In addition, our management will report on our progress and respond to your questions.
You may vote at the Annual Meeting if you owned Common Stock as of the close of business on
Record Date which is October 1, 2013. Each share of Common Stock is entitled to one vote.
ACCORDINGLY, THE BOARD RECOMMENDS A VOTE "FOR" THE RE-ELECTION OF THE
SIX INCUMBENT DIRECTORS.
What if I return my Proxy Card but do not include voting instructions?
If you return a signed card, but do not provide voting instructions, your shares will be voted:
• FOR each nominee for director;
• FOR the Reverse Split Proposal;
• To approve the compensation to our executive officers;
• To approve the frequency of future advisory votes on executive compensation be held every three years; and
• According to the best judgment of the Board of Directors if a proposal comes up for a vote at this
Meeting that is not on the proxy card.
What does it mean if I receive more than one Proxy Card?
It means you may have multiple accounts with brokers and/or our transfer agent. Please vote all of
these shares of Common Stock. We recommend that you contact your broker (if you are the beneficial owner of our shares in street
name) or our transfer agent (if you are a stockholder of record) to consolidate as many accounts as possible under the same name and
address. Our transfer agent is Computershare, 330 N. Brand Blvd., Suite 701, Glendale, CA 91203-2149, telephone (818) 254-3160.
Will my shares be voted if I do not provide my Proxy?
If you do not sign and return your proxy card, your shares will not be voted unless you vote in person at
this Meeting.
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
Certain of our stockholders hold their shares in an account at a brokerage firm, bank or other nominee holder, rather than
holding share certificates in their own name. As summarized below, there are some distinctions between shares held of record and
those owned beneficially.
Stockholder of Record / Registered Stockholders
If, on the Record Date, your shares were registered directly in your name with our transfer agent, Computershare, you are a
"stockholder of record" who may vote at the Meeting, and we are sending these proxy materials directly to you. As the
stockholder of record, you have the right to direct the voting of your shares by returning the enclosed proxy card to us or to vote in
person at the Meeting. Whether or not you plan to attend the Meeting, please complete, date and sign the enclosed proxy card to
ensure that your vote is counted.
7
Beneficial Owner
If, on the Record Date, your shares were held in an account at a brokerage firm or at a bank or other nominee holder, you are
considered the beneficial owner of shares held "in street name," and these proxy materials are being forwarded to you by
your broker or nominee who is considered the stockholder of record for purposes of voting at the Meeting. As the beneficial owner, you
have the right to direct your broker on how to vote your shares and to attend the Meeting. However, since you are not the stockholder of
record, you may not vote these shares in person at the Meeting unless you receive a valid proxy from your brokerage firm, bank or
other nominee holder. To obtain a valid proxy, you must make a special request of your brokerage firm, bank or other nominee holder.
If you do not make this request, you can still vote by using the voting instruction card enclosed with this proxy statement; however, you
will not be able to vote in person at the Meeting.
Can I change my mind after I return my Proxy?
Yes. You may change your vote at any time before your Proxy is voted at the Annual Meeting. If you
are a shareholder of record, you can do this by giving written notice to your respective corporate secretary, by submitting another Proxy
with a later date, or by attending the Annual Meeting and voting in person. If you are a shareholder in "street" or
"nominee" name, you should consult with the bank, broker or other nominee regarding that entity's procedures for revoking
your voting instructions.
How many shares are eligible to be voted at the Annual Meeting?
The record date for the Annual Meeting is October 1, 2013. Only stockholders of record at the close of business on
October 1, 2013, will be entitled to vote at the Annual Meeting. At the close of business on that date, there were outstanding
[ • ]
shares of the Company's Common Stock entitled to one vote per share.
How many votes must be present to hold the meeting?
Your shares are counted as present at the meeting if you attend the meeting and vote in person or if
you properly return a Proxy by mail. In order for us to conduct our meeting, a majority of our outstanding shares of Common Stock as of
October 1, 2013 must be present in person or by proxy at the meeting. This is referred to as a quorum. On October 1, 2013, there were
[ • ]
shares of Common Stock outstanding and entitled to vote. If a quorum is not present, then either the chairman of the meeting
or the stockholders entitled to vote at the meeting may adjourn the meeting until a later time. Abstentions and broker
"non-votes" are counted as present or represented for purposes of determining the presence or absence of a quorum. A broker
"non-vote" occurs when a broker holding shares for a beneficial owner votes on one proposal, but does not vote on another
proposal because, in respect of such other proposal, the broker does not have discretionary voting power and has not received
instructions from the beneficial owner.
What vote is required to elect directors?
Directors are elected by a plurality of the votes cast. Abstentions and broker "non-votes"
(shares held by brokers or nominees as to which they have no discretionary authority to vote on a particular matter and have received
no instructions from the beneficial owners or persons entitled to vote thereon) will have no effect on the vote for re-election of
directors.
What vote is required to approve the Reverse Stock Split Proposal?
The affirmative vote of a majority of the issued and outstanding shares of Common Stock entitled to vote at the Meeting, voting
as one class, is required for approval of the Reverse Split Proposal.
8
How many votes are required for the non-binding advisory vote on our executive compensation?
The proposal to approve, on an advisory basis, the compensation awarded to our named executive officers requires the affirmative
vote of a majority of the votes cast at the Meeting by the holders of shares of Common Stock entitled to vote.
How many votes are required for non-binding advisory vote recommending the frequency of advisory votes on executive
compensation?
For purposes of determining the votes cast with respect to the vote to approve a non-binding advisory vote recommending
the frequency of advisory votes on executive compensation, a shareholder may vote for 1, 2 or 3 years, or may abstain, and the
advisory vote on frequency will be determined by the number of years that receives the most votes cast.
