UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,Washington, D.C. 20549
__________________________
SCHEDULE 14A
__________________________
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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£ | Soliciting Material Pursuant to §240.14a-12 |
Jerash Holdings (US), Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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To our Stockholders:
Thank you for your support as a stockholder inof Jerash Holdings (US), Inc. We are excited to report strong financial results for fiscal 2019, our first full year as a publicly traded company,2020, including record sales of $85 $93million, $0.45$0.57 per share in GAAP net income and $9.8 $6.9million in cash flow from operations. We ended the year with cash and cash equivalents of $27.8 $26.9million. We also declared our firstcontinued to declare dividends, with a target of returningpaying out $0.20 per share per yearin dividends to our stockholders going forward.
Our fiscal 2020 performance was slightly impacted by the ongoing COVID-19 pandemic and the national shutdown in revenuelate March 2020 in Jordan where our production facilities are located. For fiscal 2021, there are uncertainties in customer demand in both the United States and profitability in the years ahead. For example, we initiated sample ordersEurope. We are relentlessly communicating with multiple prospectiveboth existing and new customers even as existingto secure orders, but currently we are unable to provide an annual projection given the volatility of the pandemic situation.
We have taken pro-active steps in bringing in new customers continue to ask for increased capacity. We significantly expanded warm weather production, growing revenue by 63% in our fiscal second half as we seek to maximize output year-round. To meet this rising demand from our customers, we acquired additional factory assets in Jordan that commenced production in April of this year. We also advanced construction of a satellite facility in partnership with the government of Jordan, expected to begin production late in calendar year 2019.and expanding product types, like non-medical facial masks and personal protection equipment level gears including surgical masks and isolation gowns. We believe these facilitiessuch actions, in addition to our strong cashflow position, will propel our annual capacityposition Jerash well to more than 8 million pieces bycapture additional market shares when the end of calendar year 2019, with additional upside from subsequent efficiency gains and investment in line expansion.
Finally, I want to highlight that we are achieving these successesthe above while remaining a socially responsible company. We believe in paying a living wage to our valued employees, creating a safe and rewarding work environment with opportunities for advancement, and providing access to employment for displaced or disadvantaged workers, including Syrian refugees through our work with the United Nations and local women through our work with the Jordanian government.
We look forward to the year ahead and continuing to report our progress.
Best regards,
/s/ Choi Lin Hung | ||
Choi Lin Hung | ||
Chairman and Chief Executive Officer | ||
July29, 2020 |
Jerash Holdings (US), Inc.260 East Main Street,277 Fairfield Road, Suite 2706338Rochester, NY 14604
Date: | Wednesday, September 16, 2020 | |
Time: | 8:30 P.M. HKT | |
Location: | Unit A, 19/F Ford Glory Plaza | |
Record Date: | Monday, July 20, 2020 |
Date:
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3. Consider any other business as may properly be brought before the meeting or any adjournment or postponement thereof.
The Board of Directors recommends that you vote “FOR” each of the director nominees included in Proposal No. 1 and “FOR” Proposal Nos. 2 and 3.
How to Vote
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This communication is not a form for voting and presents only an overview of the more complete proxy materials. The Company encourages you to review the complete proxy materials before voting.
THE 20192020 ANNUAL REPORT TO STOCKHOLDERS ACCOMPANIES THIS NOTICE
Important Notice Regarding the Availability of Proxy Materials for the Annual Stockholders Meeting to be Heldheld on September16, 2019:2020: This Proxy Statement, our Annual Report on Form 10-K10-K and a letter to our stockholders are available at www.proxyvote.com and can be obtained, free of charge, by writing to our Corporate SecretaryChief Financial Officer at the Company’s address above or by calling 1-800-579-16391-800-579-1639 by September2, 20192020 to receive the materials before the annual meeting.
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Below are the highlights of the important information you will find in this Proxy Statement. As this is only a summary, we request that you please review the full Proxy Statement before casting your vote.
General Meeting Information
2020 Annual Meeting Date and Time | Wednesday, September 16, 8:30 P.M. HKT | ||||
Place | Unit A, 19/F Ford Glory Plaza | ||||
Record Date | Monday, July | ||||
Voting | Stockholders of record as of the record date are entitled to vote in person or by proxy at the Annual Meeting. Each share of common stock is entitled to one vote on each matter to be voted on at the Annual Meeting. |
Voting Matters and Board Recommendations
Proposal | Voting Options | Vote Required | Broker | Board | ||||||||||||
1. Elect Directors | “FOR” all nominees or “WITHHOLD” your vote for all or any of the nominees | Each nominee for director must receive a plurality of the votes cast | No | FOR ALL NOMINEES | ||||||||||||
2. | “FOR,” “AGAINST” or “ABSTAIN” from voting | Affirmative vote of a majority of the shares present must be in favor of this proposal and entitled to vote on the proposal | Yes | FOR | ||||||||||||
Recent Highlights and Achievements
We recently reported our financial results for the fiscal year ended March 31, 20192020 (“fiscal 2019”2020”) and other recent highlights, including:
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• Generated full-year gross margin of 19.3%, reflecting the absorption of ramp-up costs for the acquired Paramount facility and the Al-Hasa sewing workshop, as well as the impact of a shutdown due to COVID-19 restrictions during the last two weeks of the fiscal year;
• Reported GAAP net income of $6.5 million, in fiscal 2019,or $0.57 per diluted share, an increase of 23% versus $69.3 million in the fiscal year ended March 31, 2018 (“fiscal 2018”);
• Added multiple new customers in fiscal 2020 who are expected to add 1.5increase their order volumes with Jerash in fiscal 2021; and
• Ended the year with cash of $26.9 million to 1.8 million pieces per year, bringing Jerash’s annual capacity to more than 8.0 million pieces, an anticipated increaseand working capital of up to 27% annually; and$48.1 million.
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Governance Highlights
We are committed to applying sound corporate governance principles. We believe sound governance practices are in the best interests of our stockholders and strengthen accountability within our organization. The following highlights our guiding governance principles:
Annual Elections | Yes | Code of Ethics | Yes | ||||||||
Board Independence | 60% | Board and Committee Annual | Yes | ||||||||
Committee Independence | 100% | Executive Sessions of Independent Directors | Yes | ||||||||
Committee Chair Independence | 100% | Anonymous Reporting | Yes | ||||||||
Number of Financial Experts | One | Anti-Corruption Policy | Yes | ||||||||
Board Gender Diversity | 20% Female | Board Geographic Diversity | 40% | 20% U.S.-based |
In addition, we intend to implement additional corporate governance principles in the future, including:
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Director Nominees
You are being asked to vote to elect the following five director nominees to our Board of Directors. Detailed information about each of these nominees begins on page 65 of the Proxy Statement.
