SCHEDULE 14A
Information Required in Proxy StatementINFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant |x|[x]
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_|[ ]
[x] Preliminary Proxy Statement
|_|[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|x|[ ] Definitive Proxy Statement
|_|[ ] Definitive Additional Materials
|_|[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
EURO TECH HOLDINGS COMPANY LIMITED
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|x|[x] No fee required.
|_|[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set(set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
|_|[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by Registration Statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: _____________________________________________________________________________________________
2) Form, Schedule or Registration Statement No.: _________________________________________________
3) Filing Party: _________________________________________________________________________________________________________________
4) Date Filed: _____________________________________________________________________________________________________________________
EURO TECH HOLDINGS COMPANY LIMITED
18/F GEE CHANG HONG CENTRE
65 WONG CHUK HANG ROAD
HONG KONG
July 6, 2000
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders
of Euro Tech Holdings Company Limited which will be held on Wednesday, August 9,
2000 at 4:00 p.m., local time, at Luk Kwok Hotel, 72 Gloucester Road, Wanchai,
Hong Kong.
Only shareholders of record at 5:00 p.m. (New York time) on July 6,
2000 can vote at this meeting or any adjournments that may take place.
At the meeting, we will be asking you to re-elect seven persons to
serve on the Company's Board of Directors, approve the Company's 2000 Officers'
and Directors' Stock Option and Incentive Plan, to approve the Company's 2000
Employees' Stock Option and Incentive Plan, to increase the total number of
shares that the Company can issue from 20,000,000 to 25,000,000 shares, to
include a provision in the Company's Memorandum and Articles of Association
which are intended to strengthen the Company's ability to respond to an
unsolicited takeover bid and which may be deemed to have an anti-takeover effect
and ratify the retention of the Company's Auditors to the fiscal year to end
December 31, 2000.
In addition, you will be asked to consider and vote upon a proposal to
adjourn the annual meeting if the Company's management should determine in its
sole discretion, at the time of the annual meeting, that an adjournment is
necessary to enable it to solicit additional proxies to secure a quorum or the
approval of any of the matters identified in the notice of meeting included with
this proxy statement.
The Board of Directors recommends a vote "for" the re-election of its
seven directors, "for" approval of the two new stock option plans, "for" the
increase in the number of authorized shares, "for" the inclusion of the proposed
provision in the Company's Memorandum and Articles of Association, "for" the
ratification of the Company's Auditors, and "for" the proposal to adjourn the
annual meeting in the circumstances described above.
Included with this letter are an attached notice of meeting and proxy
statement, as well as a proxy form and copy of the Company's annual report on
Form 20F for its fiscal year ended December 31, 1999 (the "1999 Fiscal Year"),
as filed with the Securities and Exchange Commission.
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Your vote is important. Whether or not you plan to attend the annual
meeting and regardless of the size of your holdings, we encourage you to sign,
date, and mail the enclosed proxy form in the envelope provided. Your right to
vote in person at the meeting is not affected by returning the proxy form.
On behalf of the Board of Directors, officers and employees of Euro
Tech Holdings Company Limited, I would like to thank you for your continued
interest and support.
Sincerely,
T.C. Leung
Chairman of the Board and Chief
Executive Officer
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EURO TECH HOLDINGS COMPANY LIMITED
18/F Gee Chang Hong CentreGEE CHANG HONG CENTRE
65 Wong Chuk Hang Road
Hong KongWONG CHUK HANG ROAD
HONG KONG
July 6, 2000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
PLEASE TAKE NOTICETO BE HELD ON AUGUST 9, 2000
To the Shareholders of Euro Tech Holdings Company Limited:
Notice is hereby given that the 1999 Annual Meetingannual meeting of Shareholdersshareholders of Euro
Tech Holdings Company Limited (the "Company") will be held at the Luk Kwok
Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Wednesday, September 29, 1999August 9, 2000 at
4:00 P.M.p.m., local time fortime. The purpose of the following purposes:meeting is to:
1. to elect seven persons to serve on the Company's Board of Directors until the
next Annual Meetingannual meeting of Shareholdersshareholders or until their respective successors are
duly elected and qualified as provided in the Company's Memorandum and Articles
of Association;
2. consider and vote upon the adoption of the 2000 Officers' and
Directors' Stock Option and Incentive Plan;
3. consider and vote upon the adoption of the 2000 Employees' Stock
Option and Incentive Plan;
4. consider and vote upon the Amendment to the Company's Memorandum and
Articles of Association to increase the number of authorized shares that the
Company may issue from 20,000,000 to 25,000,000;
5. consider and vote upon the inclusion of provisions in the Company's
Memorandum and Articles of Association which creates a class of preferred stock,
sometimes referred to as "blank-check preferred stock," for which the Board of
Directors will have the right to fix the rights, terms and preferences at the
time of issuance, with no further action on the part of the shareholders (the
"Blank-Check Preferred Stock Provisions");
6. confirm and ratify the retention of Arthur, Andersen & Co., HongHonk
Kong, as the Company's independent auditors for the fiscal year to end December
31, 1999;2000;
7. consider and 3.vote upon a proposal to adjourn the annual meeting if
the Company's management should determine in its sole discretion, at the time of
the special annual
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meeting, that an adjournment is necessary to enable it to solicit additional
proxies to secure a quorum or the approval of any of the matters identified in
this notice of meeting; and
8. transact suchany other and further business as may properly come before the meeting or any adjournment(s) thereof.
Shareholders of record at 5:00 p.m. (New York time) on September 3, 1999,
are entitled to notice of and to vote at theannual meeting.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY FORM AND RETURN IT
PROMPTLY TO THE COMPANY IN THE ENVELOPE PROVIDED. RETURNING THE PROXY FORM WILL
NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
By Order of Thethe Board of Directors
Jerry Wong, Secretary
September 3,-2-
TABLE OF CONTENTS
-----------------
QUESTIONS AND ANSWERS ABOUT THE PROXY STATEMENT AND ANNUAL MEETING..................6
PROPOSAL 1.........................................................................10
ELECTION OF DIRECTORS..............................................................10
VOTE REQUIREMENT................................................................10
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY......11
EXECUTIVE COMPENSATION..........................................................13
COMPENSATION OF DIRECTORS.......................................................13
PENSION PLAN....................................................................13
EMPLOYMENT AGREEMENT - T.C. LEUNG...............................................13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................................14
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS....................................15
MANAGEMENT OPTION PLAN..........................................................16
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT IS NOT REQUIRED...............17
PROPOSALS 2 AND 3..................................................................18
APPROVAL OF 2000 OFFICERS'AND DIRECTORS'STOCK OPTION AND INCENTIVE PLAN AND
APPROVAL OF THE 2000 EMPLOYEES'STOCK OPTION AND INCENTIVE PLAN.....................18
VOTE REQUIREMENT................................................................18
ADMINISTRATION..................................................................18
SHARES SUBJECT TO THE PLANS.....................................................19
ELIGIBILITY.....................................................................19
GRANT OF OPTIONS................................................................20
OPTION PRICE....................................................................20
EXERCISABILITY OF OPTIONS.......................................................20
EXPIRATION OF OPTIONS; EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICE...........21
PAYMENT OF EXERCISE PRICE FOR OPTIONS...........................................21
TRANSFER OF OPTIONS.............................................................21
INDEMNIFICATION OF THE COMMITTEE................................................22
AMENDMENT AND DURATION..........................................................22
NEW PLAN BENEFITS...............................................................22
PROPOSAL 4.........................................................................23
PROPOSAL TO AMEND THE COMPANY'S MEMORANDUM AND ARTICLES OF ASSOCIATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES FROM 20,000,000 SHARES TO 25,000,000
SHARES.............................................................................23
PRINCIPAL REASONS FOR INCREASE IN AUTHORIZED SHARES.............................23
VOTE REQUIREMENT................................................................24
PROPOSAL 5.........................................................................24
PROPOSED INCLUSION OF ANTITAKEOVER PROVISIONS IN THE COMPANY'S MEMORANDUM AND
ARTICLES OF ASSOCIATION............................................................24
PRINCIPAL REASONS FOR THE ANTITAKEOVER CHARTER PROVISIONS.......................25
POTENTIAL ANTITAKEOVER EFFECTS OF THE BLANK CHECK PREFERRED STOCK...............25
VOTE REQUIREMENT................................................................26
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PROPOSAL 6.........................................................................27
APPROVAL OF AUDITORS...............................................................27
PROPOSAL 7.........................................................................28
ADJOURNMENT OF ANNUAL MEETING......................................................28
SHAREHOLDER PROPOSALS AND NOMINATIONS..............................................29
FINANCIAL STATEMENTS...............................................................29
OTHER MATTERS......................................................................29
APPENDICES
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Appendix A...........................................2000 Officers' and Directors'
Stock Option and Incentive Plan
Appendix B...........................................2000 Employees' Stock Option and
Incentive Plan
Appendix C...........................................Amendments to the Company's
Memorandum and Articles of Association
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EURO TECH HOLDINGS COMPANY LIMITED
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 9, 2000
July 6, 2000
The Board of Directors is soliciting proxies for this annual meeting of
shareholders. This proxy statement contains important information for you to
consider when deciding how to vote on the matters brought before the meeting.
PLEASE READ IT CAREFULLY.
The Board has set August 9, 2000 as the record date for the meeting.
Shareholders who owned the Company's Ordinary Shares on that date are entitled
to attend and vote at the meeting, with each share entitled to one vote. There
were 2,481,840 Ordinary Shares of Company's outstanding on June 30, 2000.
Voting materials, which include the proxy statement, proxy form, and
the Company's 1999 annual report on Form 20F, are being mailed to shareholders
on or about July 6, 2000.
In this proxy statement:
- "we" and the "Company" mean Euro Tech Holdings Company Limited.
- "2000 Officers' and Directors' Plan" means the 2000 Officers'
and Directors' Stock Option and Incentive Plan.
- "2000 Employees' Plan" means the 2000 Employees' Stock Option
and Incentive Plan.
- "Antitakeover Charter Provisions" means the Blank-Check
Preferred Stock Provisions, as more fully described under
Proposal 5 of this proxy statement.
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QUESTIONS AND ANSWERS ABOUT THE PROXY STATEMENT AND ANNUAL
MEETING
Q: WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY FORM?
A: You are receiving a proxy statement and proxy form from us because you
own Ordinary Shares of Euro Tech Holdings Company Limited. This proxy
statement describes issues on which we would like you, as a
shareholder, to vote. It also gives you information on these issues so
that you can make an informed decision.
When you sign the proxy form, you appoint T.C. Leung and Jerry Wong as
your representatives at the meeting. T.C. Leung and Jerry Wong will
vote your shares, as you have instructed them in the proxy form, at the
meeting. This way, your shares will be voted whether or not you attend
the annual meeting. Even if you plan to attend the meeting, it is a
good idea to complete, sign and return your proxy form in advance of
the meeting just in case your plans change.
If you have signed and returned the proxy form and an issue comes up
for a vote at the meeting that is not identified on the proxy form,
T.C. Leung and Jerry Wong will vote your shares, under your proxy, in
accordance with their best judgment.
Q: WHAT MATTERS WILL BE VOTED ON AT THE MEETING?
A: You are being asked to vote on the re-election of the seven members of
the Company's Board of Directors, adoption of the 2000 Officers' and
Directors' Plan and the 2000 Employees' Plan, an increase in the number
of authorized shares that the Company may issue from 20,000,000 to
25,000,000 and the inclusion of the Antitakeover Charter Provision in
the Memorandum and Articles of Association of the Company, ratification
of the Company's appointment of its Auditors and a proposal to adjourn
the annual meeting under certain circumstances in the discretion of the
Company's management. We have described all of these matters more fully
in the attached proxy statement.
Q: HOW DO I VOTE?
A: You may vote either by mail or in person at the annual meeting. To vote
by mail, complete and sign the enclosed proxy form and mail it in the
enclosed, prepaid addressed envelope. If you mark your proxy form to
indicate how you want your shares voted on each proposal, your shares
will be voted as you instruct.
If you sign and return your proxy form but do not mark the form to
provide voting instructions, the shares represented by your proxy form
will be voted "for" the election of seven persons as the Company's
directors, "for" an Amendment to the Company's Memorandum and Articles
of Association, to increase the number of shares that the Company is
authorized to issue from 20,000,000 to 25,000,000 "for" the 2000
Officers' and Directors' Plan and the 2000 Employees' Plan, "for" the
inclusion of the Antitakeover Charter Provision in the Memorandum and
Articles of Association of the
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Company, "for" the ratification of the Company's Auditors and "for" the
proposal to adjourn the annual meeting under certain circumstances in
the discretion of the Company's management.
If you want to vote in person, please come to the meeting. We will be
passing out written ballots to anyone who wants to vote at the meeting.
Please note, however, that if your shares are held in the name of your
broker (or in what is usually referred to as "street name"), you will
need to arrange to obtain a proxy from your broker in order to vote in
person at the meeting.
Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY FORM?
A: It means that you have multiple holdings reflected in our stock
transfer records and/or in accounts with stockbrokers. Please sign and
return ALL proxy forms to ensure that all your shares are voted.
Q: IF I HOLD SHARES IN THE NAME OF A BROKER, WHO VOTES MY SHARES?
A: We provide each brokerage firm listed in our records as an owner of our
common stock with a sufficient number of copies of this proxy statement
and annual report so that the brokerage firm can forward copies to the
actual owners of the shares. If you received this proxy statement from
your broker, your broker should have provided you with instructions for
giving your broker directions as to how to vote your shares. It will
then be your broker's responsibility to vote your shares for you in the
manner you direct.
Under the rules of various national and regional securities exchanges,
brokers may generally vote on routine matters, such as the election of
directors, a proposal to adjourn a meeting in the discretion of the
Company's management and ratification of the appointment of Auditors,
but cannot vote on non-routine matters, such as the adoption of a stock
option plan, an increase in the number of authorized shares, and the
inclusion of the Antitakeover Charter Provisions in the Company's
Memorandum and Articles of Association unless they have received voting
instructions from the person for whom they are holding shares. Thus, if
you do not give your broker instructions as to how to vote your shares,
your broker will most likely be able to vote on the proposal to adjourn
the annual meeting in the discretion of the Company's management but
will not have discretionary authority to cast a vote--whether "for" or
"against" or "abstain"--on the proposed adoption of 2000 Officers' and
Directors' Plan, the adoption of the 2000 Employees' Plan, an increase
in the number of authorized shares, and the inclusion of the
Antitakeover Charter Provisions in the Company's Memorandum and
Articles of Association. If a broker does not receive instructions from
you on how to vote particular shares on the proposed adoption of the
2000 Officers' and Directors' Plan, and/or the adoption of the 2000
Employees' Plan, an increase in the number of authorized shares, the
inclusion of the Antitakeover Charter Provisions in the Memorandum and
Articles of Association of the Company and your broker does not have
discretionary authority to vote on these matters, your broker will
return the proxy form to us, indicating that he or
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she does not have the authority to vote on these matters. This is
generally referred to as a "broker non-vote" and will affect the
outcome of the voting as described below, under "How Many Votes Are
Needed For Approval Of Each Proposal?"
We encourage you to provide directions to your broker as to how you
want he or she to vote your shares on each of the matters to be brought
before the annual meeting. You should do this by very carefully
following the instructions your broker gives you concerning your
broker's procedures. This ensures that your shares will be voted at the
meeting.
Q: WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY?
A: If you hold your shares in your own name, you may revoke your proxy
and change your vote at any time before the polls close at the meeting.
You may do this by:
- signing another proxy with a later date and returning that
proxy to the Company,
- sending notice to the Company that you are revoking your proxy,
or
- voting in person at the annual meeting.
