UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment
(Amendment No. ____ )
the Securities Exchange Act of 1934
(Amendment No. ____ )
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SIGMATRON INTERNATIONAL, INC.
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SIGMATRON INTERNATIONAL, INC.
2201 LANDMEIER ROAD
ELK GROVE VILLAGE,Landmeier Road
Elk Grove Village, IL 60007
Elk Grove Village, IL 60007
August 15, 2007
13, 2010
Notice of Annual Stockholders Meeting:
You are hereby notified that the 20072010 Annual Meeting of Stockholders of SigmaTron International, Inc. (the "Company"“Company”) will be held at the Holiday InnSigmaTron International, Inc., located at 1000 Busse2201 Landmeier Road, Elk Grove Village, Illinois 60007, at 10:00 a.m. local time, on Friday, September 21, 2007,17, 2010, for the following purposes:
1. To elect two Class II directors to hold office until the 2010
Annual Meeting.
2. To consider a proposal to ratify the selection of BDO Seidman, LLP
as independent auditors of the Company for the fiscal year ending
April 30, 2008.
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
| 1. | To elect two Class II directors to hold office until the 2013 Annual Meeting. | |
| 2. | To consider a proposal to ratify the selection of BDO USA, LLP as registered public accountants of the Company for the fiscal year ending April 30, 2011. | |
| 3. | To transact such other business as may properly come before the Annual Meeting or any adjournment thereof. |
The Board of Directors has fixed the close of business on July 27, 200723, 2010 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meetingand/or adjournments thereof.
You are urged to attend the Annual Meeting in person. Whether or not you expect to be present in person at the Annual Meeting, please mark, date, sign and return the enclosed proxy in the envelope provided.
By Order of the Board of Directors
/s/ LINDA
Linda K. BLAKE
LINDA K. BLAKE
Frauendorfer
Secretary
Secretary
TABLE OF CONTENTS
SIGMATRON INTERNATIONAL, INC.
2201LANDMEIER ROAD
ELK GROVE VILLAGE,Landmeier Road
Elk Grove Village, IL 60007
2007
2201
Elk Grove Village, IL 60007
September 17, 2010
This Proxy Statement and the accompanying proxy are furnished to stockholders of SigmaTron International, Inc. (the "Company"“Company”) in connection with the solicitation of proxies by the Company'sCompany’s Board of Directors for use at the 20072010 Annual Meeting of Stockholders (the "Meeting"(sometimes referred to herein as the “Meeting”) to be held at the Holiday
InnSigmaTron International, Inc., located at 1000 Busse2201 Landmeier Road, Elk Grove Village, Illinois, 60007, at 10:00 a.m. local time, on Friday, September 21, 2007,17, 2010, for the purposes set forth in the accompanying Notice of Meeting. This Proxy Statement, the form of proxy included herewith and the Company'sCompany’s Annual Report to Stockholders for the fiscal year ended April 30, 20072010 are being mailed to stockholders on or about August 15,
2007.
13, 2010.
Stockholders of record at the close of business on July 27, 200723, 2010 are entitled to notice of and to vote at the Meeting. On such date there were outstanding 3,794,9563,823,056 shares of common stock, par value $.01 per share (the
"Common Stock").share. The presence, in person or by proxy, of the holders of a majority of the shares of Common Stockcommon stock outstanding and entitled to vote at the Meeting is necessary to constitute a quorum. In deciding all questions, each holder of Common Stockcommon stock shall be entitled to one vote, in person or by proxy, for each share held on the record date.
If you are a stockholder of record (that is, if you hold your shares in certificate form registered in your name on the books of the Company'sCompany’s transfer agent, American Stock Transfer and Trust Company, as of the close of business on July 27, 2007)23, 2010), and attend the Meeting, you may deliver your completed proxy card in person. However, if you hold your shares in "street name"“street name” (not certificate form) (a) you must return your voting instructions to your broker or nominee so that the holder of record can be instructed how to vote those shares or (b) if you wish to attend the Meeting and vote in person, you must obtain and bring to the Meeting a proxy signed by the record holder giving you the right to vote the shares in order to be able to vote at the Meeting. (You maynotuse the voting instruction form provided by your broker or nominee to vote in person at the Meeting.) For directions to the meeting, please contact the Company at847-956-8000.
Votes cast by proxy or in person at the Meeting will be tabulated by the election inspector appointed for the Meeting and will determine whether or not a quorum is present. The election inspector will treat abstentions as shares that are present and entitled to vote but as not voted for purposes of determining the approval of any matter submitted to the stockholders for a vote. Abstentions will have the same effect as negative votes.votes on the proposal to ratify the selection of the auditor. If a broker indicates on the proxy that it does not have discretionary authority as to certain shares to vote on a particular matter ("(“Broker Non-Votes"Non-Votes”), those shares will not be considered as present and entitled to vote with respect to that matter.
Properly executed proxies will be voted in the manner directed by the stockholders. If no direction is indicated, such proxies will be voted FOR the election of the nomineeseach nominee named under the caption "Election“Election of Directors"Two Class II Directors” as set forth therein as a director of the Company, and FOR the ratification of the selection of BDO Seidman,USA, LLP as the Company's independent auditors.Company’s registered public accountants. If a quorum is present at the Meeting, directors will be elected by a plurality of the votes cast. The ratification of the selection of auditors requires an affirmative vote by holders of a majority of the shares present at the Meeting in person or by proxy and entitled to vote. Any proxy may be revoked by the stockholder at any time prior to the voting thereof by notice in writing to the Secretary of the Company, either prior to the Meeting (at the above address) or at the Meeting if the stockholder attends in person. A later dated proxy will revoke a prior dated proxy.
All expenses incurred in the solicitation of proxies will be borne by the Company. In addition to the use of the mail, proxies may be solicited on behalf of the Company by directors, officers and employees of the Company by telephone or telecopy. The Company will reimburse brokers and others holding common stock as nominees
for their expenses in sending proxy material to the beneficial owners of such common stock and obtaining their proxies.
Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be held on September 17, 2010.
The proxy statement is available at[http://www.sigmatronintl.com]
As of the date of this Proxy Statement, the Board of Directors knows of no other business which will be presented for consideration at the Meeting. If other proper matters are presented at the Meeting, however, it is the intention of the proxy holders named in the enclosed form of proxy to take such actions as shall be in accordance with their best judgment.
The information contained in this Proxy Statement relating to the occupations and security holdings of directors and officers of the Company and their transactions with the Company is based upon information received from each individual as of July 13, 2007.
23, 2010.
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HOLDINGS OF STOCKHOLDERS, DIRECTORS
AND EXECUTIVE OFFICERS
AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding beneficial ownership of Common Stockcommon stock as of July 13, 200723, 2010 by (i) each director of the Company and each nominee, (ii) each executive officer of the Company, (iii) each person (including any "group"“group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act"“Exchange Act”)) who is known by the Company to own beneficially more than 5% of the outstanding Common Stock,common stock, and (iv) all directors and executive officers as a group. The address of directors and executive officers isc/o SigmaTron International, Inc., 2201 Landmeier Road, Elk Grove Village, Illinois 60007.
