SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ 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
§240.14a-12
PEAK INTERNATIONAL LIMITED
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
¨ Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
(1) |
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(2) |
Aggregate number of securities to which transaction applies: |
(3) |
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated
and state how it was determined): |
(4) |
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(5) |
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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.: |
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Date Filed: |
PEAK INTERNATIONAL LIMITED
44091 Nobel Drive
P.O. Box 1767
Fremont, California 94538
(Incorporated in Bermuda with limited liability)
August 7, 2002
Dear Shareholder:
You are cordially invited to attend the Annual General Meeting of Peak International Limited (the “Company”) to be held on Thursday, September 5, 2002, 10:00 a.m. local time, at the Waldorf-Astoria hotel located at 100 East
50th Street, New York, New York 10022.
Details of the business to be transacted at the meeting can be found in
the accompanying Notice of Annual General Meeting and Proxy Statement. The Annual Report for the fiscal year ended March 31, 2002 on Form 10-K is also enclosed.
A shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his or her place. A proxy need not be a shareholder of the
Company. We hope you are planning to attend the meeting personally and we look forward to meeting you. However, the vote of each shareholder is of utmost importance and we kindly request that you complete, date and sign your proxy card and return
it to us promptly in the enclosed envelope, whether or not you currently plan to attend the meeting. Your proxy must be received by the Company’s transfer agent, Mellon Investor Services, at least 48 hours before the time of the meeting.
Completing and returning the enclosed form of proxy will not preclude you from attending and voting in person at the meeting. You may revoke your proxy at any time before it is voted by giving written notice to the undersigned, by filing a properly
executed proxy bearing a later date, or by voting in person at the meeting.
On behalf of the Board of Directors
and the management of Peak International Limited, I would like to extend our appreciation for your continued support.
Sincerely yours,
Calvin Reed
President and Chief Executive Officer
PEAK INTERNATIONAL LIMITED
44091 Nobel Drive
P.O. Box 1767
Fremont, California 94538
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 5, 2002
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders of Peak International Limited, a Bermuda corporation with limited liability (the “Company”) will be held at the Waldorf-Astoria hotel located at 100
East 50th Street, New York, New York 10022, on Thursday, September 5, 2002, at 10:00 a.m. local time for the following purposes:
1. To elect one director to the Company’s Board of Directors;
2. To authorize the Board of Directors to fix the remuneration of the directors of the Company;
3. To approve an increase in the number of shares of the Company reserved for issuance under the Company’s 1998 Share Option Plan from
2,700,000 to 2,950,000;
4. To approve an increase in the number of shares of
the Company reserved for issuance under the Company’s 2000 Employee Stock Purchase Plan from 400,000 to 600,000;
5. To appoint PricewaterhouseCoopers as the independent auditors for the Company for the fiscal year ending March 31, 2003;
6. To authorize the Board of Directors to fix the remuneration of the independent auditors for the fiscal year ending March 31, 2003; and
7. To transact any other business that may properly be brought before the meeting
or any adjournment or postponement thereof.
The shareholders on the Register of Members at the close of business
on July 11, 2002 are entitled to notice of, and to vote at, the Annual General Meeting and all postponements or adjournments thereof. Shareholders who have purchased shares since that date should obtain a proxy from the person from whom they bought
their shares. To be valid, a form of proxy for the meeting, together with the power of attorney or other authority (if any) under which it is signed (or a certified copy thereof) must be deposited with the Company’s transfer agent, Mellon
Investor Services, Proxy Processing, Church Street Station, P.O. Box 1675, New York, NY 10277-1675 before 10:00 a.m. New York time on Thursday, September 3, 2002.
By Order of the Board of Directors,
Jack Menache
Secretary
August 7, 2002
Fremont, California
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWNED ON THE RECORD DATE.
PLEASE COMPLETE, SIGN, DATE, AND RETURN PROMPTLY THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PREPAID ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL GENERAL MEETING.
PEAK INTERNATIONAL LIMITED
44091 Nobel Drive
P.O. Box 1767
Fremont, California 94538
(510) 449-0100
PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 5, 2002
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy accompanying this Proxy Statement is solicited by and on behalf of the Board of Directors of Peak International
Limited, a Bermuda corporation (which we will refer to as the “Company” or “Peak” throughout this Proxy Statement) for use at the 2002 Annual General Meeting of Shareholders of the Company to be held on September 5, 2002, 10:00
a.m. local time, at the Waldorf-Astoria hotel located at 100 East 50th Street, New York, New York 10022, and any postponement or any adjournment thereof (the “Annual General Meeting”).
This Proxy Statement, the accompanying form of proxy and Peak’s Annual Report on Form 10-K, which contains financial statements
and schedules required to be filed for the fiscal year ended March 31, 2002, were first mailed on or about August 7, 2002 to shareholders entitled to notice of and vote at the meeting (the “Shareholders” or, individually, a
“Shareholder”).
The Company will pay the cost of soliciting proxies, including expenses incurred
by brokerage firms and other representatives of beneficial owners in forwarding solicitation materials to beneficial owners. Directors, officers and regular employees may solicit proxies, either personally or by fax or telephone, on behalf of the
Company, without additional compensation.
The Company will provide copies of exhibits to the Annual Report on
Form 10-K to any requesting Shareholder upon payment of a reasonable fee and upon request of the Shareholder made in writing to Peak International Limited, 44091 Nobel Drive, P.O. Box 1767, Fremont, California 94538, Attn: Jack Menache, Secretary.
The request must include a representation by the shareholder that, as of July 11, 2002, the Shareholder was entitled to vote at the Annual General Meeting.
Who Can Vote
Pursuant to Bye-law 45 of the Company’s Bye-laws, the Board
of Directors has set July 11, 2002 (5:00 p.m. Eastern Daylight Time) as the record date for the meeting (which we will refer to as the “Record Date” throughout this Proxy Statement). Only Shareholders whose names and addresses appear in
the Register of Members on that date will be entitled to receive notice of and attend and vote at the meeting. The only outstanding class of voting securities of the Company is its shares of par value $0.01 per share (the “Shares”). There
were 12,689,762 Shares outstanding as of the close of business on July 11, 2002.
Revocability of Proxies
A Shareholder who gives a proxy may revoke it at any time prior to its exercise by filing with the President of the Company a
written revocation or a duly executed proxy bearing a later date. The proxy may also be
revoked if the Shareholder attends the meeting and elects to vote in person. Proxies that are signed but unmarked will be voted as recommended by the Board of Directors. A Shareholder who is the
holder of two or more Shares may appoint more than one proxy to represent him/her and vote on his/her behalf at the meeting.
Required
Vote
On a show of hands, every Shareholder present in person or by proxy shall be entitled to one vote and on
a poll, every Shareholder present or by proxy shall be entitled to one vote per fully paid share. The proposals below shall be decided on a show of hands unless a poll is demanded. In the election of directors, you may vote “FOR” the
nominee, or your vote may be “WITHHELD” with respect to the nominee. Directors are elected by a plurality vote, and the person receiving the highest number of “FOR” votes will be elected. You may vote “FOR,”
“AGAINST” or “ABSTAIN” on the other proposals submitted for Shareholder approval at the Annual General Meeting. The other proposals submitted for Shareholder approval at the Annual General Meeting will be decided by the
affirmative vote of the majority of the shares present in person or represented by proxy at the Annual General Meeting and entitled to vote on such proposal. Abstentions with respect to any proposal are treated as shares present or represented and
entitled to vote on that proposal, and thus will have the same effect as a vote against a proposal.
If you just
sign your Proxy Card with no further instructions, your shares will be counted as a vote “FOR” the director nominated by the Board and “FOR” approval of the proposals referred to in Items 2, 3, 4, 5 and 6, in the Notice of Annual
General Meeting and described in this Proxy Statement.
Quorum; Abstentions; Broker Non-votes
Two (2) Shareholders entitled to vote and present in person or by proxy representing not less than one-third in nominal value of the total
issued voting Shares in the Company will constitute a quorum for the transaction of business at the meeting. Abstentions and broker “non-votes” are counted for purposes of establishing a quorum. A broker “non-vote” occurs when a
nominee (such as a broker) holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power for that particular matter and has not received instructions from the beneficial
owner. Abstentions and broker “non-votes” will not affect the voting results, although they will have the practical effect of reducing the number of affirmative votes required to achieve a majority by reducing the total number of shares
from which the majority is calculated.
Audited Financial Statements
Under the Company’s Bye-laws and Bermuda law, audited financial statements must be presented to Shareholders at an annual general meeting of Shareholders. To fulfill
this requirement, we will present at the Annual General Meeting audited consolidated financial statements for the fiscal year ended March 31, 2002. Copies of those financial statements are included in our Annual Report on Form 10-K, which is being
mailed to Shareholders together with this Proxy Statement. Representatives of PricewaterhouseCoopers, our independent auditors, are not expected to be present at the meeting. These statements have been approved by the Company’s directors. There
is no requirement under Bermuda law that such statements be approved by the Shareholders, and no such approval will be sought at the meeting.
IMPORTANT
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT AT YOUR
EARLIEST CONVENIENCE IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE SO THAT, WHETHER YOU INTEND TO BE PRESENT AT THE ANNUAL GENERAL MEETING OR NOT, YOUR SHARES CAN BE VOTED. THIS WILL NOT LIMIT YOUR RIGHTS TO ATTEND OR VOTE AT THE ANNUAL GENERAL
MEETING.
2
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The
Company’s Board of Directors currently has five (5) members. Pursuant to Bye-law 87 of the Company’s Bye-laws, at each annual general meeting, one-third of the directors for the time being (or, if their number is not a multiple of three,
the number nearest to but not greater than one-third) must retire from office by rotation. The Chairman of the Board is not, while holding such office, subject to retirement by rotation or taken into account in determining the number of directors to
retire each year. A retiring director is eligible for re-election. The directors to retire by rotation include (so far as necessary to ascertain the number of directors to retire by rotation) any director who wishes to retire and will not stand for
re-election. Any further directors to retire are those subject to retirement by rotation who have been longest in office since their last re-election or appointment. As between persons who became or were last re-elected directors on the same day,
those to retire will (unless they otherwise agree among themselves) be determined by lot.