You should send any later dated proxy or notice of revocation to: Euro
Tech Holdings Company Limited, c/o Euro Tech (Far East) Ltd., 18/F Gee
Chang Hong Centre, 65 Wong Chuk Hang Road, Hong Kong, ---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
ON SEPTEMBER 29, 1999
GENERAL INFORMATION
This Proxy Statement and the accompanying Notice of Annual Meeting and
proxy are being furnished in connection with the solicitation of proxies by the
Board of Directors of Euro Tech Holdings Company Limited (the "Company") for use
at the Company's Annual Meeting of Shareholders (the "Annual Meeting") to be
held on Wednesday, September 29, 1999 at the Luk Kwok Hotel, 72 Gloucester
Road, Wanchai, Hong Kong, at 4:00 P.M. local time and at any adjournments
thereof. The matters to be acted upon at the Annual Meeting are set forthAttention: Jerry
Wong, Secretary.
If you hold your shares in the Noticename of Annual Meeting. This Proxy Statement and a proxy are scheduledyour broker, you will need to
be
mailedcontact your broker to shareholders commencing on September 3, 1999.
Only holders of Common Stock of record on the booksrevoke your proxy.
Q: HOW MANY VOTES DO WE NEED TO HOLD THE MEETING?
A: A majority of the Company at 5:00
p.m. (New York time) on September 3, 1999 (the "Record Date") will beshares that were outstanding and entitled to notice of and to vote at the meeting. On August 6, 1999, there were 2,068,200
shares of Common Stockas
of the Company outstanding and approximately 11 holders
of record (the "Recordholders"). The Company believes these todate must be approximately
350 beneficial owners of the Common Stock.
On September 3, 1999, the Company declared a dividend to the
Recordholders. The dividend provides each Recordholder one (1) share of Common
Stock per five (5) shares of Common Stock held on the Record Date by the
Recordholder (the "Stock Dividend"). The Stock Dividend will be deemed effective
at the opening of business on the day after the Record Date. As a result,
calculations contained herein regarding the Company's securities do not give
effect to the issuance of the Stock Dividend.
The cost of soliciting proxies will be borne by the Company. Directors,
officers and employees of the Company may solicit proxies by telephone, telegram
or personal interview. The cost for such services is estimated at $1,000,
including expenses.
If a shareholder specifies on the accompanying proxy how shares are to be
voted, they will be voted accordingly. If the shareholder does not specify on
the proxy card how the shares are to be voted, they will be voted FOR the
election of directors, and the confirmation of the appointment of Arthur
Andersen & Co., Hong Kong as independent auditors for the Company's fiscal year
ended December 31, 1999. A shareholder may revoke a proxy by giving written
notice to the Secretary of the Company at or prior to the meeting or by voting
at the meeting.
The presence,present in person or by proxy of shareholders entitledat the meeting
in order to casthold the meeting and conduct business. This is called a
quorum.
Shares are counted as present at leastthe meeting if the shareholder either:
- is present and votes in person at the meeting, or
- has properly submitted a majoritysigned proxy form or other proxy.
Abstentions will be counted as present at the meeting. If a brokerage
firm indicates that it does not have authority to vote any of the
votes which all shareholders are entitledshares held in its name on a particular proposal, then those shares
will not be considered "entitled to cast
constitutesvote" and will not be counted as
present for purposes of determining whether there is a quorum for
the purposesconsideration of transacting business at the meeting.
Each outstanding sharethat proposal.
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Q: WHAT OPTIONS DO I HAVE IN VOTING ON EACH OF THE PROPOSALS?
A: You may vote "for," "against, " or "abstain" on each of the Company's Common Stock is entitledproposals
or "withhold authority" as to one vote onthe election of directors.
Q: HOW MANY VOTES ARE NEEDED FOR APPROVAL OF EACH PROPOSAL?
A: For each matter which maydirector nominee to be properly brought beforeelected to the Annual Meeting. EachBoard of Directors, each
director nominee must receive the affirmative vote of a simple majority
of the stock having voting powervotes of the shares entitled to vote, were voted and that did not
abstain in order to be elected as a
directorwithhold authority.
The 2000 Officers' and to ratify the appointment of the auditors for the fiscal year
ending December 31, 1999,Directors' Plan and 2000 Employees' Plan must
receive the affirmative vote of a simple majority of the stock
having voting powershares
entitled to vote, were voted and that did not abstainabstain.
Under the Company's Memorandum and Articles of Association, approval of
the amendment to the Memorandum and Articles of Association to increase
the authorized number of shares and the inclusion of the Antitakeover
Charter Provision in the Company's Memorandum and Articles of
Association requires the affirmative vote of a simple majority of the
shares entitled to vote, were voted and did not abstain.
If fewer shares of common stock are voted in favor of approval of the
Antitakeover Charter Provision than the number required for approval,
it is expected that the annual meeting will be adjourned to allow
additional time to solicit additional proxies or votes, and, at any
subsequent reconvening of the annual meeting, all proxies will be voted
in the same manner as the proxies would have been voted at the original
convening of the annual meeting (except for any proxies which have been
effectively revoked or withdrawn before the meeting is reconvened). In
order for adjournment to be allowed, the proposal relating to
adjournment must receive the affirmative vote of a simple majority of
the shares entitled to vote, were voted and did not abstain.
In order for the retention of the Company's auditors to be approved the
affirmative vote of a simple majority of the votes of the shares
entitled to vote, were voted and not abstained must be obtained.
An abstention will have the same effect as a vote "against." Broker
non-votes will not be counted as entitled to vote and will thus not
count for purposes of determining whether or not a quorum is present on
the matter. So long as a quorum is present, broker non-votes will have
no effect on the outcome of a vote.
Q: HOW ARE VOTES COUNTED?
A: Voting results will be tabulated and certified by our transfer agent,
American Stock Transfer & Trust Company.
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Q: WHERE DO I FIND THE VOTING RESULTS OF THE MEETING?
A: We will announce preliminary voting results at the meeting, and we may
issue a press release announcing those results. We will file a Report
on Form 6-K to announce the results. We will file that report with the
Securities and Exchange Commission, and you can get a copy by
contacting the Securities and Exchange Commission or through the SEC's
EDGAR system on its home page at WWW.SEC.GOV.
Q: WHO BEARS THE COST OF SOLICITING PROXIES?
A: The Company will bear the cost of soliciting proxies. In addition to
solicitations by mail, officers, directors, or employees of the Company
or its subsidiaries may solicit proxies in person or by telephone.
These persons will not receive any special or additional compensation
for soliciting proxies. The Company also required.reimburses brokerage houses
and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses for forwarding proxy and solicitation materials
to shareholders.
PROPOSAL I1
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ELECTION OF DIRECTORS
At the Annual Meeting,annual meeting, seven directors will be elected to serve until
the next Annual Meetingannual meeting of Shareholders or until each of their respective
successors has been duly elected and qualified as provided in the Memorandum and
Articles of Association.
Unless otherwise indicated on the proxy, votes pursuant to the
accompanying proxy will be cast for the election of the nominees on the proxy,
provided that, if any of the nominees named below shall become unavailable to
serve as a director prior to the meeting, the shares represented by valid
proxies shall be voted for the election of such other person as the Board may
recommend in his or her place, or the number of directors to be elected shall be
decreased. The Board of Directors has no reason to believe that any nominee will
be unable to serve.
VOTE REQUIREMENT
T.C. Leung, Jerry Wong, Nancy Wong, C.P. Kwan, Alex Sham, Adam L.
Goldberg, and Y.K. Liang have been nominated for election to the Board of
Directors and each has consented to serve as such, if elected. Each of the
nominees who has been nominated for election as a director commencing at the
conclusion of the Annual Meeting,annual meeting, is currently a director. In order to be
elected, each such nominee must receive the affirmative vote of a simple
majority of the votes of the shares entitled to vote thereon and were voted and
not abstained.withholding authority.
The enclosed proxy gives shareholders the following options: (A)option to vote for, all director nominees; (B) vote against
all director nominees; (C)or withhold authority to vote for onlyeach director nominee(s) they specify; (D) vote against only director nominee(s) they
specify;nominee.
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INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Information concerning the Directors and (E) abstain.
The directors and executive officersExecutive Officers of the Company are
as follows:
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Name Age Position
---- --- --------
T.C. Leung 55 Chairman of the Board of Directors
and Chief Executive Officer
Jerry Wong 39
NAME AGE POSITION
---- --- --------
T.C. Leung 56 Chairman of the Board of Directors and Chief
Executive Officer
Jerry Wong 41 Director and Chief Financial Officer
Nancy Wong 51 Director
C.P. Kwan 41 Director
Alex Sham 36 Director
Adam L. Goldberg 41 Director
Y.K. Liang 70 Director
and Chief Financial Officer
Nancy Wong 49 Director
C.P. Kwan 39 Director
Alex Sham 35 Director
Adam L. Goldberg 40 Director
Y.K. Liang 69 Director
Set forth below is a brief background of the executive officers and
directors based upon the information supplied by them:
T.C. LeungLEUNG has been Chief Executive Officer and Chairman of the Board
of Directors of both the Company and Far East since their inception. Before
establishing Far East, Mr. Leung was an engineer for English Electric in
England, from 1965 to 1968, and Lockheed Aircraft in Hong Kong, from 1968 to
1970. Mr. Leung also served as managing director of Eurotherm (Far East) Ltd.
between 1971 and 1992. Since 1988, Mr. Leung has also served as managing
director of Eurotherm Hong Kong. Mr. Leung received a Masters degree in Business
Administration from the University of East Asia, Macao in 1986 and is a
Chartered Engineer, a title bestowed upon a member of the Council of Engineering
Institutions in the United Kingdom.
Jerry WongJERRY WONG has served as Director and Chief Financial Officer of Far
East since 1994 and has been with Far East since 1987. Mr. Wong has been the
Chief Financial Officer and a Director of the Company since its inception. From
1985 until 1987, Mr. Wong worked for MUA Agencies Ltd., a subsidiary of a Hong
Kong publicly listed company engaged in the insurance business, as deputy
manager of its secretarial, legal and accounting department. From 1981 until
1985, Mr. Wong served as a senior accountant in Price Waterhouse-Hong Kong. He
is a Fellow of the Chartered Association of Chartered Certified Accountants in the United
Kingdom and a Certified Public Accountant in Hong Kong.
Nancy WongNANCY WONG has been a Director of the Company since its inception and a
Director of Far East, and its Personnel Manager, since 1994. Ms. Wong has been
with Far East since 1971. Ms. Wong is also Far East's Chief Representative in
China. During the last several years, Ms. Wong
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has played a pivotal role in Far East's business expansion in China. Ms. Wong
-3-
received a Bachelor of Science degree in Business Administration from the
University of East Asia, Macao in 1989.
C.P. KwanKWAN joined Far East in 1984 and has served as a Director and
Manager of its Process Equipment Department since 1991. Mr. Kwan has been a
Director of the Company since its inception. Before joining Far East, he was
employed by Haven Automation (H.K.) Ltd., a company involved in the water
treatment and process control business between 1981 and 1984.
Alex ShamALEX SHAM has been a Director of the Company since its inception. Mr.
Sham joined Far East in 1988 and has been its Sales Manager since 1993 and
became a Director of Far East in 1996. Mr. Sham received a Bachelor of Science
in Applied Chemistry from Hong Kong Baptist University in 1990. Prior to joining
Far East, Mr. Sham was employed by the Environmental Protection Department of
the Hong Kong Government from 1986 until 1988.
AdamADAM L. GoldbergGOLDBERG has been a director of the Company since February 16,
1998. Mr. Goldberg is an attorney who has maintained his own practice in New
York City since 1993. From 1989 until 1993, Mr. Goldberg was employed as a staff
attorney with the New York City Department of Housing Preservation and
Development. Mr. Goldberg is the designee of May Davis Group, Inc., the
underwriter of the Company's initial public offering.
Y.K. LiangLIANG has been a director of the Company since February 16, 1998.
Mr. Liang is a director of Wong Liang Consultants Ltd. ("Consultants") and a
member of the certified public accounting firm of Y.K. Liang & Co. ("LCO"). Mr.
Liang has been associated with both Consultants and LCO for more than the past
five years. Consultants is a general business consulting firm.
Directors of the Company serve until the next annual meeting of
shareholders of the Company and until their successors are elected and duly
qualified. Officers of the Company are elected annually by the Board of
Directors and serve at the discretion of the Board of Directors.
The Company believes that none of its directors, officers or beneficial
owners of ten percent or more of its Common Stock are required to file any
reports pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "1934 Act").
The Company had five meetingsone meeting of its Board of Directors during Fiscal
1998.1999. Messrs. Leung, Goldberg and Liang are the members of the Company's Audit
Committee. The Company presently doesAudit Committee did not have standing nominating or
compensation committees.meet during Fiscal 1999.
The Company has not had any directors resign or decline to stand for
re-election at any time during or since December 31, 1998.
There are no material legal proceedings involving any director, officer
or affiliate of the Company, owner of record or beneficially of more than five
percent of the Company's Common Stock or any associate of any of the foregoing.
-4--12-
Executive CompensationEXECUTIVE COMPENSATION
The following table sets forth certain summary information with respect
to the compensation paid by Far East for services rendered in all capacities to
Far East during Fiscal 19981999 and Fiscal 19971998 by Far East's Chairman of the Board
and Chief Executive Officer.
Summary Compensation Table
Name and Principal Position Year Salary ($) Bonus
SUMMARY COMPENSATION TABLE
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)
--------------------------- ---- ---------- ---------
T.C. Leung, Chairman of the Board of 1999 100,000 33,000
Directors and Chief Executive Officer 1998 100,000 30,000
Directors and Chief Executive Officer 1997 78,890 32,269
Compensation of Directors
COMPENSATION OF DIRECTORS
Directors of the Company do not receive compensation for their services
as directors; however, the Board of Directors may authorize the payment of
compensation to directors for their attendance at regular and specialannual meetings of
the Board and for attendance at meetings of committees of the Board as is
customary for similar companies. Directors will be reimbursed for their
reasonable out-of-pocket expenses incurred in connection with their duties to
the Company.
Pension PlanPENSION PLAN
The Company has a defined contribution pension plan for all of its
employees. Under this plan, all employees are entitled to a pension benefit
equal to 50% to 100% of their individual fund account balances at their dates of
resignation or retirement which depends on their years of services.service. The Company
is required to make specific contributions at approximately 10% of the basic
salaries of the employees to an independent fund management company. The Company
has no future obligations for the pension payment or any post-retirement
benefits beyond the annual contributions made. The independent fund management
company is responsible for the ultimate pension liabilities to those resigned or
retired employees. During the years ended December 31, 1996, 1997, 1998 and 1998,1999, the
Company made total pension contributions of approximately $53,500, $115,000, $127,000 and
$127,000,$124,000, respectively.
Employment AgreementEMPLOYMENT AGREEMENT - T.C. LeungLEUNG
T.C. Leung's services to the Company and Far East are provided pursuant
to a five year personal services agreement between the Company, Far East and Shereman
Enterprises Ltd., a management company terminating on March 14, 2002 pursuant to
which Mr. Leung will continue to serve as the Chairman of the Board of Directors
and Chief Executive Officer of the Far East and the Company. The agreement requires
that Mr. Leung devote substantially all of his business time to the affairs of
the Company and Far East. The agreement provides for the payment of $100,000 and
six percent of the Company's consolidated pre-tax income to the management
company in exchange for Mr. Leung's services during the first year of the
agreement's term with compensation past the first -5-
year to be renegotiated
annually. The agreement contains a confidentiality provision and a covenant not
to compete with the Company or Far East for a period of one year following
termination of the agreement under certain circumstances.
Stock Option Plan
In November 1996, the Board of Directors adopted the Company's 1996 Stock
Option Plan (the "1996 Stock Option Plan" or, the "Plan"). As certain net income
thresholds were not met, no options may be granted under the Plan.