Name | Age | Director | Independent | Occupation | ||||
Choi Lin Hung | 58 | 2017 | No | Chairman, Chief Executive Officer, President, and Treasurer of the Company | ||||
Wei (“Kitty”) Yang | 37 | 2017 | No | Vice President and Secretary of the Company | ||||
Ibrahim H. Saif | 54 | 2020 | Yes | Chief Executive Officer of Jordan Strategy Forum | ||||
Bill Korn | 63 | 2020 | Yes | Chief Financial Officer of MTBC, Inc. | ||||
Mak Chi Yan | 57 | 2018 | Yes | Consultant of Hamon Asian Advisors Limited |
Name | | | Age | | | Director Since | | | Independent | | | Occupation | |
Choi Lin Hung | | | 57 | | | 2017 | | | No | | | Chairman, Chief Executive Officer, President and Treasurer of the Company | |
Wei (“Kitty”) Yang | | | 36 | | | 2017 | | | No | | | Vice President and Secretary of the Company | |
Gary J. Haseley | | | 57 | | | 2018 | | | Yes | | | Retired; Former Senior Vice President and General Manager of Kaman Automation, Control & Energy | |
Sean Socha | | | 50 | | | 2018 | | | Yes | | | Chief Financial Officer of FirstLight Fiber, Inc. | |
Mak Chi Yan | | | 56 | | | 2018 | | | Yes | | | Executive Director of Genting Securities Limited | |
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Matters Relatingtothe Independent Registered Public Accounting Firm | 19 | |||||||
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The Board of Directors of Jerash Holdings (US), Inc. Board of Directors (the “Board”) is using this Proxy Statement to solicit proxies from the holders of its common stock for use at the Jerash Holdings (US), Inc. 20192020 annual meeting of stockholders and any adjournment or postponement thereof (the “Annual Meeting” or the “meeting”). The notice of meeting, this Proxy Statement and the enclosed form of proxy card are first being mailed to our stockholders on or about July29, 2019.2020. In this Proxy Statement, we may also refer to Jerash Holdings (US), Inc. and its subsidiaries as “Jerash,” the “Company,” “we,” “our”“our,” or “us.”
Meeting Time and Applicable Dates | This Proxy Statement is furnished in connection with the solicitation by the Board of Jerash Holdings (US), Inc., a Delaware corporation, of the accompanying proxy to be voted at the Annual Meeting to be held on | ||||
Attending the Annual Meeting | Jerash will host the Annual Meeting at Unit A, 19/F Ford Glory Plaza, 2020. | ||||
For information on how to obtain directions to the meeting, please contact us at (214) 906-0065. | |||||
Stockholders may vote and submit questions in accordance with the rules of conduct for the Annual Meeting while attending the Annual Meeting in person. | |||||
Notice of Internet Availability | We have elected to use the “notice and access” rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), which allow us to provide stockholders access to our proxy materials over the Internet. Accordingly, we sent a Notice of Internet Availably of Proxy Materials (the “Notice”) to all of our stockholders as of the record date instead of a full printed set of proxy materials. The Notice includes instructions on how to access our proxy materials over the Internet and how to request a printed copy of these materials. In addition, by following the instructions in the Notice, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. | ||||
Our use of the “notice and access” rules and your choice to receive your future proxy materials by email will save us the cost of printing and mailing documents to you and will reduce the impact of our annual meetings on the environment. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it. | |||||
Matters to be Voted Upon | At the Annual Meeting, holders of record of our common stock as of July 1. To elect five directors to the Board to serve until their successors are duly elected and qualified at the 2. |
To ratify the appointment of Friedman LLP (“Friedman”) as our independent registered public accounting firm for the fiscal year ending March 31, 3. To consider any other business as may properly be brought before the Annual Meeting. |
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As of the date of this Proxy Statement, these are the only matters that the Board intends to present at the Annual Meeting. The Board does not know of any other business to be presented at the Annual Meeting. The Board recommends that you vote “FOR” each proposal. | |||||
Voting Rights of Holders | Stockholders of record as of the record date are entitled to vote in person or by proxy at the Annual Meeting. On the record date, there were 11,325,000 shares of our common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote on each matter to be voted on at the Annual Meeting. Our stockholders do not have cumulative voting rights. | ||||
Voting Instructions for | If your shares are registered directly in your name with our transfer agent, then you are a stockholder of record with respect to those shares and you may vote by: | ||||
• calling | |||||
• visiting www.proxyvote.com; | |||||
• completing and returning the enclosed proxy card; or | |||||
• attending the Annual Meeting and voting in person. | |||||
Whether or not you plan to attend the Annual Meeting, you should vote as soon as possible. | |||||
If you plan to vote by phone or via the internet, you must vote by 11:59 P.M. Eastern Time on | |||||
Voting Instructions for | If your shares are held in a brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in “street name” and you must instruct the broker, bank, or other nominee (“broker”) to vote on your behalf. Please refer to the voting instruction card provided by your broker. | ||||
If you are a beneficial owner and wish to vote at the Annual Meeting, you must bring a letter from your broker to the Annual Meeting confirming: | |||||
1. your beneficial ownership of the shares, | |||||
2. that the broker is not voting the shares at the meeting, and | |||||
3. granting you a legal proxy to vote the shares in person or at the meeting. | |||||
You will not be able to vote shares you hold in street name in person at the Annual Meeting unless you have a legal proxy from your broker issued in your name giving you the right to vote your shares. | |||||
Broker Non-Votes | Broker | ||||
Under the rules of Broker |
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Quorum | |||||
A quorum must be present in person or by proxy to hold the Annual Meeting and will exist if the holders of a majority of the outstanding shares of our common stock are present in person or by proxy at the Annual Meeting. | |||||
We will include abstentions and broker | |||||
Vote Required to Elect Directors | You may vote either for or withhold authority to vote for all or any of the five nominees named in this Proxy Statement. | ||||
To be elected, each nominee for director must receive a plurality of the votes cast at the Annual Meeting. This means that nominees receiving the highest number of affirmative “FOR” votes will be elected as directors. | |||||
Votes that are withheld from any nominee are not counted as a vote “FOR” the director and will have no effect on the vote. Abstentions and broker | |||||
Vote Required to | You may cast your vote in favor of, against, or abstain from voting to Friedman as our independent registered accounting firm for fiscal 2021. | ||||
To be approved, this proposal must receive the affirmative vote of a majority of the shares of common stock present in person or by proxy at the Annual Meeting and entitled to vote on the proposal. | |||||
Abstentions will count as votes cast against this proposal. There will be no broker |
Revoking a Proxy | A stockholder who has given a proxy may revoke it at any time prior to its exercise by: | ||||
• executing and delivering a | |||||
• providing written notice of the revocation to the | |||||
• attending the Annual Meeting and voting in person. | |||||
Please note that attending the Annual Meeting alone (without voting in person) is not enough to revoke a proxy. If you have instructed a broker to vote your shares, you may submit a new, | |||||
Proxy Instructions | All shares of common stock represented by properly executed proxies returned and not revoked will be voted in accordance with instructions you give in the proxy. If you return a signed proxy but do not indicate voting instructions, your proxy will be voted as recommended by the Board, or “FOR” the following proposals: | ||||
• electing the five director nominees named in the Proxy Statement; | |||||
• | |||||
ratifying the appointment of Friedman as our independent registered public accounting firm for fiscal | |||||
• in the proxy holder’s best judgment as to any other matters properly brought before the Annual Meeting. |
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Participants in the Proxy | This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board in connection with the Annual Meeting. The Company will bear the cost of soliciting proxies. In addition to solicitation by mail, our directors, officers, and employees may solicit proxies personally, by telephone or otherwise. We will not compensate our directors, officers, or employees for making proxy solicitations on our behalf. We will reimburse brokers for their expenses in forwarding proxies and proxy materials to the beneficial owners of shares held in street name. | ||||
Results of the Annual Meeting | We will report the voting results in a filing with the SEC on a Current Report on Form If the official results are not available at that time, we will provide preliminary voting results and will provide the final results in an amendment to the Form | ||||
Availability of Proxy Materials | Copies of this Proxy Statement, our annual report on Form |
Multiple Copies of Notice | You may receive more than one set of the Notice if you hold your shares in more than one brokerage account or your shares are registered in more than one name. Please use each Notice you receive to vote your shares to ensure that all of your votes are counted at the Annual Meeting. For more information, see the section entitled “Notice Regarding Delivery of Stockholder Documents” below. | ||||
Contact for Questions | If you have any questions or need assistance in voting your shares, please contact us at the address and phone number below. Gilbert K. Lee |
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Our Board consists of five directors, all of whom are nominated for reelection at the Annual Meeting to serve until the 20202021 annual meeting of stockholders and until their respective successors have been elected and qualified or until their earlier resignation or removal. The Nominating and Corporate Governance Committee has recommended each nominee for election to our Board.