How will voting on any other business be conducted?
Although we do not know of any business to be conducted at the Annual Meeting other than the
proposals described in this Proxy Statement, if any other business comes before the Annual Meeting, your signed Proxy Card gives
authority to the Proxy holders to vote on those matters at their discretion.
Who will bear the costs of this solicitation?
We will bear the entire cost of solicitation of proxies, including preparation, assembly, printing and
mailing of this Proxy Statement, the Proxy Card and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of Common Stock
beneficially owned by others to forward to the beneficial owners. We may reimburse persons representing beneficial owners of
Common Stock for their costs of forwarding solicitation materials to the beneficial owners. Original solicitation of proxies by mail may be
supplemented by telephone, facsimile or personal solicitation by our directors, officers or other regular employees.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. Final voting results will be
published on a Current Report on Form 8-K within four business days after conclusion of the Annual Meeting.
9
PROPOSAL 1
RE-ELECTION OF DIRECTORS
At the Annual Meeting, six individuals will be elected to serve as directors until the next annual meeting or until
their successors are duly elected, appointed and qualified. The Company's Board of Directors currently consists of six persons. The six
individuals who are nominated for re-election to the Board of Directors are existing directors of the Company. Unless a shareholder
WITHHOLDS AUTHORITY, a properly signed and dated Proxy will be voted "FOR ALL" of the six persons named below to
serve as directors, unless the Proxy contains contrary instructions. Management has no reason to believe that any of the nominees will
not be a candidate or will be unable to serve as a director. However, in the event any nominee is not a candidate or is unable or
unwilling to serve as a director at the time of the re-election, unless the shareholder WITHHOLDS AUTHORITY from voting, the proxies
will be voted "FOR" any nominee who shall be designated by the present Board of Directors to fill such vacancy.
The six current Directors to be considered for re-election are Lei Gu, Patrick Wong, Augustine Lo, Chang Shan,
Chen Wang, and Chin Hung (James) Lo.
Our Directors will generally serve one-year terms and shall hold office until the next annual meeting of
stockholders and until his successor has been duly elected, appointed and qualified. If all the nominees are elected, the Board of
Directors will consist of six incumbent directors.
Unless Proxy Cards are otherwise marked, the persons named as proxies will vote all proxies received FOR the
re-election of each nominee named in this section.
At each annual meeting of stockholders, directors will be elected by the holders of Common Stock to succeed
those directors whose terms are expiring. Directors will be elected annually and will serve until successors are duly elected and
qualified or until a director's earlier death, resignation or removal. Our bylaws provide that the authorized number of directors may be
changed by action of the majority of the Board of Directors or by a vote of the stockholders of our Company. Vacancies in our Board of
Directors may be filled by a majority vote of the Board of Directors with such newly appointed director to serve until the next annual
meeting of stockholders, unless sooner removed or replaced.
The following table sets forth certain information concerning each nominee for re-election as a Director of the
Company:
|
|
|
|
|
Directors and Executive Officers
|
|
Age
|
|
Position / Title
|
|
|
|
|
|
Lei Gu
|
|
49
|
|
Chairman of the Board and Chief Executive Officer
|
|
|
|
|
|
Patrick Wong
|
|
34
|
|
Chief Financial Officer, Secretary and Director
|
|
|
|
|
|
Augustine Lo
|
|
58
|
|
Director (1)
|
|
|
|
|
|
Chang Shan
|
|
53
|
|
Director (1)
|
|
|
|
|
|
Cheng Wang
|
|
57
|
|
Director (1)
|
|
|
|
|
|
Chin Hung (James) Lo
|
|
45
|
|
Director
|
(1) Current members of the Audit and Compensation Committees.
10
Background
The following is a brief summary of the background of each nominee for Director of the Company:
Lei Gu, Chairman of the Board, Director and Chief Executive Officer
. Mr. Gu has served as the Chairman of the
Board and CEO of the Company since May 2004 and as the Chairman of TCB Digital since July 2007. He worked for CEC
Telecom Company Ltd. from 2000 to 2004, joining the company among its first employees and became its COO. CEC Telecom was
sold to Qiao Xing Mobile Communication which currently trades on NYSE under the symbol "QXM". From 1999 to 2000, Mr. Gu
was the President of Xin Tian Di Technology Group Company, Ltd. Mr. Gu was Associate Professor at the Beihang University in
Beijing, China from 1993 to 1999. He received his Ph.D. degree in engineering from the Beihang University in 1993. Based on Mr. Gu's
management experience and expertise in engineering, we believe that Mr. Gu is well qualified to serve as our Chairman of the Board of
Directors.
Patrick Wong, Director and Chief Financial Officer
. Mr. Wong was director of the Company since July 15, 2013. Mr. Wong
is a Certified Public Accountant and a Chartered Accountant. Since February 2012, Mr. Wong served as the Company's Vice President
of Finance. Prior to joining the Company Mr. Wong was a Partner at WWC Professional Corporation. Mr. Wong has also held various
posts at NetSuite, Cable & Wireless, and Citibank.
His proven ability to develop successful investment
and management strategies, his keen business acumen, and his knowledge of the financial markets were some of the qualities that first
formed the basis for his election to the Board.