Management Option Plan
The Company has authorized the issuance of 1,400,000 Options to purchase
up to an aggregate of 1,400,000 shares of Common Stock (the "Management
Options") to its officers, directors and employees in such numbers and to such
persons as the Company's Chairman of the Board and Chief Executive Officer may
direct. The Management Options became exercisable on March 14, 1998 for a term
of ten years.
The exercise price and the number of shares of Common Stock purchasable
upon exercise of any Management Options are subject to adjustment upon the
occurrence of certain events, including stock dividends, reclassification,
reorganizations, consolidations, mergers, and certain issuances and redemptions
of Common Stock and securities convertible into or exchangeable for Common Stock
excluding certain issuances of shares of the Company's Common Stock. No
adjustments in the exercise price will be required to be made with respect to
the Management Options until cumulative adjustments amount to $.05. The Stock
Dividend declared by the Company on September 3, 1999 will cause an adjustment
of the exercise price and the number of shares of Common Stock purchasable upon
exercise of the Management Options. Such adjustment will become effective at the
opening of business on September 4, 1999. As a result, the exercise price and
the number of shares of Common Stock purchasable upon exercise of the Management
Options, as listed in the table below, does not take into account the adjustment
that will be required in light of the issuance of the Stock Dividend.
In the event of any capital reorganization, certain reclassifications of
the Common Stock, any consolidation or merger involving the Company (other than
(i) a consolidation or merger which does not result in any reclassification or
change in the outstanding shares of Common Stock or (ii) the acquisition of Far
East or any other business), or sale of the properties and assets of the
Company, as, or substantially as, an entirety to any other corporation,
Management Options will thereupon become exercisable only for the number of
shares of stock or other securities, assets, or cash to which a holder of the
number of shares of Common Stock of the Company purchasable (at the time of such
reorganization, reclassification, consolidation, merger, or sale) upon exercise
of such Management Options would have been entitled upon such reorganization,
reclassification, consolidation, merger, or sale.
-6--13-
The table below shows, as to each of the executive officers and directors
of the Company and as to all executive officers and directors of the Company as
a group, the following information with respect to Management Options: (i) the
aggregate amounts of shares of Common Stock subject to Management Options; and
(ii) the per share exercise price for the Management Options granted to these
individuals. No other options to these individuals were issued and outstanding
as of December 31, 1998.
Shares Per Share
Name of Executive Subject Exercise
Officers and Directors to Options Price
- ---------------------- ---------- -----
T.C. Leung........................................... 750,000 $5.50
350,000 $4.00
Alex Sham............................................ 30,000 $5.50
20,000 $4.00
Jerry Wong........................................... 25,000 $5.50
15,000 $4.00
Nancy Wong........................................... 22,500 $5.50
7,500 $4.00
C.P. Kwan............................................ 22,500 $5.50
7,500 $4.00
All Executive Officers and
Directors as a group
(7 persons).......................................... 1,250,000 $4.00-$5.50(1)
Other officers and/or employees of the Company have been or will be
granted management options to purchase an aggregate of 150,000 Management
Options, all of which will be exercisable at $5.50 per share.
As of August 1, 1999, no Management Options have been exercised.
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The following table sets forth, as of August 1, 1999, certain information
concerning beneficial ownership of shares of Common Stock with respect to (i)
each person known to the
- --------
1 Price range.
-7-
Company to own 5% or more of the outstanding shares of Common Stock and (ii) all
officers and directors of the Company as a group:
Amount and Approximate
Nature of Percentage
Beneficial of Common
Ownership Stock Owned
--------- -----------
T.C. Leung(1)(2)(3).................... 2,524,000 79%
Pearl Venture Ltd.(1)(2)............... 2,524,000 79%
Regent Earning Ltd.(1)................. 1,027,600 50%
All Executive Officers and
Directors of the Company as
a group (7 persons)(4)................. 2,674,000 81%
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company was incorporated under the laws of the British Virgin Islands
on September 30, 1996. Shortly after incorporation, the Company sold 50,000
shares of its Common Stock to Gusrae, Kaplan & Bruno and 100,000 shares of its
Common Stock to Sidford for aggregate cash consideration of $1,500 or $.01 per
share. Gusrae, Kaplan & Bruno is United States counsel to the Company and was
granted the right to purchase said shares in partial
- --------
(1) The address for Mr. Leung is c/o Euro Tech (Far East) Ltd., 18/F Gee
Chang Hong Centre, 65 Wong Chuk Hang Road, Hong Kong. The address for Pearl
Venture Ltd. ("Pearl") is Columbus Centre Building, Wichhams Cay, Road Town,
Tortola, British Virgin Islands. The address for Regent Earning Ltd. ("Regent")
is Room 101, Chong Kin Commercial Building, No. 11 Wing Ho Street, Central Hong
Kong.
(2) Includes shares of the Company's Common Stock owned of record by
Pearl, which is a trust established for the benefit of Mr. Leung. Also includes
those shares of the Company's Common Stock owned of record by Regent, of which
Pearl is the majority shareholder. See Item 13. "Interest of Management in
Certain Transactions."
(3) Does not include such person's proportionate interest in shares of the
Company's Common Stock held of record by Regent or Broadskill Investments Inc.
("Broadskill"). Broadskill is a Hong Kong corporation which owns an approximate
34% equity interest in Regent. See Item 13. "Interest of Management in Certain
Transactions."
(4) Gives effect to the exercise of Management Options owned of record by
the Company's executive officers and directors. See Item 13. "Interest of
Management in Certain Transactions."
-8-
consideration of its services rendered to the Company in connection with the
Company's initial public offering ("Public Offering"). Sidford has been and is a
business consultant to Far East which initially was paid HK$5,000 by Far East
and granted the option to purchase the aforementioned 100,000 shares. In January
1997, Far East amended its consulting agreement with Sidford to pay Sidford
$5,000 per month for twenty months. At that same time, the Company repurchased
the 100,000 shares of its Common Stock held by Sidford.
Pearl is a British Virgin Islands company which is a trust for the benefit
of T.C. Leung, the Company's Chairman of the Board and Chief Executive Officer.
Regent is a Hong Kong corporation.
Concurrently with the closing of the Company's Public Offering in March of
1997, the Company consummated the acquisition of Far East by exchanging
1,400,000 shares of the Company's Common Stock for the 1,000,000 issued and
outstanding shares of the Common Stock of Far East at a ratio of 1.4 (one and
four-tenths) shares of the Company's Common Stock for each issued and
outstanding share of Far East's Common Stock.
Mr. Leung may be deemed to be a "promoter" of the Company as such term
is defined by the rules promulgated by the Commission under the Securities Act.
As so defined, a promoter is any person who (i) acting alone or in conjunction
with others, took the initiative in founding and organizing an issuer's business
or enterprise, or (ii) in connection with founding and organizing the business
or enterprise of an issuer, receives in consideration for services and/or
property, ten percent or more or either of any class of the issuer's securities
or the proceeds therefrom. Mr. Leung was the proponent of the Public Offering to
raise capital for the Company and Far East and of establishing a company in the
British Virgin Islands for that purpose. Mr. Leung is the beneficial owner of
approximately 79%67.2% of the Company's shares of Common Stock after giving effect
to the exercise of the 1,100,0001,320,000 Management Options owned by him.
The Company intends that all transactions between the Company and its
executive officers and directors be on terms no less favorable than could be
obtained from independent third parties and be approved by a majority of the
Company's directors who are not interested in such transactions.
All outstanding balances with related parties are unsecured,
non-interest bearing and are repayable in 1999.2000. The related companies with which
the Company has engaged in transactions are Euro Electron, Eurotherm, Action and
Armtison. During Fiscal 19981999 the Company made sales to Action and Eurotherm of
approximately $4,000, and $48,000, respectively.$33,000. During Fiscal 19981999 the Company made purchases from
Action, Armtison and Eurotherm of approximately $24,000,
$56,000$7,000, $38,000 and $491,000,$850,000,
respectively. Additionally, during Fiscal 1998,1999, the Company paid approximately
$46,000 to Armtison for office space rentals, and approximately $25,000$23,000 in
management fees to Eurotherm to assist in the management of some of the
Company's PRC offices. The payments to Armtison and Eurotherm were based on
actual office space usage and the time cost of personnel used, respectively.
-9-
No loans or advances have been or will be made in the future to the
Company's officers, directors or shareholders of at least five percent (5%) percent of
the issued and outstanding shares of any class of equity securities ("5%-plus
Shareholders"), or their respective affiliates unless such loans are for bona
fide business purposes.
In connection with the Public Offering, the Company sold to May Davis,
for the sum of $10.00, Warrants to purchase up to 60,00072,000 shares of the Company's
Common Stock at $8.25$6.825 and Warrants, at a price of $.2475 per Warrant to purchase
up to an additional 60,000 shares ofother securities which were repurchased by the
Company's Common Stock at $5.50 per
shareCompany in 1998 (the "May Davis Warrants") which are exercisable until March 14,
2002. For the life of the May Davis Warrants, the holders thereof are given the
opportunity to profit from a rise in the market price of the Warrants and/or
Common Stock of the Company with a resulting dilution in the interest of other
securityholders. The Company may find it more difficult to raise additional
equity capital if it should be needed for the business of the Company while the
May Davis Warrants are outstanding, and at any time when the holder of the May
Davis Warrants might be expected to exercise them, the Company would probably be
able to obtain additional equity capital on terms more favorable than those
provided in the May Davis Warrants. The Company has agreed at its expense, to
register under the Act, on one occasion, and at May Davis' expenses on another
occasion, the May Davis Warrants and/or the underlying securities at the request
of the holder thereof. The Company has also agreed to certain
"piggy-back" registration rights for the holders of the May Davis Warrants and
securities issuable upon exercise thereof.
On October 16,-14-
In 1998, the Company repurchased a portion of the securities issued to
May Davis
Warrants.Davis. The Company purchased the right to obtain 60,000certain warrants and said
right to thereby acquire 60,000 shares at an exercise price of $5.50 and any
and all rights, and powers granted pursuant to said warrants and the May Davis
Warrants relating to
the warrants and the Shares in consideration of the sum of $75,150.
May Davis had indicated its desire to exercise the demand registration
rights. The Company reviewed the situation and determined that to file a new
registration statement or post-effective amendment to its registration
statement, the cost to the Company would far exceed $75,000.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The following table sets forth, as of June 1, 2000, certain information
concerning beneficial ownership of the Ordinary Shares with respect to (i) each
person known to the Company to own 5% or more of the outstanding Ordinary
Shares, (ii) each executive officer and director of the Company, and (iii) all
executive officers and directors of the Company as a group:
APPROXIMATE
AMOUNT AND NATURE PERCENTAGE
OF OF ORDINARY
BENEFICIAL OWNERSHIP SHARES OWNED
-------------------- ------------
T. C. Leung, Chairman of the Board and
Chief Executive Officer 2,553,169(1) 67.2%(1)
Jerry Wong, Chief Financial Officer
and Director 66,350(2) 2.6%(2)
Nancy Wong, Director 59,800(3) 2.4%(3)
C.P. Kwan, Director 111,776(4) 4.4%(4)
Alex Sham, Director 86,750(5) 3.4%(5)
Adam L. Goldberg, Director 0 0%
Y.K. Liang, Director 0 0%
Pearl Venture Ltd. ("Pearl") 1,129,515(6) 45.6%(6)
All Executive Officers and Directors
of the Issuer as a Group 2,877,845(1)-(6) 71.8%(1)(6)
FOOTNOTES ON FOLLOWING PAGE
-15-
(1) Includes shares owned of record by Mr. Leung, Pearl and Regent Earning
Ltd. ("Regent").
Pearl is a trust established for Mr. Leung's benefit. Pearl is Regent's
majority stockholder. Also gives effect to the exercise of management
options owned by Mr. Leung to purchase 1,320,000 of the Company's
Ordinary Shares.
(2) Gives effect to the exercise of management options owned by Mr. Wong to
purchase 57,950 Ordinary Shares of the Company.
(3) Gives effect to the exercise of management options owned by Ms. Wong to
purchase 43,000 Ordinary Shares of the Company.
(4) Gives effect to the exercise of management options owned by Mr. Kwan to
purchase 36,000 Ordinary Shares of the Company.
(5) Gives effect to the exercise of management options owned by Mr. Sham to
purchase 69,950 Ordinary Shares of the Company.
(6) Includes 113,400 shares owned by record by Regent.
MANAGEMENT OPTION PLAN
The Company has also agreed with May Davis, that ifauthorized the Company,issuance of 1,680,000 Options to
purchase up to an aggregate of 1,680,000 Ordinary Shares (the "Management
Options") to its current or future subsidiaries, if any,officers, directors and its principal shareholders, or their
respective affiliates, will untilemployees in such numbers and to such
persons as the Company's Chairman of the Board and Chief Executive Officer may
direct. The Management Options became exercisable on March 14, 2000 provide May Davis with1998 for a Rightterm
of First Refusalten years.
The exercise price and the number of Ordinary Shares purchasable upon
exercise of any Management Options are subject to adjustment upon the occurrence
of certain events, including stock dividends, reclassification, reorganizations,
consolidations, mergers, and certain issuances and redemptions of Ordinary
Shares and securities convertible into or exchangeable for Ordinary Shares
excluding certain issuances of shares of the Company's Ordinary Shares. No
adjustments in the exercise price will be required to be made with respect to
the Management Options until cumulative adjustments amount to $.05.
In the event of any publiccapital reorganization, certain reclassifications
of the Ordinary Shares, any consolidation or private offeringmerger involving the Company (other
than (i) a consolidation or merger which does not result in any reclassification
or change in the outstanding Ordinary Shares, or (ii) sale of the properties and
assets of the Company, as, or substantially as, an entirety to any other
corporation), Management Options will thereupon become exercisable only for the
number of shares of stock or other securities, assets, or cash to which a holder
of the number of Ordinary Shares of the Company purchasable (at the time of such
reorganization, reclassification, consolidation, merger, or sale) upon exercise
of such Management Options would have been entitled upon such reorganization,
reclassification, consolidation, merger, or sale.
-16-
The table below shows, as to each of the executive officers and
directors of the Company and as to all executive officers and directors of the
Company as a group, the following information with respect to Management
Options: (i) the aggregate amounts of Ordinary Shares subject to Management
Options; and (ii) the per share exercise price for the Management Options
granted to these individuals. No other options to these individuals were issued
and outstanding as of June 1, 2000.
NAME OF EXECUTIVE SHARES SUBJECT PER SHARE
OFFICERS AND DIRECTORS TO OPTIONS EXERCISE PRICE
---------------------- ---------- --------------
T.C. Leung 900,000 $4.5833
420,000 $3.33
Alex Sham 45,950 $4.5833
24,000 $3.33
Jerry Wong 39,950 $4.5833
18,000 $3.33
Nancy Wong 34,000 $4.5833
9,000 $3.33
C.P. Kwan 27,000 $4.5833
9,000 $3.33
All Executive Officers and 1,526,900 $3.33-$4.583(1)
Directors as a group (7 persons)
Other officers and/or employees of the Company have been or will be
granted management options to purchase an aggregate of 153,100 Management
Options, all of which will be exercisable at $4.5833 per share.
As of June 1, 2000, no Management Options have been exercised. At
December 31, 1999, none of the options were "in the money," although by their
terms they are exercisable.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT IS NOT REQUIRED
As a consequence of the Company being a foreign issuer of securities,
directors, officers and beneficial owners of more than 10 percent of the
outstanding Ordinary Shares of the Company are not required to raise capital.file with the SEC
reports on Forms 3, 4 and 5 reflecting certain changes in their beneficial
ownership of the Company's Ordinary Shares.
- -----------
(1) Price range.
