Unassociated Document
UNITED
STATES
SECUIRITES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C
Information
Statement Pursuant to Section 14(c)
of
the
Securities Exchange Act of 1934
Check
the
appropriate box:
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Preliminary
Information Statement
|
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Confidential,
for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
|
| x |
Definitive
Information Statement
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EACO
CORPORATION
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|
| |
(name
of registrant as specified in the
charter)
|
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Payment
of Filing Fee (Check the appropriate box):
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Fee
computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
__________________________
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(2)
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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)
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Proposed
maximum aggregate value of transaction:
$__________________
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(5)
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Total
fee paid: $____________________
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o Fee
paid previously with
preliminary materials.
o 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.
Amount
Previously Paid: _________________________________________
Form,
Schedule or Registration Statement No.: _________________________
Filing
Party: ___________________________________________________
Date
Filed: ____________________________________________________
EACO
CORPORATION
1500
N.
Lakeview Avenue
Anaheim,
California 92807
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
Dear
Shareholder:
You
are
cordially invited to attend the 2007 Annual Meeting of Shareholders (the “Annual
Meeting”) of EACO Corporation to be held at the offices of Bisco Industries,
Inc., 1500 N. Lakeview Avenue, Anaheim, California 92807, on Monday,
July 30,
2007 at
8:30 a.m. PT for the purpose of considering and acting upon the following
matters:
| |
1.
|
the
election of four directors; and
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2.
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such
other matters as may properly come before the
meeting.
|
The
above
matters are described in the Information Statement. The vote of every
shareholder is important.
The
Board
of Directors has fixed the close of business on June 4, 2007 as the record
date
for determining shareholders entitled to vote at the Annual Meeting. Only
shareholders of record at the close of business on that date will be entitled
to
vote at the Annual Meeting.
We
are
NOT soliciting proxies in conjunction with this Annual Meeting but you are
invited to attend the Annual Meeting to assure that your vote is
counted.
| |
/s/ Glen
F. Ceiley
Glen
F. Ceiley
Chairman
of the Board
|
Date:
July 3,
2007
Shareholders
are urged to attend the annual meeting in order to vote.
We
are not asking you for a proxy and you are requested not to send us a
proxy.
EACO
CORPORATION
1500
N.
Lakeview Avenue
Anaheim,
California 92807
INFORMATION
STATEMENT
for
2007
ANNUAL MEETING OF SHAREHOLDERS
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY
General
Information
This
Information Statement is being furnished to the shareholders by and on behalf
of
the Board of Directors (the “Board”) of EACO Corporation (the “Company”) in
connection with the 2007 Annual Meeting of Shareholders (the “Annual Meeting”).
The Annual Meeting will be held at the offices of Bisco Industries, Inc.
(“Bisco”), 1500 N. Lakeview Avenue, Anaheim, California 92807, at 8:30 a.m. PT
on July 30, 2007.
This
Information Statement and accompanying Notice of Annual Meeting of Shareholders
are first being mailed on or about July 3,
2007 to
shareholders entitled to vote at the Annual Meeting. The Company is not
soliciting proxies.
Record
Date and Voting Securities
The
Board
of Directors has fixed the close of business on June 4, 2007 as the record
date
for determination of shareholders entitled to vote at the Annual Meeting.
Holders of the Company’s common stock, par value $0.01 per share (the “Common
Stock”) as of June 4, 2007 will be entitled to one vote for each share held,
with no shares having cumulative voting rights. No other class of the Company’s
securities is entitled to vote at the meeting. As of June 4, 2007, the Company
had outstanding 3,906,799 shares
of
Common Stock.
Voting
Procedures
Under
Florida law and the Amended and Restated Bylaws of the Company (the “Bylaws”), a
majority of shares of the Common Stock entitled to vote, represented by person
or proxy, constitutes a quorum at a meeting of shareholders.
Any
shareholder of record on June 4, 2007 is entitled to attend the Annual Meeting
and vote their shares in person or through their legally constituted proxies.