Augustine Lo, Director
. Mr. Lo has been an independent director of the Company since January 2009 and he
also serves as the Chairperson of the company's Audit and Compensation Committees. During the 1970s, Mr. Lo was the
Controller of the Disk Drive Division for Qume Corporation. During the 1980s, Mr. Lo worked for Apple International Inc. as the
Director of Finance & Administration, overseeing operations in Hong Kong and Japan. In 1989, Mr. Lo formed PacRim
Technologies Ltd. with operations in Singapore, Taiwan and China distributing software products including Adobe, Macromedia,
Handspring and Umax. PacRim merged into GrandTech of Taiwan in 1999 which later went public in 2001. He remained on
GrandTech's board and headed up its operations in Hong Kong, China, Korea and the Philippines until 2005. Mr. Lo received his
MBA and BS degrees from the University of California at Berkeley.
Based on Mr. Lo's substantial experience
in finance and operations of multi-national businesses, we believe that Mr. Lo is well qualified to serve on our Board.
Chang Shan, Director
. Mr. Shan has been an independent director of the Company since August 2008.
Mr. Shan is currently the President of the China Institute of Geotechnical Investigation and Survey, at which he has been
employed since 1998. He is the Chairman of the Board of Directors from 1999 to present, of the China Infrastructure Holdings Ltd., a
company in the construction business with a particular emphasis on toll bridges, and has its shares listed on the Singaporean Stock
Exchange. Mr. Shan is also a director of the Bank of Tianjin, China since 2007. Mr. Shan holds a Bachelor's degree in
Engineering from the Shanghai Tong Ji University, a Master's degree in Engineering from the China Academy of Railway Sciences and
an EMBA from the Tsinghua University.
Based on Mr. Shan experience in corporate governance and
leadership, we believe that Mr. Shan is well qualified to serve on our Board.
Cheng Wang, Director
. Mr. Wang has been an independent director since November 2009. Mr. Wang is currently a Senior
Researcher, Professor and Deputy Director of the Institute of Economics at the Chinese Academy of Social Sciences (CASS), at which
he has been employed since 1987. He is also the Co-Editor of the Economic Research Journal since 2005. Mr. Wang was a visiting
scholar at the Dept of Economics of Brown University in the US from 2001 to 2002, a visiting research fellow at the University of London
in the UK from 1997 to 1998, and a visiting researcher at Loughborough University in the UK from 1992 to 1993. In addition to the
multiple awards he has received from CASS, he was also the recipient of the Honorable Academic Subsidy from the State Council of
China in 2006. Among his many publications and translations are 20 books that he authored since 1987, with topics ranging from
Keynesian Economics, the socialist market economy, the economic transformation of China, industrial reform, risk management, and
income distribution in China. One of his books, Taiwan in the 21st Century, was published in the US in 2003. Mr. Wang received his
PhD in Economics from CASS, and his Master and Bachelor degrees from Wuhan University. Based on Mr. Wang's experience, insight,
and background in global economics and politics, we believe that Mr. Wang is well qualified to serve on our Board.
11
Chin Hung (James) Lo, Director.
Mr.Lo has been an independent director of the Company since May 2013. Mr. Lo also
has been serving as a director on the board of Spreadzoom Technologies, Co. Ltd., a joint venture between Zoom and Spreadtrum
Communications, Inc.,since March 2012. He has been a Senior Sales Director for Spreadtrum since March 2011 and the Head of
Overseas Sales since October 2011. Mr. Lo has more than 15 years of experience in the wireless communications industry. Before
joining Spreadtrum, Mr. Lo served as Head of Sales & Marketing and Senior Business Development Director for Compal
Communications Inc., a leading ODM of mobile phone products from 2003 to 2011. From 1999 to 2002, Mr. Lo served as Engineering
Director of the Mobile Phone Product Department at Motorola Corporation. Mr. Lo received an MBA degree from the National Taiwan
University, and he also has both MS and BS degrees from the Engineering Science Department of the National Cheng Kung University
in Taiwan. Mr. Lo's expertise in the wireless communication industry and his insight into the trends and developments in the industry
made him an excellent candidate for the Board.
Involvement in Certain Legal Proceedings
None of our directors has been, during the past ten years:
(i) involved in any bankruptcy petition filed by or against such person or any
business of which such person was a general partner or executive officer, either at the time of the bankruptcy or within ten years prior to
that time;
(ii) named in as a defendant or counter-claimant in any civil litigation in the past ten years;
(iii) convicted or plead nolo contendere in any criminal proceeding or is subject to a pending criminal proceeding (excluding traffic
violations and other minor offences);
(iv) subject to any order, judgment, or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or temporarily enjoined, barred, suspended or otherwise limited from
involvement in any type of business, securities, futures, commodities or banking activities;
(iv) found by a court of competent jurisdiction (in a civil action), the Securities and Exchange
Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated;
(v) involved in any judicial or administrative proceeding resulting from involvement in mail or wire fraud or fraud in connection
with any business entity;
(vi) involved in any judicial or administrative proceedings based on violations of federal or state securities , commodities,
banking or insurance laws and regulations , or any settlement to such actions ( other than settlements of civil proceedings among
private parties);
(vii) involved in any disciplinary sanction or orders imposed by a stock, commodities or derivatives exchange or other similar self-
regulatory organization.
Corporate Governance
-
Board Leadership Structure
Our Company is led by Lei Gu, who has served as Chairman of our Board of Directors and Chief Executive Officer since
September 2009, and CEO and Chairman of TCB Digital since July 2007. We believe that having Mr. Gu act in both these roles is most
appropriate for the Company at this time because it provides the Company with consistent and efficient leadership, both with respect to
the Company's operations and the leadership of the Board. In particular, having Mr. Gu act in both these roles increases the timeliness
and effectiveness of the Board's deliberations, increases the Board's visibility into the day-to-day operations of the Company, and
ensures the consistent implementation of the Company's strategies.
