Information About the Sarbanes-Oxley Act of 2002

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Summary of the Act

President Bush signed the Sarbanes-Oxley Act of 2002 into law on July 30, 2002. The law contains many reforms and is intended to address perceived inadequacies in laws that were revealed in the recent wave of corporate bankruptcies and scandals that have lowered public confidence in corporate governance. The Act applies to all companies that are required to file periodic reports with the Securities and Exchange Commission. The law directly impacts the following groups:

• CPAs and CPA firms auditing public companies
• Publicly traded companies, their employees, officers, and owners—including holders of more than 10 percent of the outstanding common shares. This category would include CPAs employed by publicly traded companies as chief financial officers (CFOs) or in the finance department
• Attorneys who work for or have as clients publicly traded companies; and
• Brokers, dealers, investment bankers and financial analysts who work for these companies.

The Act, which is named after its primary architects, Senator Paul Sarbanes (D-Maryland) and Representative Michael Oxley (R-Ohio) is organized into 11 sections. These sections deal with such issues as auditor independence, corporate responsibility, enhanced financial disclosures, conflicts of interest, and corporate accountability, among other things. The Act also establishes a public accounting oversight board. Many provisions in the law are effective immediately, while others become effective on a specific date. WB Resources focuses its resources and efforts on the implementation of Section 301(4) of the Act, which mandates audit committees to:

Establish procedures for:

• The receipt, retention, and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters; and
• The confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters

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Are you ready?

The deadline for full compliance is April 26 of 2004.

• Is the audit committee made up of independent board members?
• Is at least one member of your audit committee considered a “financial expert”?
• Has the audit committee selected a mechanism that ensures anonymous confidentiality for handling complaints about accounting, internal control and auditing matters from employees?
• Is the company who performs the audit truly independent?
• Do the financial disclosures reflect all material correcting adjustments and all material off-balance sheet items?
• Are the insider stock transactions disclosed immediately?
• Has management assessed the effectiveness of the internal controls and procedures for financial reporting, and have public accountants certified these procedures?
• Does the CEO personally review and sign all annual and quarterly reports to the SEC?
• Has the company committed to not making loans to executives?
• Has the company adopted a code of ethics for its senior financial officers?

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How should I decide what to do to comply with Section 301 (4)?

1. Why would a company want to consider using the WB-Resources, LLC system?

We focus on Sarbanes-Oxley alone, allowing us to offer a simple, cost-effective and completely confidential and anonymous solution to be in compliance. Our options for receiving and sending information include:

• Voice-messaging
• Live interviewers
• Web reporting
• Fax/direct mail

The WB-Resources, LLC approach helps employees overcome their fears and inhibitions by allowing them to express themselves confidentially and anonymously - if that’s their preference. Every WB-Resources, LLC tool is designed to eliminate any possibility of voice recognition, handwriting recognition, and phone number tracing. As a result, individuals are more comfortable offering their candid concerns.

2. Why is WB-Resources, LLC preferable to internal programs?

The biggest advantage of WB-Resources, LLC over internal programs is that messages can be completely confidential and anonymous. Because an organization has no way of knowing who sent a message - unless someone leaves their name - stakeholders have greater confidence about speaking candidly.

The other main advantage WB-Resources, LLC provides immediate compliance. We have already taken the time and developed the procedure for receipt, retention, and treatment of complaints; thus saving you time and money.

Other features of WB-Resources, LLC include easy to remember, toll-free numbers, around the clock access, unlimited message capacity, 36-hour turn around, toll-free fax and access to a team of experienced interviewers and accountants.

3. Which kind of system works best - live interviewers, voice mail or web?

There are pros and cons to each type of approach. WB-Resources, LLC can assist you with that analysis. And because WB-Resources, LLC provides an entire range of tools and permits you to mix and match options, you can be confident that there is no built-in bias towards one or another.

4. What kind of information does a company’s management receive?

The format for messages left on WB-Resources, LLC voice-messaging options is a verbatim transcript of what the caller actually says. All messages are transcribed word for word, and quality checked for accuracy. A message is sent to the Audit Committee Chairperson within 24 hours of receipt to inform him/her to log on to the secure site to obtain the complaint if it is a category one complaint. All complaints are available for retrieval within 36 hours of receipt.

5. If WB-Resources, LLC is confidential and anonymous, how can the Audit Committee provide employees with feedback?

There are several proven methods of letting employees know their messages are being heard and considered:

1. Question and answer columns in employee publications.
2. Implementing changes - and crediting them to the WB-Resources, LLC program.
3. Individuals, who choose to identify themselves, can either be called or provided with a written response to their concerns.

6.What if an organization is concerned about the confidentiality or sensitivity of its messages?

All prospective WB-Resources, LLC employees are submitted to a rigorous screening process which includes extensive interviewing and a minimum of two reference checks. In addition, most of the current staff has experience in either human resource or accounting departments where they have routinely handled sensitive information. They also are required to sign a confidentiality/non-disclosure agreement. And as part of our standard service agreement, our company also commits to maintaining confidentiality.

For quality control and verification purposes, all messages are reviewed by a minimum of two people - the transcriber and a data auditor.

Messages are only available to clients via the secure web server. Although the client is notified via email or the method they prefer, the complaint can only be obtained through the secure server. If there is a message that is of an urgent nature (category 1), the Audit Committee Chairperson is immediately sent an email alert for them to view the concern.

7. How much does WB-Resources, LLC cost and what is included in that rate?

Pricing is based on the number of people in your coverage (employees, directors, shareholders, vendors/customers, and competitors) and the services utilized. The price includes unlimited utilization of the system. It also includes a supply of custom-designed reinforcement materials (e.g. wallet cards, stickers, posters).

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