We
are NOT soliciting proxies in advance of the Annual Meeting. We strongly
encourage you to attend the Annual Meeting and vote your shares of Common Stock.
Shareholders who own their shares in street name must obtain a special proxy
card from their broker in order to vote their shares in person at the Annual
Meeting.
If
less
than a majority of the outstanding shares are represented at the Annual Meeting,
a majority of the shares so represented may adjourn the Annual Meeting without
further notice.
Dissenters’
Right of Appraisal
Under
Florida law, shareholders do not have appraisal rights with respect to the
action to be taken at the Annual Meeting.
Vote
Required
Under
the
Florida Business Corporation Act, directors are elected by a plurality of the
votes cast. Therefore, abstentions and broker non-votes have no effect under
Florida law.
PROPOSAL
1: ELECTION OF DIRECTORS
Four
directors are to be elected at the 2007 Annual Meeting to serve as directors
until the 2008 Annual Meeting and until their successors are elected and
qualified. The nominees for director are Stephen Catanzaro, Glen F. Ceiley,
Jay
Conzen and William L. Means. All of the nominees are current directors standing
for re-election and all were previously elected by the
shareholders.
As
of the
date of the Information Statement, the Board has no reason to believe that
any
of the nominees named will be unable or unwilling to serve if elected. There
are
no family relationships among any of these nominees or among any of these
nominees and any executive officer, nor is there any arrangement or
understanding between any nominee and any other person pursuant to which the
nominee was selected.
Certain
information regarding each nominee follows. Each nominee has consented to being
named in the Information Statement and to serve if elected.
The
Board of Directors recommends a vote FOR the following
nominees.
Stephen
Catanzaro, 54,
is the
Controller of Allied Business Schools, Inc., a position he has held since April
2004. Before that Mr. Catanzaro was the Chief Financial Officer of V&M
Restoration, Inc., a restoration company from September 2002 to February 2004,
and the Chief Financial Officer of Bisco, a distributor of fasteners and
components, from September 1995 to March 2002. Mr. Catanzaro was elected a
director of the Company by the shareholders at the 1999 Annual
Meeting.
Glen
F.
Ceiley, 61, serves as the Company’s Chief Executive Officer and its Chairman of
the Board. Mr. Ceiley also serves as President and Chief Executive Officer
of
Bisco, a position he has held since 1973. In addition, Mr. Ceiley is a former
director of Data I/O Corporation, a publicly-held company engaged in the
manufacturing of electronic equipment. Mr. Ceiley was appointed to the Company’s
Board in February 1998 and elected by the shareholders at the 1998 Annual
Meeting of Shareholders.
Jay
Conzen, 60, is the President of Old Fashioned Kitchen, Inc., a position he
has
held since April 2003. Before that Mr. Conzen was the principal of Jay Conzen
Investments (investment advisor) from October 1992 to April 2003. In addition,
Mr. Conzen served as a consultant to the Company from August 1999 until January
2001, and from October 2001 to April 2003. Mr. Conzen was appointed to the
Company’s Board in February 1998 and elected by the shareholders at the 1998
Annual Meeting of Shareholders.
William
L. Means, 63, is the Vice President of Information Technology of Bisco, a
position he has held since 2001. Before that, Mr. Means was Vice President
of
Corporate Development of Bisco from 1997 to 2001. Mr. Means was elected a
director of the Company by the shareholders at the 1999 Annual Meeting of
Shareholders.
CORPORATE
GOVERNANCE
Board
of Directors
The
business of the Company is under the general management of a Board of Directors
as provided by the Florida Business Corporation Act.
Board
Independence.