Board's Role in Risk Oversight
The Board as a whole has responsibility for risk oversight. The oversight responsibility of the Board is enabled by management
reporting processes that are designed to provide visibility to the Board about the identification, assessment and management of critical
risks. These areas of focus include strategic, operational, financial and reporting, succession, compensation, compliance, and other
risks.
12
Director Independence
As a NASDAQ listed company, the Company uses the independence definitions of NASDAQ in determining whether our
directors are independent. The discussion below reflects such standards of independence.
Our Board of Directors has determined that four of our directors, Mr. Augustine Lo, Mr. Shan, Mr. Wang and Mr. Chin Hung Lo,
each qualify as "independent" as the term is used in Item 407 of Regulation S-K as promulgated by the SEC and as that term is defined
under NASDAQ Rule 4200(a) (15). In addition, each member of the Audit Committee is independent as required under Section 10A (m)
(3) of the Securities Exchange Act of 1934, as amended.
Board Meetings and Committees; Annual Meeting Attendance
Our Board of Directors, including the committees of the Board, held four formal meetings during the most
recently completed fiscal year. Each of the re-elected members of our Board of Directors was present at all of the Board of Directors
meetings held. Other proceedings of the Board of Directors were conducted by resolutions consented to in writing by all the directors
and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote
on that resolution at a meeting of the directors are, according to the corporate laws of the State of Delaware and our bylaws, as valid
and effective as if they had been passed at a meeting of the directors duly called and held.
We currently do not have a policy regarding the attendance of board members at the annual meeting of stockholders.
Standing committees of the Board include an Audit Committee and a Compensation Committee. During 2013 Messrs. Augustine
Lo, Shan and Wang, served as the members of each of these Committees.
Audit Committee
The Audit Committee operates under a written charter adopted by the Board of Directors, which is publicly available on Zoom's
website at www.zoomleimone.com. Under the provisions of the Audit Committee Charter, the primary functions of the Audit Committee
are to assist the Board of Directors with the oversight of (i) Zoom's financial reporting process, accounting functions and internal
controls and (ii) the qualifications, independence, appointment, retention, compensation and performance of Zoom's independent
registered public accounting firm. At the time of this filing the Audit Committee has held three meetings during 2013 and it is expected
to meet a fourth time, on or about November 15, 2013. The Board of Directors determined that Augustine Lo qualifies as an audit
committee financial expert.
13
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed with management Zoom's audited consolidated financial statements for the
year ended December 31, 2012. The Audit Committee has also discussed with Marcum Bernstein Pinchuk LLP, Zoom's independent
registered public accounting firm for the year ended December 31, 2012, the matters required to be discussed by the Auditing
Standards Board Statement on Auditing Standards No. 61 (Communications with Audit Committees), as amended. As required by
Independence Standards Board Standard No. 1, as amended, "Independence Discussion with Audit Committees," the Audit Committee
has received and reviewed the required written disclosures and a confirming letter from Marcum Bernstein Pinchuk LLP regarding their
independence, and has discussed the matter with Marcum Bernstein Pinchuk LLP. Based on its review and discussions of the
foregoing, the Audit Committee recommended to the Board of Directors that Zoom's audited consolidated financial statements for 2012
be included in Zoom's Annual Report on Form 10-K for the year ended December 31, 2012.
Compensation Committee
Messrs. Augustine Lo, Shan and Wang are currently the members of Zoom's Compensation Committee. The primary functions
of the Compensation Committee include (i) reviewing and approving Zoom's executive compensation, (ii) reviewing the
recommendations of the Chief Executive Officer regarding the compensation of senior officers, (iii) evaluating the performance of the
Chief Executive Officer, and (iv) overseeing the administration of, and the approval of grants of stock options and other equity awarded
under Zoom's stock option plans. The Compensation Committee operates under a written charter adopted by the Board of Directors. A
copy of the Compensation Committee's written charter is publicly available on Zoom's website at www.zoomleimone.com. The
Compensation Committee did not hold any meetings but had two resolutions by unanimous written consent during 2013.
Decisions regarding executive compensation are made by the Compensation Committee. The Compensation Committee is also
responsible for administering the Company's 2009 Equity Incentive Compensation Plan, including determining the individuals to whom
stock options are awarded, the terms upon which option grants are made, and the number of shares subject to each option granted.
Independent Director Oversight of Director Nominations
Director nominees must either be selected, or recommended for the Board's selection by our independent directors
constituting a majority of the Board's independent directors in a vote in which only independent directors participate. Messrs. Augustine
Lo, Shan,Wang and Li are the independent members of the Board of Directors. The Board did not receive any shareholder nominations
to the Board of Directors and each of the independent members on the Board nominated for re-election for each of Messrs. Gu, Chan,
Augustine Lo, Shan, Wang and Chin Hung Lo based on their experience on the Company's Board of Directors.
14
In nominating directors for election, the independent directors may consider candidates recommended by stockholders as well as
from other sources such as other directors or officers, third party search firms or other appropriate sources. For all potential candidates,
the independent directors may consider all factors it deems relevant, such as a candidate's personal integrity and sound judgment,
business and professional skills and experience, independence, possible conflicts of interest, diversity, the extent to which the
candidate would fill a present need on the Board, and concern for the long-term interests of the stockholders. In general, persons
recommended by stockholders will be considered on the same basis as candidates from other sources. If a stockholder wishes to
recommend a candidate for Director for election at the 2014 Annual Meeting of Stockholders, it must follow the procedures described in
"Deadline for Receipt of Stockholder Proposals and Recommendations for Director." The Board of Directors does not have a policy with
regard to the consideration of diversity in identifying director nominees.
