Mark Products is completing our implementation of a comprehensive Year 2000 (Y2K) Compliance Program to insure that we will be able to supply our products and services to our customers without interruption in the Year 2000 and beyond.

Mark Products has conducted an inventory assessment of all potentially affected processes and applications for Year 2000 compliance. This audit has entailed a complete evaluation of the following areas: products, applications, infrastructure, operating systems and suppliers. A final audit is scheduled to be completed in 3Q99.

Below is the status of our Year 2000 compliance:

1. Products – The Nan Ya LCD module products marketed and distributed by Mark Products do not have any date-sensitive functions related to Year 2000 issues.

2. Software/Applications – Mark Products’s core information systems are based upon an integrated business software package that supports the entire internal operations of Mark Products including:

	Sales order management
	Purchasing and inventory management
	Financials (General ledger, accounts payables, accounts receivables)
	Shipping and distribution
	Management reporting

The current production version of this software has been certified for Year 2000 compliance by one of the nation’s leading accounting firms and has been installed and operational at Mark Products since 4Q98.

3. Hardware – All internal computer hardware was reviewed in 4Q98 and non-compliant hardware was upgraded or replaced by 1Q99. All servers have been upgraded to the current operating system and patch level release. All desktop computers are Pentium-class PCs with Year 2000 compliant BIOS running Windows 95 or greater.

4. Telecommunications – This area covers phones, fax machines, physical networks and related hardware. We expect to complete testing in this area by the end of 2Q99 and implement any necessary corrective actions by the end of 3Q99.

5. Environmental Operations – This area covers our physical plant and related systems at our facilities (HVAC, fire and burglar alarms, etc.). We are currently performing testing in these areas.

6. Suppliers – Nan Ya Plastics of Taiwan is the exclusive supplier of LCD module products to Mark Products. We are working closely with Nan Ya to assure that their processes and systems are fully Year 2000 compliant.

Like most of the Taiwanese government systems and those of other major Taiwanese companies, Nan Ya’s core information systems are based on the Republic of China (ROC) calendar and, as such, are not susceptible to Year 2000 problems. (The ROC calendar was established by the Chinese Nationalists when they founded the ROC in 1911, and under the ROC calendar, the year 1999 converts to ROC year 88. Therefore, computer systems using ROC dates do not face the current Year 2000 problem, but instead will face an ROC Year 100 problem in another 11 years when the two-digit year fields will need to expand to accommodate the three-digit year.)

Nan Ya’s automated LCD manufacturing line is computer-controlled by PCs and embedded microcontrollers. Each individual piece of process and test equipment is the process of being evaluated for potential Year 2000 problems with determinations made as to the necessary corrective actions. These evaluations and corrective actions are planned for completion in 3Q99.

Other hardware and software used for quality control and engineering has already been tested and, when required, upgraded for Year 2000 compliance.

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