The
Board
of Directors has determined that two of its four directors, which members are
also the nominees for director, are independent, as defined by the NASDAQ Stock
Market’s Marketplace Rules. In addition to such rules, the Board of Directors
considered transactions, relationships, and relationships between each director
or his immediate family to determine whether any such relationships or
transactions were inconsistent with a determination that the director is
independent. As a result, the Board determined that Messrs. Ceiley and Means
are
not independent, due to the fact that Messrs. Ceiley and Means are employees
of
Bisco and members of Bisco’s steering committee. Bisco’s steering
committee handles the day to day operations of the Company, and Messrs. Ceiley
and Means are intimately involved with decision-making that directly affects
the
financial statements of the Company. Bisco is an affiliate of the
Company.
Board
Meetings
The
Board
of Directors held four meetings
during fiscal year 2006. Each member of the Board attended all meetings. All
directors attended the 2006 Annual Meeting of Shareholders. The Company does
not
have a policy with regard to directors’ attendance at annual meetings of
shareholders.
Standing
Committees
In
accordance with the Bylaws of the Company, which empower the Board of Directors
to appoint such committees as it deems necessary and appropriate, the Board
of
Directors has appointed an Audit Committee and an Executive Compensation
Committee.
Audit
Committee
The
Audit
Committee’s basic functions are to assist the Board of Directors in discharging
its fiduciary responsibilities to the shareholders and the investment community
in the preservation of the integrity of the financial information published
by
the Company, to maintain free and open means of communication between the
Company’s directors, independent auditors and financial management, and to
ensure the independence of the independent auditors. The Board of Directors
has
adopted a written charter for the Audit Committee which is attached as
Appendix
A
to this
Information Statement. Currently, the members of the Audit Committee are
Directors Catanzaro, Conzen and Means. Directors Catanzaro and Conzen are
“independent” within the listing standards of the NASDAQ Stock Market’s
Marketplace Rules. Director Means is not “independent,” as he is employed by
Bisco, and is a member of Bisco’s steering committee which handles the day to
day operations of the Company. Also, Mr. Means is intimately involved with
decision-making that directly affects the financial statements of the Company.
The Audit Committee held one meeting during
the fiscal year ending December 27, 2006. All members of the Audit Committee
attended the meeting.
Audit
Committee Financial Expert:
The
Company does not currently have an audit committee financial expert. The Company
believes that the members of the Board of Directors have demonstrated that
they
are capable of understanding generally accepted accounting principles and
financial statements, analyzing and evaluating the Company’s financial
statements, and understanding internal controls and procedures for financial
reporting. In addition, the Company believes that retaining a director who
would
qualify as an audit committee financial expert would be costly and burdensome
and is not warranted in the circumstances.
Audit
Committee Pre-Approval Policies and Procedures:
The
Audit Committee is required to pre-approve all auditing services and permissible
non-audit services, including related fees and terms, to be performed for the
Company by its independent auditor, subject to the de minimus exceptions for
non-audit services described under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), which are approved by the Audit Committee prior to
the completion of the audit. In fiscal year 2006, the Audit Committee
pre-approved all services performed for the Company by the auditor.
Executive
Compensation Committee
The
Executive Compensation Committee administers the Company’s stock option plans
and is responsible for granting stock options to officers and managerial
employees of the Company. It is also responsible for establishing the salary
and
annual bonuses paid to executive officers of the Company. The Executive
Compensation Committee has not adopted a formal charter. The current members
of
the Executive Compensation Committee are Directors Ceiley and Means. The
Executive Compensation Committee held one meeting
during
fiscal year 2006. All members
of the Committee attended this meeting. The Company does not utilize any
compensation consultant in determining the amount or form of executive
compensation. Please refer to the “Compensation Discussion and Analysis” section
of this Information Statement regarding the functions and operations of the
Executive Compensation Committee.
Compensation
Committee Interlocks and Insider Participation
The
members of the Compensation Committee are Directors Ceiley and Means. During
fiscal year 2006, Mr. Ceiley served as the Company’s Chief Executive Officer,
but Mr. Ceiley did not receive any compensation for his service as such. Mr.