Code of Ethics
We have adopted a written code of business conduct and ethics, known as our Code of Business Conduct and Ethics which
applies to all of our directors, officers, and employees, including our principal executive officer and our principal financial and
accounting officer. Our Code of Business Conduct and Ethics is posted at www.zoomleimone.com. To receive a copy of our Code of
Business Conduct and Ethics, at no cost, requests should be directed to the Secretary, Sanlitun SOHO, Building A, 11th Floor, No.8
Worker Stadium North Road, Chaoyang District, Beijing, China 100027. We intend to disclose any amendment to, or waiver of, a
provision of the Code of Business Conduct and Ethics in a report filed under the Securities Exchange Act of 1934, as amended, within
four business days of the amendment or waiver.
Required Vote
Directors are elected by a plurality of the votes cast. Abstentions and broker "non-votes" will have no effect on the vote for
re-election of directors. Unless marked to the contrary, proxies received will be voted "FOR" all directors nominated in Proposal 1.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL THE NOMINEES FOR
DIRECTOR IN PROPOSAL NO. 1.
[Remainder of page intentionally left blank]
15
PROPOSAL 2
Amendment of the Company's AMENDED certificate of incorporation to effect a reverse stock split of the
Company's common stock at a ratio of between one-for-FIVE and one-for-TEN
General
On September 25, 2013, our Board unanimously voted to adopt and declared advisable the Amendment to
Article FOURTH of our Certificate of Incorporation, as amended, effecting a reverse stock split of our Common Stock at a ratio of
between one-for-five and one-for-tenwith such ratio to be determined at the sole discretion of the Board and with such Reverse Split to
be effected at such time and date, if at all, as determined by the Board in its sole discretion. The Board is now asking you to approve
this Amendment.
Effecting the Reverse Split requires that Article FOURTH of our Certificate of Incorporation be amended to
include a reference to the Reverse Split. The additional text added to Article FOURTH, is attached as
Appendix
A
to this proxy statement. If approved, the Amendment will be effective upon the filing of the Amended and Restated Certificate of
Incorporation in the form attached as
Appendix A
with the Secretary of State of Delaware with such filing to occur at the sole
discretion of the Board.
The intention of the Board in effecting the Reverse Split is to increase the stock price of our Common Stock,
which is currently trading on The Nasdaq Capital Market ("Nasdaq"), to a level sufficiently above the $1.00 minimum bid
price requirement that is required for continuing listing on Nasdaq.
One principal effect of the Reverse Split would be to decrease the number of outstanding shares of our
Common Stock. Except for de minimus adjustments that may result from the treatment of fractional shares as described below, the
Reverse Split will not have any dilutive effect on our stockholders since each stockholder would hold the same percentage of our
Common Stock outstanding immediately following the Reverse Split as such stockholder held immediately prior to the Reverse Split.
The relative voting and other rights that accompany the shares of Common Stock would not be affected by the Reverse Split. The table
below sets forth the number of shares of our Common Stock outstanding before and after the Reverse Split based on [●]
shares of Common Stock outstanding as of [●], 2013.
|
Prior to the
Reverse Split
|
Assuming a
one-for-five
Reverse Split
|
Assuming a
one-for-ten
Reverse Split
|
Aggregate Number of Shares of Common Stock
|
[●]
|
[●]
|
[●]
|
Although the Reverse Split will not have any dilutive effect on our stockholders, the proportion of shares
owned by our stockholders relative to the number of shares authorized for issuance will decrease because the Reverse Split does not
change the current authorized number of shares of Common Stock (60,000,000). The remaining authorized shares may be used for
various purposes, including, without limitation, raising capital, providing equity incentives to employees, officers or directors, effecting
stock dividends, establishing strategic relationships with other companies and expanding our business through the acquisition of other
businesses or products. We do not currently have any plans, proposals or arrangements to issue any of the newly available authorized
shares for any purposes. In order to support our projected need for additional equity capital and to provide flexibility to raise the capital
as necessary, our Board believes the number of shares of Common Stock should be maintained at 60,000,000.
The Reverse Split is not part of a broader plan to take us private.
16
Reasons for the Reverse Split
As disclosed in the Company's previous SEC filings, in November 2012, the Company received Nasdaq's
notice that because the closing bid price for the Company's Common Stock has fallen below $1.00 per share for 30 consecutive
business days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Capital
Market under Rule 5550(a)(2) of Nasdaq Listing Rules. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been
provided an compliance period of 360 calendar days, as extended, or until November 25, 2013, to regain compliance with the minimum
bid price requirement. To regain compliance, the closing bid price of the Company's common stock must meet or exceed $1.00 per
share for a minimum of 10 consecutive business days prior to November 25, 2013.
The Board of Director's primary objective in proposing the Reverse Split is to raise the per share trading price of
our Common Stock to a level sufficiently above the $1.00 minimum bid price requirement that is required for continuing listing on
Nasdaq. Upon receiving stockholder approval,
the Board may file the Amendment with the Secretary of State
of Delaware.
Our Board concluded that the liquidity and marketability of our Common Stock may be adversely affected if it is
not quoted on a national securities exchange as investors can find it more difficult to dispose of, or to obtain accurate quotations as to
the market value of, our Common Stock.
Our Board also has confidence that the Reverse Split and any resulting increase in the per share price of our
Common Stock should enhance the acceptability and marketability of our Common Stock to the financial community and investing
public. Many institutional investors have policies prohibiting them from holding lower-priced stocks in their portfolios, which reduces the
number of potential buyers of our Common Stock, although we have not been told by them that is the reason for not investing in our
Common Stock. Additionally, analysts at many brokerage firms are reluctant to recommend lower-priced stocks to their clients or
monitor the activity of lower-priced stocks. Brokerage houses frequently have internal practices and policies that discourage individual
brokers from dealing in lower-priced stocks. Further, because brokers' commissions on lower-priced stock generally represent a higher
percentage of the stock price than commissions on higher priced stock, investors in lower-priced stocks pay transaction costs which are
a higher percentage of their total share value, which may limit the willingness of individual investors and institutions to purchase our
Common Stock.