Set forth below for each nominee for election as a director is a brief statement about the nominee’s age, principal occupation, and business experience, including any directorships with any other public companies, describing the specific individual qualities and skills of each nominee that contribute to the overall effectiveness of the Board and its committees. Each nominee has consented to being named as a nominee and to serve as a director if elected. Although we do not anticipate that any of the nominees named will be unable to serve if elected, the votes will be cast for a substitute nominee selected by the Board unless the number of directors to be elected has been reduced to the number of nominees willing and able to serve on our Board.
Tthe Bboard recommends the election of these nomineesnominees::
Name | | | Age | | | Director Since | | | Independent | | | Occupation | |
Choi Lin Hung | | | 57 | | | 2017 | | | No | | | Chairman, Chief Executive Officer, President and Treasurer of the Company | |
Wei (“Kitty”) Yang | | | 36 | | | 2017 | | | No | | | Vice President and Secretary of the Company | |
Gary J. Haseley | | | 57 | | | 2018 | | | Yes | | | Retired; Former Senior Vice President and General Manager of Kaman Automation, Control & Energy | |
Sean Socha | | | 50 | | | 2018 | | | Yes | | | Chief Financial Officer of FirstLight Fiber, Inc. | |
Mak Chi Yan | | | 56 | | | 2018 | | | Yes | | | Executive Director of Genting Securities Limited | |
Name | Age | Director | Independent | Occupation | ||||
Choi Lin Hung | 58 | 2017 | No | Chairman, Chief Executive Officer, President, and Treasurer of the Company | ||||
Wei (“Kitty”) Yang | 37 | 2017 | No | Vice President and Secretary of the Company | ||||
Ibrahim H. Saif | 54 | 2020 | Yes | Chief Executive Officer of Jordan Strategy Forum | ||||
Bill Korn | 63 | 2020 | Yes | Chief Financial Officer of MTBC, Inc. | ||||
Mak Chi Yan | 57 | 2018 | Yes | Consultant of Hamon Asian Advisors Limited |
Choi Lin Hung | Principal Occupation: Chairman, Chief Executive Officer, President, and Treasurer of the Company | ||||
Director since: | Business Experience: | ||||
May 2017 | • Experience with the Company’s subsidiaries since 2012: | ||||
• Director of Jerash Garments since 2012 | |||||
• General Manager of Chinese Garments and Jerash Embroidery since 2015 | |||||
• Director of Treasure Success since 2016 | |||||
• Previously held various positions with Deutsche Bank and First Pacific Bank | |||||
Current Directorships: | |||||
• Victory City International Holdings Ltd., a textile and fabric manufacturing group listed on the Stock Exchange of Hong Kong • Jiangmen | |||||
Skills and Expertise: | |||||
• Over 20 years of experience in the garment industry, including fabric manufacturing and trading • Critical institutional knowledge of Jerash and its subsidiaries • Financial and treasury expertise |
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Wei “Kitty” Yang | Principal Occupation: Vice President and Secretary of the Company | ||||
Director since: | Business Experience: | ||||
May 2017 | • Deputy General Manager of Jerash Garments since 2014 • Former Deputy Operations Officer for Martino Holding Limited, handling business operations with global clientele and suppliers from 2010 to 2014 • Former Partner at Eternity Travel Agency from 2008 to 2010 • Former Human Resources Chief at Jordan Dragon Garment Co. Ltd., a company listed in Taiwan, where she established and implemented human resources policies and processes for over 4,000 employees | ||||
Skills and Expertise: | |||||
• Fluent in English, Arabic, and Chinese • Experience as a liaison with overseas customers and suppliers and in human resources management • Critical institutional knowledge of Jerash and its subsidiaries | |||||
Ibrahim H. Saif | Principal Occupation: | ||||
Director since: | Business Experience: | ||||
January 2020 | • | • Former Senior Scholar at the Carnegie Middle East Center, consultant to the World Bank, the International Monetary Fund, and other international organizations • Former Director of the Center for Strategic Studies at the University of Jordan and Secretary General of the Economic and Social Counsel in Jordan | |||
Skills and Expertise: | |||||
• In-depth understanding of economics, business development, and operations • Leadership skills as a senior officer | |||||
Bill Korn |
Principal Occupation: Chief Financial Officer of | |||||
Director since: | Business Experience: | ||||
June 2020 | • Chief Financial Officer of July 2013 • Former Chief Financial Officer of July 2013 • Former Chief Financial Officer | • Former senior management of IBM during the 1990s | |||
Skills and Expertise: | |||||
• • Leadership skills as a senior officer |
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Mak Chi Yan | Principal Occupation: | ||||
Director since: | Business Experience: | ||||
May 2018 | • Former Executive Director of Genting Securities Limited to January 2020 • Former Associate Director of Uob Kay Hian Hong Kong Limited from 2003 to 2011 • Former Vice President of Institutional Sales at Worldsec International Limited, an affiliate of the Bank of • Former Head of International Sales for the Corporate & Institutional Business Group at HLG Securities SDN BHD from 1999 to 2000 | ||||
Skills and Expertise: | |||||
• • Leadership skills as a senior officer |
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The Board determines whether each of our directors is considered independent. For a director to be considered independent, the director must meet the bright-linebright-line independence standards under the Nasdaq listing standards. The Board must also affirmatively determine that, in its opinion, each director has no relationship that would interfere with the directors’ exercise of independent judgment in carrying out the director’s responsibilities. In addition to the Nasdaq listing standards, the Board will consider all relevant facts and circumstances in determining whether a director is independent. There are no family relationships among any of our directors and executive officers. The Board has determined that the following nominees satisfy the independence requirements of Nasdaq: Gary Haseley, Sean Socha,Ibrahim H. Saif, Bill Korn, and Mak Chi Yan.
Leadership Structure of the Board
The Board does not have a policy on whether the roles of Chief Executive Officer and Chairman of the Board should be separate and, if they are to be separate, whether the Chairman of the Board should be a non-employeenon-employee director or an employee. The Board believes that it should have the flexibility to choose this role in any manner that is in the best interests of our Company and our stockholders. Under the Company’s amended and restated bylaws (the “Bylaws”), the Board of Directors may elect a Chairperson of the Board from among the directors or from among other officers as it may determine to preside at meetings of the stockholders and directors and to perform other duties as the Board may determine.