Ceiley has not participated in any related party transactions required to be
disclosed under Item 404 of Regulation S-K. Mr. Means is not currently nor
has
he ever been an employee or officer of the Company, and has not participated
in
any related party transactions (described in Item 404 of Regulation S-K). During
fiscal year 2006, none of the Company’s executive officers served as a member of
the board of directors or compensation committee of any entity for which a
member of the Company’s Board of Directors or Compensation Committee served as
an executive officer.
Nominating
Committee
The
Board
of Directors does not have a Nominating Committee. Given the size of the Company
and its resources, the Board believes that this is appropriate. Each director
participates in the consideration of director nominees. The Board believes
that
having such a committee would not enhance the nomination process. The Company
has not adopted a charter relating to the director nomination process, nor
does
it have a formal policy regarding the consideration of any director candidates
recommended by shareholders or specific minimum qualifications for director
nominees. The Board believes this is appropriate since any such recommendations
may be informally submitted and considered by the Nominating Committee.
Recommendations by shareholders should include the name and address of the
candidate; a brief biographical description, including the candidate’s
occupation for at least five years; a statement of the qualifications of the
candidate; and the candidate’s signed consent to be named in the Information
Statement or Proxy Statement and to serve as director, if elected. Directors
should possess qualities such as understanding the business and operations
of
the Company and corporate governance principles.
Communications
to Board of Directors
The
Board
of Directors has established a process for shareholders to communicate with
members of the Board of Directors. If you would like to contact the Board you
can do so by forwarding your concern, question or complaint to the Company’s
Corporate Secretary at 1500 N. Lakeview Avenue, Anaheim, California
92807.
EXECUTIVE
OFFICERS AND DIRECTORS
Glen
F.
Ceiley currently serves as Chairman of the Board and Chief Executive Officer
of
the Company. Stephen Catanzaro, Jay Conzen and William L. Means also currently
serve as directors on the Company’s Board of Directors. Edward B. Alexander
served as the Company’s President until April 2006.
Our
officers, directors and the nominees have neither been convicted in any criminal
proceeding during the past five years nor parties to any judicial or
administrative proceeding during the past five years that resulted in a
judgment, decree or final order enjoining them from future violations of, or
prohibiting activities subject to, federal or state securities laws or a finding
of any violation of federal or state securities law or commodities law.
Similarly, no bankruptcy petitions
have been filed by or against any business or property of any of our directors
or officers, nor has any bankruptcy petition been filed against a partnership
or
business association in which these persons were general partners or executive
officers.
None
of
directors or the nominees, executive officers or any affiliate of the Company
or
any owner of record or beneficial owner of more than 5% of the Company’s voting
securities or any of their associates is a party adverse to the Company or
has a
material interest adverse to the Company.
There
are
no family relationships between any of our directors, nominees for directors
or
executive officers.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
There
have been no transactions with any director or nominee for director, executive
officer, or their families during fiscal year 2006.
EXECUTIVE
AND DIRECTOR COMPENSATION
Compensation
Discussion and Analysis
The
Executive Compensation Committee (the “Committee”), currently consisting of
Directors Ceiley and Means, uses the following objectives as guidelines for
its
executive compensation decisions:
| |
·
|
to
provide a compensation package that will attract, motivate and retain
qualified executives;
|
| |
·
|
to
ensure a compensation mix that focuses executive behavior on the
fulfillment of annual and long-term business objectives;
and
|
| |
·
|
to
create a sense of ownership in the Company that causes executive
decisions
to be aligned with the best interests of the Company’s
shareholders.
|
The
elements of the Company’s compensation program in 2006 for its executive
officers consisted of base salary, performance bonuses, and stock options.
The
Committee determined salary levels for the Company’s executive
officers.
General
Compensation Policies
In
general, base salary levels are set at the minimum levels believed by the
Company’s executive officers to be sufficient to attract and retain qualified
executives when considered with the other components of the Company’s
compensation structure.