The Board of Directors
has nominated and recommends the election of William Snyder, who is being re-nominated for election to another term as director. Mr. Snyder’s age, business background and tenure as a director of the Company is set forth under “Directors
and Executive Officers” below. Mr. Snyder will be elected to serve until his successor is elected and qualified. If, at the time of the meeting, he should be unable to or decline to serve, the discretionary authority provided in the proxy will
be exercised to vote for a substitute chosen by the Board of Directors. Mr. Snyder has consented to serve, if elected, and the Company has no reason to believe that any substitute nominee will be required.
Required Vote
The
nominee receiving the highest number of affirmative votes of the Shares present at the Annual General Meeting in person or by proxy and entitled to vote shall be elected as a director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE RE-ELECTION OF WILLIAM SNYDER AS A DIRECTOR.
DIRECTORS AND EXECUTIVE OFFICERS
The
following table sets forth information with respect to the directors and executive officers of the Company and their ages as of July 11, 2002.
| Name |
Age |
Position | ||
| Mr. Calvin Reed |
59 |
Chairman of the Board and Chief Executive Officer | ||
| Mr. Douglas Broyles |
60 |
Director | ||
| Mr. John Haughey |
61 |
Vice President of US Sales & Marketing of Peak International, Inc. | ||
| Mr. Jack Menache |
59 |
Vice President of Administration, Secretary, General Counsel and Director | ||
| Mr. Jerry Mo |
43 |
Chief Financial Officer and Controller | ||
| Ms. Christine Russell |
52 |
Director | ||
| Mr. William Snyder |
58 |
Director | ||
| Mr. Darien Spencer |
39 |
Vice President, Manufacturing Operations | ||
| Mr. Danny Tong |
34 |
Vice President of Sales & Marketing of Peak Plastic & Metal Products (International) Limited |
3
Mr. Calvin Reed has served as our President, and Chief Executive Officer
and as a member of our Board of Directors since April 1999 and as Chairman of the Board of Directors since October 2001. Mr. Reed has over thirty years of experience in the electronics and technology sectors. From 1993 to 1998, Mr. Reed served as
the chairman, president, and chief executive officer of Valance Technology, Inc., a battery manufacturing company. Mr. Reed was retired prior to joining Peak.
Mr. Douglas Broyles has served as a member of our Board of Directors since May 1999. Since June 2000, Mr. Broyles has served as a general partner of Huntington
Ventures, a venture capital firm. From 1996 to March 2000, Mr. Broyles served as president and chief executive officer of Avalon Data, a wireless data communications design and manufacturing company. Prior to that, he was a partner for ten
years with Glenwood Management, a venture capital firm based in Menlo Park, California.
Mr. John
Haughey has served as Vice President of Sales and Marketing in the United State since March 2002. He has over 30 years of experience in sales management in the technology arena. Mr. Haughey has served as senior vice president of world wide sales
and sales administration for Conner Peripherals, a disk drive company. In 1985, he served as vice president of far east sales and marketing for Seagate Technology, a disk drive company. In 1996, Mr. Haughey served as president and chief executive
officer of OR Technology, a company specializing in the design, manufacture and sale of high density floppy disks.
Mr. Jack Menache has served as our Vice President of Administration, Secretary and General Counsel since July 1999. He served as a member of our Board of Directors from May 1999 until July 1999 and from October 2001 to the
present. From September 1989 until July 1999, he served as vice president, general counsel and secretary for Integrated Device Technology, Inc., an international manufacturer of semiconductors. Mr. Menache holds an LLB degree from George Washington
University Law School, and a bachelor of arts degree from the University of the Americas. He is admitted to the Bar in California.
Mr. Jerry Mo has served as our Chief Financial Officer and Controller since 1996. From 1992 to 1996, Mr. Mo worked as the financial controller for the group administration division of Pacific Dunlop Ltd., a major
industrial conglomerate in Australia. He holds a bachelor of science degree in accounting and data processing from Leeds University in the United Kingdom. He is a fellow member of the Institute of Chartered Accountants in England and Wales and an
associated member of the Institute of Chartered Accountants in Australia and the Hong Kong Society of Accountants.
Mr. Darien Spencer has served as our Vice President, Manufacturing Operations since July 2001. He was previously employed as president and chief executive officer of PCS Corporation, a contract service provider. From June 1997
to June 2000, he served as senior vice president of operations and development of Spectrian Corporation, a communications equipment manufacturer, and was responsible for the company’s RF amplifier operations. Prior to June 1997, Mr. Spencer was
employed as chief operating officer of CAM Advanced Technology, a contract manufacturing company.
Ms.
Christine Russell has served as a member of our Board of Directors since March 2000. Since 1997, Ms. Russell has served as the vice president and chief financial officer of Persistence Software, a company addressing the Internet
infrastructure and enterprise application development markets. From 1995 to 1997, Mrs. Russell served as vice president of Cygnus Solutions, an emerging software company. She is a graduate of the University of Santa Clara and has a masters in
business administration in finance.
Mr. William Snyder has served as a member of Board of Directors since
July 1999. Mr. Snyder served as chief financial officer of Etec Systems, Inc., a multinational capital equipment manufacturer, from August 1997 until March 2000, when Etec was acquired by Applied Materials, Inc. Prior to that, Mr. Snyder served as
chief financial officer of Integrated Device Technology, Inc., a semiconductor company, from 1990 to July of 1997. Mr. Snyder has a masters in business administration from the University of Arizona.
4
Mr. Danny Tong has served as Vice President of Sales and Marketing of our
subsidiary, Peak Plastic & Metal Products (International) Limited, and has been responsible for the Company’s sales and operations in Asia and Europe since March 2002. From 1995 to March 2002, he was the Company’s Vice President
responsible for the sales of various regions and locations of the Company. He holds a bachelor of applied science degree in mechanical engineering from the University of Toronto.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held three regular meetings, two special meetings, and acted by written consent once during the last fiscal year. The Board has two committees: the Compensation and Stock Option
Committee and the Audit Committee. The Compensation and Stock Option Committee did not meet during the fiscal year ended March 31, 2002 but acted by written consent once. The Audit Committee met four times during the fiscal year. In addition, a
Special Committee acted once by unanimous written consent in connection with our tender offer for a portion of the Trust Enhanced Dividend Securities of Peak TrENDS Trust. Each director has attended at least 75% of the aggregate of all Board
meetings and meetings of the committees of which he or she is a member.
The Board of Directors formed the
Compensation Committee and the Audit Committee in February 1997. The role of the Compensation Committee is to make recommendations to the Board of Directors relating to salaries and other compensation for the Company’s directors, officers and
employees and to administer the employee share option and stock purchase plans. The Committee was subsequently renamed as the Compensation and Stock Option Committee and is composed of directors Douglas Broyles and William Snyder.
The role of the Audit Committee is to review the results and scope of the annual audit and other services provided by the
Company’s independent auditors, to review and evaluate the Company’s internal audit and control functions, to monitor transactions between the Company and its directors, officers, employees and other related parties and reviews other
matters relating to the relationship of the Company with its auditors. It is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance
with generally accepted accounting principles. Management is responsible for preparing the Company’s financial statements, and the independent auditors are responsible for auditing those financial statements. However, the Audit Committee does
consult with management and the Company’s independent auditors prior to the presentation of financial statements to Shareholders and, as appropriate, initiates inquiries into various aspects of the Company’s financial affairs. The members
of the Audit Committee are independent directors Douglas Broyles, Christine Russell and William Snyder.
Compensation of Directors
Each director of the Company who is not an employee of the Company or its affiliates receives an annual fee
of $15,000 plus a fee of $1,000 for each Board meeting attended and $500 for each committee meeting attended. In addition, each such director is annually awarded a fully vested option to purchase 10,000 Shares at a purchase price determined on the
date of grant in accordance with the applicable stock option plan. Each member of the Audit Committee is annually granted an additional fully vested option to purchase 5,000 Shares at a purchase price determined on the date of grant in accordance
with the applicable stock option plan. The chairpersons of the Compensation and Stock Option Committee and Audit Committee are annually granted an additional fully vested option to purchase 2,000 Shares at a purchase price determined on the date of
grant in accordance with the applicable stock option plan. Chairpersons and directors who are also employees of the Company or its affiliates receive no remuneration for serving as directors. All directors traveling overseas for the purpose of
fulfilling their oversight responsibilities are paid $1,500 per day plus actual expenses.
5
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended March 31, 2002, the Compensation and Stock Option Committee of the Board of Directors consisted of Mr.
Broyles and Mr. Snyder, neither of whom is an officer or employee of the Company. No member of the Compensation and Stock Option Committee or executive officer of the Company has a relationship that would constitute an interlocking relationship with
executive officers or directors of another entity.
PROPOSAL NO. 2
REMUNERATION OF DIRECTORS
The Board of Directors also seeks Shareholder approval to authorize the Board of Directors to fix the remuneration for the directors with respect to their service to the Company as directors. Information regarding the
remuneration paid to directors last year is set forth under “Directors and Executive Officers—Compensation of Directors” above.
Required Vote
Adoption of this proposal requires the affirmative vote of a majority of the
votes cast at the meeting by the Shareholders entitled to vote thereon.
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO AUTHORIZE THE BOARD OF DIRECTORS TO FIX THE REMUNERATION FOR THE DIRECTORS.
6
EXECUTIVE COMPENSATION AND RELATED INFORMATION
The following Summary Compensation Table sets forth for fiscal 2000, 2001 and 2002 certain information with respect to the compensation of
the Company’s President and Chief Executive Officer and the four other most highly compensated executive officers who served in such capacities for the fiscal year ended March 31, 2002 (the “Named Executive Officers”).