We cannot assure you that the Reverse Split will have any of the desired effects described above. More
specifically, we cannot assure you that after the Reverse Split the market price of our Common Stock will increase proportionately to
reflect the ratio for the Reverse Split, that the market price of our Common Stock will not decrease to its pre-split level, that our market
capitalization will be equal to the market capitalization before the Reverse Split, or that we will be able to maintain our listing on
Nasdaq.
Potential Disadvantages of the Reverse Split
As noted above, the principal purpose of the Reverse Split would be to help increase the per share market
price of our Common Stock by up to factor of ten. We cannot assure you, however, that the Reverse Split will accomplish this objective
for any meaningful period of time. While we expect that the reduction in the number of outstanding shares of Common Stock will
increase the market price of our Common Stock, we cannot assure you that the Reverse Split will increase the market price of our
Common Stock by an equivalent multiple, or result in any permanent increase in the market price of our Common Stock. The price of
our Common Stock is dependent upon many factors, including our business and financial performance, general market conditions and
prospects for future success. If the per share market price does not increase proportionately as a result of the Reverse Split, then the
value of our Company as measured by our stock capitalization will be reduced, perhaps significantly.
17
The number of shares held by each individual stockholder would be reduced if the Reverse Split is
implemented. This will increase the number of stockholders who hold less than a "round lot," or 100 shares. This has two
disadvantages. First, the Nasdaq Marketplace Rules require that we have at least 300 round lot stockholders. Second, the transaction
costs to stockholders selling "odd lots" are typically higher on a per share basis. Consequently, the Reverse Split could
increase the transaction costs to existing stockholders in the event they wish to sell all or a portion of their position.
Although our Board believes that the decrease in the number of our Common Stock outstanding as a
consequence of the Reverse Split and the anticipated increase in the market price of our Common Stock could encourage interest in
our Common Stock and possibly promote greater liquidity for our stockholders, such liquidity could also be adversely affected by the
reduced number of shares outstanding after the Reverse Split.
Effecting the Reverse Split
Upon receipt of stockholder approval for the Amendment, if our Board concludes that it is in the best
interests of our Company and our stockholders to effect the Reverse Split, the Board would determine the conversion ratio and the
Amendment will be filed with the Secretary of State of Delaware. The actual timing of the filing of the Amendment with the Secretary of
State of the State of Delaware to effect the Reverse Split will be determined by our Board. In addition, if for any reason our Board
deems it advisable to do so, the Reverse Split may be abandoned at any time prior to the filing of the Amendment, without further action
by our stockholders. The Reverse Split will be effective as of the date of filing with the Secretary of State of Delaware (the
"Effective Time").
Upon the filing of the Amendment, without further action on our part or our stockholders, the outstanding shares
of Common Stock held by stockholders of record as of the Effective Time would be converted into a lesser number of shares of
Common Stock based on a Reverse Stock Split ratio as determined by the Board. For example, if you presently hold 1,000 shares of
our Common Stock, you would hold 200 shares of our Common Stock following the Reverse Split if the ratio is one-for-five or you would
hold 100
shares of our Common Stock if the ratio is one-for-ten.
Effect on Outstanding Shares, Options and Certain Other Securities
If the Reverse Split is implemented, the number of shares our Common Stock owned by each stockholder
will be reduced in the same proportion as the reduction in the total number of shares outstanding, such that the percentage of our
Common Stock owned by each stockholder will remain unchanged except for any de minimus change resulting from rounding up to the
nearest number of whole shares so that we are not obligated to issue cash in lieu of any fractional shares that such stockholder would
have received as a result of the Reverse Split. The number of shares of our Common Stock that may be purchased upon exercise of
outstanding options or other securities convertible into, or exercisable or exchangeable for, shares of our Common Stock, and the
exercise or conversion prices for these securities, will also be ratably adjusted in accordance with their terms as of the Effective
Time.
|
Prior to the
Reverse Split
|
After the
Reverse Split
|
Warrants
|
[8,638,604]
|
[1,727,720]
|
Options
|
[1,910,000]
|
[382,000]
|
Effect on Registration
Our Common Stock is currently registered under the Securities Act of 1933, as amended, and we are
subject to the periodic reporting and other requirements of the Securities Exchange Act of 1934, as amended. The proposed Reverse
Split will not affect the registration of our Common Stock.
18
Fractional Shares; Exchange of Stock Certificates
Our Board does not currently intend to issue fractional shares in connection with the Reverse Split.
Therefore, we do not expect to issue certificates representing fractional shares. In lieu of any fractional shares, we will issue to
stockholders of record who would otherwise hold a fractional share because the number of shares of Common Stock they hold before
the Reverse Split is not evenly divisible by the Reverse Split ratio that number of shares of Common Stock as rounded up to the
nearest whole share. For example, if a stockholder holds 150.75 Common Stock following the Reverse Split, that stockholder will
receive certificate representing 151 Common Stock. No stockholders will receive cash in lieu of fractional shares.
As of [●], 2013, we had [●] holders of record of our Common Stock (although we have
significantly more beneficial holders). We do not expect the Reverse Split and the rounding up of fractional shares to whole shares to
result in a significant reduction in the number of record holders. We presently do not intend to seek any change in its status as a
reporting company for federal securities law purposes, either before or after the Reverse Split.