The
Committee adjusts salary levels for executive officers based on achievement
of
specific annual performance goals, including personal, departmental and overall
Company goals depending upon each officer’s specific job responsibilities. The
Committee also uses its subjective judgment, based upon such criteria as the
executive’s knowledge of and importance to the Company’s business, willingness
and ability to accomplish the tasks for which he or she was responsible,
professional growth and potential, the Company’s operating earnings and an
evaluation of individual performance, in making salary decisions. Compensation
paid to executive officers in prior years is also taken into account. No
particular weighting is applied to these factors.
The
Committee may determine that the Company’s financial performance and individual
achievements merit the payment of annual bonuses. The Company instituted a
bonus
program for management of the Company beginning in 2003, based on a percentage
of the earnings from operations of the Company.
The
Committee determines stock option grants to the executive officers. The
Committee determines annual stock option grants to other employees based on
recommendations of the Chief Executive Officer. Stock options are intended
to
encourage key employees to remain employed by the Company by providing them
with
a long term interest in the Company’s overall performance as reflected by the
market price of the Company’s Common Stock. No stock option grants were made in
2006.
The
Committee will consider any federal income tax limitations on the deductibility
of executive compensation in reaching compensation decisions and will seek
shareholder approval where such approval will eliminate any limitations on
deductibility.
Summary
Compensation
The
following table sets forth compensation information for the named executive
officers in fiscal year 2006.
|
Name
and Principal
Position
|
Year
|
Salary
($)
|
All
Other Compensation
($)
|
Total
($)
|
|
Edward
B. Alexander
President1
|
2006
|
$
80,0001
|
$
0
|
$
80,000
|
|
Glen
F. Ceiley
Chief
Executive Officer1
|
2006
|
0
|
12,0002
|
12,000
|
1
Mr.
Alexander served as the Company’s President until April 2006 and this table
reflects his compensation until such date.
2
Reflects
fees paid to Mr. Ceiley in his capacity as director of the Company. Such fees
are also reflected in the section entitled “Director Compensation.”
Grants
of Plan-Based Awards
None
of
the Company’s named executive officers received grants of plan-based awards in
fiscal year 2006.
Outstanding
Equity Awards at Fiscal Year-End
None
of
the Company’s named executive officers received or were granted option awards to
purchase the Company’s Common Stock in fiscal year 2006. Further, none of the
Company’s named executive officers held any outstanding equity awards at the end
of fiscal year 2006.
Option
Exercises and Stock Vested
None
of
the named executive officers exercised options during fiscal year 2006. Further,
no shares of stock became vested.
Retirement
Benefits
The
Company does not offer a retirement plan for executive officers or employees,
but during fiscal year 2006, the Company provided for participation in its
401(k) for all employees, including executive officers. The
Company’s 401(k) Plan was terminated at the end of fiscal year 2006.
Director
Compensation
In
order
to attract and retain highly qualified directors through an investment interest
in the Company’s future success, the Company enacted, in l985, a non-qualified
Stock Option Plan for Non-Employee Directors (the “Directors’ Plan”), which was
used to compensate directors until January 2002. Due to the expiration of the
Directors’ Plan in 2002, the Company paid $10,000 cash to each director in 2006
as compensation for his services. In addition, directors who are not employees
of the Company receive a fee of $500 for each Board of Directors’ meeting
attended. No fees are awarded to directors for attendance at meetings of the
Audit or Executive Compensation Committees of the Board of
Directors.
The
following table sets forth the compensation of the Company’s directors for the
fiscal year ended December 27, 2006.
|
Director
|
|
Fees
Earned or Paid in Cash ($)
|
|
Total
($)
|
|
|
Stephen
Catanzaro
|
|
$
|
11,500
|
|
$
|
11,500
|
|
|
Glen
F. Ceiley
|
|
|
12,000
|
|
|
12,000
|
|
|
Jay
Conzen
|
|
|
12,000
|
|
|
12,000
|
|
|
William
L. Means
|
|
|
12,000
|
|
|
12,000
|
|
REPORT
OF THE EXECUTIVE COMPENSATION COMMITTEE
The
Executive Compensation Committee reviewed and discussed the Compensation
Discussion and Analysis and the related tables with management. Based on such
review and discussion, the Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this Information Statement
and Annual Report on Form 10-K.