-17-
PROPOSALS 2 AND 3
-----------------
APPROVAL OF 2000 OFFICERS' AND DIRECTORS' STOCK OPTION AND
INCENTIVE PLAN AND APPROVAL OF THE 2000 EMPLOYEES' STOCK OPTION
AND INCENTIVE PLAN
On May Davis must agree1, 2000, the Board of Directors approved the 2000 Officers' and
Directors' Stock Option Plan ("2000 Officers' and Directors' Plan") and the 2000
Employees' Stock Option Plan ("2000 Employees' Plan").
The 2000 Officers' and Directors' Plan provides for the grant of
options to undertakeacquire shares of the common stock to the Company's executive
officers and directors and persons holding the same positions with the Company's
subsidiaries. The 2000 Employees' Plan provides for the grant of options to
acquire Ordinary Shares to key employees of the Company and its subsidiaries.
The 2000 Officers' and Directors' Plan and 2000 Employees' Plan are collectively
referred to as the "2000 Plans". The purpose of the plans are to enable the
Company and its subsidiaries to attract, retain and reward officers, directors
and key employees by offering them an opportunity to have a greater proprietary
interest in and closer identity with the Company and its financial success.
In 1996, the Board of Directors adopted, and the Company's shareholders
approved, a stock option plan. Prior to the grant of any options under this 1996
stock option plan, certain net income thresholds were required to be, but never
were, met. As a result no options were granted under the 1996 Plan.
146,000 and 292,000 shares will be authorized for issuance under the
2000 Employees' Plan and 2000 Officers' and Directors' Plan, respectively.
Copies of the 2000 Employees' Plan and 2000 Officers' and Directors'
Plan are attached as Appendices A and B, respectively, to this proxy statement.
The following discussion of the material features and provisions of the Plans
are qualified in their entirety by reference to Appendices A and B.
VOTE REQUIREMENT
The affirmative vote of a simple majority of the votes cast by the
holders of the Ordinary Shares present, in person or by proxy, and entitled to
vote at the annual meeting, were voted and did not abstain is required in order
to approve the Plans. Abstentions will be counted in determining the total
number of votes cast on the proposal at the annual meeting. As a result, an
abstention will have the same effect as a vote "against" the approval of the
Plans. Broker non-votes will not be counted as entitled to vote and will thus
not count for purposes of determining whether or not a quorum is present.
Provided that a quorum is present, broker non-votes will have no effect on the
outcome of the vote on the Plans.
-18-
ADMINISTRATION
Under the terms of the Plans, the Board of Directors or a committee
(the "Committee") appointed by the Board of Directors will administer the Plans.
The Board of Directors or the Committee has the authority to interpret the
Plans, prescribe, amend and rescind rules and regulations relating to it,
determine the terms and provisions of options granted under the Plans (which
need not be identical), and make other determinations as it deems necessary and
advisable for the administration of the Plans. The Board of Directors or the
Committee also has the authority to delegate decisions with respect to Options
granted to key employees under the 2000 Employees' Plan who are not elected
officers or directors of the Company or its subsidiaries and to delegate
decisions with respect to key employees to the Chief Executive Officer.
Any decision by the Committee or the Chief Executive Officer to grant
an award under the Plans are subject to ratification by the Board of Directors
of the Company. The Company will also require the Board to ratify any decision
that affects the terms or conditions of options awarded to elected officers or
directors of the Company or its subsidiaries.
SHARES SUBJECT TO THE PLANS
If the Plans are adopted, 146,000 and 292,000 Ordinary Shares will be
authorized for issuance under the 2000 Employees' Plan and 2000 Officers' and
Directors' Plan, respectively. Ordinary Shares issued upon the exercise of
options granted under the Plans may be either authorized but unissued shares or
shares reacquired by the Company and held in treasury. The grant of an option
will reduce the number of shares of common stock available for grant under the
2000 Officers' and Directors' Plan by the number of Ordinary Shares subject to
such option. If an option granted under the 2000 Officers' and Directors' Plan
expires unexercised, terminates or lapses, any shares of common stock subject to
such option will again be available for grant.
In the event that the Ordinary Shares of the Company are subdivided or
consolidated as a result of a reorganization, stock split, payment of a stock
dividend, reverse stock split or other change in the Company's capitalization,
the Committee or the Board of Directors has the authority to make appropriate
adjustments in the Ordinary Shares available for issuance under the Plans, the
number of shares subject to options that may have been or may be awarded to any
participant in any 12-month period, the price, number of Ordinary Shares or kind
of securities subject to outstanding options, or the terms of such options in
order to prevent dilution or enlargement of rights under the options. In
addition, the Board may also change the kind of securities available for grant
under the Plans to reflect any such financingcorporate changes.
ELIGIBILITY
Only key employees of the Company or its subsidiaries will be eligible
to participate in the 2000 Employees' Plan.
Only executive officers and directors of the Company will be eligible
to participate in the 2000 Officers' and Directors' Plan.
The Committee or the Chief Executive Officer has the discretion to
determine which employees constitute key employees to whom options will be
awarded under the 2000
-19-
Employees' Plan, and there is therefore no fixed number of employees eligible to
participate in the 2000 Employees' Plan. As of the date hereof, a total of 71
employees of the Company and its subsidiaries are eligible to participate in the
2000 Employees' Plan. As of the date hereof, a total of five executive officers
and directors of the Company and its subsidiaries will be eligible to
participate in the 2000 Officers' and Directors' Plan.
GRANT OF OPTIONS
The Committee or Chief Executive Officer, as the case may be, will
determine the number of shares of common stock subject to options to be granted.
OPTION PRICE
The purchase price per share of the Ordinary Shares to be paid upon the
exercise of the option will be at least 100% of the fair market value of an
Ordinary Share on the samedate on which the option was granted.
Under the Plans, if the common stock is principally traded on a
national securities exchange or better termsthe Nasdaq Stock Market's National Market or
Small Cap Market at the time of grant, the Company is required to use, as fair
market value, the average of the closing prices of the common stock for the ten
consecutive trading days immediately before the date of grant. If the common
stock is traded on a national securities exchange or the Nasdaq Stock Market's
National Market or Small Cap Market, but no closing prices are reported for such
ten-day period, or if the common stock is principally traded in the
over-the-counter market, the Company is required to use, as fair market value,
the average of the mean between the bid and asked prices reported for the
Company's Ordinary Shares at the close of trading during such ten-day period
before the date of grant. If the common stock is traded neither on a national
securities exchange, the Nasdaq Stock Market's National Market, Small Cap Market
nor in the over-the-counter market or if bid and asked prices are otherwise not
available, the fair market value of the common stock on the date of grant will
be determined in good faith by the Committee or the Board of Directors, as the
case may be.
EXERCISABILITY OF OPTIONS
The Board of Directors or the Committee, as the case may be, or, to the
extent that such authority has been delegated to the Chief Executive Officer,
the Chief Executive Officer will determine, at the time of grant, when each
option granted under the Plans will become exercisable. Notwithstanding the
foregoing, all options held by a key employee of the Company or its subsidiaries
will become immediately exercisable, whether or not exercisable at the time,
upon the death or disability of the key employee or non-employee director.
See "--Expiration of Options; Effect of Termination of Employment or Service."
-20-
EXPIRATION OF OPTIONS; EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICE
No option will be exercisable more than ten years from the date the
option is granted.
Death or Disability. If a participant in the Plan ceases to be an
employee or director of the Company or its subsidiaries due to death or
disability (as determined by the Board, Committee or the Chief Executive
Officer, as applicable), the participant or his or her beneficiary or permitted
transferee, as the case may be, will be permitted to exercise any other financing proposal.
The Company has agreed thatoptions held
by the participant on the date of termination of employment or service on the
board, whether or not exercisable as of such date, for a period of 12 months
following such date, but in no event later than the expiration date of the
options.
Termination by the Company Without Cause. If the Company or any of its
subsidiaries terminates a participant's employment with, or service on the board
of, the Company or its subsidiaries without cause, the participant will be
permitted to exercise any options that were exercisable upon the date of
termination of employment or service for a period of 90 days following such
date, but in no event later than the expiration date of the options.
Termination for Cause; Voluntary Resignation. If (1) the Company or any
of its subsidiaries terminates a participant's employment with, or service on
the board of, the Company or its subsidiaries for cause, or (2) the participant
voluntarily resigns all employment with, or service on the board of, the Company
or its subsidiaries, all options whether or not exercisable at the date of
termination of employment or service, will be null and void and will terminate.
Termination for cause includes termination for willful misconduct, willful and
substantial non-performance of duty, incompetence, breach of trust, personal
dishonesty, conviction of any felony, and similar reasons.
PAYMENT OF EXERCISE PRICE FOR OPTIONS
Under the Plans, payment for shares purchased upon exercise of an
option may be made by any of the following methods, subject to certain
requirements: (1) in cash, paid by either the option holder or a broker to whom
the optionee has tendered the option; (2) in Ordinary Shares of the Company,
delivered to the Company and valued at the fair market value of such shares on
the date of exercise, provided that such shares were held by the option holder
for not less than six months prior to the date of exercise of the option; (3) by
any other medium of payment that the Board, Committee or the Chief Executive
Officer, as applicable, has authorized at the time endingof grant (other than the
withholding of shares issuable upon the exercise of options); or (4) by any
combination of the preceding methods.
TRANSFER OF OPTIONS
Under the Plans, an option may not earlier than
March 14,be sold, assigned or otherwise
transferred except to:
- the spouse or lineal descendant of a Plan Participant;
-21-
- the trustee of a trust for the primary benefit of a Plan
Participant's spouse or lineal descendant;
- a partnership of which a Plan Participant's and lineal
descendants are the only partners; or
- a charitable organization.
These assignments will only be permitted if the assigning optionee does
not receive any compensation in connection with the assignment and the
assignment is expressly approved by the Board or Committee, as the case may be.
INDEMNIFICATION OF THE COMMITTEE
The Company will indemnify the members of any Committee and its
delegates and the Chief Executive Officer against (1) reasonable expenses
incurred in connection with the defense of any action, suit or proceeding to
which they may be a party by reason of any action taken or failure to act in
connection with the Plans, and (2) all amounts paid by them in settlement of or
satisfaction of a judgment entered in any such action, suit or proceeding,
except in cases where such a person is adjudged liable for gross negligence or
gross misconduct in the performance of his or her duties.
AMENDMENT AND DURATION
The Board may terminate, suspend, or amend the Plans at any time
without the authorization of shareholders to the extent allowed by law or the
rules of any applicable national securities exchange or other market on which
the Company's shares are then listed or quoted.
Unless required by law, no termination, suspension, or amendment of the
Plans may adversely affect options outstanding under the Plans, without the
consent of the owners of the options.
NEW PLAN BENEFITS
The Board of Directors has not proposed any option grants to be awarded
if the Plans are approved by the shareholders. As a result, benefits under the
Plans in 2000 May Davisor thereafter are not determinable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE 2000
OFFICERS' AND DIRECTORS' PLAN AND 2000 EMPLOYEES' PLAN. UNLESS OTHERWISE
DIRECTED IN THE PROXY, THE PERSONS NAMED IN THE ACCOMPANYING PROXY INTEND TO
VOTE THE PROXY "FOR" PROPOSALS 2 AND 3.
-22-
PROPOSAL 4
----------
PROPOSAL TO AMEND THE COMPANY'S MEMORANDUM AND ARTICLES OF ASSOCIATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES FROM 20,000,000 SHARES TO 25,000,000
SHARES
The Board of Directors has approved an amendment to the Company's
Memorandum and Articles of Association which, if adopted, would increase the
number of authorized shares from 20,000,000 to 25,000,000 shares. The Board of
Directors recommends that shareholders approve this amendment.
PRINCIPAL REASONS FOR INCREASE IN AUTHORIZED SHARES
As of June 1, 2000, there were 2,481,840 Ordinary Shares issued
outstanding, with the following numbers of Ordinary Shares for issuance as
indicated below:
Number of Ordinary Shares
Reserved for Issuance Reason for Reservation
------------------------- ----------------------
1,944,000 Private and Publicly Offered Warrants
72,000 Underwriters' Warrants
120,000 Consultant Options
1,680,000 Management Options
---------
Total Reserved: 3,816,000
=========
If the Company had to call upon all of its Reserved Ordinary Shares, it
would then have 6,297,840 Ordinary Shares issued and outstanding. If the option
plans that the Company seeks to have authorized at the annual meeting were
approved, all options granted and exercised, it would then have 6,735,840
Ordinary Shares issued and outstanding. If the Company's Proposal to authorize
5,000,000 shares of Blank Check Preferred Stock were to be approved, the Company
would then have 8,264,160 unreserved Ordinary Shares available for issuance.
The increase in the number of authorized Ordinary Shares is being
proposed because the Board of Directors believes that it is advisable to have a
greater number of authorized but unissued Ordinary Shares available for various
corporate time sensitive acquisitions, stock dividends or stock splits, and
public or private financings to provide the Company with capital, which may
involve the issuance of additional shares of Ordinary Shares or securities
convertible into Ordinary Shares. The Board of Directors believes that having
authority to issue additional Ordinary Shares will avoid the possible delay and
significant expense of calling and holding an annual meeting of shareholders to
increase the authorized number of Ordinary Shares.
The Company has no present plan, agreement or understanding involving
the issuance of its stock except for shares required or permitted to be issued
under option plans. It is possible,
-23-
however, that additional merger and acquisition opportunities involving the
issuance of Ordinary Shares will develop. It is also possible that an increase
in the market price for the Ordinary Shares, and conditions in the capital
markets generally, may make a stock dividend, a stock split or a public offering
of the Company's Ordinary Shares desirable. The Company believes that an
increase in the number of authorized Ordinary Shares will enhance its ability to
respond promptly to any such opportunities.
If the proposed amendment to the Company's Memorandum and Articles of
Association is approved, the Board of Directors will not solicit shareholder
approval to issue additional authorized Ordinary Shares, except to the extent
that such approval may be required by law or under Nasdaq rules, and such shares
may be issued for such consideration, cash or otherwise, at such times and in
such amounts as the Board of Directors may determine.
Although the Board of Directors presently intends to employ the
additional Ordinary Shares solely for the purposes set forth above, such shares
could be used by the Board of Directors to dilute the stock ownership of persons
seeking to obtain control of the Company, thereby possibly discouraging or
deterring a nonnegotiated attempt to obtain control of the Company and making
removal of incumbent management more difficult. The proposal, however, is not a
result of, nor does the Board of Directors have knowledge of, any effort to
accumulate capital stock of the Company or to obtain control of the Company by
means of a merger, tender offer, solicitation in opposition to the Board of
Directors or otherwise. Proposed amendments to the Memorandum and Articles of
Association are attached as Appendix C.
VOTE REQUIREMENT
The affirmative vote of a simple majority of the votes of the shares
entitled to vote, were voted and did not abstain is required to approve this
amendment. An abstention will have the same effect as a vote "against" this
amendment. Broker non-votes will not be counted as entitled to vote and will
thus not count for purposes of determining whether or not a quorum is present on
this matter. So long as a quorum is present, broker non-votes will have no
effect on the outcome of the vote. All proxies will be voted "for" approval of
the amendment unless a shareholder specifies to the contrary on such
shareholder's proxy card.
The Board of Directors recommends a vote "for" this amendment.
PROPOSAL 5
----------
PROPOSED INCLUSION OF ANTITAKEOVER PROVISIONS IN THE COMPANY'S
MEMORANDUM AND ARTICLES OF ASSOCIATION
The Company's Board of Directors recommends that the Company's
shareholders approve a proposal that provides for an added provision in the
Company's Memorandum and Articles of Association creating a class of preferred
stock, sometimes referred to as "blank-check preferred stock," for which the
Board of Directors will have the right to designatefix the rights, terms and preferences
at the time of issuance, with no further action on the part of the shareholders
(the "Blank-Check Preferred Stock Provisions").