Currently, our Chairman of the Board, Choi Lin Hung, is also our Chief Executive Officer, President, and Treasurer, Choi Lin Hung.Treasurer. We believe that Mr. Choi’s leadership of the Company in this dual role is appropriate for the Company at this time because his involvement with the Company’s operations and business strategy provide the main focus for the Board. The Board does not currently have a lead independent director. The Board believes its current leadership structure is appropriate because Mr. Choi’s leadership ensures the Company maintains continuity as it grows as a public company and affords the Board access to Mr. Choi’s institutional knowledge of the Company.
The Board held sixfour meetings during fiscal 2019.2020. No director attended fewer than 75% the aggregate number of all meetings of the Board of Directors and committees on which he or she served during fiscal 2019.2020. All five of the Company’s directors, except those who were recently elected, attended last year’s annual meeting of stockholders either in person or by conference call. The Company expects the directors to attend the Annual Meeting either in person or by conference call.
Board Committees
The Board of Directors has created three standing committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The Board has adopted a formal, written charter for each of the committees under which each committee operates. The charters can be found in the Corporate Governance section of the Investor Relations tab on the Company’s website at www.jerashholdings.com. As a matter of routine corporate governance, each committee intends to review its charter and practices on an annual basis to determine whether its charter and practices are consistent with listing standards of Nasdaq.
Committee Composition
Director | Audit | Compensation | Nominating and | |||||||
Ibrahim H. Saif | X | C | X | |||||||
Bill Korn | C | X | X | |||||||
Mak Chi Yan | X | X | C | |||||||
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C = Committee chairperson; X = Committee member
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Audit Committee
The Audit Committee of the Board (the “Audit Committee”) is composed of three independent directors: Sean Socha,Bill Korn, who is the chairperson, Gary HaseleyIbrahim H. Saif, and Mak Chi Yan. Each member of the Audit Committee is an independent director as defined by rules of the SEC and Nasdaq. In addition, the Board of Directors has determined that Sean SochaBill Korn is an audit committee financial expert as defined by SEC rules.
The Audit Committee has the sole power and authority to select and engage independent auditors for the Company. The Audit Committee reviews with the auditors and with the Company’s management all matters relating to the annual audit of the Company. The Audit Committee held fivefour meetings and several informal meetings over the phone in fiscal 2019.
Compensation Committee
The Compensation Committee of the Board (the “Compensation Committee”) is composed of three independent directors: Gary Haseley,Ibrahim H. Saif, who is the chairperson, Sean SochaBill Korn, and Mak Chi Yan. Each member of the Compensation Committee is an independent director as defined by the rules of the SEC and Nasdaq.
The Compensation Committee has the power and authority to review and approve the remuneration arrangements for the Company’s executive officers, directors, and certain employees. The Compensation Committee also interprets and administers our employee benefit plans, including by selecting participants and approving awards under those plans. The Compensation Committee has the power and authority to form, and delegate authority to, subcommittees. The Compensation Committee held twodid not hold any meetings in fiscal 2019.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee of the Board (the “Nominating and Corporate Governance Committee”) is composed of three independent directors: Mak Chi Yan, who is the chairperson, Gary HaseleyIbrahim H. Saif, and Sean Socha.Bill Korn. Each member of the Nominating and Corporate Governance Committee is an independent director as defined by the rules of the SEC and Nasdaq.
The Nominating and Corporate Governance Committee is responsible for identifying, screening and recommending candidates for membership on the Board. Each year, prior to the annual meeting of stockholders, the Nominating and Corporate Governance Committee recommends nominees to serve as our directors for the following year. The Nominating and Corporate Governance Committee did not hold any meetings in fiscal 2019.
Our Audit Committee is primarily responsible for overseeing our risk management processes on behalf of the Board, including with respect to cybersecurity risks. The Audit Committee receives reports from management on at least a quarterly basis regarding management’s assessment of risks to the Company.
In addition, the Audit Committee reports regularly to our Board, which also monitors our risk profile. The Audit Committee and the Board focus on the most significant risks we face and our general risk management strategies, while our management team coordinates responses to day-to-dayday-to-day risks.
We have a Code of Ethics that applies to all of our directors and executive officers, including our principal executive officer, principal financial officer, and principal accounting officer or controller. The Code of Ethics is publicly available in the Corporate Governance section of the Investor Relations tab on the Company’s website at www.jerashholdings.com. We intend to post any amendments to or waivers from the Code of Ethics that apply to our principal executive officer, principal financial officer, and principal accounting officer, or persons performing similar functions, on our website.
We have adopted an Anti-CorruptionAnti-Corruption Policy that applies to all of our directors, officers, employees, subsidiaries, agents, consultants, joint venture partners, and any other third-partythird-party representative that conducts business on behalf
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of the Company outside of the U.S. or interacts with non-U.S.non-U.S. government officials. This Anti-CorruptionAnti-Corruption Policy sets forth our guiding principles to comply with the U.S. Foreign Corrupt Practices Act of 1977 and other anti-corruptionanti-corruption and anti-briberyanti-bribery laws to which we may be subject, including the anti-corruptionanti-corruption provisions of the Penal Code of Jordan. Our Anti-CorruptionAnti-Corruption Policy is publicly available in the Corporate Governance section of the Investor Relations tab on the Company’s website at www.jerashholdings.com.
The Nominating and Corporate Governance Committee is responsible for identifying, screening, and recommending candidates for membership on the Board.
The Nominating and Corporate Governance Committee has not yet developed a policy for selecting directors, including any specific minimum requirements or a diversity policy. We believe that the Nominating and Corporate Governance Committee will develop these policies in fiscal 2020.2021. The Nominating and Corporate Governance Committee considers candidates recommended by stockholders in the same manner as it evaluates candidates recommended by Board members, officers, or search firms. To recommend a potential candidate to the Board, a stockholder must submit the recommendation in writing to the Secretary of the Corporation,Chief Financial Officer, Jerash Holdings (US), Inc., 260 East Main Street,277 Fairfield Road, Suite 2706, Rochester, New York 14604,338, Fairfield, NJ 07004, in the manner set forth in our Bylaws, as filed with the SEC. Stockholder nominations must be received no earlier than May 19, 20202021 and no later than June 18, 20202021 to be considered for our 20202021 annual meeting of stockholders. See “Other Important Information — Stockholder Proposals for the 20202021 Annual Meeting” below for more information. Following the amendment and restatement of our Bylaws in July 2019, stockholders must follow specific requirements to recommend a nominee to serve as a director of the Company. These requirements, as set forth in the Bylaws, are designed to elicit the type of information regarding a director nominee who is proposed by a stockholder that would be comparable to the information reviewed for those nominees proposed by our management to best ensure that stockholder nominees are considered in the same manner by the Nominating and Corporate Governance Committee.
Stockholders wishing to communicate with our directors may send a letter to: Jerash Holdings (US), Inc., 260 East Main Street,277 Fairfield Road, Suite 2706, Rochester, New York 14604,338, Fairfield, NJ 07004, Attention: Board of Directors. All correspondence sent to that address will be delivered to the appropriate directors by our Corporate Secretary.