Respectfully
submitted,
Glen
F.
Ceiley
William
L. Means
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
table
set forth below presents certain information regarding beneficial ownership
of
the Company’s Common Stock (the Company’s only voting security), as of
June 22,
2007,
by (i) each shareholder known to the Company to own, or have the right to
acquire within sixty (60) days, more than five percent (5%) of the Common Stock
outstanding, (ii) each named executive officer and director of the Company,
and
(iii) all officers and directors of the Company as a group.
|
Name
of Beneficial Owner
|
|
Amount
of Common Stock Beneficially
Owned(1)
|
|
Percent
of Class(2)
|
|
|
Edward
B. Alexander(3)
|
|
|
3,500
|
|
|
*
|
|
|
Stephen
Catanzaro
|
|
|
10,713
|
|
|
*
|
|
|
Glen
F. Ceiley(4)
|
|
|
2,474,257
|
|
|
63.3
|
%
|
|
Jay
Conzen(5)
|
|
|
25,000
|
|
|
*
|
|
|
William
L. Means
|
|
|
14,313
|
|
|
*
|
|
|
________________________________________
|
|
|
|
|
|
|
|
|
All
Executive Officers and Directors as a group(5)
|
|
|
2,527,783
|
|
|
64.3
|
%
|
________________________________________
*
Less
than
1%
(1)
Under
the rules of the Securities and Exchange Commission (the “SEC”), the
determinations of “beneficial ownership” of the Company’s Common Stock are based
upon Rule 13d-3 under the Exchange Act. Under this Rule, shares will be deemed
to be “beneficially owned” where a person has, either solely or with others, the
power to vote or to direct the voting of shares and/or the power to dispose,
or
to direct the disposition of shares, or where a person has the right to acquire
any such power within 60 days after the date such beneficial ownership is
determined. Shares of the Company’s Common Stock that a beneficial owner has the
right to acquire within 60 days under the exercise of the options or warrants
are deemed to be outstanding for the purpose of computing the percentage
ownership of such owner but are not deemed outstanding for the purpose of
computing the percentage ownership of any other person.
(2)
The
percentages represent the total of the shares listed in the adjacent column
divided by 3,906,799 issued
and outstanding shares of Common Stock as of June
22,
2007,
plus
any stock options or warrants exercisable by such person within 60 days of
June
22,
2007.
(3)
As of
April 4, 2006, Edward B. Alexander no longer served as the Company’s
President.
(4)
Glen
F. Ceiley, President and a director of Bisco, owns 1,895,686 shares,
individually; Zachary Ceiley, Mr. Ceiley’s son, owns 1,300 shares; and the Bisco
Industries Profit Sharing and Savings Plan (the “Bisco Plan”) owns 577,271
shares. Mr. Ceiley has the sole power to vote and dispose of the shares of
Common Stock he owns individually and the power to vote and to dispose of the
shares owned by his son, Bisco and the Bisco Plan.
(5)
Jay
Conzen has 25,000 shares issuable upon the exercise of options within 60 days
of
June 22, 2007.
(6)
All
executive officers and directors as a group have 25,000 shares issuable upon
the
exercise of options within 60 days of June 22, 2007. The address for each
officer and director is c/o Bisco Industries, Inc., 1500 North Lakeview Avenue,
Anaheim, CA 92807.
EQUITY
COMPENSATION PLANS
As
of
December 27, 2006, the Company had no equity compensation plans.
SECTION
16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act, requires certain officers of the Company and its
directors, and persons who beneficially own more than ten percent of any
registered class of the Company’s equity securities, to file reports of
ownership in such securities and changes in ownership in such securities with
the SEC and the Company.