Summary Compensation Table
| Annual Compensation |
Long-Term Compensation |
All Other Compensation ($)(1) | ||||||||
| Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Securities Underlying
Options/SARs (#) |
||||||
| Calvin Reed President and Chief Executive Officer |
2002 2001 2000 |
415,000 442,974 373,308 |
— 120,000 — |
113,417 98,000 442,500 |
— — — | |||||
| Jerry Mo Chief Financial Officer and Controller |
2002 2001 2000 |
272,592 290,708 305,797 |
— 50,000 — |
34,167 86,000 217,000 |
13,214 13,801 13,098 | |||||
| Jack Menache VP of
Administration, Secretary and General Counsel |
2002 2001 2000 |
276,666 292,585 172,571 |
— 50,000 — |
34,167 106,000 127,000 |
— — — | |||||
| Darien Spencer(2) VP of Manufacturing Operations |
2002 |
196,154 |
— |
100,000 |
— | |||||
| Danny Tong VP of International Sales |
2002 2001 2000 |
192,603 164,705 143,590 |
— 50,000 — |
34,117 86,000 77,000 |
7,778 8,123 7,778 | |||||
(1) |
Represent the Company’s contribution to the relevant employee benefit plans of officers who are based in Hong Kong. |
(2) |
Mr. Spencer joined the Company in July 2001. |
Stock Option Information
The following table sets forth information regarding stock
options granted to the Named Executive Officers during the fiscal year ended March 31, 2002. The exercise price in all cases is equal to 100% of the fair market value of our Shares on the date of grant.
In addition, in accordance with the Securities and Exchange Commission rules, the table shows the hypothetical gains that would exist for
these options. Gains are based on the assumed rates of annual compound stock price appreciation of 5% and 10% from the date the options were granted, and do not represent the Company’s estimates or projections of future stock prices. There can
be no assurance that any of the values reflected in the table will be achieved. The actual value that an executive may realize, if any, will depend upon the difference between the market price of our Shares and the exercise price of the option on
the date the option is exercised.
7
Options/SAR Grants in Last Fiscal Year
| Individual Grants(1) |
Value at Assumed Annual Rates of Share Price Appreciation
for Option Term | |||||||||||||||
| Name |
Number of Securities Underlying Options/SARs Granted (#) |
Percent of Total Options/ SARs Granted to Employees in Fiscal 2002(2) |
Exercise Price ($/Share) |
Expiration Date |
||||||||||||
| 5% ($) |
10% ($) | |||||||||||||||
| Calvin Reed President and
Chief Executive Officer |
113,417 |
26.4 |
% |
$ |
6.21 |
8/6/2005 |
$ |
151,785 |
$ |
326,875 | ||||||
| Jerry Mo Chief Financial
Officer and Controller |
34,167 |
8.0 |
|
|
6.21 |
8/6/2005 |
|
45,725 |
|
98,471 | ||||||
| Jack Menache VP of
Administration, Secretary and General Counsel |
34,167 |
8.0 |
|
|
6.21 |
8/6/2005 |
|
45,725 |
|
98,471 | ||||||
| Darien Spencer VP of
Manufacturing Operations |
100,000 |
23.3 |
|
|
6.21 |
8/6/2005 |
|
133,829 |
|
288,206 | ||||||
| Danny Tong VP of
International Sales |
34,117 |
7.9 |
|
|
6.21 |
8/6/2005 |
|
45,658 |
|
98,327 | ||||||
(1) |
All options were granted under the Company’s 1998 Share Option Plan. Unless otherwise noted, the options vest quarterly over a three year period from the
grant date. The options have a term of four years, subject to earlier termination if the officer leaves the Company. |
(2) |
Based on a total of 429,868 options granted to employees in fiscal 2002. |
Aggregated Option/SAR Exercises in Last Fiscal Year
And Fiscal Year-End Option/SAR Values
The following table shows information about option
exercises by the Named Executive Officers during the fiscal year ending March 31, 2002, and the value of unexercised options at March 31, 2002. Value at fiscal year end is measured as the difference between the exercise price and fair market value
on March 28, 2002, which was $8.00.
| Name |
Shares Acquired on Exercise (#) |
Value Realized ($) |
Number of Securities Underlying Unexercised Options at Fiscal Year End (#) |
Value of Unexercised In-the-money Options/SARS at Fiscal Year
End ($) | ||||||||||
| Exercisable |
Unexercisable |
Exercisable |
Unexercisable | |||||||||||
| Calvin Reed President and
Chief Executive Officer |
— |
— |
474,612 |
179,305 |
$ |
768,602 |
$ |
235,977 | ||||||
| Jerry Mo Chief Financial
Officer and Controller |
— |
— |
293,581 |
68,555 |
|
878,944 |
|
50,965 | ||||||
| Jack Menache VP of
Administration, Secretary and General Counsel |
— |
— |
202,778 |
64,389 |
|
324,777 |
|
86,382 | ||||||
| Darien Spencer VP of Manufacturing Operations |
— |
— |
— |
100,000 |
|
29,834 |
|
149,166 | ||||||
| Danny Tong VP of
International Sales |
— |
— |
157,546 |
68,514 |
|
270,803 |
|
50,891 | ||||||
8
Employment Contracts, Termination of Employment and Change-in-Control Arrangements
Calvin R. Reed. Effective April 22, 1999, the Company entered into an employment agreement with
Mr. Reed, providing that beginning on that date, he would serve as President and Chief Executive Officer of the Company for an initial term of three years, to be automatically extended by one year on an annual basis unless one party notifies
the other of termination. The agreement contains standard provisions relating to benefits, intellectual property, confidentiality, and restrictions on competitive activities and solicitation of Company employees and customers. Pursuant to this
agreement, Mr. Reed is entitled to an annual base salary of $405,000 per year, which may be increased as determined by the Board of Directors. A portion of this salary is paid upon completion of the fiscal year so long as Mr. Reed continues to be
employed by the Company at such time. Mr. Reed has been granted three options to purchase shares of common stock of the Company. The first option is for the purchase of 150,000 shares of common stock at a per share exercise price of $3.65625,
the second option is for the purchase of 150,000 shares of common stock at a per share exercise price of $7.00, and the third option is for the purchase of 100,000 shares of common stock at a per share exercise price of $10.00. The options vest over
ten years from the date of grant in twelve equal, quarterly installments, provided that no options will vest during the first two years of the agreement. After the second anniversary of the agreement, in all cases of termination except those
occurring within two years of a change in control, Mr. Reed’s options shall remain exercisable for a period of one year. Should Mr. Reed be terminated without cause or resign (as a result a reduction in pay or title, the Company’s material
breach of the employment contract or a relocation of Mr. Reed’s offices outside of Southern California), within two years of a change of control or liquidation of the Company, all of Mr. Reed’s options shall vest immediately and
remain exercisable for a period of one year and he shall receive a severance payment equal to two times his current base salary if termination occurs in the first year of the contract, and three times his current base salary if termination happens
thereafter. Mr. Reed is also entitled to a severance payment of three times his current base salary if he is terminated by the Company without cause (as defined in the agreement).
Jerry Mo, Jack Menache, John Haughey, Darien Spencer and Danny Tong. Effective October 1, 2000, the Company entered into identical three year
employment agreements with Mr. Menache, Mr. Mo, and Mr. Tong. In addition, the Company entered into identical agreements with Mr. Haughey and Mr. Spencer on February 14, 2002 and June 27, 2001, respectively. These agreements contain standard
provisions relating to confidentiality and restrictions on competitive activities and solicitation of Company employees and customers. Each agreement also calls for a lump-sum severance payment in an amount equal to 12 months base salary and unused
vacation pay, and the vesting of all stock options which would have vested within 18 months of the date of termination with such options remaining exercisable for one year should the employee be terminated without cause or resign because of a
reduction in base salary or material adverse change in employment duties. If termination without cause or resignation (resulting from a reduction in base salary or a materially adverse change in employment duties) occurs in anticipation of or within
two years following a change in control or liquidation of the Company, then all stock options shall immediately vest in full and remain exercisable for a period of one year.
9
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS(1)
The following is the report of the Audit Committee with respect to our audited financial statements for the fiscal year ended March 31, 2002, which include our consolidated balance sheets as of March
31, 2002 and March 31, 2001, and the related consolidated statements of operations, shareholders equity and cash flows for each of the three years in the period ended March 31, 2002, and the notes thereto.
The Audit Committee is composed of three directors, all of whom are independent as defined by the Nasdaq Marketplace Rules. The Audit
Committee is primarily responsible for reviewing the services performed by the Company’s independent auditors and internal finance department, evaluating the Company’s accounting policies and its system of internal controls and reviewing
significant financial transactions. The Audit Committee operates under a written charter adopted by the Board of Directors.
The Audit Committee recommends to the Board of Directors, subject to shareholder ratification, the selection of an accounting firm to be engaged as the Company’s independent auditors. The independent auditors are responsible for
performing an independent audit of the Company’s financial statements in accordance with generally accepted auditing standards and to issue a report thereon. Management is responsible for our internal controls and the financial reporting
process. The Audit Committee is responsible for monitoring and overseeing these processes.
The Audit Committee
has reviewed and discussed the Company’s audited financial statements with management and with the Company’s independent auditors. In addition, the Audit Committee discussed with the Company’s independent auditors the matters to be
discussed by Statement of Accounting Standards No. 61. The Audit Committee has also received the written disclosures and letter from the Company’s independent auditors in accordance with the Independence Standards Board Standard No. 1, and has
discussed with the Company’s independent auditors their independence. Based on these reviews and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s
Annual Report on Form 10-K for the fiscal year ended March 31, 2002, for filing with the Securities and Exchange Commission.
The Audit Committee and the Board of Directors have also recommended, subject to shareholder approval, the selection of PricewaterhouseCoopers as the Company’s independent auditors for the fiscal year ending March 31, 2003.