BENEFICIAL OWNERSHIP
Beneficial Ownership
| Number of | ||||||||
Name | Shares(1) | Percent | ||||||
Beneficial Owners of at least 5% of the outstanding Capital Stock | ||||||||
| Royce & Associates, LLC(2) | 460,243 | 12.0 | % | |||||
| 1414 Avenue of the Americas | ||||||||
| New York, NY 10019 | ||||||||
| Cyrus Tang Foundation(3) | 373,884 | 9.8 | % | |||||
| 8960 Spanish Ridge Ave. Las Vegas, NV 89148 | ||||||||
| Fidelity Management & Research Company(4) | 381,880 | 9.99 | % | |||||
| 82 Devonshire St. | ||||||||
| Boston, MA 02109 | ||||||||
| Tang Foundation for the Research of Traditional Chinese Medicine(3) | 240,874 | 6.3 | % | |||||
| 8960 Spanish Ridge Ave. Las Vegas, NV 89148 | ||||||||
Directors, Nominees and Executive Officers | ||||||||
| Gary R. Fairhead(5) | 108,203 | 2.8 | % | |||||
| Gregory A. Fairhead(5) | 68,307 | 1.8 | % | |||||
| John P. Sheehan(5) | 51,566 | 1.3 | % | |||||
| Linda K. Frauendorfer(5) | 37,468 | 1.0 | % | |||||
| Daniel P. Camp(5) | 49,500 | 1.3 | % | |||||
| Rajesh B. Upadhyaya(5) | 22,500 | * | ||||||
| John P. Chen(6) | 10,200 | * | ||||||
| Thomas W. Rieck(6)(7)(8) | 14,099 | * | ||||||
| Carl A. Zemenick(6) | 10,000 | * | ||||||
| Dilip S. Vyas(6) | 10,000 | * | ||||||
| All directors and executive officers as a group(9) | 381,843 | 9.3 | % | |||||
| * | Less than 1 percent. | |
| (1) | Unless otherwise indicated in the footnotes to this table, the Company believes the persons named in this table have sole voting and investment power with respect to all shares of common stock reflected in this table. As of July 23, 2010, 3,823,056 shares were outstanding, not including certain options held by various directors and officers as noted in subsequent footnotes. This table is based on information supplied by the Company’s officers, directors and principal stockholders and by Schedules 13D and 13G filed with the Securities and Exchange Commission. | |
| (2) | Number of shares owned by Royce & Associates, |
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| (3) | The Cyrus Tang Foundation and Tang Foundation for the Research of Traditional Chinese | |
| (4) | Number of shares owned by Fidelity Management & Research Company | |
| (5) | The number of shares includes 30,000, 56,650, 51,566, 37,068, 49,500 and 22,500 shares issuable upon the exercise of stock options granted to Gary R. | |
| (6) | Includes 10,000 | |
| (7) | Includes 4,099 shares issuable upon the exercise of director stock options granted in December 2001. | |
| (8) | In addition to the number of shares set forth on the Beneficial Ownership table, Mr. Rieck is also one of three trustees of Rieck and Crotty, P.C.’s profit sharing plan and is a member of a family investment company which owns 10,000 | |
| (9) | Includes 291,383 shares issuable upon exercise of stock options. |
SECTION 16A)16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is required to report to stockholders those directors, officers and beneficial owners of more than 10% of any class of the Company'sCompany’s equity securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”), who fail to file timely reports of beneficial ownership and changes in beneficial ownership, as required by Section 16(a) of the Exchange Act. Based solely upon a review of copies of such reports furnished to the Company, the Company believes that all persons subject to the reporting requirements of Section 16(a) of the Exchange Act timely filed all necessary reports during the fiscal year ended April 30, 2007.
2010.
I. ELECTION OF DIRECTORS
Pursuant to the Company'sCompany’s Certificate of Incorporation, the Board of Directors is divided into three classes of directors, each serving overlapping three-year terms. The term of Class I director (Mr. Rieck)Mr. Rieck expires in 2009;2012; the terms of Class II directors (Messrs. Chen and Zemenick) expire in 2007;2010; and the terms of Class III directors (Messrs. Fairhead Sove and Vyas) expire in 2008.2011. All directors of each class will hold their positions until the annual meeting of stockholders in the year indicated above, at which time the terms of the directors in such class expire, or until their respective successors are elected and qualify,qualified, subject in all cases to any such director'sdirector’s earlier death, resignation or removal.
William L. McClelland did not stand for reelection when his term as
Mr. Franklin D. Sove was the Chairman of the Board and a Class
I director expired atmember of the 2006Board of Directors from 1994 until he retired following the Company’s 2009 Annual Meeting of Stockholders. On September 18, 2009, Mr. John P. Chen was elected Chairman of the Board of Directors. Mr. Chen has been a director of the Company since 1994. The Board of Directors did not fill the vacancy leftcreated by the departureretirement of Mr. McClelland. TheSove. Accordingly, the Board of Directors decided to reducehas reduced the number of directors from seven memberssix to six members and to re-designatefive as of the 2008 Annual Meeting of Stockholders
one of the Class III directors as a Class I director. Upon redesignation as a
Class I director in 2008, that director will hold office until the expiration of
the term of the current Class I director at the 2009 Annual Meeting of Stockholders.
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NOMINEES FOR ELECTION AS CLASS
4
Nominees for Election as Class II DIRECTOR AT THE MEETING
Director at the Meeting
If a quorum is present at the Meeting, two Class II directors will be elected by a plurality of the stockholder votes cast at the Meeting, each director to serve until the 2010 annual meeting2013 Annual Meeting of stockholdersStockholders or until his successor shall be elected and qualified, subject to his earlier death, resignation or removal. Abstentions and Broker Non-Votes will have no effect on the vote. Shares represented by executed proxies will be voted, if the authority to do so is not withheld, for the election of the nomineeseach nominee named below. The stockholders do not have cumulative voting rights with respect to the election of directors. The following persons have been nominated:
nominated as a Class II director:
Name | Age | |||||
| John P. Class II | 56 | John P. Chen has served as a director of the Company since February 7, 1994 and has served as Chairman of the Board since September, 2009. Mr. Chen currently serves on the Compensation and Nominating Committees, and has also served on our Audit Committee. Mr. Chen also serves on the Board of Directors of TAP Automotive Holdings, LLC, a privately held company specializing in after market parts for customized trucks and off-road vehicles. From January, 2006 to July, 2009, Mr. Chen served as the President of SKD Automotive Group, | ||||
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Name | Age | |||||
| Carl A. Class II | 65 | Carl Zemenick has served as a director of the Company since September, 2001. He currently serves on the Audit and Nominating Committees and is presently Chairman of the Compensation Committee. Mr. Zemenick has been President | ||||
The Board of Directors recommends that you vote in favor of the nominees named above.
The Board of Directors knows of no reason why the foregoing nominees will be unavailable or will decline to serve, but, in the event of any such unavailability, the proxies received will be voted for such substitute nominees as the Board of Directors may recommend. THE ENCLOSED PROXY CANNOT BE VOTED FOR
A GREATER NUMBER OF PERSONS THAN TWO, THE NUMBER OF NOMINEES NAMED IN THIS PROXY
STATEMENT.