Based
solely on a review of the reports and written representations provided to the
Company by the above referenced persons, the Company believes that during fiscal
year 2006 all filing requirements applicable to its reporting officers,
directors and greater than ten percent beneficial owners were timely satisfied
except one delinquent Form 4 filing by Jay Conzen resulting in one transaction
being untimely reported.
FINANCIAL
CODE OF ETHICAL CONDUCT
The
Company has adopted a financial code of ethics applicable to the Company’s
senior executive and financial officers. You may receive, without charge, a
copy
of the Financial Code of Ethical Conduct by contacting our Corporate Secretary
at 1500 N. Lakeview Avenue, Anaheim, California 92807.
INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The
Audit
Committee has not yet recommended to the Board of Directors an accounting firm
to be engaged as independent auditor for the Company for 2007 but will do so
at
a later date. The firm Squar, Milner, Peterson, Miranda & Williamson, LLP
(“Squar Milner”), served as the independent accountant for the Company for the
fiscal year ending December 28, 2006. That firm has served as the auditor for
the Company since October 2005. Representatives of Squar Milner are expected
to
be present at the Annual Meeting where they will have an opportunity to make
a
statement if they desire to do so and will be available to respond to
appropriate questions.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
Audit
Fees
The
aggregate fees billed by Squar Milner for the fiscal year ended December 27,
2006 and by Squar Milner and Deloitte & Touche LLP for the fiscal year ended
December 28, 2005, for professional services rendered for the audit of the
Company’s annual financial statements and for the reviews of the financial
statements included in the Company’s Quarterly Reports on Form 10-Q for those
fiscal years were $85,000 and
$61,000, respectively.
Audit-Related
Fees
The
Company was billed no audit-related fees by Squar Milner for the fiscal year
ended December 27, 2006 or by Squar Milner and Deloitte & Touche LLP for the
fiscal year ended December 28, 2005.
Tax
Fees
The
aggregate fees billed by Squar Milner for the fiscal year ended December 27,
2006 and for the fiscal year ended December 28, 2005, for professional services
rendered for tax services were $11,200 and $10,000, respectively.
All
Other Fees
There
were no other fees billed by Squar Milner for the fiscal year ended December
27,
2006 or for the fiscal year ended December 28, 2005, for services rendered
to
the Company, other than the services described above.
The
Audit
Committee has considered whether the provision of non-audit services is
compatible with maintaining the principal accountant’s
independence.
Audit
Committee Pre-Approval
See
section titled “Audit Committee Pre-Approval Policies and Procedures” of this
Information Statement which is herein incorporated by reference.
REPORT
OF THE AUDIT COMMITTEE
The
Board
approved the Company’s engagement of the firm Squar, Milner, Peterson, Miranda
& Williamson LLP (“Squar Milner”) to serve as the Company’s independent
accountants and to audit and report on the Company’s financial statements for
the fiscal year ended December 27, 2006.
The
Audit
Committee has reviewed the audited financial statements of the Company for
the
year ended December 27, 2006, and has met with management and Squar Milner,
the
Company’s independent auditors, to discuss the audited financial
statements.
The
Audit
Committee received from Squar Milner written disclosures regarding their
independence and the letter required by Independence Standards Board Standard
No. 1, and has discussed with Squar Milner their independence. In connection
with its review, the Audit Committee has also discussed with Squar Milner the
matters required to be discussed by U.S. Auditing Standards Section 380 -
Communications
with Audit Committees.
The
Audit
Committee has discussed with Squar Milner the matters required to be discussed
by SAS61 (Certification of Statements on Auditing Standards) as modified or
supplemented.
Based
on
its review and discussions with management and Squar Milner, the Audit Committee
recommended to the Board of Directors that the audited financial statements
be
included in the Company’s Annual Report to Shareholders for the year ended
December 27, 2006.