AUDIT COMMITTEE
Douglas Broyles
Christine Russell
William Snyder
(1) |
The material in this report is not “soliciting material,” is not deemed “filed” with the Securities and Exchange Commission and is not to be
incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation
language contained in such filing. |
10
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. T. L. Li, Chairman of the Board of Directors until October 2001, through his beneficial ownership of all of the outstanding shares of
Luckygold, is the single largest shareholder of the Company. Mr. Li owns approximately 40% of the outstanding shares of QPL Holdings, a company incorporated under Bermuda law and listed on The Hong Kong Stock Exchange. QPL Holdings is a holding
company of a group of semiconductor companies which includes QPL, QPL (U.S.) Inc. (f.k.a. Worltek International Limited) and Talent Focus Industries Limited and formerly included ASAT and Newport Wafer-Fab Limited.
A portion of our sales have been made to companies controlled by Mr. T. L. Li, which include QPL and other subsidiaries of QPL Holdings
and formerly included ASAT. Our product sales to the subsidiaries of QPL Holdings in the year ended March 31, 2002 represented approximately 2.5% of our net sales or $1,120,000. QPL and ASAT are our customers and may, from time to time, engage
in transactions with us that are material to our results of operations.
We review related party transactions on
an ongoing basis and utilize the Audit Committee to review potential conflicts of interest where appropriate. Our policy is to conduct transactions with our affiliates, including the companies in QPL Holdings, on an arms-length basis.
11
REPORT OF THE COMPENSATION AND STOCK OPTION
COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation and Stock Option Committee of the Board of Directors of the Company is comprised of non-employee directors Douglas Broyles and William Snyder. The Compensation and Stock Option Committee reviews and makes
recommendations concerning base salaries and incentive compensation for all officers of the Company and authorizes the grant of stock options.
Compensation Philosophy
The Company’s executive compensation program is generally
designed to align the interests of executives with the interests of shareholders and to reward executives for achieving corporate objectives. The executive compensation program is also designed to attract and retain the services of qualified
executives.
Key Elements of Executive Compensation
Executive compensation currently consists of a base salary, bonuses, stock options, and other compensation and benefit programs generally available to other employees.
Base Salary. Base salary levels for the Chief Executive Officer (“CEO”)
and other executive officers are intended to compensate executives competitively. Base salaries are determined on an individual basis by evaluating each executive’s scope of responsibility, past performance, prior experience and compensation
levels in relevant markets for comparable talent. Base salaries for executives are reviewed from time to time by the Committee. Effective September 1, 2001, the salaries of Messrs. Menache and Mo were reduced by 15% subject to payment in the form of
bonuses if the Company met certain revenue and profitability goals in fiscal year 2002. On April 29, 2002, the salary reductions were eliminated.
Bonuses. The Executive Compensation Plan provided for bonuses to the CEO and other executive officers based on revenue and profitability goals in fiscal year 2002. For the
fiscal year ended March 31, 2002, no bonuses were paid to the CEO or other executive officers.
Stock
Options. The Company provides long-term equity incentives to its executive officers and to other employees through the grant of stock options under its stock option plans. The purpose of granting stock options is to create
a direct link between compensation and the long-term performance of the Company. Stock options are generally granted at an exercise price equal to 100% of the fair market value on the date of grant, have a four-year term and generally vest in
quarterly installments over thirty-six months. Because the receipt of value by an executive officer under a stock option is dependent upon an increase in the price of the Company’s common stock, this portion of the executives’ compensation
is directly aligned with an increase in shareholder value. The primary stock options granted to executive officers are generally in conjunction with the executive officer’s acceptance of employment with the Company. When determining the number
of stock options to be awarded to an executive officer, the Committee considers the executive’s current contribution to the Company’s performance, the executive officer’s anticipated contribution in meeting the Company’s
long-term goals and by comparisons to formal and informal surveys of stock option grants made by other companies. The Committee also reviews stock option levels for executive officers each fiscal year in light of long-term objectives and each
executive’s current and anticipated contributions to the Company’s future performance.
Chief Executive Compensation
The Committee determines the compensation of the CEO using the same criteria as for the other executive
officers. On June 7, 2000, Mr. Reed’s salary was set at $450,000 per year, including $50,000 to be paid upon completion of the fiscal year so long as Mr. Reed continues to be employed by the Company at such time. Effective September 1, 2001,
Mr. Reed’s salary was reduced by 15% subject to payment in the form of bonuses
12
if the Company met certain revenue and profitability goals in fiscal year 2002. On April 29, 2002, the salary reduction was eliminated. For fiscal year ended March 31, 2002, Mr. Reed did not
receive a bonus. On August 6, 2001, Mr. Reed was granted a stock option for 113,417 shares. The option was granted at fair market value on the date of grant, vests quarterly over three years and has a term of four years.
Tax Deductibility of Executive Compensation
The Committee has considered the potential impact of Section 162(m) of the Internal Revenue Code on the compensation paid to the Company’s executive officers. Section 162(m) limits the tax deductibility by a corporation
of compensation in excess of $1 million paid to its CEO and any other of its four most highly compensated executive officers. However, compensation which qualifies as “performance based” is excluded from the $1 million limit if, among
other requirements, the compensation is payable only upon attainment of pre-established, objective performance goals under a plan approved by the corporation’s shareholders. In general, it is the Committee’s policy to qualify, to the
maximum extent possible, its executives’ compensation for deductibility under applicable tax laws.
The
Committee does not presently expect total cash compensation to exceed the $1 million limit for any individual executive officer of the Company. In addition, realized gains on the exercise of nonstatutory stock options may also qualify for the
exemption from the tax deduction limit under Section 162(m) as performance-based compensation if certain conditions under Section 162(m) are met. After consideration of the requirements of Section 162(m), the Compensation and Stock Option Committee
believes that nonstatutory stock option grants to date meet the requirement that such grants be “performance based.”
COMPENSATION AND STOCK OPTION COMMITTEE
Douglas
Broyles
William Snyder
13
STOCK PRICE PERFORMANCE GRAPH
In accordance with the rules of the Securities and Exchange Commission, the following graph compares the cumulative total return of the
Company, the Russell 2000 Index and the Dow Jones Containers and Packaging Industry Group. The total return assumes $100 invested in the Company’s shares, the Russell 2000 Index and the Dow Jones Containers and Packaging Industry Group on June
20, 1997 and includes reinvestment of dividends.
The comparative performance of the Company’s shares against
the indexes as depicted in this graph is dependent on the price of stock at a particular measurement point in time. Since individual stocks are more volatile than broader stock indexes, the perceived comparative performance of the Company’s
shares may vary based on the strength or weakness of the share price at the new measurement point used in each future proxy statement graph. For this reason, the Company does not believe that this graph should be considered as the sole indicator of
the Company’s performance and is not necessarily indicative of future performance.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
PEAK, RUSSELL 2000 INDEX, AND DOW JONES CONTAINERS & PACKAGING GROUP
(Fiscal year Ended March 31)
| Base Period and
Fiscal Year Ending |
PEAK |
Russell 2000
Index |
Dow Jones Containers
& Packaging Group | |||
| 6/20/97 |
$100.00 |
$100.00 |
$100.00 | |||
| 3/31/98 |
211.46 |
122.18 |
95.45 | |||
| 3/31/99 |
19.27 |
101.70 |
77.87 | |||
| 3/31/00 |
82.29 |
137.81 |
65.77 | |||
| 3/31/01 |
48.96 |
115.04 |
56.12 | |||
| 3/31/02 |
66.67 |
129.31 |
85.68 |
The information contained above under the captions “Report of
the Compensation and Stock Option Committee of the Board of Directors” and “Stock Price Performance Graph” shall not be deemed to be soliciting material or to be filed with the Securities and Exchange Commission, nor shall such
information be incorporated by reference into any future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except that the Company specifically incorporates it by reference into such filing.
14
PROPOSAL NO. 3
INCREASE IN THE NUMBER OF SHARES RESERVED FOR ISSUANCE
UNDER THE 1998 SHARE OPTION
PLAN
The Board of Directors approved an increase in the number of Shares reserved for issuance under the
Company’s 1998 Share Option Plan from 2,700,000 to 2,950,000. The Board of Directors believes that the increase is in the best interests of the Company and its Shareholders because it will increase the Company’s ability to attract and
retain employees by providing them with appropriate equity incentives. This plan plays an important role in the Company’s efforts to attract and retain employees of outstanding ability. The following summary of the principal features of the
1998 Share Option Plan is qualified by reference to the terms of the 1998 Share Option Plan, a copy of which is available without charge upon Shareholder request to Jack Menache, Peak International Limited, 44091 Nobel Drive, P.O. Box 1767, Fremont,
California 94538.
Shares Available for Awards and Administration of the Plan
Subject to certain adjustments, if approved, the number of Shares with respect to which awards may be granted under the 1998 Share Option
Plan (referred to in this Proposal No. 3 as the “Plan”) shall be 2,950,000. No participant may receive awards under the Plan in any calendar year that relate to more than 200,000 Shares. The Plan shall be administered by the Compensation
and Stock Option Committee, which shall be authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the
administration of the Plan. Subject to applicable law, the Compensation and Stock Option Committee shall be permitted to delegate its duties and powers under the Plan to designated individuals. In addition, on April 29, 2002, the Board of Directions
amended the Plan to (1) limit the maximum number of shares that may be granted to an independent director in any year to an amount not to exceed 20,000 shares per year, (2) to prohibit grants at less than fair market value, and (3) to prohibit
material changes to the Plan without shareholder approval.
Adjustment
In the event that the Compensation and Stock Option Committee determines that any dividend or other distribution (whether in the form of cash, Shares, other securities, or
other property) or any alteration in the capital structure of the Company, including but not limited to any recapitalization, stock split, subdivision, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, or
exchange of Shares or other securities of the Company, issuance of warrants or other rights to subscribe for or acquire Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an
adjustment is determined by the Compensation and Stock Option Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Compensation and Stock
Option Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number of Shares or other securities of the Company (or number and kind of other securities or property) with respect to which awards may be granted, (ii)
the number of Shares or other securities of the Company which are the subject of outstanding awards, and (iii) the grant or exercise price with respect to any award, or, if deemed appropriate by the Compensation and Stock Option Committee, make
provision for a cash payment to the holder of an outstanding award; provided that, no adjustment to the grant or exercise price of an award shall be made which would result in an exercise or grant price of less than the par value of a Share.