On or after the Effective Time, we will mail a letter of transmittal to each stockholder. Each stockholder will be
able to obtain a certificate evidencing his, her or its post-Reverse Split shares only by sending the exchange agent (who will be the
Company's transfer agent) the stockholder's old stock certificate(s), together with the properly executed and completed letter of
transmittal and such evidence of ownership of the shares as we may require. Stockholders will not receive certificates for post-Reverse
Split shares unless and until their old certificates are surrendered. Stockholders should not forward their certificates to the exchange
agent until they receive the letter of transmittal, and they should only send in their certificates with the letter of transmittal. The
exchange agent will send each stockholder, if elected in the letter of transmittal, a new stock certificate after receipt of that stockholder's
properly completed letter of transmittal and old stock certificate(s). A stockholder that surrenders his, her or its old stock certificate(s)
but does not elect to receive a new stock certificate in the letter of transmittal will be deemed to have requested to hold that
stockholder's shares electronically in book-entry form with our transfer agent.
Certain of our registered holders of Common Stock hold some or all of their shares electronically in book-entry
form with our transfer agent. These stockholders do not have stock certificates evidencing their ownership of our Common Stock. They
are, however, provided with a statement reflecting the number of shares registered in their accounts. If a stockholder holds registered
shares in book-entry form with our transfer agent, the stockholder will need to return a properly executed and completed letter of
transmittal.
Stockholders who hold shares in street name through a nominee (such as a bank or broker) will be treated in
the same manner as stockholders whose shares are registered in their names, and nominees will be instructed to effect the Reverse
Split for their beneficial holders. However, nominees may have different procedures and stockholders holding shares in street name
should contact their nominees.
Stockholders will not have to pay any service charges in connection with the exchange of their
certificates.
Authorized Shares
If and when our Board elects to effect the Reverse Split, the Amendment will concurrently therewith
maintain the authorized number of shares of our Common Stock at 60 million. Accordingly, there will be no reduction in the
number of authorized shares of our Common Stock in proportion to the Reverse Split ratio. As a result, the proportion of shares owned
by our shareholders relative to the number of shares authorized for issuance will decrease and the additional authorized shares of
Common Stock will be available for issuance at such times and for such purposes as our Board of Directors may deem advisable
without further action by our shareholders, except as required by applicable laws and regulations.
The Reverse Split will have no effect on our authorized preferred stock, $0.01 par value per share, because
there are no shares of preferred stock currently outstanding.
In accordance with our amended and restated certificate of incorporation and Delaware law, our shareholders
do not have any preemptive rights to purchase or subscribe for any of our unissued or treasury shares.
19
Anti-Takeover and Dilutive Effects
The purpose of maintaining our authorized Common Stock at 60,000,000 after the Reverse Split is to
facilitate our ability to raise additional capital to support our operations, not to establish any barriers to a change of control or acquisition
of our Company. The Common Stock that are authorized but unissued provide our Board with flexibility to effect, among other
transactions, public or private refinancings, acquisitions, stock dividends, stock splits and the granting of equity incentive awards.
However, these authorized but unissued shares may also be used by our Board, consistent with and subject to its fiduciary duties, to
deter future attempts to gain control of us or make such actions more expensive and less desirable. The Reverse Split would give our
Board authority to issue additional shares from time to time without delay or further action by the stockholders except as may be
required by applicable law or the rules of the Exchanges. The Reverse Split is not being recommended in response to any specific
effort of which we are aware to obtain control of us, nor does our Board have any present intent to use the authorized but unissued
Common Stock to impede a takeover attempt. There are no plans or proposals to adopt other provisions or enter into any arrangements
that have material anti-takeover effects.
In addition, the issuance of additional shares of Common Stock for any of the corporate purposes listed above
could have a dilutive effect on earnings per share and the book or market value of our outstanding Common Stock, depending on the
circumstances, and would likely dilute a stockholder's percentage voting power in us. Holders of our Common Stock are not entitled to
preemptive rights or other protections against dilution. Our Board intends to take these factors into account before authorizing any new
issuance of shares.
Accounting Consequences
As of the Effective Time, the stated capital attributable to Common Stock on our balance sheet will be reduced proportionately
based on the Reverse Split ratio (including a retroactive adjustment of prior periods), and the additional paid-in capital account will be
credited with the amount by which the stated capital is reduced. Reported per share net income or loss will be higher because there will
be fewer shares of our Common Stock outstanding.
Federal Income Tax Consequences
The following summary describes certain material U.S. federal income tax consequences of the Reverse Split to holders of our
Common Stock. This summary addresses the tax consequences only to a beneficial owner of our Common Stock that is a citizen or
individual resident of the United States, a corporation organized in or under the laws of the United States or any state thereof or the
District of Columbia or otherwise subject to U.S. federal income taxation on a net income basis in respect of our Common Stock (a
"U.S. holder"). This summary does not address all of the tax consequences that may be relevant to any particular
stockholder, including tax considerations that arise from rules of general application to all taxpayers or to certain classes of taxpayers or
that are generally assumed to be known by investors. This summary also does not address the tax consequences to persons that may
be subject to special treatment under U.S. federal income tax law or persons that do not hold our Common Stock as "capital
assets" (generally, property held for investment). This summary is based on the provisions of the Internal Revenue Code of 1986,
as amended ("IRC"), U.S. Treasury regulations, administrative rulings and judicial authority, all as in effect as of June 15,
2011. Subsequent developments in U.S. federal income tax law, including changes in law or differing interpretations, which may be
applied retroactively, could have a material effect on the U.S. federal income tax consequences of the Reverse Stock Split.