The enclosed proxy cannot be voted for a greater number of persons than two, the number of nominees named in this proxy statement.
| Directors Whose Terms Extend Beyond The Meeting | ||||||
| Principal Occupation(s) During Past Five Years | ||||||
Name | Age | and Other Public Directorships | ||||
| Thomas W. Class I | 65 | Thomas W. Rieck has served as a director of the Company since its formation in November, 1993. At that time, he was a director and Secretary of Circuit Systems, Inc., a circuit board maker located in Elk Grove Village, Illinois, and the shareholder of the Company. He has served on the Nominating Committee and is presently Chairman of the Audit Committee, the Company’s Audit Committee financial expert, and a member of the Compensation Committee. Prior to the time of the Company’s initial public offering and to this date, he has been President and Managing Partner of Rieck and | ||||
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| Directors Whose Terms Extend Beyond The Meeting | ||||||
| Principal Occupation(s) During Past Five Years | ||||||
Name | Age | and Other Public Directorships | ||||
| Gary R. Class III | 58 | Gary R. Fairhead has served as the President and Chief Executive | ||||
| Dilip S. Vyas Class III | 62 | Dilip S. Vyas has served as a director of | ||||
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II. PROPOSAL TO RATIFY SELECTION OF INDEPENDENT
CERTIFIED
REGISTERED PUBLIC ACCOUNTANTS
REGISTERED PUBLIC ACCOUNTANTS
The Board of Directors will recommend at the Annual Meeting that the stockholders ratify the appointment of the firm of BDO Seidman,USA, LLP to audit the accounts of the Company for the current fiscal year. Representatives of that firm are expected to be present at the Annual Meeting, have the opportunity to make a statement, if they desire to do so, and be available to respond to appropriate questions. BDO Seidman,USA, LLP was recommended by the Audit Committee and the Board of Directors for the fiscal year 2007. In March 2006 the2011.
The Board of Directors dismissed
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Grant Thornton LLP and engagedrecommends that you vote in favor of ratification of the selection of BDO Seidman,USA, LLP as the Company's auditors. The
principal accountant's report onCompany’s registered public accountants for the financial statements was unqualified for fiscal year 2006 and 2007.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF RATIFICATION OF THE
SELECTION OF BDO SEIDMAN, LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING APRILending April 30, 2008.
2011.
In connection with the audits for the years ended April 30, 20072010 and 2006,2009, the Company has had no disagreements with BDO Seidman,USA, LLP 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 Seidman,USA, LLP would have caused it to make reference thereto in its report on the consolidated financial statements for 20072010 and 2006.
2009.
The ratification of the selection of auditors requires an affirmative vote by holders of a majority of the shares present at the Meeting in person or by proxy and entitled to vote. Abstentions and Broker Non-Votes will have the same effect as negative votes.
FISCAL 2007YEARS 2010 AND 20062009 AUDIT FIRM FEE SUMMARY
During the first three quarters of fiscal 2006,years 2010 and 2009, the Company retained as its auditor, Grant ThorntonBDO USA, LLP, to provide services. BDO Seidman LLP provided
services during the fourth quarter of fiscal 2006 and completed the audit for
fiscal year 2006 and 2007.as defined below. The following amounts were charged by Grant ThorntonBDO USA, LLP for services provided in fiscal years 20062010 and by BDO Seidman, LLP for
services provided in fiscal years 2006 and 2007.
2009.
| 2010 | 2009 | |||||||
| Audit Fees(a) | $ | 189,170 | $ | 187,940 | ||||
| Audit-Related Fees(b) | 9,500 | 10,000 | ||||||
| Tax Fees(c)(d) | 18,335 | 53,100 | ||||||
| (a) | Fees for audit services billed in 2010 and 2009 consisted of: |
| • | Audit of the Company’s annual financial statements and review quarterly financial statements |
| (b) | Fees |
| (c) | Fees |
| • | Federal, state and local income tax return preparation | |
| • | Assistance with tax return filings and compliance in certain foreign jurisdictions | |
| • | Assistance with tax audits and amended tax returns |
| (d) | Fees |
| • | Assistance with tax audits and amended tax returns |
| (e) | As described in the Audit Committee Charter, it is the Audit Committee’s policy and procedure to review and consider and ultimately pre-approve, where appropriate, all audit and non-audit engagement services to be performed by the registered public accountants. |
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Corporate Governance
Our Board of Directors determined that each of Messrs. Chen, Rieck, Sove, Vyas and Zemenick are independent under the rules of the Nasdaq Stock Market, Inc. As a result, our Board of Directors currently has a majority
5
of independent directors under the rules of the Nasdaq Stock Market, Inc. Our Board of Directors has determined that our independent directors shall have regularly scheduled meetings at which only the independent directors are present. Generally, the independent directors, meet quarterly.
DIRECTOR COMMITTEES; BOARD MEETINGS
separately at each regularly scheduled board meeting.
Director Committees; Board Meetings
The Board of Directors has established an Audit Committee, a Compensation Committee and a Nominating Committee. The Audit Committee Charter, Compensation Committee Charter and the Nominating Committee Charter are available on the Company'sCompany’s website atwww.sigmatronintl.com. The Company believes that the composition of these committees meets the criteria for independence under, and the functioning of these committees complies with, the applicable requirements of the Sarbanes-Oxley Act of 2002, the current listing standards of the Nasdaq Stock Market, Inc. and the Securities and Exchange Commission'sCommission’s rules and regulations.
regulations promulgated under the Sarbanes-Oxley Act of 2002 as set forth below.
The functions of the Audit Committee include:are to: (1) selection, evaluationSelect and where appropriate, replacementevaluate the performance of the Company's independent accountants;accountants. (2) pre-approvalreview the audits of auditthe financial statements of the Company and permitted non-audit services to be performed by
the independent accountants; (3) review of the scope of the audit; (4)
reviewing,(3) review with the independent accountants the corporate accounting and financial reporting practices and policies and recommendingrecommend to whom reports should be submitted within the Company; (5) reviewing the final report of(4) review with the independent accountants; (6)
reviewingaccountants their final report; (5) review with the internal and independent accountants overall accounting and financial controls; and (7) being(6) be available to the independent accountants and management for consultation purposes. The Audit Committee is currently comprised of three members: Messrs. Rieck Sove (Chairman), Zemenick and Vyas. The Board of Directors has determined that each of the members of the Audit Committee, both currently and after the 2010 Annual Meeting of Stockholders, is independent as defined by the Nasdaq Stock Market, Inc. listing standards andunder the rules of the Securities and Exchange Commission. Mr. Rieck has been determined to be an Audit Committee financial expert as defined in Item 401407 ofRegulation S-K promulgated under the Exchange Act. The Board of Directors has adopted a written charter for the Audit Committee.Committee, which was revised and restated as of July 8, 2010. The report of the Audit Committee to the Stockholders is included in this Proxy Statement under the heading "Report“Report of the Audit Committee."