Eligibility
Any director and employee shall be eligible to participate. As of July 11, 2002, the Company had approximately five directors and 150 employees who were eligible under the Plan.
15
Share Options
Subject to the provisions of the Plan, the Compensation and Stock Option Committee shall have sole, absolute and complete authority to determine the directors or the
employees to whom options shall be granted provided that the number of shares granted to an independent director in any year shall not exceed 20,000 shares, the number of Shares to which each option relates and the conditions and limitations
applicable to the exercise of any option. The Compensation and Stock Option Committee shall have the authority to grant Incentive Stock Options, or to grant Non-Qualified Stock Options, or to grant both types of options. In the case of Incentive
Stock Options, the terms and conditions of such grants shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code, as from time to time amended, and any regulations implementing such statute.
The Compensation and Stock Option Committee in its sole and absolute discretion will establish the exercise price at the time
each option is granted which in any event shall not be less than the par value of a Share and provided that no option may have an exercise price that is less than the fair market value of the underlying Shares on the date of grant of such option. As
of July 11, 2002, the closing price of the Company’s Common Stock, as reported on the Nasdaq National Market was $5.50 per Share. Each option shall be exercisable at such times and subject to such terms and conditions as the Compensation and
Stock Option Committee may, in its sole and absolute discretion, specify in the applicable award agreement or thereafter. The Committee may impose such conditions with respect to the exercise of options, including without limitation, any relating to
the application of United States federal or state securities laws, as it may deem necessary or advisable.
Termination or Suspension
of Employment
Unless the Compensation and Stock Option Committee shall have provided otherwise, if the
participant’s employment with the Company or its affiliates or his appointment as a director is terminated for any reason other than death or permanent and total disability, the participant shall have the right to exercise any option following
such termination of employment or appointment and prior to the date which falls 90 days after the date of such termination of employment or appointment to the extent such option was exercisable at the date of such termination of employment or
appointment and shall not have been exercised. But in no event shall such option be exercisable later than the expiration date for such option set forth in the award agreement. Unless the Compensation and Stock Option Committee shall have provided
otherwise, if the participant’s employment with the Company or its affiliates or the participant’s appointment as a director is terminated by reason of death or permanent and total disability, the unvested portion of any options shall
terminate and expire on the date of such termination of employment and the participant’s successor, in the case of the participant’s death, or otherwise the participant shall have the right to exercise any option following such termination
of employment or appointment to the extent it was exercisable at the date of such termination of employment or appointment and shall not have been exercised, but in no event shall such option be exercisable later than the expiration date for the
option set forth in the applicable award agreement.
Amendment and Termination
Subject to certain restrictions in the Plan, the Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion
thereof at any time, provided however, the Board of Directors amended the Plan on April 29, 2002 to provide that the Company must seek Shareholder approval of material changes to the Plan. The Compensation and Stock Option Committee may also waive
any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any award provided that if such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination would adversely affect
the number of Shares of any award or the amount payable by a participant upon exercise of any granted option, it shall not be effective without the consent of the affected participant. The Compensation and Stock Option Committee may cause any award
granted to be cancelled in consideration of a cash payment or alternative award made to the holder of such cancelled award equal in value to the fair market value as at the original date of grant of the cancelled award.
16
Nontransferability
No award or option granted under the Plan may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a participant, in whole or in part,
except pursuant to a validly made will of the participant or the laws of inheritance of property.
Taxes and Withholding
Generally, all taxes (including income tax) arising from the exercise of any option granted to any
participant under the Plan will be borne by that participant. A participant may be required to pay to the Company (or an affiliate) and the Company (or an affiliate) may withhold from any award or from any compensation or other amount owing to a
participant the amount of any applicable withholding taxes.
No Right to Employment
The grant of an award shall not be construed as giving a participant the right to be retained in the employ of the Company or one of its
affiliates. The Company or an affiliate may at any time dismiss a participant from employment, free from any liability or any claim under the Plan or any award and options granted thereunder. The terms of employment of a participant shall not be
affected by his participation in the Plan.
No Rights as Shareholder
Subject to the provisions of the applicable award, no participant or holder or beneficiary of any award shall have any rights as a shareholder with respect to any Shares to
be distributed under the Plan until he or she has become the registered holder of such Shares. Shares allotted and issued on exercise of an option shall be subject to all provisions of the memorandum of association and bye-laws of the Company, and
shall rank in full for all entitlements, including dividends or other distributions declared or recommended in respect of the then existing Shares.
Term of the Plan
The Plan has been effective since July 27, 1998. No award may be granted
under the Plan after July 27, 2008.
Summary of U.S. Federal Income Tax Consequences
The following summary is intended only as a general guide as to the U.S. federal income tax consequences under current law and does not
attempt to describe all possible federal or other tax consequences of such participation or tax consequences based on particular circumstances.
Incentive Stock Options
A participant recognizes no taxable income for regular income tax
purposes as a result of the grant or exercise of an incentive stock option qualifying under Section 422 of the Code. Participants who neither dispose of their Shares within two years following the date the option was granted nor within one year
following the exercise of the option will normally recognize a capital gain or loss equal to the difference, if any, between the sale price and the purchase price of the Shares. If a participant satisfies such holding periods upon a sale of the
Shares, the Company will not be entitled to any deduction for federal income tax purposes. If a participant disposes of Shares within two years after the date of grant or within one year after the date of exercise (a “disqualifying
disposition”), the difference between the fair market value of the Shares on the determination date (see discussion under “Nonstatutory Stock Options” below) and the option exercise price (not to exceed the gain realized on the sale
if the disposition is a transaction with respect to which a loss, if sustained, would be recognized) will be taxed as ordinary income at the time of disposition. Any gain in excess of that amount will be
17
a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the participant upon the disqualifying
disposition of the Shares generally should be deductible by the Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code.
The difference between the option exercise price and the fair market value of the Shares on the determination date of an incentive stock option (see discussion under
“Nonstatutory Stock Options” below) is treated as an adjustment in computing the participant’s alternative minimum taxable income and may be subject to an alternative minimum tax which is paid if such tax exceeds the regular tax for
the year. Special rules may apply with respect to certain subsequent sales of the Shares in a disqualifying disposition, certain basis adjustments for purposes of computing the alternative minimum taxable income on a subsequent sale of the Shares
and certain tax credits which may arise with respect to participants subject to the alternative minimum tax.
Nonstatutory Stock
Options
Options not designated or qualifying as incentive stock options will be nonstatutory stock options
having no special tax status. A participant generally recognizes no taxable income as the result of the grant of such an option. Upon exercise of a nonstatutory stock option, the participant normally recognizes ordinary income in the amount of the
difference between the option exercise price and the fair market value of the Shares on the determination date (as defined below). If the participant is an employee, such ordinary income generally is subject to withholding of income and employment
taxes. The “determination date” is the date on which the option is exercised unless the Shares are subject to a substantial risk of forfeiture (as in the case where a participant is permitted to exercise an unvested option and receive
unvested Shares which, until they vest, are subject to the Company’s right to repurchase them at the original exercise price upon the participant’s termination of service) and are not transferable, in which case the determination date is
the earlier of (i) the date on which the Shares become transferable or (ii) the date on which the Shares are no longer subject to a substantial risk of forfeiture. If the determination date is after the exercise date, the participant may elect,
pursuant to Section 83(b) of the Code, to have the exercise date be the determination date by filing an election with the Internal Revenue Service no later than 30 days after the date the option is exercised. Upon the sale of stock acquired by the
exercise of a nonstatutory stock option, any gain or loss, based on the difference between the sale price and the fair market value on the determination date, will be taxed as capital gain or loss. No tax deduction is available to the Company with
respect to the grant of a nonstatutory stock option or the sale of the stock acquired pursuant to such grant. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant as a result of
the exercise of a nonstatutory stock option, except to the extent such deduction is limited by applicable provisions of the Code.
Required Vote
Approval of the amendment to the 1998 Share Option Plan requires the
affirmative vote of a majority of the votes cast at the meeting by the Shareholders entitled to vote thereon.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE UNDER THE COMPANY’S 1998 SHARE OPTION PLAN FROM 2,700,000 TO 2,950,000.
18
PROPOSAL NO. 4
INCREASE IN THE NUMBER OF SHARES RESERVED FOR ISSUANCE
UNDER THE 2000 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors approved an increase in the number of Shares reserved for issuance under the Company’s 2000
Employee Stock Purchase Plan from 400,000 to 600,000. The following summary of the principal features of the 2000 Employee Stock Purchase Plan is qualified by reference to the terms of the 2000 Employee Stock Purchase Plan, a copy of which is
available without charge upon Shareholder request to Jack Menache, Peak International Limited, 44091 Nobel Drive, P.O. Box 1767, Fremont, California 94538.
Shares Subject to and Administration of the Plan
If approved, the total number of
Shares which may be issued under the 2000 Employee Stock Purchase Plan (referred to in this Proposal No. 4 as the “Plan”) will be 600,000 Shares, which may consist, in whole or in part, of unissued Shares, treasury Shares or Shares
purchased on the open market. The Plan shall be administered by the Compensation and Stock Option Committee, which shall be authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make
any other determinations that it deems necessary or desirable for the administration of the Plan. Subject to applicable law, the Compensation and Stock Option Committee shall be permitted to delegate its duties and powers under the Plan to
designated individuals.
Offering Periods
Offering periods shall be three months long and commence on a quarterly basis. The first offering period under the Plan commenced on January 1, 2001 and ended on March 31, 2001. The final offering
period is to commence on September 1, 2010 and end on December 31, 2010. The Compensation and Stock Option Committee may, however, change the duration of any offering period.