-24-
PRINCIPAL REASONS FOR THE ANTITAKEOVER CHARTER PROVISIONS
In light of the Company's current status as a personpublic company, the Board
of Directors recently reviewed the Company's Memorandum and Articles of
Association to determine whether any changes were appropriate. The Board of
Directors determined that the Memorandum and Articles of Association provide
only limited protection to the Company and its shareholders in the event of an
unsolicited takeover attempt. The Board of Directors believes that it is
appropriate to include, in the Company's Memorandum and Articles of Association,
provisions intended to enhance the ability of the Board of Directors to respond
to an unsolicited takeover attempt in a manner which it believes is in the best
interest of the Company and its shareholders even if such provisions may have
the effect of discouraging unsolicited takeover offers that some of its
shareholders might find attractive.
The Board of Directors is not aware, at present, of any effort to
accumulate Ordinary Shares of the Company or to obtain control of the Company by
means of a merger, tender offer, solicitation in opposition to management, or
otherwise. The Board of Directors believes, however, that it is appropriate to
propose the adoption of provisions that may have an antitakeover effect at a
time when there is no pending threat of an unsolicited takeover so that both the
Board of Directors and the shareholders will be able to make a non-voting advisormore careful and
reasoned evaluation of the advantages and disadvantages of including such
provisions in the Company's Memorandum and Articles of Association. Those
advantages and disadvantages are more fully discussed below under "Antitakeover
Effects of the Blank Check Preferred Stock".
POTENTIAL ANTITAKEOVER EFFECTS OF THE BLANK CHECK PREFERRED STOCK
In considering how to vote on this proposal, you should also consider
the following.
POTENTIAL POSITIVE EFFECTS. The Antitakeover Charter Provisions are
intended to reduce the Company's vulnerability to unsolicited or hostile
attempts to obtain control of the Company. In the absence of statutory or
charter antitakeover protection, a potential acquiror may initiate a tender
offer or exchange offer to obtain control of a public company or may accumulate
stock in a public company in order to force a merger or other business
combination, in each case without prior negotiation with, or the approval of,
the Company's Board of Directors. In addition, persons who do not intend to
acquire control of a public company may use the threat of a proxy contest or
takeover to force a public company to repurchase their shares at a premium or to
drive up, temporarily, the market price of their stock. The Board of Directors
believes that an unsolicited takeover attempt may be disadvantageous or unfair
to the Company and its shareholders because, among other things, it may (1) be
timed to take advantage of temporarily depressed stock prices, (2) be designed
to minimize or foreclose the possibility of more favorable competing bids or
alternative transactions, (3) result in the transfer to the acquiring
shareholder of a controlling interest in the Company's stock, without affording
all of the Company's shareholders the opportunity to receive the same
consideration for their shares as those shareholders who sell their shares to
the acquiring shareholder, and (4) deprive the shareholders of an opportunity to
make an informed decision concerning the merits of a proposed sale or other
transaction involving the Company or their shares.
-25-
The Antitakeover Charter Provisions are generally designed to ensure
that the Company's Board of Directors who will receivehave a sufficient opportunity to
review any unsolicited antitakeover bid, to explore appropriate alternatives,
and to act in what it believes is the same
compensation asbest interests of all of the Company's
shareholders. They are also intended to ensure that the Board of Directors has
an opportunity to negotiate a memberfair price for all of the Company's shareholders
in connection with any proposed sale, merger, or other transaction affecting the
Company. Certain provisions are also designed to prevent substantial
shareholders of the Company from using their voting power to effect changes in
the Board of Directors or in the Company's corporate structure or for any other
purpose without the broad-based support of the other holders of the Company's
Ordinary Shares.
POTENTIAL NEGATIVE EFFECTS. While the Antitakeover Charter Provisions
are intended to strengthen the ability of the Board of Directors to act in the
best interests of all of the Company's shareholders in the face of an
unsolicited takeover attempt, such provisions, individually and who will be indemnified
bycollectively,
may make more difficult, and as a result may discourage, any tender offer,
merger, or other transaction involving the Company against any claims arising out of his participation at meetings
ofthat is not approved by the
Board of Directors. Alternatively, May Davis hasAs a result, such provisions and the right, during
-10-
such period, to designate one personAntitakeover Charter
Provisions may have the effect of discouraging transactions which a majority of
the Company's shareholders deem to be electedin their best interests or in which some
or all of the shareholders may have otherwise received a substantial premium
over the then current market value of, or their basis in, their shares. There
is, moreover, no assurance that the Antitakeover Charter Provisions will result
in the payment to the Company's Boardshareholders of Directors. The Company has agreed to use its best effort to obtaina price that reflects the electionvalue
of their shares in the event of an unsolicited change in control of the May Davis designee and such person shall be entitled to receiveCompany.
The Antitakeover Charter Provisions may also delay or frustrate the
same
compensation, expense reimbursement and other benefits as any other non-employee
Directorassumption of control of the Company if any. May Davis has designated Mr. Goldberg forby the holder of a large block of the
Company's voting stock even if individual shareholders believe such a change in
control would be in the best interests of the Company. By discouraging
unsolicited takeover attempts, the Antitakeover Charter Provisions may also have
the effect of (1) rendering more difficult changes in the Company's management,
even if many of the shareholders believe that such changes would be in the best
interests of the Company, and (2) inhibiting the temporary fluctuations in the
market price of stock which may result from actual or rumored takeover attempts.
In deciding to approve the Antitakeover Charter Provisions, the Board
of Directors. AtDirectors considered both the completionpotential positive effects and potential
negative effects of the Public Offering,Antitakeover Charter Provisions. The Board of Directors
believes that, on balance, the positive effects of the Antitakeover Charter
Provisions outweigh their potential negative effects.
VOTE REQUIREMENT
The affirmative vote of a simple majority of the vote of the shares
entitled to vote, were voted and did not abstain is required to approve this
amendment. Broker non-votes will not be counted as entitled to vote and thus not
count for purposes of determining whether or not a quorum is present on this
matter. So long as a quorum is present, broker non-votes will have no effect on
the outcome of the vote. All proxies will be voted "for" approval of the
amendment unless a shareholder specifies to the contrary on such shareholder's
proxy card.
-26-
The Board of Directors believes that it is in the best interests of the
Company retained May Davis to actinclude in the Memorandum and Articles of Association a provision
authorizing the issuance of up to 5,000,000 shares of preferred stock, par value
$ .01 per share, for which the Board of Directors will have the right to fix,
from time to time, the rights, terms and preferences. Such stock is sometimes
referred to as "blank-check preferred stock."
If Proposal 5 is approved, the Board of Directors will have the right
to authorize the issuance, and fix the rights, terms and preferences, of one or
more series of preferred stock, without further action by the shareholders. As a
financial consultantresult, the Board of Directors will have the authority to issue shares of
preferred stock which have voting rights and take precedence over the Company's
common stock with respect to both the payment of dividends and payments upon the
liquidation. If Proposal 5 is not approved, the Company's Memorandum and
Articles of Association will authorize the issuance of only 25,000,000 Ordinary
Shares, $.01 par value.
The Board of Directors has no present intention of issuing shares of
preferred stock if Proposal 5 is approved. If Proposal 5 is approved, however,
the Board of Directors will be able, without any further action on the part of
the Company's shareholders, to issue shares of a class or series of stock with
rights superior to the Company's Ordinary Shares with respect to the payment of
dividends or upon the liquidation, dissolution or winding up of the Company. By
authorizing such shares, the shareholders will be giving the Board of Directors
the ability to take timely advantage of market conditions and issue preferred
stock, should the Board of Directors determine that such issuance is
appropriate.
Although the Board of Directors has no present intention of using
shares of preferred stock for such purposes, the ability to authorize and issue
shares of preferred stock could also be used, in certain circumstances, to
discourage or render more difficult a periodchange in control of time
concludingthe Company. For
example, the Board of Directors could authorize the issuance of shares of voting
preferred stock to dilute the voting power of a person seeking to gain control
of the Company or it could privately place shares of voting preferred stock with
purchasers who might be expected to support the Board of Directors in opposing a
change of control. The Board could also issue a series of preferred stock in one
or more transactions with terms that might make the acquisition of a controlling
interest in the Company more difficult or costly.
The Board of Directors believes that, on March 14, 2000 for fees aggregating $108,000 which were paid in
full atbalance, the potential
positive effects of the Blank-Check Preferred Stock Provisions outweigh their
potential negative effects. The Board of Directors unanimously recommends that
time.shareholders vote "for" Proposal 5, the Blank-Check Preferred Stock Provisions.
PROPOSAL II6
----------
APPROVAL OF AUDITORS
The Board of Directors, upon the recommendation of the Company's Audit
Committee, havehas selected Arthur Andersen & Co., Hong Kong, a certified public
accounting firm, as independent auditors of the Company's financial statements
for its fiscal 1999year 2000 to end December 31, 1999.2000. A representative of Arthur
Andersen & Co., Hong Kong is expected to be
-27-
present at the Annual Meetingannual meeting and will have an opportunity to make a statement
if he desires to do so. The representative is expected to be available to
respond to appropriate questions.
The members of the Board of Directors recommend that the shareholders
vote "FOR""for" the proposal to approve Arthur Andersen & Co., Hong Kong as the
Company's auditors for its fiscal year ending December 31, 1999.2000. In order to be
so approved Arthur Andersen & Co., Hong Kong must receive the affirmative vote
of a simple majority of the votes of the shares entitled to vote thereon and were
voted and did not abstained.abstain. . Broker non-votes will not be counted as entitled to
vote and thus not count for purposes of determining whether or not a quorum is
present on this matter. So long as a quorum is present, broker non-votes will
have no effect on the outcome of the vote. All proxies will be voted "for"
approval of Arthur Andersen & Co., Hong Kong, as the Company's auditors for its
fiscal year ending December 31, 2000, unless a shareholder specified to the
contrary on such shareholder's proxy card.
PROPOSAL 7
----------
ADJOURNMENT OF ANNUAL MEETING
In the event that the number of shares present, in a person or by
proxy, at the annual meeting is insufficient to constitute a quorum or to
approve any of the matters identified in the notice of meeting for the annual
meeting, the Board of Directors may decide to adjourn the annual meeting to
permit further solicitation of proxies. If the annual meeting is adjourned, no
further notice of the time and place of the adjourned meeting is required to be
given to the Company's shareholders other than an announcement of such time and
place at the annual meeting; provided, however, that if the date of any
adjourned meeting is more than 30 days after the date for which the meeting was
originally noticed, or if a new record date is fixed for the adjourned meeting,
written notice of the place, date, and time of the adjourned meeting will be
given.
If the annual meeting is postponed or adjourned, at any subsequent
reconvening of the annual meeting, all proxies will be voted in the same manner
as such proxies would have been voted at the original convening of the annual
meeting (except for any proxies which have theretofore effectively been revoked
or withdrawn). In the event that proxies are voted to adjourn the annual
meeting, the persons named in the enclosed proxy form will not vote the shares
represented by such proxies for or against any proposal introduced by management
at any adjournment of the meeting, other than the proposals identified in the
notice of meeting included with this proxy statement, without first resoliciting
proxies to vote on such proposals.
The Board of Directors recommends a vote "for" the proposal to adjourn
the meeting. The affirmative vote of a simple majority of the vote of the shares
entitled to vote, were voted and did not abstain is required to approve this
proposal. Broker non-votes will not be counted as entitled to vote and thus not
count for purposes of determining whether or not a quorum is present on this
matter. So long as a quorum is present, broker non-votes will have no effect on
the outcome of the vote. All proxies will be voted "for" approval of this
proposal unless a shareholder specifies to the contrary on such shareholder's
proxy card.
-28-
In order to allow the Company's management to vote proxies received by
the Company at the time of the annual meeting in favor of such an adjournment
under the circumstances described above, the Company has submitted the question
of adjournment as a separate matter for the consideration and vote of the
shareholders.
SHAREHOLDER PROPOSALS AND NOMINATIONS
Any shareholder proposals intended to be considered for presentation at
the 2000 Annual Meeting2001 annual meeting and for inclusion in the 20002001 proxy statement must be
made in writing and received by the Corporate Secretary at the Company's
principal executive offices by April 1, 2000.2001. The Company will consider only
proposals meeting the requirements of applicable Securities and Exchange
Commission rules. Shareholders are urged to review these rules and, if questions
arise, consult their own legal counsel before submitting a proposal to the
Company.
Recommendations by shareholders for directors to be nominated at the
2000
Annual Meeting2001 annual meeting must be made in writing, with sufficient biographical and
other relevant information such that an informed judgment as to the proposed
nominee's qualifications can be made and be accompanied by a notarized written
consent to be named in the Proxy Statement, if nominated, and to serve as a
director, if elected, executed by the proposed nominee. Recommendations received
in proper order by the Corporate Secretary at the Company's principal executive
office at least four months prior to the 2000 Annual Meeting2001 annual meeting will be referred
to, and considered by, the Company's Board of Directors. No shareholder
recommendations were received before the 1999 Annual Meeting.
-11-
2000 annual meeting.
FINANCIAL STATEMENTS
ConsolidatedThe consolidated financial statements forof the Company and its
subsidiaries are contained in the Company's Annual Report for the fiscal year ended December 31,
1998, as amended,20F which has been previously sent to you or is being delivered to you
herewith.with this Proxy Statement.
OTHER MATTERS
The Board of Directors is not currently aware of any other matter to be
transacted at the Annual Meeting.
-12-annual meeting.
-29-
APPENDIX A
EURO TECH HOLDINGS COMPANY LIMITED
2000 OFFICERS' AND DIRECTORS'
STOCK OPTION AND INCENTIVE PLAN
1. Purpose
Euro Tech Holdings Company Limited, a British Virgin Islands
corporation ("ETHC") hereby establishes the Euro Tech Holdings Company Limited
2000 Officers' and Directors' Stock Option and Incentive Plan (the "Plan"). The
purpose of the 2000 Officers' and Directors' Plan is to enable ETHC and its
subsidiaries to attract, retain, and reward Officers and Directors of ETHC
(references hereinafter to "Board" mean the Board of Directors of ETHC and any
subsidiary of ETHC, as the context dictates, unless otherwise indicated), by
offering them an opportunity to have a proprietary interest in and closer
identity with ETHC and its subsidiaries and with their financial success.
Proceeds received by ETHC from shares of Ordinary Shares acquired pursuant to
Options granted under the Plan shall be used for general corporate purposes.
2. Administration
This Plan shall be administered by the Board or a committee
("Committee") appointed by the Board. Except as otherwise provided in this Plan,
the Board or the Committee may interpret this Plan, prescribe, amend and rescind
rules and regulations relating to it, determine the terms and provisions of
options granted under this Plan (which need not be identical), and make such
other determinations as it deems necessary and advisable for the administration
of this Plan. A majority of the Committee members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members. Any
decision or determination reduced to writing, and signed by all of the members,
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee shall also have express
authorization to hold Committee meetings by means of conference telephone, or
similar communications equipment, by which all persons participating in the
meeting can hear each other. The decisions of the Committee under this Plan
shall be conclusive and binding. No member of the Board or the Committee, shall
be liable for any action taken or determination made hereunder in good faith.
Service on the Committee shall constitute service as a director of ETHC so that
the members of the Committee shall be entitled to indemnification and
reimbursement as directors of ETHC pursuant to its by-laws. If this Plan is
administered by the Board, the Board shall administer this Plan as if it were
the Committee having the authority hereunder.
1
3. Eligibility
Officers and Directors who have been selected to receive an Option
shall participate in this Plan and shall be collectively referred to as
"Participants". The Board or the Committee, as applicable, shall determine,
within the limits of the express provisions of this Plan, those Participants to
whom, and the time or times at which, Options shall be granted. The Board or the
Committee, as applicable, shall also determine, with respect to Options granted
to Participants, the number of Ordinary Shares to be subject to each such
Option; the duration of each Option; the exercise price under each Option; the
time or times within which (during the term of the Option) all or portions of
each Option may be exercised; whether cash, Ordinary Shares, or other property
may be accepted in full or partial payment upon exercise of an Option; and any
other terms and conditions of such Options. In making such determinations, the
Board or the Committee, as applicable, may take into account the nature of the
services rendered by the Participant, his or her present and potential
contributions to ETHC's success and such other factors as the Board or the
Committee, as applicable, in its discretion shall deem relevant.
