will also maintain regular liaison with the Corporation's Chief Executive
Officer, Chief Financial Officer and the lead independent audit partner of the
Corporation's independent accountants.
RESPONSIBILITIES
The Audit Committee's primary responsibilities include:
* Recommending to the Board the independent accountant to be selected or
retained to audit the financial statements of the Corporation. In so
doing, the Committee will request from the auditor a written
affirmation that the auditor is in fact independent, discuss with the
auditor any relationships that may impact the auditor's independence,
and recommend to the Board any actions necessary to oversee the
auditor's independence.
* Overseeing the independent auditor relationship by discussing with the
auditor the nature and rigor of the audit process, receiving the
reviewing audit reports, and
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providing the auditor full access to the Committee and the Board to report
on any and all appropriate matters.
* Reviewing the audited financial statements and discussing them with
management and the independent auditor. These discussions shall include
consideration of the quality of the Corporation's accounting principles as
applied in its financial reporting, including review of estimates,
reserves and accruals, review of judgmental areas, review of audit
adjustments, whether or not recorded, and such other inquiries as may be
appropriate. Based on the review, the Committee shall make its
recommendation to the Board as to the inclusion of the Corporation's report
on Form 10-K.
* Reviewing with management and the independent auditor quarterly financial
information prior to the Corporation's filing of Form 10-Q. This review may
be performed by the Committee or its Chairperson.
* Discussing with management the status of pending litigation, taxation
matters and other areas of oversight to the legal and compliance area as
may be appropriate.
* Reporting Audit Committee activities to the full Board and issuing
annually a report to be included in the proxy statement, including
appropriate oversight conclusions, for submission to the shareholders.
REVISIONS TO CHARTER
This Charter shall be reviewed, updated and approved annually by the Board of
Directors.
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REVOCABLE PROXY
FRMO CORP.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
Revoking any such prior appointment, the undersigned hereby appoints Murray
Stahl, Steven Bregman and Lester Tanner, and each of them, attorneys and agents,
with power of substitution to vote as Proxy for the undersigned as herein
stated, at the Annual Meeting of Shareholders of FRMO Corp. (the "Company") to
be held at the 25th floor conference room, 99 Park Avenue (at 40th Street), New
York, New York 10016 on Thursday, July 19, 2001 at 3:00 P.M., and at any
adjournment thereof, with respect to the number of shares the undersigned would
be entitled to vote if personally present.
1. Election of Directors WITH- FOR ALL
To elect the nominees listed below: FOR HOLD EXCEPT
[ ] [ ] [ ]
Murray Stahl, Steven Bregman,
Peter Doyle, Lawrence J. Goldstein,
Allan Kornfeld, David Michael and Lester Tanner
INSTRUCTION: To withhold authority to vote for any individual nominee,
mark "For All Except" and write that nominee's name in the space provided below.
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The Board of Directors recommends a vote FOR the election of nominees named
above.
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED FOR THE ELECTION OF THE
BOARD OF DIRECTORS IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED AND IN THE
DISCRETION OF THE NAMED ATTORNEYS AND AGENTS ON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.
Please sign exactly as your name appears on this card. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
The shareholder(s) hereby acknowledge(s) receipt of a copy of the Proxy
Statement relating to such Annual Meeting.
Please be sure to sign and date Date
this Proxy in the box below. --------------------------
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-------------Shareholder sign above Co-holder (if any) sign above-------------
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DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
FRMO CORP.
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
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