”
The functions of the Compensation Committee are to review and recommend to the Board of Directors annual salaries and bonuses for all executive officers of the Company, to review and recommend to the Board of Directors compensation for the Directors, to review and recommend to the Board of Directors the terms and conditions of all employee benefit plans or changes thereto and to administer the Company'sCompany’s stock option plans. While the Chief Executive Officer of the Company may make recommendations regarding such salaries, compensation and terms and conditions, the Compensation Committee reviews any such recommendations independently and is responsible for making final recommendations to the full Board of Directors. Messrs. Chen, RieckZemenick (Chairman), Rieck, and ZemenickChen are members of the Compensation Committee. The Board of Directors has determined that each of the members of the Compensation Committee is independent under the listing standards of the Nasdaq Stock Market, Inc.
The functions of the Nominating Committee are toshall include (1) review and recommend to the Board of Directors the size and composition of the Board of Directors and a slate of nominees for each election of members to the Board of Directors; (2) review and recommend changes to the number, classification and term of directors; (3) identify and recommend to the Board of Directors candidates to fill appointments to Board committees; (4) develop, assess and make recommendations to the Board of Directors concerning appropriate corporate governance policies; (5) to identify and recommend to the Board of Directors candidates to fill a vacancy in the offices of President and Chief Executive; and (6) to review nominations by stockholders with regard to the nomination process and to establish the procedures by which stockholder candidates will be considered. The members of the Nominating Committee are Messrs. ChenVyas (Chairman), VyasChen and Zemenick. The current Board of Directors has determined that each of the members of the Nominating Committee is independent under the Nasdaq Stock Market, Inc. listing standards.
In evaluating and determing whether to recommend a person as a candidate for election as a director,Director, the Nominating Committee'sCommittee’s criteria reflects the requirements of the recently adopted Nasdaq rules with respect to
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independence as well as the following factors: the needs of the Company with respect to the particular talents and experience of its directors; personal and professional integrity of the candidate; the level of educationand/or business experience of the candidate; broad-based business acumen of the candidate; the candidate'scandidate’s level of understanding of the Company'sCompany’s business and the electronic manufacturing services industry; the candidate'scandidate’s abilities for strategic thinking and willingness to share ideas; and the Board of Directors'Directors’ need for diversity of experiences, expertise and background. The Committee nominating will use these criteria to evaluate all potential nominees.
The Company does not have a stand-alone diversity policy, but in considering whether to recommend any director nominee, including candidates recommended by stockholders, the Nominating Committee will consider the factors above, including the candidate’s diversity of experiences, expertise and background. The Nominating Committee does not assign specific weights to particular criteria, and no particular criterion is necessarily applicable to all prospective nominees. The Company believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant mix of experience, knowledge and abilities that will allow the Board of Directors to fulfill its responsibilities.
The Nominating Committee will consider proposed nominees whose names are submitted to it by stockholders. The Nominating Committee has not adopted a formal process for that purpose because it believes that the 6
Committee'snominating Committee’s process for considering information has been and remains adequate. Historically, stockholders have not proposed any nominees. The Nominating Committee intends to review periodically whether a formal process should be adopted. To be considered, all stockholder nominations must comply with the notice provisions of the Company'sCompany’s by-laws, which generally require that such notice be received by the Secretary of the Company not less than 60 days and not more than 90 days prior to a regularly scheduled annual meetingAnnual Meeting of stockholders,Stockholders, or within 10 days after receipt of notice of an annual meetingAnnual Meeting of stockholdersStockholders if the date of such meeting has not been publicly disclosed within 70 days prior to the meeting date.
The Board of Directors held eight10 meetings either in person or by telephone conference during the fiscal year ended April 30, 2007.2010. The Compensation Committee held five meetings1 meeting in person or by telephone conference and the Audit Committee held eight5 meetings in person or by telephone conference during the fiscal 2007.year 2010. The Nominating Committee held one meeting during the fiscal 2007.year 2010. All directors attended at least 75% of the meetings of the board and each of the committees of which they were members. The Company has a policy of encouraging all directors to attend the annual meetingAnnual Meeting of stockholders.Stockholders. All directors attended the Company's 2006 annual meetingCompany’s 2009 Annual Meeting of stockholders.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Stockholders.
Board Leadership Structure and Role in Risk Oversight
John P. Chen is the non-executive Chairman of the Board of Directors, and Gary R. Fairhead is the President and CEO. The Board of Directors believes that separating these roles enables Mr. Fairhead to run the Company with minimum distraction while the Chair leads the Board of Directors and advises the CEO.
Stockholder Communications with the Board of Directors
Stockholders can contact the Board of Directors or any of the individual directors by contacting: Franklin D. Sove, Chairman of the Board,Henry J. Underwood, Corporate Counsel, Howard & Howard Attorneys PLLC, by regular mail at 2201 Landmeier Road, Elk Grove Village,200 South Michigan Avenue, Chicago, IL 60007.60604. Inquiries will be reviewed, sorted and summarized by the ChairmanCorporate Counsel of the Board of Directors before they will be forwarded to the Board of Directors or to an individual director.
COMPENSATION OF DIRECTORS
Compensation of Directors
The Company pays non-employee directors $2,000$2,500 per month. Directors who serve on the Audit Committee are paid an additional $1,250$1,500 per month. Directors who serve on the Compensation Committee or the Nominating Committee are paid an additional $250 per month per committee. The Chairman of the Board receives monthly the greater of $4,000 or the amount paid to the most highly compensated non-employee director. The directors voluntarily reduced the above compensation scale by 20 percent beginning February 2009 due to the Company’s cost reduction program in response to the downturn in the economy. Due to the improvement in the Company’s financial
10
performance, the directors were paid back 95% of the 2010 fee reduction which was initated in February 2009. Effective July 2010, the monthly director fees were reinstated at the regular compensation scale set forth above.
In addition, under the 2000 Directors'Directors’ Stock Option Plan, non-employee directors received a grant of options to acquire 7,500 shares of Common Stockcommon stock at each of the September 2000, December 2001 and September 2002 annual stockholders' meetings.Annual Stockholders’ Meetings. Such options are exercisable for ten years from the respective date of grant at a price based on the price of the Common Stockcommon stock on the respective grant dates. In addition, under the 2004 Directors'Directors’ Stock Option Plan, non-employee directors received a grant of options to acquire 5,000 shares of Common Stockcommon stock at the September 2004 and September 2005 annual stockholders' meeting.Annual Stockholders’ Meeting. Such options are exercisable for ten years from the respective date of grant at a price based on the price of the Common Stockcommon stock on the respective grant dates.
7
EXECUTIVE COMPENSATION
Set forth below is information on the compensation of the Company’s Chief Executive Officer and its two other most highly compensated Named Executive Officers who served in such capacities during fiscal year 2010 based on total compensation for the last completed fiscal year. In view of the depressed economic environment and the Company’s reduced profitability during late 2008 and much of calendar year 2009, the Named Executive Officers (together with all the other officers and non-union U.S. employees of the Company) participated in salary reductions which took effect on February 1, 2009, and no bonuses were awarded during fiscal year 2009. In light of the Company’s improved financial performance during fiscal year 2010, all non-union U.S. employees received a partial repayment of those salary reductions and the Named Executive Officers received in the aggregate repayments of $47,267. Salaries of all non-union employees, including Named Executive Officers, remained at the reduced levels throughout fiscal year 2010. At the end of fiscal year 2010, the Company awarded bonuses to all of its non-union U.S. employees. Bonuses earned in fiscal year 2010 and paid to Named Executive Officers in fiscal year 2011 are listed in the following summary compensation table.