4. Ordinary Shares
The total number of shares of Ordinary Shares that may be subject to
Options under this Plan shall be 292,000. Such total number of shares shall be
adjusted in accordance with the provisions of Section 9 hereof. Such shares may
be either authorized but unissued shares or reacquired shares. In the event that
any Option granted under this Plan expires unexercised or is terminated,
surrendered, forfeited, canceled or reacquired without being exercised, in whole
or in part, for any reason, then the number of Ordinary Shares theretofore
subject to such Option, or the unexercised, terminated, surrendered, forfeited,
canceled or reacquired portion thereof, shall be added to the remaining number
of shares of Ordinary Shares that may be made subject to Options granted under
this Plan. Such Options include Options to former holders of such Options, upon
such terms and conditions as the Board or the Committee, as applicable, shall
determine, which terms may be more or less favorable than those applicable to
such former holders of Options.
5. Grants
Options may be granted at any time and from time to time as shall be
determined by the Board or the Committee. Subject to the limitation on the total
number of shares subject to issuance in subsections 6(a) and (d), the Board or
the Committee, as applicable, shall have complete discretion in determining the
number of Ordinary Shares subject to Options granted. The Board or the
Committee, as applicable, may grant any type of Option to purchase Ordinary
Shares that is permitted by law at the time of the grant.
6. Required Terms and Conditions of Options
Each Option granted shall be in such form and subject to such
restrictions and conditions and other terms as the Board or the Committee, as
applicable, may determine at the time of grant,
2
subject to the general provisions of this Plan, the applicable Option Agreement
and the following specific rules:
(a) Exercise Price. Except as otherwise provided, the per share
exercise price of each Option shall be at least 100% of the Fair Market Value of
the Ordinary Shares at the time such Option is granted.
(b) Maximum Term. Subject to earlier termination as provided in Section
7, each Option shall expire on the date determined in the applicable Option
Agreement at the time the Option is granted, provided that no Option shall be
exercisable after the expiration of 10 years from the date it is granted, except
as otherwise provided in subsection (a) next above.
(c) Time of Exercise. The Board or the Committee, as applicable, shall
specify in the Option Agreement, at the time each Option is granted, the
duration of each Option and the time or times within which (during the term of
the Option) all or portions of each Option may be exercised, except to the
extent that other terms of exercise are specifically provided by other
provisions of the Plan.
7. Expiration of Options; Termination of Employment, Disability, Death,
and Expiration of Restrictions Upon Occurrence of Specified Events
(a) General Rule. Except with respect to Options expiring pursuant to
subsections 7(b), (c) or (d) below, each Option granted to a Participant shall
expire on the expiration date or dates set forth in the applicable Option
Agreement. Each Option expiring pursuant to subsections 7(b), (c) or (d) below
shall expire on the date set forth in subsections 7(b), (c) or (d)
notwithstanding any restrictions and conditions that may be contained in a
Participant's Option Agreement.
(b) Expiration Upon Termination of Employment or Service on the Board.
If a Participant ceases to be an employee of ETHC or any of its subsidiaries, or
ceases to serve on the Board, due to the voluntary resignation of the
Participant, or a termination by ETHC or any of its subsidiaries for Cause, then
all of such Participant's Options shall be null and void and shall terminate. If
a Participant ceases to be an employee of ETHC or any of its subsidiaries or
ceases to serve on the Board of ETHC or any of its subsidiaries due to
termination without Cause by ETHC or any of its subsidiaries, then all of such
Participant's Options shall expire on the first to occur of (i) the applicable
date or dates determined pursuant to subsection 7(a), or (ii) the date ninety
(90) days after the date that the employment of the Participant with ETHC or its
subsidiaries, or service of the Participant on the Board, terminates.
(c) Expiration Upon Disability or Death. If the employment of a
Participant with ETHC and its subsidiaries, or service on the Board, terminates
by reason of disability (as determined by the Board or the Committee, as
applicable), all of the Participant's unexercised Options may be exercised by
the Participant, whether or not otherwise exercisable at the date of disability,
within twelve (12) months after the date of disability, but in no event later
than the expiration date of such Options. If a Participant dies while in the
employ of ETHC and its
3
subsidiaries, or during such Participant's service on the Board, all of the
Participant's unexercised Options, whether or not otherwise exercisable at the
date of death, may be exercised within twelve (12) months after the date of
death by the person specified in Section 8, but in no event later than the
expiration date of such Options.
(d) Expiration of Restrictions Upon Occurrence of Specified Events.
Upon the occurrence of any event described in subsection 9(b), each
Participant's outstanding Options shall become immediately vested and
exercisable. In such event, the Participant may elect to exercise in whole or in
part any or all of his or her Options, in accordance with the terms of Section
8, notwithstanding any restrictions and conditions that may be contained in his
or her Option Agreement.
(e) "Cause" shall mean: a) the willful failure of Participant to
substantially perform his or her duties with ETHC or any of its subsidiaries
(other than any such failure resulting from Participant's incapacity due to
physical or mental illness) after a written demand for substantial performance
is delivered to Participant specifically identifying the manner in which
Participant has not substantially performed his or her duties; b) any willful
act of misconduct by Participant which is materially injurious to ETHC or it
subsidiaries (monetarily or otherwise); c) criminal indictment or conviction of
Participant for any felony or act involving dishonesty, breach of trust, or a
violation of the laws of the United States or any state of the United States; d)
a breach of fiduciary duty involving personal profit; e) a willful violation of
any law, rule, regulation or final cease and desist order; f) incompetence,
personal dishonesty or material violation of any employment policy of ETHC or
any of its subsidiaries relating to Participant which would have a material
adverse effect on ETHC or any of its subsidiaries; or g) suspension, removal
and/or prohibition (whether temporary or permanent) by any banking or similar
regulatory authority from participation in the affairs of ETHC or any of its
subsidiaries.
8. Method of Exercise of Options
Any Option may be exercised by the Participant, by a legatee or
legatees of such Option under the Participant's last will, by his or her
executors, personal representatives or distributees by his or her assignee or
assignees as provided in Section 11 below, by delivering to the Secretary of
ETHC written notice of the number of shares of Ordinary Shares with respect to
which the Option is being exercised, accompanied by full payment to ETHC of the
exercise price of the shares being purchased under the Option, and by satisfying
all other conditions provided for in this Plan. Except as otherwise provided in
this Plan or in any Option Agreement, the exercise price of Ordinary Shares upon
exercise of any Option by a Participant shall be paid in full (i) in cash, (ii)
in Ordinary Shares which have been held by the Participant for not less than six
months prior to the exercise of the Option, valued at its Fair Market Value on
the date of exercise, (iii) in cash by a broker-dealer to whom the holder of the
Option has submitted an exercise notice consisting of a fully endorsed Option,
or (iv) by such other medium of payment as the Board or the Committee, as
applicable, in its or his sole discretion, shall authorize, or by any
combination of (i), (ii), or (iii), at the sole discretion of the Board or the
Committee, as applicable, or in any manner provided in the Option Agreement,
except by directing ETHC to withhold Ordinary Shares otherwise issuable upon the
exercise of the Option in payment of the
4
exercise price. In the case of payment pursuant to (ii) or (iii), above, the
Participant's election must be made on or prior to the date of exercise of the
Option and must be irrevocable. In lieu of a separate election governing each
exercise of an Option, a Participant may file a blanket election which shall
govern all future exercises of Options until revoked by the Participant. ETHC
shall issue, in the name of the Participant (or, if applicable, the legatee(s),
executor(s), personal representative(s), or distributee(s) of a deceased
Participant, or the assignee(s) as provided in Section 11), stock certificates
representing the total number of Ordinary Shares issuable pursuant to the
exercise of any Option as soon as reasonably practicable after such exercise.
9. Adjustments
(a) Appropriate adjustment in the maximum number of Ordinary Shares
issuable pursuant to this Plan, the maximum number of Ordinary Shares with
respect to which Options may be granted within any 12-month period to any
Participant during the duration of this Plan, the number of shares subject to
Options granted under this Plan, and the exercise price with respect to Options,
shall be made to give effect to any increase or decrease in the number of issued
Ordinary Shares resulting from a subdivision or consolidation of shares whether
through reorganization, recapitalization, stock split, reverse stock split,
spin-off, split-off, spin-out, or other distribution of assets to shareholders,
stock distributions or combination of shares, assumption and conversion of
outstanding Options due to an acquisition by ETHC of the stock or assets of any
other corporation, payment of stock dividends, other increase or decrease in the
number of such shares outstanding effected, without receipt of consideration by
ETHC, or any other occurrence for which the Committee determines an adjustment
is appropriate. If the number of Ordinary Shares subject to an Option has been
adjusted pursuant to this paragraph, the decision of the Board or the Committee,
as applicable, as to the amount and timing of any such adjustments shall be
conclusive.
(b) The Committee shall make all determinations relating to the
applicability and interpretation of this Section 9, and all such determinations
shall be conclusive and binding.
10. Terms and Conditions of Options
(a) In order for an Option to be effective, each Participant shall
agree to such restrictions and conditions and other terms in connection with the
exercise of an Option, including restrictions and conditions on the disposition
of the Ordinary Shares acquired upon the exercise, grant or sale thereof, as the
Committee may deem appropriate. The certificates delivered to a Participant
evidencing the Ordinary Shares acquired upon exercise of an Option may bear a
legend referring to the restrictions and conditions and other terms contained in
the respective Option Agreement and this Plan, and ETHC may place a stop
transfer order with its transfer agent against the transfer of such shares. If
requested to do so by the Board or the Committee, as applicable, at the time of
exercise of an Option, each Participant shall execute a written instrument
stating that he or she is purchasing the Ordinary Shares for investment and not
with any present intention to sell the same.
5
(b) The obligation of ETHC to sell and deliver Ordinary Shares under
the plan shall be subject to all applicable laws, regulations, rules and
approvals. A Participant shall have no rights as a shareholder with respect to
any shares covered by an Option granted to, or exercised by, him or her until
the date of delivery of a stock certificate to him or her for such shares. No
adjustment other than pursuant to Section 9 (a) hereof shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is delivered.
11. Nontransferability
(a) Except as provided in subsection (b) next below, Options governed
hereby and any rights and privileges pertaining thereto, may not be transferred,
assigned, pledged or hypothecated in any manner, by operation of law or
otherwise, other than by will or by the laws of descent and distribution, and
shall not be subject to execution, attachment or similar process. The granting
of an Option shall impose no obligation upon the applicable Participant to
exercise such Option.
(b) Notwithstanding the provisions of subsection (a) above, a
Participant, at any time prior to his or her death, may assign all or any
portion of an Option granted to him or her to (i) his or her spouse or lineal
descendant, (ii) the trustee of a trust for the primary benefit of his or her
spouse or lineal descendant, (iii) a partnership of which his or her spouse and
lineal descendants are the only partners, or (iv) a tax exempt organization. In
such event, the spouse, lineal descendant, trustee, partnership or tax exempt
organization will be entitled to all of the rights of the Participant with
respect to the assigned portion of such Option, and such portion of the Option
will continue to be subject to all of the terms, conditions and restrictions
applicable to the Option, as set forth herein and in the related Option
Agreement immediately prior to the effective date of the assignment. Any such
assignment will be permitted only if (i) the Participant does not receive any
consideration therefore, and (ii) the assignment is expressly permitted by the
applicable Option Agreement and approved by the Committee. Any such assignment
shall be evidenced by an appropriate written document executed by the
Participant, and a copy thereof shall be delivered to ETHC on or prior to the
effective date of the assignment.
(c) The offer and sale of Ordinary Shares underlying Options have not
been registered under the Securities Act of 1933, as amended (the "Act"). A
Participant shall not sell or otherwise dispose of the Ordinary Shares acquired
pursuant to the exercise of such Options, in violation of the Act.
12. Indemnification of the Committee
In addition to such other rights of indemnification as they may have as
members of the Board, or as members of the Committee, or as its delegatees, the
members of the Committee and its delegatees shall be indemnified by ETHC against
(a) the reasonable expenses (as such expenses are incurred), including
attorneys' fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding (or in connection with any appeal therein), to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan, or any Option granted
hereunder; and (b) all amounts paid by them
6
in settlement thereof (provided such settlement is approved by independent legal
counsel selected by ETHC) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such Committee member
or delegatee, as applicable, is liable for gross negligence or gross misconduct
in the performance of his or her duties; provided that within 60 days after
institution of any such action, suit or proceeding a Committee member or
delegatee shall in writing offer ETHC the opportunity, at its own expense, to
handle and defend the same.
13. No Contract of Employment or Service on the Board
Neither the adoption of this Plan nor the grant of any Option shall be
deemed to obligate ETHC or any subsidiary to continue the employment or service
on the Board of any Participant for any particular period, nor shall the
granting of an Option constitute a request or consent to postpone the retirement
date of any Participant.
14. Termination and Amendment of this Plan
Unless required by law, no termination, suspension, amendment or
modification of this Plan shall adversely affect any right acquired by any
Participant under an Option granted before the date of such termination,
suspension, amendment or modification, unless such Participant shall consent;
but it shall be conclusively presumed that any adjustment for changes in
capitalization as provided for herein does not adversely affect any such right.
15. Effective Date of this Plan
This Plan shall become effective upon adoption by the Board; provided,
however, that it shall be submitted for approval by the holders of a majority of
the outstanding Ordinary Shares of ETHC present, or represented, and entitled to
vote at a shareholders' meeting held within 12 months thereafter, and Options
granted prior to such shareholder approval shall become null and void if such
shareholder approval is not obtained.
16. Withholding Taxes
Whenever ETHC proposes or is required to issue or transfer Ordinary
Shares to a Participant under this Plan, the Board or the Committee, as
applicable, shall have the right to require the Participant to remit to ETHC an
amount sufficient to satisfy any withholding tax requirements prior to the
delivery of any certificate or certificates for such shares. If such
certificates have been delivered prior to the time a withholding obligation
arises, ETHC shall have the right to require the Participant to remit to ETHC an
amount sufficient to satisfy all withholding tax requirements at the time such
obligation arises and to withhold from other amounts payable to the Participant,
as compensation or otherwise, as necessary. A Participant may elect to satisfy
any such tax withholding obligation incurred with respect to the Taxable Date of
an Option by (a) directing ETHC to withhold a portion of the shares of Ordinary
Shares otherwise distributable to the Participant, or (b) transferring to ETHC a
certain number of Ordinary Shares either subject to an Option being exercised or
previously owned, such shares
7
being valued at the Fair Market Value thereof on the Taxable Date.
Notwithstanding any provision of this Plan to the contrary, a Participant's
election pursuant to the preceding sentence (a) must be made on or prior to the
Taxable Date with respect to such Option, and (b) must be irrevocable. In lieu
of a separate election on each Taxable Date of an Option, a Participant may make
a blanket election with the Board or the Committee that shall govern all future
Taxable Dates until revoked by the Participant. If the holder of shares of
Ordinary Shares purchased in connection with the exercise of an Option disposes
of such shares within two years of the date such Option was granted or within
one year of such exercise, he or she shall notify ETHC of such disposition and
remit an amount necessary to satisfy any applicable withholding requirements. If
such holder does not remit such amount, ETHC may withhold all or a portion of
any amounts then or in the future owed to such holder as necessary to satisfy
such requirements. Taxable Date means the date a Participant recognizes income
with respect to an Option under the Code or any applicable tax law.