Eligibility
Any individual who is an employee of the
Company or of a participating subsidiary or of its parent is eligible to participate in the Plan, except those employees: (i) whose customary employment is twenty (20) hours or less per week; (ii) whose customary employment is for not more than five
(5) months in any calendar year; (iii) who, if granted an option would immediately thereafter own Shares possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the employer corporation or of its
parent or subsidiary; and (iv) who have been employed less than three months. As of July 11, 2002, the Company and its affiliates had approximately 150 employees who were eligible under the Plan.
Participation in the Plan
The Compensation and
Stock Option Committee shall set forth procedures pursuant to which participants may elect to participate in a given offering period under the Plan. Once a participant elects to participate in an offering period, such employee shall automatically
participate in all subsequent offering periods, unless the employee makes a new election or withdraws from an offering period or from the Plan.
Grant of Option on Enrollment
Each participant who elects to participate in a given
offering period shall be granted an option to purchase a number of Shares equal to the lesser of: (i) the maximum number of Shares that a participant may purchase on any given purchase date as determined by the Compensation and Stock Option
Committee, or (ii) the number determined by dividing the amount accumulated in such employee’s payroll deduction account during such offering period by the purchase price. The purchase price at which a Share will be sold for a given offering
19
period shall be eighty-five percent (85%) of the lesser of the fair market value of a Share on the offering date; or the fair market value of a Share on the purchase date. As of July 11, 2002,
the closing price of the Company’s Common Stock, as reported on the Nasdaq National Market was $5.50 per Share.
Payment of
Purchase Price; Changes in Payroll Deductions; Issuance of Shares
Subject to certain limitations, payroll
deductions shall be made on each day that participants are paid during an offering period with respect to all participants who elect to participate in such offering period. The deductions shall be made as a percentage of the participant’s
compensation in one percent (1%) increments, from one percent (1%) to twenty percent (20%) of such participant’s compensation, as elected by the participant; provided, however, that no participant shall be permitted to purchase Shares under the
Plan with an aggregate fair market value in excess of $25,000 for anyone calendar year. For a given offering period, payroll deductions commence on the offering date and end on the related purchase date unless sooner altered or terminated as
provided in the Plan.
A participant shall not change the rate of payroll deductions once an offering period has
commenced. The Compensation and Stock Option Committee shall specify procedures by which a participant may increase or decrease the rate of payroll deductions for subsequent offering periods.
All payroll deductions made with respect to a participant shall be credited to his or her payroll deduction account under the Plan and shall be deposited with the
general funds of the Company, and no interest shall accrue on the amounts credited to such payroll deduction accounts. All payroll deductions received or held by the Company may be used by the Company for any corporate purpose, and the Company shall
not be obligated to segregate such payroll deductions. A participant may not make any separate cash payment into his or her payroll deduction account, and payment for Shares purchased under the Plan may not be made in any form other than by payroll
deduction.
On each purchase date, the Company shall exercise all options granted hereunder by applying all funds
then in the participant’s payroll deduction account to purchase Shares (in whole and/or fractional Shares, as the case may be) pursuant to the option granted on the offering date. In the event that the number of Shares to be purchased by all
participants in one offering period exceeds the number of Shares then available for issuance under the Plan, the Company shall make a pro rata allocation of the remaining Shares in as uniform a manner as shall be practicable and as the Compensation
and Stock Option Committee shall determine to be equitable and all funds not used to purchase Shares on the purchase date shall be returned, without interest, to the participant.
As soon as practicable following the end of each offering period, the number of Shares purchased by each participant shall be deposited into an account established in the
participant’s name with a stock brokerage or other financial services firm designated by the Compensation and Stock Option Committee. Unless otherwise permitted by the Compensation and Stock Option Committee, dividends that are declared on the
Shares held in such account shall be reinvested in whole or fractional Shares.
The applicable holding period for
U.S. residents is currently set forth in the Internal Revenue Code of 1986, as amended (the “Code”) as two years after the date of the option grant and one year after the receipt of Shares into the designated brokerage account. Non-U.S.
residents may not be subject to the Code, but are subject to any applicable local laws, rules, or regulations. Once the applicable holding period has been satisfied with respect to a participant’s Shares, the participant may: (i) transfer his
or her Shares to another brokerage account of his or her choosing or (ii) request in writing that a stock certificate be issued to him or her with respect to the whole Shares in his or her designated brokerage account and that any fractional Shares
remaining in such account be paid in cash to him or her. The Compensation and Stock Option Committee may require that the participant bear the cost of transferring such Shares or issuing certificates for such Shares. The participant shall have no
interest or voting right in the Shares covered by his or her option until the participant’s Shares shall have been deposited in the participant’s account with the designated brokerage firm.
20
Withdrawal
Each participant may withdraw from an offering period or from the Plan under certain terms and conditions. Upon a participant’s withdrawal from an offering period or
from the Plan, all accumulated payroll deductions in the payroll deduction account shall be returned, without interest, to such participant, and he or she shall not be entitled to any Shares on the purchase date or thereafter with respect to the
offering period in effect at the time of such withdrawal. Such participant shall be permitted to participate in subsequent offering periods pursuant to such terms and conditions established by the Compensation and Stock Option Committee.
Termination of Employment
A participant shall cease to participate in the Plan upon his or her termination of employment for any reason (including, but not limited to, retirement, death or disability). In such event, all
payroll deductions credited to the participant’s payroll deduction account shall be returned, without interest, to such participant or to his or her designated beneficiary, as the case may be, and such participant or beneficiary shall have no
future rights in any unexercised options under the Plan.
Adjustments Upon Certain Events
In the event of any change in the outstanding Shares by reason of any Share dividend or split, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of Shares or other corporate exchange, or any distribution to Shareholders of Shares other than regular cash dividends, the Compensation and Stock Option Committee in its sole discretion and without
liability to any person may make such substitution or adjustment, if any, as it deems to be equitable, as to the number or kind of Shares or other securities issued or reserved for issuance pursuant to the Plan, the purchase price and/or any other
affected terms of such options. In the event of a change in control, the Compensation and Stock Option Committee in its sole discretion and without liability to any person may take such actions, if any, as it deems necessary or desirable with
respect to any option as of the date of the consummation of the change in control.
Nontransferability
No options granted under the Plan shall be transferable or assignable by the participant otherwise than by will or by the laws of descent
and distribution, and options shall only be exercisable, during the participant’s lifetime, by the participant.
No Right to
Employment
The granting of an option under the Plan shall impose no obligation on the Company or any
subsidiary to continue the employment of a participant and shall not lessen or affect the Company’s or any subsidiary’s right to terminate the employment of such participant.
Section 423 of the Code
The Plan is intended to qualify as
an “employee stock purchase plan” within the meaning of Section 423 of the Code, or any successor section thereto. Accordingly, all participants shall have the same rights and privileges under the Plan, subject to any permitted exceptions.
Amendment or Termination of the Plan
The Plan shall continue until the earliest to occur of: (i) termination of the Plan by the Board of Directors, (ii) issuance of all of the Shares reserved for issuance under the Plan and (iii) December
31, 2010. The Board of Directors may amend, alter or discontinue the Plan, but no amendment, alteration or discontinuation shall be made which: (i) without the approval of the Shareholders of the Company, would increase the total number of
21
Shares reserved for the purposes of the Plan (except as described under “Adjustments Upon Certain Events” above), or (ii) without the consent of a participant, would impair any of the
rights or obligations under any option theretofore granted to such participant under the Plan; provided, however, that the Compensation and Stock Option Committee may amend the Plan as necessary to permit the granting of options meeting the
requirements of the Code or other applicable laws.
Tax Withholding
A participant’s employer may withhold from such participant such withholding taxes as may be required by federal, state, local or other law, or to otherwise require
the participant to pay such withholding taxes. Unless the Compensation and Stock Option Committee specifies otherwise, a participant may elect to pay a portion or all of such withholding taxes by delivery of Shares or having Shares withheld by the
Company from the Shares otherwise to be received. The Shares so delivered or withheld shall have an aggregate fair market value equal to the amount of such withholding taxes.
Summary of U.S. Federal Income Tax Consequences
The
following is intended only as a general guide as to the U.S. federal income tax consequences under current law and does not attempt to describe all possible federal and other tax consequences of such participation or tax consequences based on
particular circumstances.
The 2000 Employee Stock Purchase Plan is intended to qualify as an “employee stock
purchase plan” within the meaning of Section 423 of the Internal Revenue Code.
Tax Treatment of
the Participating Employee. Participating employees will not recognize income for federal income tax purposes either upon enrollment in the Plan or upon the purchase of Shares. All tax consequences are deferred until a
participating employee sells the Shares, disposes of the Shares by gift or dies.
If Shares are held for
more than one year after the date of purchase and more than two years from the beginning of the applicable offering period, or if the participating employee dies while owning the Shares, the participating employee will realize ordinary income on a
sale, or a disposition by way of gift or upon death, to the extent of the lesser of: (1) 15% of the fair market value of the Shares at the beginning of the offering period; or (2) the actual gain (the amount by which the market value of the Shares
on the date of sale, gift or death exceeds the purchase price). All additional gain upon the sale of Shares will be treated as long-term capital gain. If the Shares are sold and the sale price is less than the purchase price, there will be no
ordinary income and the participating employee will have a long-term capital loss for the difference between the sale price and the purchase price.
If the Shares are sold or are otherwise disposed of including by way of gift, but not death, bequest or inheritance, within either the one-year or the two-year holding periods described above, which is
referred to as a disqualifying disposition, the participating employee will realize ordinary income at the time of sale or other disposition, taxable to the extent that the fair market value of the Shares at the date of purchase is greater than the
purchase price. This excess will constitute ordinary income (not currently subject to withholding) in the year of the sale or other disposition even if no gain is realized on the sale or if a gratuitous transfer is made. The difference, if any,
between the proceeds of sale and the aggregate fair market value of the Shares at the date of purchase will be a capital gain or loss. Capital gains may be offset by capital losses, and up to $3,000 of capital losses may be used annually against
ordinary income.