The compensation of our directors is set by our Board of Directors and reviewed by the Compensation Committee at least annually. The Company does not pay any director who is also an employee of the Company or its subsidiaries for his or her service as director. In addition to reimbursement for reasonable expenses incurred in connection with serving on the Board, in fiscal 20192020 we paid eachour independent directors who served during that year compensation as follows:
Director Compensation Table
Name | Fees earned or | Total | ||
Ibrahim H. Saif(1) | 18,750 | 18,750 | ||
Mak Chi Yan | 75,000 | 75,000 | ||
Former Director who served as a Director in fiscal 2020 | ||||
Gary Haseley(2) | 56,250 | 56,250 | ||
Sean Socha(3) | 75,000 | 75,000 |
____________
(1) Mr. Saif was elected as our independent director an annual fee of $75,000 in cash or common stock at each director’s election.January 2020.
(2) Mr. Haseley ceased to be our independent director in January 2020.
(3) Mr. Socha ceased to be our independent director in June 2020.
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Name | | | Fees earned or paid in cash ($) | | | Total ($) | | ||||||
Gary J. Haseley | | | | | 75,000 | | | | | | 75,000 | | |
Sean Socha | | | | | 75,000 | | | | | | 75,000 | | |
Mak Chi Yan | | | | | 75,000 | | | | | | 75,000 | | |
We review all relationships and transactions in which we and any of our directors, executive officers, or their immediate family members are participants to determine whether those persons have a direct or indirect material interest in the relevant transaction. Our Audit Committee is responsible for reviewing, approving, and overseeing transactions between us and any related person and other potential conflict of interest situations. Our Bylaws provide that a transaction will not be void or voidable because it is a related party transaction if:
•
•
•
Historically, we have engaged in transactions with entities that are considered our affiliates. These entities include:
•
•
•
•
•
• Jiangmen V-Apparel Manufacturing Limited, which is a subsidiary of FGH;
• Merlotte Enterprise Limited (“Merlotte”), which is wholly owned by Mr. Choi;
•
•
•
Transactions with Affiliates
On November 29, 2016, the Board of Directors of Jerash Garments declared and approved a cash dividend of $6,000,000 to its parent company, Global Trend. On November 30, 2016, the Board of Directors of Global Trend declared and approved a cash dividend of $5,307,500 to its stockholders. Jerash Garments paid the dividend of $6,000,000 directly to Global Trend’s stockholders on December 14, 2016. The overpaid amount was treated as due from stockholders and was fully collected from stockholders on May 8, 2017. The amount due from stockholders was interest-free. As of March 31, 2019, there is no outstanding balance with respect to this overpaid dividend.
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On August 31, 2019, Jiangmen Treasure Success and Jiangmen V-Apparel Manufacturing Limited entered into the 2018a lease agreement, which was approveda replacement of a previous lease agreement between Treasure Success and Jiangmen V-Apparel Manufacturing Limited dated August 15, 2019, pursuant to which Treasure Success leases its office space in Jiangmen, China from Jiangmen V-Apparel Manufacturing Limited for a monthly rent in the amount of CNY6,200 (approximately $891). The lease has a 10-year term with a clause to increase the rental amount by our disinterested directors.
On July 15, 2019, the Company, through Treasure Success, entered into an agreement to purchase office space together with certain parking spaces from FGIL for an aggregate purchase price of HKD63,000,000 (approximately $8.1 million). Pursuant to the agreement, Treasure Success paid an initial deposit of HKD6,300,000 (approximately $0.8 million) upon signing the agreement. On October 31, 2019, this agreement was terminated pursuant to its terms because the conditions precedent to closing under the agreement were not met. As a result of the termination, on November 7, 2019, FGIL repaid in full, without interest, the deposit Treasure Success paid at the time the agreement was signed.
Our wholly-ownedwholly-owned subsidiary, Treasure Success, entered into an invoice discounting/factoring facility for $12,000,000 with HSBC on August 21, 2017, as amended on June 14, 2018, that is guaranteedwhich were previously secured by us, Jerash Garments, Treasure Success,the personal guarantees of Mr. Choi, and Mr. Ng.Ng Tsze Lun, a significant stockholder of the Company. The interests of Mr. Choi and Mr. Ng may differ from other stockholders of the Company as a result of their personal guarantees. The personal guarantees of Mr. Choi and Mr. Ng are expected to bewere released during calendar yearas of August 12, 2019.
Agreements Relating to Contributions of Consultants
Eric Tang, who is the husband of our Vice President, Secretary and director, Ms. Yang, has provided us with consulting services since 2013 primarily in sales and marketing, including playing a critical role providing consulting services in connection with our transition from receiving purchase orders from Ford GloryFGIL to receiving purchase orders directly from VF Corporation, one of our major customers. On December 1, 2016, Mr. Tang entered into an employment agreement with our wholly-ownedwholly-owned subsidiary,
Effective January 12, 2018, Treasure Success, our wholly-ownedwholly-owned subsidiary, entered into a consulting agreement with Yukwise Limited, pursuant to which Mr. Choi is compensated for his services as the Chief Executive Officer, President, and Treasurer of the Company. Treasure Success compensates Yukwise Limited for Mr. Choi’s time at a rate of $25,000 per month. During each of fiscal 20192020 and fiscal 2018,2019, we paid Yukwise Limited $300,000 and $75,000, respectively, for Mr. Choi’s services.
Effective January 16, 2018, Treasure Success, our wholly-ownedwholly-owned subsidiary, entered into a consulting agreement with Multi-Glory Corporation Ltd.Multi-Glory, pursuant to which Ng Tsze Lun, a significant stockholder of the Company, provides consulting services to the Company as Head of Marketing. In exchange for such services, Treasure Success compensates Multi-Glory Corporation Ltd.Multi-Glory at a rate of $300,000 annually. During each of fiscal 2020 and fiscal 2019, and fiscal 2018, we paid Multi-Glory Corporation Ltd.Multi-Glory $300,000 and $75,000, respectively, for Mr. Ng’s services.
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The table and biographies below identify our executive officers, the term they have served with us, and their business experience:
Name | Age | Office and Position | |||||
Choi Lin Hung | 58 | Chairman, Chief Executive Officer, President, and Treasurer of the Company | |||||
Gilbert K. Lee | 62 | Chief Financial Officer | |||||
Wei (“Kitty”) Yang | 37 | Vice President and Secretary of the Company | |||||
Choi Lin Hung, the Chairman of the Board, is the Chief Executive Officer, President, and Treasurer of the Company. His biographical information is set forth above under “Proposal No. 1 — Election of Directors.”