17. Ratification of Awards
The determination by the Board or the Committee, as applicable, to
grant any Award under this Plan, must be ratified in full by the Board of
Directors of ETHC. Any such Award which is not ratified in full by the Board of
Directors of ETHC within 60 days after the date of grant thereof shall be null
and void.
18. Leaves of Absence
A period of leave of absence shall not be deemed a termination of
employment or service for purposes of Options granted under this Plan, if such
leave of absence is expressly approved in writing by the Board or the Committee,
as applicable, as a leave of absence for purposes of this Plan.
19. Governing Law
This Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of Hong Kong.
20. Fair Market Value
"Fair Market Value" as of a given date for all purposes of this Plan
and any Option Agreement means (a) if the Ordinary Shares are listed on a
national securities exchange or the Nasdaq Stock Market's National Market, the
average of the closing prices of the Ordinary Shares for the 10 consecutive
trading days immediately preceding such given date; (b) if the Ordinary Shares
are principally traded on a national securities exchange or Nasdaq but there are
no reported closing sales prices on such exchange or Nasdaq during the 10
consecutive trading days immediately preceding such given date or if the
Ordinary Shares are principally traded on the over-the-counter market, the
average of the mean between the bid and the asked price for the Ordinary Shares
at the close of trading for the 10 consecutive trading days immediately
preceding such given date; or (c) if the Ordinary Shares are neither listed on a
national securities
8
exchange or Nasdaq nor traded on the over-the-counter market, or if no such bid
and asked prices are otherwise available, such value as the Board, in good
faith, shall determine. The Committee shall have broad discretion in selecting a
valuation method consistent with this Section 20 for purposes of determining
"Fair Market Value."
21. Successors
In the event of a liquidation, dissolution, sale or transfer of
substantially all of the assets of ETHC, or a merger or consolidation involving
ETHC, all obligations of ETHC under this Plan with respect to Options governed
by this Plan shall be binding on the successor to the transaction. Employment of
a Participant with such a successor or service on the board of directors of a
successor shall be considered employment of the Participant with ETHC, or
service on the Board, for purposes of this Plan.
22. Notices
Notices given pursuant to this Plan shall be in writing and shall be
deemed received when personally delivered or five days after mailed by
registered or certified mail, return receipt requested, addressee only, postage
prepaid. Notice to ETHC shall be directed to:
Mr. T.C. Leung, Chairman
Euro Tech (Far East) Ltd.
18/F Gee Chang Hong Centre
65 Wong Chuk Hang Road
Hong Kong
Notices to or with respect to a Participant shall be directed to the
Participant, or the executors, personal representatives or distributees of a
deceased Participant or to a Participant's assignee, at the Participant's or
assignee's home address on the records of ETHC.
IN WITNESS WHEREOF, ETHC has caused this Plan to be executed on its
behalf by its duly authorized officer on June 1, 2000.
EURO TECH HOLDINGS COMPANY LIMITED
By: ___________________________________
T.C. Leung, Chief Executive Officer
9
APPENDIX B
EURO TECH HOLDINGS COMPANY LIMITED
2000 EMPLOYEES' STOCK OPTION AND INCENTIVE PLAN
1. Purpose
Euro Tech Holdings Company Limited, a British Virgin Islands
corporation ("ETHC") hereby establishes the Euro Tech Holdings Company Limited
2000 Employees' Stock Option and Incentive Plan (the "Plan"). The purpose of the
Plan is to enable ETHC and its subsidiaries to attract, retain, and reward key
employees ("Key Employees") (references hereinafter to "Board" mean the Board of
Directors of ETHC and any subsidiary of ETHC, as the context dictates, unless
otherwise indicated), by offering them an opportunity to have a proprietary
interest in and closer identity with ETHC and its subsidiaries and with their
financial success. Proceeds received by ETHC from shares of Ordinary Shares
acquired pursuant to Options granted under the Plan shall be used for general
corporate purposes.
2. Administration
This Plan shall be administered by the Board or a committee
("Committee") appointed by the Board. Except as otherwise provided in this Plan,
the Board or the Committee may interpret this Plan, prescribe, amend and rescind
rules and regulations relating to it, determine the terms and provisions of
options granted under this Plan (which need not be identical), and make such
other determinations as it deems necessary and advisable for the administration
of this Plan. A majority of the Committee members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members. Any
decision or determination reduced to writing, and signed by all of the members,
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee shall also have express
authorization to hold Committee meetings by means of conference telephone, or
similar communications equipment, by which all persons participating in the
meeting can hear each other. The Committee may delegate decisions with respect
to Options granted to Key Employees who are not elected officers or directors of
ETHC or its subsidiaries. The decisions of the Committee or the Chief Executive
Officer of ETHC (the "Chief Executive Officer") under this Plan shall be
conclusive and binding. No member of the Board or the Committee or the Chief
Executive Officer, shall be liable for any action taken or determination made
hereunder in good faith. Service on the Committee shall constitute service as a
director of ETHC so that the members of the Committee shall be entitled to
indemnification and reimbursement as directors of ETHC pursuant to its by-laws.
If this Plan is administered by the Board, the Board shall administer this Plan
as if it were the Committee having the authority hereunder.
3. Eligibility
Key Employees who have been selected to receive an Option shall
participate in this Plan and shall be collectively referred to as
"Participants." The Board, the Committee or the Chief Executive Officer, as
applicable, shall determine, within the limits of the express provisions of
1
this Plan, those Participants to whom, and the time or times at which, Options
shall be granted. The Board, the Committee or the Chief Executive Officer, as
applicable, shall also determine, with respect to Options granted to
Participants, the number of Ordinary Shares to be subject to each such Option;
the duration of each Option; the exercise price under each Option; the time or
times within which (during the term of the Option) all or portions of each
Option may be exercised; whether cash, Ordinary Shares, or other property may be
accepted in full or partial payment upon exercise of an Option; and any other
terms and conditions of such Options. In making such determinations, the Board,
the Committee or the Chief Executive Officer, as applicable, may take into
account the nature of the services rendered by the Participant, his or her
present and potential contributions to ETHC's success and such other factors as
the Board, the Committee or the Chief Executive Officer, as applicable, in its
or his discretion shall deem relevant.
4. Ordinary Shares
The total number of shares of Ordinary Shares that may be subject to
Options under this Plan shall be 146,000. Such total number of shares shall be
adjusted in accordance with the provisions of Section 9 hereof. Such shares may
be either authorized but unissued shares or reacquired shares. In the event that
any Option granted under this Plan expires unexercised or is terminated,
surrendered, forfeited, canceled or reacquired without being exercised, in whole
or in part, for any reason, then the number of Ordinary Shares theretofore
subject to such Option, or the unexercised, terminated, surrendered, forfeited,
canceled or reacquired portion thereof, shall be added to the remaining number
of shares of Ordinary Shares that may be made subject to Options granted under
this Plan. Such Options include Options to former holders of such Options, upon
such terms and conditions as the Board, the Committee or the Chief Executive
Officer, as applicable, shall determine, which terms may be more or less
favorable than those applicable to such former holders of Options.
5. Grants
Options may be granted at any time and from time to time as shall be
determined by the Board, the Committee or the Chief Executive Officer. Subject
to the limitation on the total number of shares subject to issuance in
subsections 6(a) and (d), the Board, the Committee or the Chief Executive
Officer, as applicable, shall have complete discretion in determining the number
of Ordinary Shares subject to Options granted. The Board, the Committee or the
Chief Executive Officer, as applicable, may grant any type of Option to purchase
Ordinary Shares that is permitted by law at the time of the grant.
6. Required Terms and Conditions of Options
Each Option granted shall be in such form and subject to such
restrictions and conditions and other terms as the Board, the Committee or the
Chief Executive Officer, as applicable, may determine at the time of grant,
subject to the general provisions of this Plan, the applicable Option Agreement
and the following specific rules:
(a) Exercise Price. Except as otherwise provided, the per share
exercise price of each
2
Option shall be at least 100% of the Fair Market Value of the Ordinary Shares at
the time such Option is granted.
(b) Maximum Term. Subject to earlier termination as provided in Section
7, each Option shall expire on the date determined in the applicable Option
Agreement at the time the Option is granted, provided that no Option shall be
exercisable after the expiration of 10 years from the date it is granted, except
as otherwise provided in subsection (a) next above.
(c) Time of Exercise. The Board. the Committee or the Chief Executive
Officer, as applicable, shall specify in the Option Agreement, at the time each
Option is granted, the duration of each Option and the time or times within
which (during the term of the Option) all or portions of each Option may be
exercised, except to the extent that other terms of exercise are specifically
provided by other provisions of the Plan.
7. Expiration of Options; Termination of Employment, Disability, Death,
and Expiration of Restrictions Upon Occurrence of Specified Events
(a) General Rule. Except with respect to Options expiring pursuant to
subsections 7(b), (c) or (d) below, each Option granted to a Participant shall
expire on the expiration date or dates set forth in the applicable Option
Agreement. Each Option expiring pursuant to subsections 7(b), (c) or (d) below
shall expire on the date set forth in subsection 7(b), (c) or (d)
notwithstanding any restrictions and conditions that may be contained in a
Participant's Option Agreement.
(b) Expiration Upon Termination of Employment. If a Participant ceases
to be an employee of ETHC or any of its subsidiaries, due to the voluntary
resignation of the Participant, or a termination by ETHC or any of its
subsidiaries for Cause, then all of such Participant's Options shall be null and
void and shall terminate. If a Participant ceases to be an employee of ETHC or
any of its subsidiaries due to termination without Cause by ETHC or any of its
subsidiaries, then all of such Participant's Options shall expire on the first
to occur of (i) the applicable date or dates determined pursuant to subsection
7(a), or (ii) the date ninety (90) days after the date that the employment of
the Participant with ETHC or its subsidiaries, terminates.
(c) Expiration Upon Disability or Death. If the employment of a
Participant with ETHC and its subsidiaries, terminates by reason of disability
(as determined by the Board, the Committee or the Chief Executive Officer, as
applicable), all of the Participant's unexercised Options may be exercised by
the Participant, whether or not otherwise exercisable at the date of disability,
within twelve (12) months after the date of disability, but in no event later
than the expiration date of such Options. If a Participant dies while in the
employ of ETHC and its subsidiaries, all of the Participant's unexercised
Options, whether or not otherwise exercisable at the date of death, may be
exercised within twelve (12) months after the date of death by the person
specified in Section 8, but in no event later than the expiration date of such
Options.
(d) Expiration of Restrictions Upon Occurrence of Specified Events.
Upon the occurrence of any event described in subsection 9(b), each
Participant's outstanding Options shall become immediately vested and
exercisable. In such event, the Participant may elect to exercise in whole or in
part any or all of his or her Options, in accordance with the terms of Section
8,
3
notwithstanding any restrictions and conditions that may be contained in his or
her Option Agreement.
(e) "Cause" shall mean: a) the willful failure of Participant to
substantially perform his or her duties with ETHC or any of its subsidiaries
(other than any such failure resulting from Participant's incapacity due to
physical or mental illness) after a written demand for substantial performance
is delivered to Participant specifically identifying the manner in which
Participant has not substantially performed his or her duties; b) any willful
act of misconduct by Participant which is materially injurious to ETHC or it
subsidiaries (monetarily or otherwise); c) criminal indictment or conviction of
Participant for any felony or act involving dishonesty, breach of trust, or a
violation of the laws of the United States or any state of the United States; d)
a breach of fiduciary duty involving personal profit; e) a willful violation of
any law, rule, regulation or final cease and desist order; f) incompetence,
personal dishonesty or material violation of any employment policy of ETHC or
any of its subsidiaries relating to Participant which would have a material
adverse effect on ETHC or any of its subsidiaries; or g) suspension, removal
and/or prohibition (whether temporary or permanent) by any banking or similar
regulatory authority from participation in the affairs of ETHC or any of its
subsidiaries.
8. Method of Exercise of Options
Any Option may be exercised by the Participant, by a legatee or
legatees of such Option under the Participant's last will, by his or her
executors, personal representatives or distributees by his or her assignee or
assignees as provided in Section 11 below, by delivering to the Secretary of
ETHC written notice of the number of shares of Ordinary Shares with respect to
which the Option is being exercised, accompanied by full payment to ETHC of the
exercise price of the shares being purchased under the Option, and by satisfying
all other conditions provided for in this Plan. Except as otherwise provided in
this Plan or in any Option Agreement, the exercise price of Ordinary Shares upon
exercise of any Option by a Participant shall be paid in full (i) in cash, (ii)
in Ordinary Shares which have been held by the Participant for not less than six
months prior to the exercise of the Option, valued at its Fair Market Value on
the date of exercise, (iii) in cash by a broker-dealer to whom the holder of the
Option has submitted an exercise notice consisting of a fully endorsed Option,
or (iv) by such other medium of payment as the Board, the Committee or the Chief
Executive Officer, as applicable, in its or his sole discretion, shall
authorize, or by any combination of (i), (ii), or (iii), at the sole discretion
of the Board, the Committee or the Chief Executive Officer, as applicable, or in
any manner provided in the Option Agreement, except by directing ETHC to
withhold Ordinary Shares otherwise issuable upon the exercise of the Option in
payment of the exercise price. In the case of payment pursuant to (ii) or (iii),
above, the Participant's election must be made on or prior to the date of
exercise of the Option and must be irrevocable. In lieu of a separate election
governing each exercise of an Option, a Participant may file a blanket election
which shall govern all future exercises of Options until revoked by the
Participant. ETHC shall issue, in the name of the Participant (or, if
applicable, the legatee(s), executor(s), personal representative(s), or
distributee(s) of a deceased Participant, or the assignee(s) as provided in
Section 11), stock certificates representing the total number of Ordinary Shares
issuable pursuant to the exercise of any Option as soon as reasonably
practicable after such exercise.
4
9. Adjustments
(a) Appropriate adjustment in the maximum number of Ordinary Shares
issuable pursuant to this Plan, the maximum number of Ordinary Shares with
respect to which Options may be granted within any 12-month period to any
Participant during the duration of this Plan, the number of shares subject to
Options granted under this Plan, and the exercise price with respect to Options,
shall be made to give effect to any increase or decrease in the number of issued
Ordinary Shares resulting from a subdivision or consolidation of shares whether
through reorganization, recapitalization, stock split, reverse stock split,
spin-off, split-off, spin-out, or other distribution of assets to shareholders,
stock distributions or combination of shares, assumption and conversion of
outstanding Options due to an acquisition by ETHC of the stock or assets of any
other corporation, payment of stock dividends, other increase or decrease in the
number of such shares outstanding effected, without receipt of consideration by
ETHC, or any other occurrence for which the Committee determines an adjustment
is appropriate. If the number of Ordinary Shares subject to an Option has been
adjusted pursuant to this paragraph, the decision of the Board, the Committee or
the Chief Executive Officer, as applicable, as to the amount and timing of any
such adjustments shall be conclusive.
(b) The Committee shall make all determinations relating to the
applicability and interpretation of this Section 9, and all such determinations
shall be conclusive and binding.
10. Terms and Conditions of Options
(a) In order for an Option to be effective, each Participant shall
agree to such restrictions and conditions and other terms in connection with the
exercise of an Option, including restrictions and conditions on the disposition
of the Ordinary Shares acquired upon the exercise, grant or sale thereof, as the
Committee may deem appropriate. The certificates delivered to a Participant
evidencing the Ordinary Shares acquired upon exercise of an Option may bear a
legend referring to the restrictions and conditions and other terms contained in
the respective Option Agreement and this Plan, and ETHC may place a stop
transfer order with its transfer agent against the transfer of such shares. If
requested to do so by the Board, the Committee or the Chief Executive Officer,
as applicable, at the time of exercise of an Option, each Participant shall
execute a written instrument stating that he or she is purchasing the Ordinary
Shares for investment and not with any present intention to sell the same.