SUMMARY COMPENSATION TABLE
The individuals listed in the following table are referred to as our "Named“Named Executive Officers"Officers” throughout this proxy statement. The following table sets forth a summary of all compensation paid by the Company for its fiscal years ended April 30, 2007, 20062010 and 20052009 to the Company'sCompany’s Named Executive Officers:
| Annual Compensation | All Other | Total | ||||||||||||||||||
| Salary | Bonus | Compensation | Compensation | |||||||||||||||||
Name and Principal Position | ($) | ($) | (2)($) | ($) | ||||||||||||||||
| Gary R. Fairhead | 2010 | 150,000 | 45,000 | (1) | 19,993 | 214,993 | ||||||||||||||
| President and Chief Executive Officer | 2009 | 188,349 | 0 | 2,184 | 190,533 | |||||||||||||||
| Rajesh B. Upadhyaya | 2010 | 156,000 | 40,000 | (1) | 17,700 | 213,700 | ||||||||||||||
| Executive Vice President, West Coast | 2009 | 182,450 | 0 | 2,522 | 164,972 | |||||||||||||||
| Operations since 2005. Mr. Upadhyaya was the Vice President of the Fremont Operation from 2001 until 2005. | ||||||||||||||||||||
| Gregory A. Fairhead | 2010 | 153,600 | 40,000 | (1) | 15,375 | 208,975 | ||||||||||||||
| Executive Vice President and Assistant | 2009 | 183,899 | 0 | 2,139 | 186,038 | |||||||||||||||
| Secretary. Gregory A. Fairhead has been Executive Vice President since February 2000 and Assistant Secretary since 1994. Mr. Fairhead was Vice President — Acuna Operations for the Company from February 1990 to February 2000. Gregory A. Fairhead is the brother of Gary R. Fairhead | ||||||||||||||||||||
| (1) | Represents bonus earned in fiscal 2010 and | |
| (2) | Represents 21 weeks of salary paybacks for wage reductions implemented in February 2009. Includes the match and |
11
Employment Contracts, Termination of Employment and paid in fiscal 2008.
(2) Represents bonus earned in fiscal 2006 and paid in fiscal 2007.
(3) Represents bonus earned in fiscal 2005 and paid in fiscal 2005 and 2004.
(4) In fiscal 2006 30,000, 27,500, 25,000, 25,000, and 22,500 stock options
were granted to Gary R. Fairhead, Gregory A. Fairhead, Linda K. Blake,
Daniel P. Camp and Raj B. Upadhyaya, respectively. The Company adopted
Financial Accounting Standards Board, Share-Based Payment ("SFAS 123(R)")
on May 1, 2006 in fiscal year 2007 and implemented the new standard
utilizing the modified prospective application transition method.
Accordingly, there was no compensation expense recorded for the fiscal
2006 stock option grants.
(5) Represents the match and contributions to the Company's 401(k) plan made
by the Company.
(6) Represents bonus earned in conjunction with the Company's purchaseChange of SMT
Unlimited L.P. ("SMTU") in the amount of $51,812, $103,897 and $85,677 in
fiscal 2007, 2006 and 2005, respectively.
GRANTS OF PLAN-BASED AWARDS TABLE
There were no options or stock appreciation rights granted to Named
Executive Officers of the Company in fiscal 2007.
8
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
The following table sets forth certain information with respect to each
Named Executive Officer of the Company concerning the exercise of options during
the fiscal year ended April 30, 2007, as well as any unexercised options held as
of the end of such fiscal year. The Company has not granted any stock
appreciation rights.
OPTIONS EXERCISES AND STOCK VESTED TABLE
There were no options exercised or vesting of options during fiscal year
ended April 30, 2007.
PENSION BENEFITS TABLE
The table "PENSION BENEFITS" has been omitted because we have no
compensation information to report in that table.
NONQUALIFIED DEFERRED COMPENSATION TABLE
The table "NONQUALIFIED DEFERRED COMPENSATION" has been omitted because we
have no compensation information to report in that table.
DIRECTOR COMPENSATION TABLE
9
EQUITY COMPENSATION PLAN INFORMATION
The following tables provides information as of the fiscal year ended April
30, 2007 with respect to shares of Common Stock that may be issued under the
Company's existing equity compensation plans, as detailed below:
- --------
* Not applicable.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
Control Agreements
The Company adopted an Amended and RestatedChange-in-Control Severance Payment Plan on May 30, 2002 (the "CIC Plan"“CIC Plan”), which covers Named Executive Officers and certain other officers of the Company (each a "CIC Participant"“CIC Participant”). Under the terms of the CIC Plan, each CIC Participant is entitled to the payment of severance pay in the event such CIC Participant'sParticipant’s employment with the Company is involuntarily terminated within twenty-four months of a change of control of the Company. The amount of severance pay to which a CIC Participant may be entitled under the CIC Plan is a function of the value of the common stock of the Company as of the date on which a change in control of the Company takes place.
In general, for purposes of the CIC Plan, a change of control will be deemed to have occurred when (a) any entity, person or group other than Cyrus Tang or his affiliates, acquires more than thirty percent of the outstanding stock entitled to vote for directors of the Company, (b) as a result of or in connection with certain corporate transactions identified in the CIC Plan, the identity of a majority of the members of the Board of Directors immediately before such transaction changes immediately after the transaction, (c) the merger, consolidation, or share exchange of the Company, or (d) a sale of all or substantially all of the Company'sCompany’s assets. In general, a CIC Participant'sParticipant’s employment will be deemed to have been involuntarily terminated under the CIC Plan in the event of such employee'semployee’s termination by the Company for a reason other than (w) for cause (as defined in the Plan), (x) death, (y) disability, or (z) that employee'semployee’s voluntary retirement or resignation except on account of the reasons set forth in the agreementCIC Plan (which in general would result in a constructive discharge).
Disputes concerning the CIC Plan and benefits under the CIC Plan are
subject to arbitration.
The CIC Plan provides for automatic reduction of the amounts to be paid out under the plan in the event such amounts would constitute "parachute payments"“parachute payments” under the Internal Revenue Code. Payments under the CIC Plan are also subject to an aggregate cap equal to 15% of the market value of the Company'sCompany’s outstanding capital stock on such date in the event the employment of one or more of the CIC Participants is terminated voluntarily or involuntarily within seven days after thechange-in-control.