Richard J. ShawGilbert K. Lee has served as our Chief Financial Officer since May 2017.November 2019. From August 2015 to November 2019, Mr. Shaw hasLee served as the President of LogiCore, a financial and business advisory services firm, since June 2014. Mr. Shaw also has served as Chief Financial Officer of BirchBioMed,Fuling Global Inc., a clinical-stage biomedical company focused on the commercialization, clinical evaluationmanufacturer of environmentally-friendly plastic and development of anti-scarring drugs, autoimmune therapeutics/therapies and novel strategies for transplantation, since March 2016. Previously,paper food service ware. From August 2011 through May 2015, Mr. ShawLee served Tanke Biosciences Corporation, a livestock nutrition products manufacturer, first as its U.S.-based Chief Financial Officer and Treasurerthen as its Vice President of Tripborn, Inc., an online travel agency that offers travel reservationsBusiness Development. Mr. Lee received his Master of Business Administration degree from the University of Texas at Austin in 1994 and related travel services to travel agentshis Master’s degree in India,Professional Accounting and Bachelor’s degree in Marketing from May 2016 through November 2018. Mr. Shaw served as Chief Operating Officerthe University of Roberts Office Furniture Concepts, a designer, manufacturerTexas at Arlington in 1987 and remanufacturer of sustainable office furniture and workplace systems, from September 2013 to June 2016. Mr. Shaw served as Chief Financial Officer of High Peaks Hospitality, LLC, an independent hotel ownership, development construction and management company from June 2012 to August 2013, and Chief Financial Officer of Harden Furniture, Inc., a manufacturer of solid wood furniture and upholstery from May 2008 to June 2012. Mr. Shaw earned a BS in Accounting from LeMoyne College and is a Certified Public Accountant, licensed by the State of New York.
Wei (“Kitty”) Yang, our Vice President and Secretary, is also a member of the Board. Her biographical information is set forth above under “Proposal No. 1 — Election of Directors.”
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Karl Brenza has served as our Head of US Operations since August 2018. Mr. Brenza has also served as Senior Managing Director of Paulson Investment Company, LLC (“Paulson”), a New York City-based investment bank, since August 2018. Prior to serving at Paulson, Mr. Brenza served as Senior Managing Director and Head of the Capital Growth Advisory Group at Maxim Group, LLC, a New York City-based investment bank, from February 2008 to August 2018. Mr. Brenza has over 25 years of investment banking and financial advisory experience as well as significant operational and technology experience as a corporate executive. Mr. Brenza’s prior investment banking positions include Managing Director and Head of Investment Banking at Broadband Capital Management and Managing Director and Head of Industry Consolidations at BlueStone Capital Partners. Mr. Brenza began his career as an investment banker at Prudential Securities. Mr. Brenza’s operational and technology experience includes positions as Chief Finance Officer of a public IT solutions company, Director of Business Development and Head of the ISP/telecom group for a venture-backed Internet services company and as a systems engineer for Raytheon Co. Mr. Brenza received an MBA with honors from Columbia Business School, a BS in Electrical Engineering from the University of Pennsylvania and has been a guest lecturer at the NYU Stern Graduate School of Business.
The following table sets forth the compensation paid by us during fiscal 20192020 and fiscal 20182019 for services performed on our behalf with respect to the persons who served as our named executive officers as of March 31, 20192020 and for fiscal 2019.2020. Our named executive officers are Mr. Choi, Mr. Lee, Ms. Yang, Mr. Richard Shaw, and Mr. Karl Brenza. Mr. Choi serves as our Chairman, Chief Executive Officer, President, and Treasurer, Mr. Lee serves as our Chief Financial Officer, Ms. Yang serves as our Vice President, Secretary, and as a director, Mr. Shaw served as our Chief Financial Officer until October 2019, and Mr. Brenza servesserved as our Head of US Operations.
Summary Compensation Table
Name and Principal Position | Year | Salary | Bonus | Option | All Other | Total | ||||||
Choi Lin Hung | 2020 | 300,000 | — | — | — | 300,000 | ||||||
Chief Executive Officer, President and Treasurer | 2019 | 300,000 | — | 1,088,763 | — | 1,388,763 | ||||||
Gilbert K. Lee(2) | 2020 | 41,316 | — | 84,303 | — | 125,619 | ||||||
Chief Financial Officer | ||||||||||||
Wei (“Kitty”) Yang | 2020 | 66,100 | — | — | — | 66,100 | ||||||
Vice President and Secretary | 2019 | 66,100 | — | 324,000 | — | 390,100 | ||||||
Richard J. Shaw(3) | 2020 | 70,000 | — | 64,652 | — | 134,652 | ||||||
Former Chief Financial Officer | 2019 | 80,000 | — | 129,302 | — | 209,302 | ||||||
Karl Brenza(4) | 2020 | 85,589 | — | 129,303 | — | 241,892 | ||||||
Former Head of US Operations | 2019 | 90,000 | — | 388,000 | — | 478,000 |
____________
(1)
(2) Mr. Lee became our Chief Financial Officer in November 2019.
(3) Mr. Shaw ceased to be our Chief Financial Officer in October 2019.
(4) Mr. Brenza became oneceased to be our Head of our executive officersUS Operations in August 2018.
Agreements with Named Executive Officers
Effective January 12, 2018, Treasure Success, our wholly-ownedwholly-owned subsidiary, entered into a consulting agreement with Yukwise Limited, pursuant to which Mr. Choi is compensated for his services as the principal executive officer of the Company. Treasure Success compensates Yukwise Limited for Mr. Choi’s time at a rate of $25,000 per month.
Effective November 27, 2019, we entered into an employment agreement with Mr. Lee, pursuant to which he serves as our Chief Financial Officer at a rate of $10,000 per month. This agreement has a 12-month term and automatically renews unless it is earlier terminated by us or Mr. Lee. At any time after the initial 12-month term, Mr. Lee may terminate this agreement upon 30 days’ prior written notice to us. We may terminate this agreement without prior notice for just cause or, if the termination is without cause, upon 30 days’ written notice. Pursuant to the employment agreement, on November 27, 2019, Mr. Lee was granted an option to purchase 50,000 shares of the Company’s common stock, par value $0.001 per share, under the Company’s Amended and Restated 2018 Stock Incentive Plan (the “Amended Plan”). This option is exercisable at a per share exercise price of $6.50 and fully vested on the six-month anniversary of the date of grant. The option may be exercised at any time until November 27, 2029.
In January 2017,2020, Ms. Yang entered into an employment agreement with our subsidiary, Jerash Garments, with respect to her services as deputy general manager. Pursuant to the agreement, Ms. Yang is employed by Jerash
14
Garments as Deputy General Manager of our facilities in Jordan for a period of three years. She receives JOD3,900 per month for the term of the agreement and is also provided accommodations, transportation and three daily meals. She is eligible for a performance bonus based on her individual performance and the performance of Jerash Garments at the discretion of Jerash Garments. We have not entered into an employment agreement with Ms. Yang to serve as our Vice President or our Secretary.
Effective August 3, 2018, we entered into an employment agreement with Mr. Shaw pursuant to which he served as our Chief Financial Officer at a rate of $10,000 per month. Mr. Shaw ceased to be our Chief Financial Officer in October 2019.
Effective August 3, 2018, we entered into an employment agreement with Mr. Brenza pursuant to which he servesserved as our Head of US Operations at a rate of $10,000 per month. This agreement has a twelve-month term and automatically renews for subsequent one-month terms thereafter, unless terminated by us or Mr. Brenza. At any time after the initial twelve-month term, Mr. Brenza may make such termination upon thirty days’ prior written noticeceased to us. We may terminate this agreement without prior notice for just cause or, if the termination is without cause, upon thirty days’ written notice.