Tax Treatment of the Company. The Company will be entitled
to a deduction in connection with the disposition of Shares acquired under the Plan only to the extent that the participating employee recognizes ordinary income on a disqualifying disposition of the Shares. The Company will treat any transfer of
record ownership of Shares as a disposition, unless the Company is notified to the contrary. In order to enable the
22
Company to learn of disqualifying dispositions and ascertain the amount of the deductions to which the Company is entitled, participating employees will be required to notify
the Company in writing of the date and terms of any disposition of Shares purchased under the Plan.
Required Vote
Approval of the amendment to the 2000 Employee Stock Purchase Plan requires the affirmative vote of a
majority of the votes cast at the meeting by the Shareholders entitled to vote thereon.
THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE UNDER THE COMPANY’S 2000 EMPLOYEE STOCK PURCHASE PLAN FROM 400,000 TO 600,000.
23
EQUITY COMPENSATION PLAN INFORMATION
The following chart gives aggregate information regarding grants under all equity compensation plans of Peak as of July 11, 2002:
| 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: |
|||||||
| 1997 Share Option Plan |
451,626 |
$ |
8.64883 |
192,612 | |||
| 1998 Share Option Plan |
1,910,757 |
$ |
6.87749 |
680,810 | |||
| 2000 Employee Stock Purchase Plan(1) |
— |
|
— |
313,136 | |||
| |
|
|
| ||||
| Subtotal |
2,362,383 |
$ |
7.21612 |
1,186,558 | |||
| Equity compensation plans not approved by security holders |
300,000 |
$ |
7.44271 |
— | |||
| |
|
|
| ||||
| Total |
2,662,383 |
$ |
7.24166 |
1,186,558 | |||
| |
|
|
| ||||
(1) |
Shares available for sale pursuant to the Company’s 2000 Employee Stock Purchase Plan. Shares of common stock will be purchased at a price equal to 85% of
the fair market value per share of common stock on either the first day preceding the offering period or the last date of the accumulation period, whichever is less. |
24
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain
information with respect to the beneficial ownership of the shares as of July 11, 2002, for:
(i) each person known by the Company to beneficially own more than 5% of the outstanding Shares;
(ii) each of the Company’s current directors and the nominee for director of the Company;
(iii) each of the Company’s executive officers named under “Executive Compensation—Summary Compensation Table;” and
(iv) all current directors and executive officers as a group.
Amounts appearing in the table below include all shares outstanding as of July 11, 2002 and all shares issuable upon the exercise of
options or warrants within 60 days thereof. As of July 11, 2002, there were 12,689,762 Shares of Peak issued and outstanding. Unless otherwise noted, the address of each of the Shareholders named below is the Company’s principal executive
office.
| Name and Address of Beneficial Owner |
Number of Shares(1) |
Percentage of
Class(1) |
|||
| 5% Shareholders |
|||||
| Luckygold 18A Ltd.(2) Units 4, 5 and 7, 37th Floor Cable TV Tower 9 Hoi Shing
Road Tsuen Wan, New Territories, Hong Kong |
2,343,438 |
18.5 |
% | ||
| FMR Corp.(3) 82 Devonshire Street Boston, Massachusetts 02109 |
1,694,090 |
13.4 |
| ||
| Quaker Capital Management Corporation(4) 401 Wood Street, Suite
1300 Pittsburgh, Pennsylvania 15222 |
1,190,400 |
9.4 |
| ||
| Royce & Associates, Inc.(5) 1414 Avenue of the Americas New York, New York 10019 |
1,045,300 |
8.2 |
| ||
| Merrill Lynch, Pierce, Fenner & Smith Inc.(6) Four World Financial Center, North
Tower 250 Vesey Street New York, New York 10080 |
675,000 |
5.3 |
| ||
| Directors and Executive Officers |
|||||
| Mr. Douglas Broyles(7) |
46,000 |
* |
| ||
| Ms. Christine Russell(8) |
30,000 |
* |
| ||
| Mr. William Snyder(9) |
46,000 |
* |
| ||
| Mr. Calvin Reed(10) |
566,264 |
4.3 |
| ||
| Mr. Jerry Mo(11) |
324,442 |
2.5 |
| ||
| Mr. Jack Menache(12) |
236,175 |
1.8 |
| ||
| Mr. Darien Spencer |
— |
— |
| ||
| Mr. Danny Tong(13) |
188,523 |
1.5 |
| ||
| All directors and executive officers as a group (9 persons)(14) |
1,445,737 |
10.3 |
% |
25
* |
Represents less than one percent of our outstanding stock |
(1) |
To the Company’s knowledge, the persons named in the table have sole voting and investment power with respect to all Shares shown as beneficially owned by
them, subject to community property laws where applicable and the information contained in the notes to this table. Beneficial ownership is determined in accordance with the rules and regulations of the Securities and Exchange Commission. In
computing the number of Shares beneficially owned by a person and the percentage ownership of that person, Shares subject to options held by that person that are currently exercisable or exercisable within 60 days of July 11, 2002 are deemed
outstanding. These shares, however, are not deemed outstanding for the purposes of computing percent ownership of any other person. |
(2) |
Based solely on information provided to the Company by Luckygold 18A Ltd. on July 16, 2002. Mr. T. L. Li is the sole stockholder of Luckgold 18A
Ltd. and has sole voting and investment power with respect to these shares. |
(3) |
Based solely on information provided on Amendment No. 2 to Schedule 13G filed by FMR Corp. on February 14, 2002. Includes 1,627,245 shares beneficially owned by
Fidelity Management & Research Company (“Fidelity”), a wholly-owned subsidiary of FMR Corp., as a result of Fidelity acting as an investment adviser to various investment companies, including Fidelity Low Priced Stock Fund, which
beneficially owns 1,375,700 shares. Edward C. Johnson III, chairman of FMR Corp. and members of his family which hold a controlling interest in FMR Corp., and FMR Corp. each have sole power to dispose of 1,627,245 shares. Voting power of the shares
held by the Fidelity funds is held by the Board of Trustees of each of the various funds. |
(4) |
Based solely on information provided on Schedule 13G filed by Quaker Capital Management (“Quaker”) on February 14, 2002. Quaker is an investment
adviser and has shared voting and shared dispositive power over 1,190,400 shares owned by its clients and held in accounts over which Quaker has discretionary authority. |
(5) |
Based solely on information provided on Amendment No. 2 to Schedule 13G filed by Royce & Associates, Inc. on February 13, 2002. Royce & Associates, Inc.
claims sole voting and dispositive power over 1,045,300 shares. |
(6) |
Based solely on information provided on a Schedule 13G filed by Merrill Lynch, Pierce, Fenner & Smith Inc. filed on February 15, 2002. Merrill Lynch,
Pierce, Fenner & Smith Inc. claims sole voting and dispositive power over 675,000 shares. |
(7) |
Includes 46,000 shares subject to options which are exercisable within 60 days of July 11, 2002. |
(8) |
Includes 30,000 shares subject to options which are exercisable within 60 days of July 11, 2002. |
(9) |
Includes 46,000 shares subject to options which are exercisable within 60 days of July 11, 2002. |
(10) |
Includes 550,264 shares subject to options which are exercisable within 60 days of July 11, 2002. |
(11) |
Includes 316,441 shares subject to options which are exercisable within 60 days of July 11, 2002. |
(12) |
Includes 233,972 shares subject to options which are exercisable within 60 days of July 11, 2002. |
(13) |
Includes 180,398 shares subject to options which are exercisable within 60 days of July 11, 2002. |
(14) |
Includes 1,411,408 shares subject to options which are exercisable within 60 days of July 11, 2002. |
26
PROPOSAL NO. 5
APPOINTMENT OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors has recommended the appointment of the firm of PricewaterhouseCoopers as independent auditors for the Company for the fiscal year ending March 31, 2003. The
Company has been advised by such firm that they will be independent auditors with respect to the Company within the meaning of the Securities Act administered by the Securities and Exchange Commission and the requirements of the Independence
Standards Board.
PricewaterhouseCoopers commenced performing services as the Company’s independent auditors
on July 1, 2002. Arthur Andersen & Co were the independent auditors for the Company for the fiscal year ended March 31, 2002. Effective July 1, 2002, Arthur Andersen & Co resigned as the Company’s independent auditors. The Board of
Directors, upon the approval of the Audit Committee, selected Arthur Andersen & Co as the Company’s independent auditors on October 11, 2001, after Deloitte Touche Tohmatsu declined to stand for re-election at the 2001 annual general
meeting of Shareholders. Deloitte Touche Tohmatsu were the independent auditors for the Company for the fiscal year ended March 31, 2001. Subject to ratification by the Shareholders, the Board of Directors has selected the firm of
PricewaterhouseCoopers as independent auditors for the Company for the fiscal year ending March 31, 2003. This decision to change auditors was recommended and approved by the Audit Committee. Representatives of PricewaterhouseCoopers and Arthur
Andersen & Co are not expected to be present at the meeting.
During the past two fiscal years, the reports on
the Company’s financial statements by the independent auditors for the Company did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.
During the past two fiscal years, and the subsequent period through July 1, 2002, there have been no
disagreements with the Company’s independent auditors on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the auditor’s satisfaction, would have
caused such auditor to make reference to the subject matter of any such disagreements in connection with its report on the Company’s financial statements for the applicable period. In addition, during the past two fiscal years, and the
subsequent period through July 1, 2002, there were no reportable events as defined in Item 304(a) of Regulation S-K.
During the past two fiscal years, and the subsequent period through July 1, 2002, the Company did not consult PricewaterhouseCoopers with respect to the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, or any other matters or reportable events as set forth in Items 304(a)(2)(i) or (ii) of Regulation S-K.