Respectfully
submitted,
Jay
Conzen, Chairman
Stephen
Catanzaro
William
L. Means
OTHER
MATTERS
The
Board
of Directors is not aware of any other matters to come before the meeting.
Any
other
matter which may be considered at the Annual Meeting will be approved if the
votes cast favoring the matter exceed the votes opposing the matter, unless
a
greater number of affirmative votes or voting by classes is required by Florida
law or the Company’s Articles of Incorporation. Abstentions and broker non-votes
have no effect under Florida law.
SHAREHOLDER
PROPOSALS
Proposals
of shareholders to be presented at the 2008 Annual Meeting of Shareholders
must
be received by the Company (addressed to the attention of the Corporate
Secretary) not later than December 28, 2007 to be considered for inclusion
in
the Company’s proxy or information statement materials relating to that meeting.
To be submitted at the meeting, any such proposal must be a proper subject
for
shareholder action under the laws of the State of Florida, and must otherwise
conform to applicable regulations of the SEC.
The
Company may solicit proxies in connection with next year’s Annual Meeting which
confer discretionary authority to vote on any shareholder proposals of which
the
Company does not receive notice by December 28, 2007. Proposals should be sent
to the Company’s executive office to the attention of the Corporate
Secretary.
DELIVERY
TO SHAREHOLDERS SHARING ADDRESS
Only
one
Information Statement and Annual Report has been delivered to multiple
shareholders sharing an address unless the Company has received contrary
instructions from one or more of the shareholders. The Company will promptly
deliver upon written or oral request a separate copy of this Information
Statement or the Annual Report to a shareholder at a shared address to which
a
single copy was sent. Shareholders residing at a shared address who would like
to request an additional copy of the Information Statement or Annual Report
now
or with respect to future mailings (or to request to receive only one copy
of
the Information Statement or Annual Report if multiple copies are being
received) may write or call the Company’s Corporate Secretary at 1500 N.
Lakeview Avenue, Anaheim, California 92807, (714) 876-2490.
By
Order
of the Board of Directors
Glen
F.
Ceiley
Chairman
of the Board
Date:
July 3,
2007
APPENDIX
A
EACO
CORPORATION
AUDIT
COMMITTEE CHARTER
ADOPTED
BY THE BOARD OF DIRECTORS
MAY
10,
2000
ROLE
AND
INDEPENDENCE
The
audit
committee of the board of directors assists the board in fulfilling its
responsibility for the safeguarding of assets and oversight to the quality
and
integrity of the accounting, auditing and reporting practices of the company
and
such other 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 their
individual exercise of independent judgment. The committee is expected to
maintain free and open communication (including private executive sessions
at
least annually) with the independent accountants, and management of the company.
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. This charter shall be reviewed and updated
annually.
RESPONSIBILITIES
The
audit
committee's primary responsibilities include:
| - |
Primary
input into the recommendation to the board for the selection and
retention
of the independent accountant who audits the financial statements
of the
company. In so doing, the committee will discuss and consider the
auditor's written affirmation that the auditor is in fact independent,
will discuss the nature of the audit process, receive and review
all
reports and will provide to the independent accountant full access
to the
committee (and the board) to report on any and all appropriate
matters.
|
| - |
Review
of financial statements (including quarterly reports) with management
and
the independent auditor. It is anticipated that these discussions
will
include quality of earnings, discussions of significant items subject
to
estimate, consideration of the suitability of accounting principle,
review
of highly judgmental areas, audit adjustments whether or not recorded
and
such other inquiries as may be
appropriate.
|
| - |
Discussion
with management and the auditors of the quality and adequacy of the
company's internal controls.
|
| - |
Discussion
with management of the status of pending litigation, taxation matters
and
other areas of oversight to the legal and compliance area as may
be
appropriate.
|
| - |
Reporting
on audit committee activities to the full board and issuance annually
of a
summary report (including appropriate oversight conclusions) suitable
for
submission to the shareholders in the company's annual proxy
statement.
|