Equity Awards to Named Executive Officers
On April 9, 2018, Mr. Choi and Ms. Yang were granted options to purchase 336,038 and 100,000 shares of our common stock, respectively, at an exercise price of $7.00 per share. The stock options vested immediately and are exercisable until April 9, 2023.
On August 3, 2018, Mr. Shaw was granted options to purchase 50,000 shares of our common stock at an exercise price of $6.12. per share. The stock options vested in three equal six-month installments, provided that Mr. Shaw remained employed by us through the applicable vesting date. The final one-third portion of the award has vested on August 3, 2019. These options are exercisable until August 3, 2028.
On August 3, 2018, Mr. Brenza was granted options to purchase 100,000 shares of our common stock at an exercise price of $6.12. per shareshare. The stock options vestvested in three equal six-monthsix-month installments, provided that Mr. Brenza remainsremained employed by us through the applicable vesting date. The final one-thirdone-third portion of the award is scheduled to vesthas vested on August 3, 2019. These options are exercisable until August 3, 2028.
On November 27, 2019, Mr. Lee was granted an option to purchase 50,000 shares of the Company’s common stock, par value $0.001 per share, under the Amended Plan. This option is exercisable at a per share exercise price of $6.50 and fully vested on the six-month anniversary of the date of grant. The option may be exercised at any time until November 27, 2029.
Outstanding Equity Awards at Fiscal Year-End
| | | Option Awards | | |||||||||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options Exercisable (#) | | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | |||||||||||||||
Choi Lin Hung | | | | | 336,038 | | | | | | — | | | | | | — | | | | | | 7.00 | | | | | | 4/9/2023 | | |
Wei (“Kitty”) Yang | | | | | 100,000 | | | | | | — | | | | | | — | | | | | | 7.00 | | | | | | 4/9/2023 | | |
Karl Brenza | | | | | 66,666 | | | | | | 33,334(1) | | | | | | — | | | | | | 6.12 | | | | | | 8/3/2028 | | |
Option Awards | ||||||||||
Name | Number of | Number of | Equity | Option | Option | |||||
Choi Lin Hung | 336,038 | — | — | 7.00 | 4/9/2023 | |||||
Wei (“Kitty”) Yang | 100,000 | — | — | 7.00 | 4/9/2023 | |||||
Richard J. Shaw | 50,000 | — | — | 6.12 | 8/3/2028 | |||||
Karl Brenza | 100,000 | — | — | 6.12 | 8/3/2028 | |||||
Gilbert K. Lee | 50,000 | — | — | 6.50 | 11/27/2029 |
Except as disclosed herein, we did not otherwise award or pay, and our named executive officers and directors did not otherwise earn, any compensation in fiscal 20192020 and fiscal 2018.2019.
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Equity Compensation Plan Information
On March 21, 2018,September 16, 2019, our stockholders voted to approve the Board adopted the Stock IncentiveAmended Plan, pursuant to which the Board may grant equity awards to certain members of management, key employees, and consultants of the Company. The Stock IncentiveAmended Plan currently authorizes up to 1,484,2501,784,250 shares of common stock to be issued to employees, directors, or consultants of the Company. The Board may grant awards of stock options, restricted stock, restricted stock units, and other awards pursuant to the Stock IncentiveAmended Plan. Awards may be granted under the Stock IncentiveAmended Plan at any time and from time to time on or prior to the tenth anniversary of its effective date, or March 21, 2028.July 19, 2029. The Stock IncentiveAmended Plan will be administered by the Board or a committee thereof, if so directed by the Board.
The following table reflects the shares available for issuance under our Stock IncentiveAmended Plan as of the end of the most recently completed fiscal year:
Plan category | Number of | Weighted- | Number of | |||
Equity compensation plans approved by security holders | 1,453,910 | 6.77 | 594,750 | |||
Equity compensation plans not approved by security holders | — | — | — | |||
Total | 1,453,910 | 6.77 | 594,750 |
Plan category | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted-average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans | | |||||||||
Equity compensation plans approved by security holders | | | | | — | | | | | | — | | | | | | — | | |
Equity compensation plans not approved by security holders | | | | | 1,139,500 | | | | | $ | 6.92 | | | | | | 344,750 | | |
Total | | | | | 1,139,500 | | | | | $ | 6.92 | | | | | | 344,750 | | |
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The following table provides information as of July 19, 2019,20, 2020, concerning beneficial ownership of our common stock known to us to be held by (1) our named executive officers, (2) our directors, (3) our named executive officers and directors as a group, and (4) each person or entity we know to beneficially own more than five percent of our common stock. The percentages of shares owned shown in the table below are based on 11,325,000 shares of our common stock outstanding as of the record date. The address for our executive officers is 260 East Main Street,277 Fairfield Road, Suite 2706, Rochester, NY 14604.
Name | | | Number of Shares(1) | | | Percentage(1) | | ||||||
Named Executive Officers and Directors: | | | | | | | | | | | | | |
Choi Lin Hung(2) Chairman, Chief Executive Officer, President and Treasurer | | | | | 4,641,913(3) | | | | | | 39.8% | | |
Kitty Yang Vice President, Secretary and Director | | | | | 361,350(4) | | | | | | 3.2% | | |
Richard J. Shaw Chief Financial Officer | | | | | 51,000(5) | | | | | | * | | |
Karl Brenza Head of US Operations | | | | | 445,743(6) | | | | | | 3.9% | | |
Gary J. Haseley Director | | | | | 166,000(7) | | | | | | 1.5% | | |
Sean Socha Director | | | | | — | | | | | | — | | |
Mak Chi Yan Director | | | | | — | | | | | | — | | |
All directors and executive officers as a group (7 persons) | | | | | 5,666,006 | | | | | | 47.3% | | |
5% Stockholders: | | | | | | | | | | | | | |
Merlotte Enterprise Limited(2) 19/F, Ford Glory Plaza 37-39 Wing Hong Street Cheung Sha Wan, Kowloon, Hong Kong | | | | | 4,305,875(2) | | | | | | 38.0% | | |
Lee Kian Tjiauw Flat A, 9/F, Block 3, Regency Park 3 Wah King Road Kwai Chung, Hong Kong | | | | | 2,798,031(8) | | | | | | 24.7% | | |
Ng Tsze Lun 19/F, Ford Glory Plaza 37-39 Wing Hong Street Cheung Sha Wan, Kowloon, Hong Kong | | | | | 1,324,631(9) | | | | | | 11.4% | | |
Name | Number of | Percentage(1) | ||||
Named Executive Officers and Directors: |
|
| ||||
Choi Lin Hung(2) | 4,641,913 | (3) | 39.8 | % | ||
Kitty Yang | 361,350 | (4) | 3.2 | % | ||
Gilbert K. Lee | 50,000 | (5) | * |
| ||
Ibrahim H. Saif | — |
| — |
| ||
Bill Korn | — |
| — |
| ||
Mak Chi Yan | — |
| — |
| ||
All directors and executive officers as a group (six persons) | 5,053,263 |
| 44.6 | % | ||
5% Stockholders: |
|
| ||||
Merlotte Enterprise Limited(2) | 4,305,875 | (2) | 38.0 | % | ||
Lee Kian Tjiauw | 2,798,031 | (6) | 24.7 | % | ||
Ng Tsze Lun | 1,324,631 | (7) | 11.4 | % |
____________
*
(1)
(2)
(3)
(4)
(5)
(6)
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(7) Includes (i) 988,594 shares of common stock held by Mr. Ng and (ii) presently exercisable options to purchase 336,037 shares. The information as to the beneficial ownership of shares of common stock is based on a Schedule 13G filed with the Securities and Exchange Commission on February 13, 2019 by Mr. Ng. Mr. Ng’s address is 19/F, Ford Glory Plaza 37-3937-39 Wing Hong Street Cheung Sha Wan, Kowloon, Hong Kong. Mr. Ng reports sole voting and dispositive power with respect to his shares.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our directors and executive officers and those who beneficially own more than ten10 percent of our common stock to file initial reports of ownership and reports of changes in ownership of our common stock with the SEC. You can view these reports on the SEC’s website at www.sec.gov.