Fiscal 2002 Audit Fees
PricewaterhouseCoopers did not perform any work for the Company during the fiscal year ended March 31, 2002. The aggregate fees billed for professional services for the audit of the Company’s annual financial statements and the
reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q for the fiscal year ended March 31, 2002 by Arthur Andersen & Co and Deloitte Touche Tohmatsu amounted to a total of $240,266.
Financial Information Systems Design and Implementation Fees
No fees were billed for professional services rendered for information technology services related to financial information systems design and implementation by Arthur
Andersen & Co or Deloitte Touche Tohmatsu for the fiscal year ended March 31, 2002.
27
All Other Fees
The aggregate fees billed for all other services rendered by Arthur Andersen & Co and Deloitte Touche Tohmatsu for the fiscal year ended March 31, 2002 amounted to a
total of $291,001.
Upon consideration, the Audit Committee determined that the provision of services other than
the audit services is compatible with maintaining the Company’s independent auditor’s independence.
Required Vote
Ratification of PricewaterhouseCoopers as the Company’s independent auditors for the fiscal year ending
March 31, 2003 will require the affirmative vote of a majority of the votes cast at the meeting by the Shareholders entitled to vote thereon. If the Shareholders reject the nomination, the Board of Directors will reconsider its selection.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE APPOINTMENT OF THE FIRM OF
PRICEWATERHOUSECOOPERS AS THE COMPANY’S INDEPENDENT AUDITORS.
PROPOSAL NO. 6
REMUNERATION OF INDEPENDENT AUDITORS
The Board of Directors also seeks Shareholder approval to authorize the Board of Directors to fix the remuneration for the Company’s independent auditors with respect to their service to the
Company for the fiscal year ending March 31, 2003. Information regarding the remuneration paid to the Company’s auditors last year is set forth under “Proposal No. 5—Appointment of Independent Auditors” above.
Required Vote
Adoption of this proposal requires the affirmative vote of a majority of the votes cast at the meeting by the Shareholders entitled to vote thereon.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO AUTHORIZE THE BOARD OF DIRECTORS TO FIX THE REMUNERATION FOR THE COMPANY’S INDEPENDENT
AUDITORS FOR FISCAL YEAR 2003.
28
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires directors, officers and persons who own more than 10
percent of a registered class of a U.S. issuer’s equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of such securities, and to furnish the Company with copies
of all such reports they file. To the Company’s knowledge, based solely on a review of Forms 3, 4 and 5 under the Securities Exchange Act furnished to us, we believe that during fiscal year 2002, our officers, directors and holders of more than
10 percent of our common stock filed all Section 16(a) reports on a timely basis, except for the following: Luckygold 18A Ltd. failed to file two reports on Form 4, each of which would have reported one transaction.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for consideration at the meeting by the Board of Directors or by Shareholders who have requested inclusion of proposals in the Proxy Statement. If any other
matter shall properly come before the meeting, the persons named in the accompanying form of proxy intend to vote on such matters in accordance with their judgment.
SHAREHOLDER PROPOSALS
Under United States federal
securities laws, any Shareholder proposals intended to be presented at the 2003 Annual General Meeting must be received by the Company at its principal executive offices no later than April 19, 2003 in order to be considered for inclusion in
the proxy materials, and must otherwise comply with the requirements of Rule 14a-8 of the Securities Exchange Act of 1934, as amended.
Although information received after such date will not be included in proxy materials sent to shareholders, a shareholder proposal may still be presented at the annual general meeting if such proposal
complies with the Company’s Bye-laws then in effect. In accordance with Bye-law 59 of the Company’s Bye-laws, shareholder proposals may be brought before an annual general meeting only if such proposal is made pursuant to written notice
timely given to the Company’s Secretary accompanied by certain information. To be timely, a shareholder’s written notice must be received at the principal executive offices of the Company not less than ninety (90) days prior to anniversary
date of the prior year’s annual general meeting. The chairman of the annual general meeting may review proposals from eligible shareholders which it receives by that date and will determine whether any such proposal has been received in
accordance with the Company’s Bye-Laws and whether any such proposal will be acted upon at the annual general meeting.
In addition, Section 79 of the Companies Act 1981 of Bermuda provides that shareholders representing either: (1) not less than 5% of the total voting rights of all the shareholders having a right to vote at an annual general meeting
of the Company; or (2) not less than one hundred shareholders; may require a proposal to be submitted to an annual general meeting. Generally, notice of such a proposal must be received by the Company at its principal executive offices not less than
six weeks before the date of the meeting, unless the meeting is subsequently called for a date six weeks or less after the notice has been deposited.
By order of the Board of Directors
Calvin Reed
Chairman, Chief Executive Officer and President
August 7, 2002
Fremont, California
29
| PROXY |
PROXY |
PEAK INTERNATIONAL LIMITED
(Incorporated in Bermuda with limited liability)
FORM OF PROXY FOR USE
AT THE ANNUAL GENERAL MEETING
(or at any postponement or adjournment thereof)
I/We (Note 1)
of
, the registered holder(s) of (Note 2)
shares par value US $0.01 per share each in the capital of Peak International
Limited (the “Company”), HEREBY APPOINT
(Note 3) of
or failing him, the Chairman of the meeting, as my/our
proxy (the “Proxy”) to act for me/us at the Annual General Meeting (or at any postponement or adjournment thereof) of the Company to be held at the Waldorf-Astoria, 100 East 50th Street, New York, New York 10022 on September 5, 2002 at
10:00 a.m. (local time) and in particular (but without limitation) at such meeting (or at any adjournment thereof) to vote for me/us and in my/our name(s) as indicated below or, if no such indication is given as my/our proxy thinks fit.
This proxy is solicited by and on behalf of the Board of Directors of Peak International Limited.
<FOLD AND DETACH HERE<
1. |
To re-elect William Snyder as director. |
FOR ¨ WITHHELD ¨
2. |
To authorize the directors to fix the remuneration of the directors. |
FOR ¨ AGAINST ¨ ABSTAIN ¨
3. |
To increase the number of Shares reserved for issuance under the 1998 Share Option Plan. |
FOR ¨ AGAINST ¨ ABSTAIN ¨
4. |
To increase the number of Shares reserved for issuance under the 2000 Employee Stock Purchase Plan. |
FOR ¨ AGAINST ¨ ABSTAIN ¨
5. |
To appoint PricewaterhouseCoopers as the independent auditors for the Company for the fiscal year ending March 31, 2003; |
FOR ¨ AGAINST ¨ ABSTAIN ¨
6. |
To authorize the Directors to fix the remuneration of the auditors for fiscal 2003. |
FOR ¨ AGAINST ¨ ABSTAIN ¨
7. |
In their/his/her discretion, the Proxy is authorized to vote upon such other business as may properly come before the meeting or any postponement or adjournment
thereof. |
| Signature: |
|
Date: |
| |||
| Please date and sign exactly as name appears above. If acting as attorney, executor, trustee or in other representative capacity, sign and
include your name and title. | ||||||
<FOLD AND DETACH
HERE<
Notes:
1. |
Full name(s) and address(es) should be inserted in BLOCK CAPITALS. |
2. |
Please insert the number of Shares of par value US$0.01 per Share registered in your name(s). If no number is inserted, this form of proxy will be deemed to
relate to all the Shares of the Company registered in your name(s). |
3. |
Please insert the name and address of the proxy. IF NO NAME IS INSERTED, THE CHAIRMAN OF THE MEETING WILL, SUBJECT TO THE LIMITATION SET OUT BELOW, ACT AS
YOUR PROXY. Under the Company’s Bye-laws, a proposal put to the meeting will be decided on a show of hands unless a poll is properly demanded. On a show of hands, every member present in person or (being a corporation) by a duly authorized
representative or by proxy will have one vote. AS THE CHAIRMAN OF THE MEETING IS ONLY ABLE TO EXERCISE ONE VOTE ON A SHOW OF HANDS, HE WILL USE THE VOTE FOR THOSE MEMBERS WHO WISH TO VOTE FOR ANY OR ALL OF THE PROPOSALS PUT TO THE MEETING. IF YOU
WISH TO VOTE AGAINST ANY OR ALL OF THE PROPOSALS PUT TO THE MEETING, YOU MUST APPOINT A PERSON OTHER THAN THE CHAIRMAN OF THE MEETING TO ACT AS YOUR PROXY. |
4. |
IF YOU WISH TO VOTE FOR A PROPOSAL, PLEASE TICK IN THE RELEVANT BOX MARKED “FOR”. IF YOU WISH TO VOTE AGAINST A PROPOSAL, PLEASE TICK IN THE RELEVANT
BOX MARKED “AGAINST”. IF YOU WISH TO ABSTAIN FROM VOTING ON ANY PROPOSAL PLEASE TICK IN THE RELEVANT BOX MARKED “ABSTAIN”. Failure to tick any box will entitle your proxy to cast your vote at his discretion. If the Chairman
of the meeting is appointed as your proxy and no direction is given with respect to a proposal, this proxy will be voted “FOR” the election of the director listed above and “FOR” the other proposals. Your proxy will also be
entitled to vote at his discretion on any proposal properly put out to the meeting other than those referred to in the notice convening the meeting. |
5. |
This form of proxy must be signed by you or your attorney duly authorized in writing, in the case of a corporation, must be either under its seal or under the
hand of an officer, attorney or other person duly authorized. |
6. |
In the case of joint holders, any one of such joint holders may vote, either in person or by proxy, at the meeting, but if more than one of the joint holders
are present at the meeting, the vote of a senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders, and for this purpose, seniority shall be determined by the order in which
the names stand in the Register of Members of the Company. |
7. |
In order to be valid, this form of proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that
power of authority, must be deposited at Mellon Investor Services, Proxy Processing, Church Street Station, P.O. Box 1675, New York, NY 10277-1675 not less than 48 hours before the time appointed for holding the meeting or the adjourned or postponed
meeting (as the case may be). |
8. |
The proxy need not be a member of the Company but must attend the meeting in person to represent you. |
9. |
Completion and deposit of the form of proxy will not preclude you from attending and voting at the meeting if you so wish. |
2