(b) The obligation of ETHC to sell and deliver Ordinary Shares under
the plan shall be subject to all applicable laws, regulations, rules and
approvals. A Participant shall have no rights as a shareholder with respect to
any shares covered by an Option granted to, or exercised by, him or her until
the date of delivery of a stock certificate to him or her for such shares. No
adjustment other than pursuant to Section 9 (a) hereof shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is delivered.
11. Nontransferability
(a) Except as provided in subsection (b) next below, Options governed
hereby and any rights and privileges pertaining thereto, may not be transferred,
assigned, pledged or
5
hypothecated in any manner, by operation of law or otherwise, other than by will
or by the laws of descent and distribution, and shall not be subject to
execution, attachment or similar process. The granting of an Option shall impose
no obligation upon the applicable Participant to exercise such Option.
(b) Notwithstanding the provisions of subsection (a) above, a
Participant, at any time prior to his or her death, may assign all or any
portion of an Option granted to him or her to (i) his or her spouse or lineal
descendant, (ii) the trustee of a trust for the primary benefit of his or her
spouse or lineal descendant, (iii) a partnership of which his or her spouse and
lineal descendants are the only partners, or (iv) a tax exempt organization. In
such event, the spouse, lineal descendant, trustee, partnership or tax exempt
organization will be entitled to all of the rights of the Participant with
respect to the assigned portion of such Option, and such portion of the Option
will continue to be subject to all of the terms, conditions and restrictions
applicable to the Option, as set forth herein and in the related Option
Agreement immediately prior to the effective date of the assignment. Any such
assignment will be permitted only if (i) the Participant does not receive any
consideration therefore, and (ii) the assignment is expressly permitted by the
applicable Option Agreement and approved by the Committee. Any such assignment
shall be evidenced by an appropriate written document executed by the
Participant, and a copy thereof shall be delivered to ETHC on or prior to the
effective date of the assignment.
(c) The offer and sale of Ordinary Shares underlying Options have not
been registered under the Securities Act of 1933, as amended (the "Act"). A
Participant shall not sell or otherwise dispose of the Ordinary Shares acquired
pursuant to the exercise of such Options, in violation of the Act.
12. Indemnification of the Committee and Chief Executive Officer
In addition to such other rights of indemnification as they may have as
members of the Board, or as members of the Committee, or as its delegatees, or
as the Chief Executive Officer, the members of the Committee and its delegatees
and the Chief Executive Officer shall be indemnified by ETHC against (a) the
reasonable expenses (as such expenses are incurred), including attorneys' fees
actually and necessarily incurred in connection with the defense of any action,
suit or proceeding (or in connection with any appeal therein), to which they or
any of them may be a party by reason of any action taken or failure to act under
or in connection with the plan, or any Option granted hereunder; and (b) all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by ETHC) or paid by them in satisfaction
of a judgment in any such action, suit or proceeding, except in relation to
matters as to which it shall be adjudged in such action, suit or proceeding that
such Committee member or delegatee, or the Chief Executive Officer, as
applicable, is liable for gross negligence or gross misconduct in the
performance of his or her duties; provided that within 60 days after institution
of any such action, suit or proceeding a Committee member or delegatee or the
Chief Executive Officer shall in writing offer ETHC the opportunity, at its own
expense, to handle and defend the same.
6
13. No Contract of Employment
Neither the adoption of this Plan nor the grant of any Option shall be
deemed to obligate ETHC or any subsidiary to continue the employment or service
of any Participant for any particular period, nor shall the granting of an
Option constitute a request or consent to postpone the retirement date of any
Participant.
14. Termination and Amendment of this Plan
Unless required by law, no termination, suspension, amendment or
modification of this Plan shall adversely affect any right acquired by any
Participant under an Option granted before the date of such termination,
suspension, amendment or modification, unless such Participant shall consent;
but it shall be conclusively presumed that any adjustment for changes in
capitalization as provided for herein does not adversely affect any such right.
15. Effective Date of this Plan
This Plan shall become effective upon adoption by the Board; provided,
however, that it shall be submitted for approval by the holders of a majority of
the outstanding Ordinary Shares of ETHC present, or represented, and entitled to
vote at a shareholders' meeting held within 12 months thereafter, and Options
granted prior to such shareholder approval shall become null and void if such
shareholder approval is not obtained.
16. Withholding Taxes
Whenever ETHC proposes or is required to issue or transfer Ordinary
Shares to a Participant under this Plan, the Board or the Committee, as
applicable, shall have the right to require the Participant to remit to ETHC an
amount sufficient to satisfy any withholding tax requirements prior to the
delivery of any certificate or certificates for such shares. If such
certificates have been delivered prior to the time a withholding obligation
arises, ETHC shall have the right to require the Participant to remit to ETHC an
amount sufficient to satisfy all withholding tax requirements at the time such
obligation arises and to withhold from other amounts payable to the Participant,
as compensation or otherwise, as necessary. A Participant may elect to satisfy
any such tax withholding obligation incurred with respect to the Taxable Date of
an Option by (a) directing ETHC to withhold a portion of the shares of Ordinary
Shares otherwise distributable to the Participant, or (b) transferring to ETHC a
certain number of Ordinary Shares either subject to an Option being exercised or
previously owned, such shares being valued at the Fair Market Value thereof on
the Taxable Date. Notwithstanding any provision of this Plan to the contrary, a
Participant's election pursuant to the preceding sentence (a) must be made on or
prior to the Taxable Date with respect to such Option, and (b) must be
irrevocable. In lieu of a separate election on each Taxable Date of an Option, a
Participant may make a blanket election with the Board or the Committee that
shall govern all future Taxable Dates until revoked by the Participant. If the
holder of shares of Ordinary Shares purchased in connection with the exercise of
an Option disposes of such shares within two years of the date such Option was
granted or within one year of such exercise, he or she shall notify ETHC of such
disposition and remit an amount necessary to satisfy any applicable withholding
7
requirements. If such holder does not remit such amount, ETHC may withhold all
or a portion of any amounts then or in the future owed to such holder as
necessary to satisfy such requirements. Taxable Date means the date a
Participant recognizes income with respect to an Option under the Code or any
applicable tax law.
17. Ratification of Awards
The determination by the Board, the Committee or the Chief Executive
Officer, as applicable, to grant any Award under this Plan, must be ratified in
full by the Board of Directors of ETHC. Any such Award which is not ratified in
full by the Board of Directors of ETHC within 60 days after the date of grant
thereof shall be null and void.
18. Leaves of Absence
A period of leave of absence shall not be deemed a termination of
employment or service for purposes of Options granted under this Plan, if such
leave of absence is expressly approved in writing by the Board, the Committee or
the Chief Executive Officer, as applicable, as a leave of absence for purposes
of this Plan.
19. Governing Law
This Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of Hong Kong.
20. Fair Market Value
"Fair Market Value" as of a given date for all purposes of this Plan
and any Option Agreement means (a) if the Ordinary Shares are listed on a
national securities exchange or the Nasdaq Stock Market's National Market, the
average of the closing prices of the Ordinary Shares for the 10 consecutive
trading days immediately preceding such given date; (b) if the Ordinary Shares
are principally traded on a national securities exchange or Nasdaq but there are
no reported closing sales prices on such exchange or Nasdaq during the 10
consecutive trading days immediately preceding such given date or if the
Ordinary Shares are principally traded on the over-the-counter market, the
average of the mean between the bid and the asked price for the Ordinary Shares
at the close of trading for the 10 consecutive trading days immediately
preceding such given date; or (c) if the Ordinary Shares are neither listed on a
national securities exchange or Nasdaq nor traded on the over-the-counter
market, or if no such bid and asked prices are otherwise available, such value
as the Board, in good faith, shall determine. The Committee shall have broad
discretion in selecting a valuation method consistent with this Section 20 for
purposes of determining "Fair Market Value."
21. Successors
In the event of a liquidation, dissolution, sale or transfer of
substantially all of the assets of ETHC, or a merger or consolidation involving
ETHC, all obligations of ETHC under this Plan with respect to Options governed
by this Plan shall be binding on the successor to the
8
transaction. Employment of a Participant with such a successor shall be
considered employment of the Participant with ETHC for purposes of this Plan.
22. Notices
Notices given pursuant to this Plan shall be in writing and shall be
deemed received when personally delivered or five days after mailed by
registered or certified mail, return receipt requested, addressee only, postage
prepaid. Notice to ETHC shall be directed to:
Mr. T.C. Leung, Chairman
Euro Tech (Far East) Ltd.
18/F Gee Chang Hong Centre
65 Wong Chuk Hang Road
Hong Kong
Notices to or with respect to a Participant shall be directed to the
Participant, or the executors, personal representatives or distributees of a
deceased Participant or to a Participant's assignee, at the Participant's or
assignee's home address on the records of ETHC.
IN WITNESS WHEREOF, ETHC has caused this Plan to be executed on its
behalf by its duly authorized officer on June 1, 2000.
EURO TECH HOLDINGS COMPANY LIMITED
By: ___________________________________
T.C. Leung, Chief Executive Officer
9
APPENDIX C
The Company's Memorandum of Association includes the following new
Section 8 to replace the existing Section 8:
DESIGNATIONS, POWERS, PREFERENCES, ETC. OF SHARES
8. THE RIGHTS ATTACHING TO THE ORDINARY SHARES AND PREFERRED SHARES ARE AS
FOLLOWS:
8.1 ORIDNARY SHARES
8.1.1 THE HOLDERS OF ORDINARY SHARES SHALL:
(i) HAVE ONE VOTE FOR EACH ORDINARY SHARE HELD OF
RECORD;
(ii) BE ENTITLED TO RECEIVE DIVIDENDS AS AND WHEN
DECLARED AND TO PARTICIPATE RATABLY IN THE
ASSETS OF THE COMPANY UPON LIQUIDATION; AND
(iii) NOT BE ENTITLED TO REDEEM THE ORDINARY SHARES,
OR BE ENTITLED TO ANY PRE-EMPTIVE OR SIMILAR
RIGHTS.
8.2 PREFERRED SHARES
THE HOLDERS OF PREFERRED SHARES SHALL HAVE SUCH VOTING POWERS, FULL OR
LIMITED, OR NO VOTING POWERS, AND SUCH DESIGNATIONS, PREFERENCES AND
RELATIVE PARTICIPATING, OPTIONS OR OTHER SPECIAL RIGHTS, AND
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF, AS SHALL BE STATED
AND EXPRESSED IN THE RESOLUTION OR RESOLUTIONS PROVIDING FOR THE
ISSUANCE OF SUCH SHARES ADOPTED FROM TIME TO TIME BY THE BOARD OF
DIRECTORS. THE BOARD OF DIRECTORS IS HEREBY EXPRESSLY VESTED WITH THE
AUTHORITY TO DETERMINE AND FIX IN THE RESOLUTION OR RESOLUTIONS
PROVIDING FOR THE ISSUANCE OF PREFERRED SHARES THE VOTING POWERS,
DESIGNATIONS, PREFERENCES AND RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, OF EACH SUCH SERIES TO THE FULL
EXTENT PERMITTED BY THE LAWS OF THE BRITISH VIRGIN ISLANDS.
PROXY FRONT
EURO TECH HOLDINGS COMPANY LIMITED
PROXY SOLICITED BY BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints T.C. Leung and Jerry
Wong and each of them, with full power of substitution, as proxies to represent
the undersigned and vote all the Ordinary Shares of Euro Tech Holdings Company
Limited, which the undersigned is entitled to vote at the Annual Meeting of
Shareholders to be held on September 29, 1999,August 9, 2000, at 4:00 P.M. local time at the Luk
Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong and at any adjournments
thereof,thereof. Said proxies are directed to vote as instructed on the matters set
forth in the following manner:
Management recommends that you vote FOR Proposal 1proxy and FOR Proposals 2otherwise at their discretion. Receipt of a copy of the
notice of said meeting and 3.
1. |_| For all nominees listed below, except any nominee(s) for whom
authority to vote has been withheld in the manner specified below.
T.C. Leung, Jerry Wong, Nancy Wong, C.P. Kwan, Alex Sham
Adam L. Goldberg and Y.K. Liang.
|_| Against all nominees listed above.
|_| For only those nominees listed below. Instructions: To grant
authority to vote for any specific nominee(s), you must write the name or names
of such nominees in the following space: ______________________________________
|_| Against only those nominees listed below. Instructions: To
withhold authority to vote for any specific nominee(s), you must write the name
or names of such nominees in the following space: ____________________________
|_| Abstain
2. Proposal to ratify the appointment of Arthur Andersen & Co., Hong
Kong as auditors for the 1999 fiscal year.
|_| FOR |_| AGAINST |_| ABSTAIN
3. IN ACCORDANCE WITH THEIR BEST JUDGMENT, the Proxyproxy statement is authorized to
vote upon any other matter which may properly come before the Meeting.
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PROXY BACK
(continued from other side)hereby acknowledged.
THIS PROXY IFWHEN PROPERLY EXECUTED WILL BE VOTED ASIN THE MANNER DIRECTED
HEREIN. UNLESS
OTHERWISE DIRECTED, ORHEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION ISDIRECTIONS ARE GIVEN, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE DIRECTOR NOMINEES NAMED ONPROPOSALS 1, 2, 3, 4, 5, 6 AND 7.
(PLEASE SIGN AND DATE THE REVERSE SIDE AND MAIL IN THE RETURN ENVELOPE
TO: AMERICAN STOCK TRANSFER AND TRUST COMPANY, 99 WALL STREET, NEW YORK, NEW
YORK 10005.)
MANAGEMENT RECOMMENDS THAT YOU VOTE FOR PROPOSALS 1, 2, and 3.
Date:___________________________, 1999
______________________________________3, 4, 5, 6 AND
7.
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. [X]
1. Election of Directors:
WITHOUT
AUTHORITY
NOMINEES FOR AGAINST TO VOTE FOR
T.C. Leung [ ] [ ] [ ]
Jerry Wong [ ] [ ] [ ]
Nancy Wong [ ] [ ] [ ]
C.P. Kwan [ ] [ ] [ ]
Alex Sham [ ] [ ] [ ]
Y.K. Liang [ ] [ ] [ ]
Adam L. Goldberg [ ] [ ] [ ]
2. Proposal to adopt the 2000 Officers and FOR AGAINST ABSTAIN
Directors Stock Option and Incentive Plan. [ ] [ ] [ ]
3. Proposal to adopt the 2000 Employees FOR AGAINST ABSTAIN
Stock Option and Incentive Plan. [ ] [ ] [ ]
4. Proposal to amend the Company's FOR AGAINST ABSTAIN
Memorandum and Articles of Association [ ] [ ] [ ]
to increase the authorized number of
shares from 20,000,000 to 25,000,000
5. Proposal to amend the Company's FOR AGAINST ABSTAIN
Memorandum and Articles of [ ] [ ] [ ]
Association to authorize 5,000,000
shares of Blank Check Preferred
Stock.
6. Proposal to ratify the appointment of FOR AGAINST ABSTAIN
Arthur Andersen & Co., Hong Kong, [ ] [ ] [ ]
as auditors for the 2000 Fiscal Year
7. Proposal to adjourn the special meeting FOR AGAINST ABSTAIN
in the discretion of the Company's [ ] [ ] [ ]
management if adjournment is necessary
to enable it to solicit additional proxies
to secure a quorum or the approval of
any of the matters listed above.
Dated: ____________, 2000
- ---------------------------
Signature
______________________________________- ---------------------------
Signature if jointly held
Please date and sign exactly as your
name appears hereon. If shares are
jointly held, all joint owners should
sign. TrusteesExecutors, Administrators,
trustees, guardians and others signing
in a representative capacity in which
they sign.sign should give their full titles.
If the signatory is a corporation or
partnership, sign the full corporate or
partnership name by a duly authorized
officer or partner.
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