10
POTENTIAL SEVERANCE PAYMENTS UPON CHANGE-IN-CONTROL
Potential Severance Payments uponChange-In-Control
The following table describes approximate potential severance payments under the CIC Plan to which the Named Executive Officers would be entitled uponchange-in-control of the Company, assuming that the change in control of the Company occurred on April 30, 20072010, that all participants actually participated in the severance payment, and that our common stock is valued at $9.44,$6.13, which was the closing market price for our common stock on April 30, 2007.2010. The actual amount of payments can only be determined at the time of a change-in-
controlchange-in-control and will vary from the estimated amounts in the table below.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
| Gary R. | Rajesh B. | Gregory A. | ||||||||||
| Fairhead | Upadhyaya | Fairhead | ||||||||||
| Change-In-Control Payment | $ | 412,714 | $ | 398,182 | $ | 371,810 | ||||||
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
The Compensation Committee duringfollowing table sets forth certain information with respect to each Named Executive Officer of the 2007Company concerning any unexercised options held as of the end of such fiscal year. The Company has not granted any stock appreciation rights. No options were exercised or granted in fiscal year was comprised2010.
| Number of | Number of | |||||||||||||||
| Securities | Securities | |||||||||||||||
| Underlying | Underlying | |||||||||||||||
| Unexercised | Unexercised | Option | ||||||||||||||
| Options | Options | Exercise | Option | |||||||||||||
| (#) | (#) | Price | Expiration | |||||||||||||
Name | Exercisable | Unexercisable | ($) | Date | ||||||||||||
| Gary R. Fairhead | 30,000 | 0 | 9.17 | 9/15/15 | ||||||||||||
| Rajesh B. Upadhyaya | 22,500 | 0 | 9.17 | 9/15/15 | ||||||||||||
| Gregory A. Fairhead | 29,150 | 0 | 2.20 | 2/12/12 | ||||||||||||
| 27,500 | 0 | 9.17 | 9/15/15 | |||||||||||||
12
DIRECTOR COMPENSATION TABLE
| Fees | ||||||||
| Earned or | ||||||||
| Paid in | ||||||||
| Cash | Total | |||||||
Name | ($) | ($) | ||||||
| Thomas W. Rieck | 45,000 | 45,000 | ||||||
| Dilip S. Vyas | 42,500 | 42,500 | ||||||
| John P. Chen | 38,400 | 38,400 | ||||||
| Carl A. Zemenick | 38,400 | 38,400 | ||||||
The Company did not issue stock grants or stock option grants to the Board of Messrs. Chen, Rieck, and Zemenick. None of the members of the Compensation
Committee has ever been an officer or employee of the Company.Directors during fiscal year 2010. No Compensation
Committee interlocking relationships exist as to Messrs. Chen, Rieck and
Zemenick.
11
options were exercised in fiscal year 2010.
13
REPORT OF THE AUDIT COMMITTEE
The functions of the Audit Committee include: (1) selection, evaluation,
and where appropriate, replacement of the independent accountants; (2) pre-
approval of audit and permitted non-audit services to be performed by the
independent accountants; (3) review of the scope of the audit; (4) reviewing,
with the independent accountants, the corporate accounting practices and
policies and recommending to whom reports should be submitted within the
Company, (5) reviewing the final report of the independent accountants (6)
reviewing accounting controls, and (7) being available to the independent
accountants and management for consultation purposes. The Audit Committee is
comprised of three members Messrs. Rieck, Sove (Chairman) and Vyas. The Board of
Directors has determined that each of the members is independent as defined by
the rules of the Securities and Exchange Commission and under the Nasdaq Stock
Market Inc. listing standards. Mr. Rieck has been determined to be an Audit
Committee financial expert as defined in Item 401 of Regulation S-K. The Board
of Directors has adopted a written charter for the Audit Committee, a copy of
which is accessible at the Company's web site, www.sigmatronintl.com.
The Audit Committee has reviewed, and discussed the audited financial statements with management, and discussed with the independent auditorspublic accountants the matters required to be discussed by Statement on Auditing Standards (SAS) NoNo. 61 (Codification of Statements on Auditing Standards, AU sec.§ 380), as the same has been modified or supplemented. The Audit Committee has received the written disclosures and the letter from the independent public accountants required by Independence Standards Board Standard NoNo. 1, as the same has been modified or supplemented, and has discussed with the independent public accountants the independent accountants'public accountants’ independence. Based on the review and discussions referred to herein, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company'sCompany’s Annual Report onForm 10-K for the last fiscal year for filing with the Securities and Exchange Commission.
THIS REPORT IS SUBMITTED BY THE MEMBERS OF THE COMMITTEE.
Franklin D. Sove (Chairman)
Thomas W. Rieck
Dilip S. Vyas
12
STOCK PRICE PERFORMANCE GRAPH
The following performance graph compares
This report is submitted by the percentage change in the
cumulative total stockholder return on the Company's Common Stock during the
period from May 2003 through April 2007 with the cumulative total return on (i)
a group consistingmembers of the Company's peer corporations on a line-of-business (the
"Peer Group") and (ii) the Nasdaq Composite Index (Total Return). The comparison
assumes $100 was invested on May 1, 2002 in the Company's Common Stock, the Peer
Group (allocated equally among each of the Peer Group members), and the Nasdaq
Composite Index and assumes reinvestment of dividends, if any. The Peer Group
consists of IEC Electronics Corp., Nortech Systems Inc., SMTEK International,
Inc. (included through 2004; acquired by CTS Corp in 2005), and Simclar Inc.
(formerly known as Techdyne, Inc.)
Comparison of five year cumulative total among SigmaTron International,
Inc., the Peer Group, and the Nasdaq Composite Index (Total Return).
COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN
(PERFORMANCE GRAPH)
TOTAL RETURN TO SHAREHOLDERS
(INCLUDES REINVESTMENT OF DIVIDENDS)
13
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
Following is the 2007 Compensation Discussion and Analysis, which is a
discussion of the Company's executive compensation programs and policies written
from the perspective of how the Compensation Committee and management view and
use such policies and programs. Given the Compensation Committee's role in
providing oversight to the design of those programs and policies, and in making
specific compensation decisions for Named Executive Officers (those individuals
identified in the Summary Compensation Table on page 8) and other key employees
using those policies and programs, the Compensation Committee initiated
preparation of the Compensation Discussion and Analysis, reviewing successive
drafts of the document, and then participated with management in finalizing the
document. After the Committee discussed the Compensation Discussion and Analysis
with management, the Compensation Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this proxy statement.
Committee.
Thomas W. Rieck (Chairman)
John Chen
Dilip S. Vyas
Carl A. Zemenick
2007 COMPENSATION DISCUSSION AND ANALYSIS
General Philosophy. We compensate our Named Executive Officers primarily
through a combination of base salary and bonus and, secondarily, depending upon
availability, equity compensation, in an effort to be competitive with
comparable employers and, at the same time, to align management's incentives
with the long-term interests of our stockholders. At the senior-most levels,
incentive compensation is heavily-weighted on Company-wide performance based
primarily upon a return on invested assets. At lower levels, incentive
compensation is to reward the achievement of specific operational goals within
areas under the control of the relevant employees, although Company-wide
performance is also a factor.
Base Salaries. We attempt to set salaries competitive with salaries paid
to executives with similar responsibilities at comparable electronic
manufacturing service companies. We make some industry-related comparisons
including companies referenced on the Stock Price Performance Graph on page 13;
we do not presently use any other market data, nor do we presently engage any
compensation specialists. We are mindful of the differing levels of competition
for employees in our various geographic locations. Company-wide cost-of-living
increases are generally made annually.
Bonuses. We award performance bonuses based primarily upon overall Company
performance, on specific location performance, and on individual performance.