During the year ended March 31, 2019,2020, all of our officers, directors, and greater than ten10 percent beneficial owners timely complied with the filing requirements of Section 16(a) of the Exchange Act except for Mr. Shaw,Saif, our Chief Financial Officer, who was late in filing one Form 4 reporting one transaction and Mr. Brenza, our Head of US Operations,director, who was late in filing his initial statement of beneficial ownership on Form 3.
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While stockholder ratification of the Company’s independent registered public accountants is not required by our Certificate of Incorporation, Bylaws, or otherwise, the Audit Committee and management believe that it is desirable and a matter of good corporate practice for stockholders to ratify the Company’s selection of the independent registered public accountants. Therefore, the Audit Committee is requesting that stockholders approve the proposal to ratify the appointment of Friedman as the independent registered public accounting firm for the Company for the fiscal year ending March 31, 2020.
The Audit Committee values the input of our stockholders. In the event that stockholders do not approve this proposal, the Audit Committee will consider that fact when it selects the independent registered public accountants for the following year. The Audit Committee may, in its discretion, replace Friedman as the independent registered public accounting firm at a later date without stockholder approval.
Friedman has acted as our independent registered public accountants since 2017. A representative of Friedman will be present at the Annual Meeting, either in person or by telephone, to respond to appropriate questions and will have an opportunity to make a statement if he or she desires to do so.
The BoardThe Board recommends that you vote “for” “for” ratifying the appointment of Friedman Friedman to serve as the Company’s Company’s independent registered public accounting firm for the year ending March March31, 2020.2021.
Pre-Approval Policy
To date, Friedman has not performed any non-auditnon-audit services for the Company. The Audit Committee intends to develop a pre-approvalpre-approval policy for all non-auditnon-audit work performed by Friedman during fiscal 2020.
Fees
Aggregate fees billed to the Company for services rendered by Friedman for fiscal 2020 and 2019 and 2018 were:
| | | 2019 | | | 2018 | | ||||||
Audit Fees(1) | | | | $ | 235,000 | | | | | $ | 215,000 | | |
Audit-Related Fees(2) | | | | | 27,000 | | | | | | 25,000 | | |
Tax Fees(3) | | | | | — | | | | | | — | | |
All Other Fees(4) | | | | | — | | | | | | — | | |
Total Fees | | | | $ | 262,000 | | | | | $ | 240,000 | | |
2020 | 2019 | |||||
Audit Fees(1) | $ | 255,000 | $ | 235,000 | ||
Audit-Related Fees(2) |
| — |
| 27,000 | ||
Tax Fees(3) |
| — |
| — | ||
All Other Fees(4) |
| — |
| — | ||
Total Fees | $ | 255,000 | $ | 262,000 |
____________
(1)
(2)
(3)
(4)
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Management is responsible for the Company’s accounting and financial reporting process. Our external auditors are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with standards of the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee’s responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has met and held discussions with management and the external auditors. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the external auditors. The Audit Committee discussed with the external auditors the matters required to be discussed by the applicable requirements of the PCAOB and the SEC.
The Company’s external auditors also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding the external auditor’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with the external auditors that firm’s independence.
Based on the Audit Committee’s discussion with management and the external auditors and the Audit Committee’s review of the representation of management and the report of the external auditors to the Audit Committee, the Audit Committee recommended to the Board, and the Board has approved, that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K10-K for the year ended March 31, 2019,2020, for filing with the SEC. The Audit Committee has also approved, subject to stockholder ratification, the appointment of Friedman as the Company’s external auditors for the year ending March 31, 2020.
Audit Committee
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Any stockholder who intends to present a proposal at our 20202021 annual meeting of stockholders must deliver notice of the proposal to the Company at this address:
Gilbert K. Lee
Chief Financial Officer
Jerash Holdings (US), Inc.260 East Main Street,277 Fairfield Road, Suite 2706338Rochester, NY 14604
We must receive any stockholder proposals by the dates below for those proposals to be considered timely:
•
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If the date of our 20202021 annual meeting of stockholders has been changed by more than 30 days before or more than 60 days after the first anniversary of this Annual Meeting, you must submit your proposal not later than the close of business on (1) the 90th day prior to the 20202021 annual meeting or (2) the 10th day following the day on which public disclosure of the 20202021 annual meeting is first made. Stockholders may nominate candidates for the Board by the same deadlines as proposals for business to come before the 20202021 annual meeting of stockholders. Each notice of business or nomination must set forth the information required by our Bylaws. Submitting a notice does not ensure that the proposal will be raised at our annual meeting.
The SEC permits us to send a single set of annual disclosure documents to stockholders who share an address, unless you have instructed us otherwise. This “householding” process reduces the volume of duplicate information you receive and reduces our printing and mailing expenses. If you share an address with another stockholder and have received only one Notice, but you would prefer to continue receiving a separate Notice, you may request a separate Notice at no cost to you by writing to the Company at Jerash Holdings (US), Inc., 260 East Main Street,277 Fairfield Road, Suite 2706, Rochester, NY 14604,338, Fairfield, NJ 07004, or by calling (212) 575-9085.(214) 906-0065. Alternatively, if you are currently receiving multiple Notices at the same address and wish to receive a single Notice in the future, you may contact us by calling or writing to us at the telephone number or address given above.
If you are a beneficial owner, your broker may deliver only one Notice to stockholders who have the same address unless the broker has received contrary instructions from one or more of the stockholders. If you wish to receive a separate Notice, now or in the future, you may contact us at the address or telephone number above and we will promptly deliver a separate Notice. Beneficial owners sharing an address who are currently receiving multiple Notices and wish to receive a single Notice in the future should contact their broker to request that only a single Notice be delivered to all stockholders at the shared address in the future.
Upon written request by any stockholder, we will furnish a copy of our Annual Report on Form 10-K10-K for fiscal 2019,2020, this Proxy Statement and other proxy materials without charge, except that copies of any exhibit will be furnished once the requesting stockholder has paid the Company’s reasonable expenses in furnishing the exhibit. Please direct any written requests to our principal executive offices at:
Jerash Holdings (US), Inc.260 East Main Street,277 Fairfield Road, Suite 2706338Rochester, NY 14604
Stockholders may also view our Annual Report on Form 10-K,10-K, this Proxy Statement and other proxy materials at www.proxyvote.com.
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JERASH HOLDINGS (US), INC.AMENDED AND RESTATED2018 STOCK INCENTIVE PLAN
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. E82912-P27326