Dilip S. Vyas
Carl A. Zemenick
14
MISCELLANEOUS
The performance bonus is entirely discretionary. There are no specific
performance objectives other than to continuously increase Company
profitability. Our wide geographic footprint, the relatively new start-up
operations in China, Tijuana and Hayward, and fluctuating profitability (for
various reasons) make it difficult to establish Company-wide specific
performance objectives at this time. The Company informally refers to a return
on invested assets benchmark when considering performance bonuses, the general
concept being that performance bonuses should only be awarded after stockholder
value has been enhanced. When in our opinion performance bonuses haven't been
earned we sometimes award a retention payment to retain and incentivize key
employees who we believe are integral to the Company's success. We usually
require that such a retention payment be repaid in the event the key employee
voluntary terminates employment within a period of time after receipt of the
award.
Equity Compensation. Historically, we have awarded qualified stock options
across-the-board to Company employees after fiscal year end. As of April 30,
2007, there are only 53,464 options available to grant. At the present time the
Company is not planning to increase the number of options available to grant.
These options are generally used for two purposes: first, they are informally
reserved for award to new higher-level employees in an effort to induce them to
join the Company and to immediately align their interests with those of the
stockholders; and second, when available, options are granted to key employees
as incentive compensation based upon their salary level, performance, potential
and impact on Company performance. The exercise price of all options granted by
the Company in the 2007 fiscal year has been the closing price of the Company's
stock on the date of grant, and fair market value is based upon that price. The
timing of the grants is not coordinated with the release of material non-public
information. Those option grants customarily vest incrementally over a three to
five year period. The
14
Company adopted SFAS 123(R) on May 1, 2006 and implemented the new accounting
standard for stock options utilizing the modified prospective application
transition method. As of April 30, 2007, there was approximately $68,500 of
unrecognized compensation cost related to the Company's stock option plans. This
compensation cost is being amortized over a three year period on a straight line
basis.
Other Benefits. Named Executive Officers participates in the Company's
other benefit plans on the same terms as other employees. These plans include
group medical and dental insurance, voluntary life and disability insurance, and
a 401(k) plan, to which the Company annually matches employee contributions to
$300 per employee. Relocation and other benefits are individually negotiated
when they occur.
Change in Control Severance Payment Plan. The Company adopted an Amended
and Restated Change-in-Control Severance Payment Plan on May 30, 2002 (the "CIC
Plan"), which covers Named Executive Officers and certain other offices of the
Company. The CIC Plan is described in detail elsewhere in this Proxy Statement.
Relative to the overall value of the Company, these potential change in control
benefits are relatively minor and are capped as a group. We believe that the
benefits under the CIC Plan are consistent with the general practice among
comparable employers, although we have not conducted a study to confirm this.
Board Process. The President and Chief Executive Officer meets
periodically with the Compensation Committee throughout the year on various
compensation issues. The President and Chief Executive Officer, keeping in mind
the Company's compensation philosophy and practice, makes the initial bonus and
stock option, if any, and other benefit change recommendations to the
Compensation Committee. Thereafter the Compensation Committee meets to review
the recommendations, separately and with the President and Chief Executive
Officer. The Compensation Committee makes the recommendation for the President
and Chief Executive Officer based upon the philosophy described above. After
further deliberation, the Compensation Committee thereafter submits its
recommendations of the proposed compensation and other awards to officers and
other key employees to the entire Board of Directors which makes the final
decision on all compensation issues except for stock options, which, until May
1, 2007, was the exclusive decision of the Committee. On May 1, 2007, the Board
adopted the Compensation Committee Charter (accessible on the Company's website
www.sigmatronintl.com) which provides that the Compensation Committee will
recommend stock option awards to the entire Board, which will make the final
decision on all compensation issues.
COMPENSATION OF NAMED EXECUTIVES.
President and Chief Executive Officer -- Mr. Fairhead has been President
and Chief Executive Officer of the Company since its inception in 1990. His
total 2007 fiscal year compensation of $188,213 increased by 3.7% from the 2006
fiscal year solely for a cost-of-living increase similar to the increase granted
to most Company employees. The Committee has recommended that Mr. Fairhead not
be awarded a performance or retention bonus for fiscal years 2006 and 2007,
based on the performance of the Company consistent with Mr. Fairhead's and the
Company's pay for performance policy. Notwithstanding the non-payment of a
bonus, Mr. Fairhead remains committed to the Company's long-term prospects and
success.
Chief Financial Officer -- Ms. Blake has been Chief Financial Officer of
the Company since 1994. Her total 2007 fiscal year compensation of $162,710
increased by 27.5% from the 2006 fiscal year. Her base salary in fiscal 2007
increased 4.1% solely for a cost-of-living increase similar to the increase
granted to most Company employees. The Committee has recommended that Ms. Blake
be awarded a discretionary retention payment of $30,000 in fiscal 2007,
primarily as a result of additional responsibilities as a result of Sarbanes-
Oxley compliance and the acquisition of Able Electronics Corp. ("Able").
Executive Vice President -- Operations -- Mr. Gregory A. Fairhead joined
the Company in 1991 in charge of manufacturing, and is now Executive Vice
President -- Operations, with primary responsibility for operations in Acuna,
Mexico and Elk Grove Village, Illinois. His total 2007 fiscal year compensation
of $219,934 increased by 3% from the 2006 fiscal year. His base salary in fiscal
2007 increased approximately 3.7% solely for a cost-of-living increase similar
to the increase granted to most Company employees. The Committee has recommended
that Mr. Fairhead be awarded a discretionary retention payment of $40,000 in
fiscal 2007 because of the success of the operating units for which Mr. Gregory
Fairhead is primarily responsible.
Executive Vice President -- Hayward Operations -- Mr. Upadhyaya was an
officer of the Company's former affiliate, SMTU, located in Fremont, California.
After the remaining minority interest in SMTU was acquired by the
15
Company and SMTU was liquidated in late 2004, Mr. Upadhyaya became Executive
Vice President of Fremont Operations. After the Able acquisition and
consolidation of the Fremont and Hayward operations into a single location in
Hayward, California, Mr. Upadhyaya became Executive Vice President of Hayward
and Tijuana Operations. His total 2007 fiscal year compensation of $259,530
decreased by 18.7% from the 2006 fiscal year. Mr. Upadhyaya's total compensation
in fiscal years 2005, 2006 and 2007 included a bonus in conjunction with SMTU.
The SMTU bonus was greater in 2006 compared to 2007, resulting in a decrease in
total compensation for 2007. Mr. Upadhyaya's base salary in fiscal 2007
increased 14.7% in an effort to bring his salary consistent with salary levels
for executives with similar responsibilities in the Silicon Valley and for cost-
of-living increase similar to the increase granted to most Company employees.
The Committee has recommended that Mr. Upadhyaya be awarded a discretionary
retention payment of $30,000 in fiscal 2007 because of the increased
responsibilities for both the Hayward and Tijuana locations.
Vice President -- China Operations -- Daniel P. Camp. Mr. Camp joined the
Company as Director of Operations, Mexico, in 1994, and is now Vice President -
China Operations. His total 2007 fiscal year compensation of $183,406 increased
by 9.1% from the 2006 fiscal year. His base salary in fiscal 2007 increased 3.6%
for a cost-of-living increase similar to the increase granted to most Company
employees. The Committee has recommended Mr. Camp be awarded a discretionary
retention payment of $30,000 in fiscal 2007 because of the success of the
operating unit for which he is responsible.
CERTAIN TRANSACTIONS
There are no reportable related party transactions.
RELATED PERSON TRANSACTION POLICY
The Board has adopted a written policy addressing the Company's procedures
with respect to the review, approval and ratification of "Related Person
Transactions" that are required to be disclosed pursuant to Item 404(a) of
Regulation S-K. Related Person includes any of an Executive Officer (as defined
in Item 404(a)), director, a nominee for director, a beneficial owner of more
than 5% of any class of voting securities of the Company, and with respect to
each of them, their immediate family members. Related Person Transaction means
any transaction involving an amount in excess of $120,000 in which the Company
is a participant and in which a Related Person has or will have a direct or
indirect material interest.
To identify Related Person Transactions, each year the Company requires its
Executive Officers, directors and nominees to complete an annual questionnaire
which seeks information relating to any potential Related Person Transaction
involving themselves and their immediate family members that are known to them.
The Audit Committee will evaluate identified Related Person Transactions, which
will be approved or ratified (i) by the Audit Committee or (ii) if the Audit
Committee determines that the approval or ratification should be considered by
all of the disinterested directors, by a majority vote of the disinterested
directors. In its review of Related Person Transactions, the Audit Committee or
the disinterested directors will consider all factors that they believe are
relevant to the Related Person Transaction, including the following: (i) the
nature and extent of the Company's participation in the transaction; (ii) the
size of the transaction and the amount payable to the Related Person; (iii) the
nature of the interest of the Related Person in the transaction; (iv) whether
the transaction involves a conflict of interest or the appearance of a conflict
of interest; and (v) whether the transaction involves the provision of goods or
services to the Company that are available from unaffiliated third parties and,
if so, whether the transaction is on terms and made under circumstances that are
at least as favorable to the Company as would be available in comparable
transactions with or involving unaffiliated third parties.
MISCELLANEOUS
The Company's 2007Company’s 2010 Annual Report to Stockholders is being mailed to stockholders contemporaneously with this Proxy Statement.
COST OF SOLICITATION
All expenses incurred in the solicitation
Proposals of proxies will be borne by the
Company. In addition to the use of the mail, proxies may be solicited on behalf
of the Company by directors, officers and employees of the Company by telephone
or telecopy. The Company will reimburse brokers and others holding Common Stock
as nominees for
16
their expenses in sending proxy material to the beneficial owners of such Common
Stock and obtaining their proxies.
PROPOSALS OF STOCKHOLDERS
Stockholders
In accordance with the rules of the Securities and Exchange Commission, any proposal of a stockholder intended to be presented at the Company's 2008Company’s 2011 Annual Meeting of Stockholders must be received by the Secretary of the Company before April 17, 200819, 2011 in order for the proposal to be considered for inclusion in the Company'sCompany’s notice of meeting, proxy statement and proxy relating to the 20082011 Annual Meeting.
Stockholders may present proposals that are proper subjects for consideration at an annual meeting, even if the proposal is not submitted by the deadline for inclusion in the proxy statement. The stockholder must comply with the procedures specified by the Company'sCompany’s by-laws which require all stockholders who intend to make proposals at an annual stockholders meeting to send a proper notice which is received by the Secretary not less than 120 or more than 150 days prior to the first anniversary of the date of the Company'sCompany’s consent solicitation or proxy statement released to stockholders in connection with the previous year'syear’s election of directors or meeting of stockholders; provided that if no annual meetingAnnual Meeting of stockholdersStockholders or election by consent was held in the previous year, or if the date of the annual meeting has been changed from the previous year'syear’s meeting, a proposal must be received by the Secretary within 10 days after the Company has publicly disclosed the date of such meeting.
The Company currently anticipates the 20082011 Annual Meeting of stockholdersStockholders will be held September 19, 2008.
16, 2011.
The by-laws also provide that nominations for director may only be made by or at the direction of the Board of Directors or by a stockholder entitled to vote who sends a proper notice which is received by the Secretary no less than 60 or more than 90 days prior to the meeting; provided, however, thatmeeting. However, if the Company has not publicly disclosed the date of the meeting at least 70 days prior to the meeting date, notice may be timely made by a stockholder if received by the Secretary no later than the close of business on the 10th day following the day on which the Company publicly disclosed the meeting date.
Some brokers and other nominee record holders may be participating in the practice of "householding"“householding” corporate communications to stockholders, such as proxy statements and annual reports. This means that only one copy of this proxy statement may have been sent to multiple stockholders in your household. The Company will promptly deliver a separate copy of this proxy statement to you if you call or write us at the following address or phone number: SigmaTron International, Inc., 2201 Landmeier Road, Elk Grove Village, Illinois 60007, Telephone:(800) 700-9095. If you want to receive separate copies of our corporate communications to stockholders such as proxy statements and annual reports in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your broker or other nominee record holders, or you may contact the Company at the above address and phone number.
By order of the Board of Directors
LINDA
Linda K.
Secretary
Dated: August 13, 2010
15 2007
17
SIGMATRON INTERNATIONAL, INC.
2201 LANDMEIER ROAD
ELK GROVE VILLAGE, IL 60007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gary R. Fairhead, Linda K. Blake and Henry
J. Underwood, and each of them, with full power of substitution, as attorneys
and proxies to represent the undersigned at the 2007 Annual Meeting of
Stockholders of SIGMATRON INTERNATIONAL, INC. (the "Company") to be held at the
Holiday Inn located at 1000 Busse Road, Elk Grove Village, Illinois at 10:00
a.m. local time, on Friday, September 21, 2007 or at any adjournment thereof,
with all power which the undersigned would possess if personally present, and to
vote all shares of stock of the Company which the undersigned may be entitled to
vote at said Meeting as follows.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
ANNUAL MEETING OF STOCKHOLDERS OF
SIGMATRON INTERNATIONAL, INC.
SEPTEMBER 21, 2007
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSALS 2 AND 3.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
- --------------------------------------------------------------------------------
| ANNUAL MEETING OF STOCKHOLDERS OF SIGMATRON INTERNATIONAL, INC. September 17, 2010 NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting, proxy statement and proxy card are available at www.sigmatronintl.com Please sign, date and mail your proxy card in the envelope provided as soon as possible. Please detach along perforated line and mail in the envelope provided.20230300000000000000 4 091710 THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS AND “FOR” PROPOSALS 2 AND 3. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x FOR AGAINST ABSTAIN 1. Election of |
| 0 SIGMATRON INTERNATIONAL, INC. 2201 LANDMEIER ROAD ELK GROVE VILLAGE, IL 60007 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Gary R. Fairhead, Linda K. Frauendorfer and Henry J. Underwood, and each of them, with full power of substitution, as attorneys and proxies to represent the undersigned at the 2010 Annual Meeting of Stockholders of SIGMATRON INTERNATIONAL, INC. (the “Company”) to be held at the Company’s offices at 2201 Landmeier Road, Elk Grove Village, Illinois at 10:00 a.m. local time, on Friday, September 17, 2010 or at any adjournment thereof, with all power which the undersigned would possess if personally present, and to vote all shares of stock of the Company which the undersigned may be entitled to vote at said Meeting as follows. (Continued and to be signed on the reverse side) 14475 |