If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our
Common Stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner
and the activities of the partnership. Partnerships that hold our Common Stock, and partners in such partnerships, should consult their
own tax advisors regarding the U.S. federal income tax consequences of the Reverse Split.
20
Each stockholder should consult his, her or its own tax advisor regarding the U.S. federal, state, local and foreign income and
other tax consequences of the Reverse Stock Split.
The Reverse Split should be treated as a recapitalization for U.S. federal income tax purposes. Therefore, no gain or loss
should be recognized by a U.S. holder upon the Reverse Split. Accordingly, the aggregate tax basis in the Common Stock received
pursuant to the Reverse Split should equal the aggregate tax basis in the Common Stock surrendered and the holding period for the
Common Stock received should include the holding period for the Common Stock surrendered.
Text of Proposed Amendment; Effectiveness
The text of the proposed Amendment is set forth in Appendix A to this Proxy Statement. If and when effected by our
Board, the Amendment will become effective upon its filing with the Secretary of State of Delaware.
Required Vote
Amending the Certificate of Incorporation of the Company requires the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock of the Company. Unless marked to the contrary, proxies received will be voted "FOR"
Proposal 2.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR
PROPOSAL NO. 2.
21
PROPOSAL 3 - ADVISORY VOTE ON EXECUTIVE COMPENSATION
The SEC has adopted final rules requiring public companies to provide stockholders with periodic advisory (non-binding votes) on
executive compensation, also referred to as "say-on-pay" proposals. We are presenting the following proposal, which gives
you as a stockholder the opportunity to endorse or not endorse the compensation paid to our Principal Executive Officer and Principal
Financial Officer (collectively, the "Named Executive Officers"), as disclosed in this Proxy Statement pursuant to Item 402 of
Regulation S-K (including the compensation tables and accompanying narrative discussion). .
"RESOLVED, that the compensation paid to the Company's Named Executive Officers, as disclosed pursuant to Item 402 of
Regulation S-K, compensation tables and narrative discussion is hereby APPROVED."
Pursuant to the Exchange Act and the rules promulgated thereunder, this vote will not be binding on the Board or the
Compensation Committee and may not be construed as overruling a decision by the Board or the Compensation Committee, creating
or implying any change to the fiduciary duties of the Board or the Compensation Committee or any additional fiduciary duty by the
Board or the Compensation Committee or restricting or limiting the ability of stockholders to make proposals for inclusion in proxy
materials related to executive compensation. The Board and the Compensation Committee, however, may in their
discretion take into account the outcome of the vote when considering future executive compensation arrangements.
Required Vote
In voting to approve the above resolution, stockholders may vote for the resolution, against the resolution or abstain from
voting. This matter will be decided by the affirmative vote of a majority of the votes cast at the
Meeting. Abstentions and broker non-votes will have no direct effect on the outcome of this proposal.
THE BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THE COMPENSATION OF
THE COMPANY'S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
22
PROPOSAL 4 - TO CONDUCT AN ADVISORY VOTE ON THE FREQUENCY OF
FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
The SEC has also adopted final rules requiring public companies to hold an advisory (non-binding) vote on the frequency of
holding say-on-pay votes. Accordingly, as required by the SEC's rules, we are including this proposal to give our stockholders the
opportunity to inform us as to how often they wish the Company to include a say-on-pay proposal, similar to Proposal Three, in our
proxy statements.
We are presenting the following proposal, which gives you, as a stockholder, the opportunity to inform us as to whether you wish us
to hold an advisory (non-binding) vote on executive compensation once every (1) one year, (2) two years, or (3) three years, or you
may abstain from voting on the proposal set forth in the following resolution.
"RESOLVED, that the stockholders determine, on an advisory basis, whether the preferred frequency of an advisory vote on
the executive compensation of the Company's named executive officers as set forth in the Company's Proxy Statement for the 2013
Annual Meeting of Stockholders should be every year, every two years, or every three years."
The Board recommends that you vote for every three (3) years as the desired frequency for the Company to hold a non-binding,
advisory vote of the stockholders on executive compensation. We believe this frequency is appropriate for the reasons set forth
below:
1. Our equity compensation program for the named executive
officers is designed to support long-term value creation, and a vote every three years will allow the stockholders to better judge the
equity compensation program in relation to our long-term performance. We strive to ensure management's interests are aligned with
stockholders' interests to support long-term value creation through our equity compensation program. To that end, we grant equity
awards to vest over multi-year periods of service to encourage our named executive officers to focus on long-term performance, and
recommend a vote every three years, which would allow the equity compensation to be evaluated over a similar time-frame and in
relation to long-term performance.
2. A vote every three (3) years will provide the Board and the
Compensation Committee with the time to thoughtfully consider and thoroughly respond to stockholders' sentiments and to implement
any necessary changes in light of the timing required therefor. The Board and the compensation committee will carefully review
changes to the executive compensation to maintain the effectiveness and credibility of the program, which is important for aligning
interests and for motivating and retaining our named executive officers.
3. We are open to input from stockholders regarding board
and governance matters, as well as the equity compensation program. We believe that the stockholders' ability to contact us and the
Board at any time to express specific views on executive compensation holds us accountable to stockholders and reduces the need for
and value of more frequent advisory votes on executive compensation.
Pursuant to the Exchange Act and the rules promulgated thereunder, this vote on the frequency of future advisory votes on named
executive officer compensation is non-binding on the Board and its committees. This vote may not be construed as overruling a
decision by the Board or its committees, creating or implying any change to the fiduciary duties of the Board or its committees or any
additional fiduciary duty by the Board or its committees or restricting or limiting the ability of stockholders to make proposals for
inclusion in proxy materials related to executive compensation. Notwithstanding the Board's recommendation and the outcome of the
vote on this matter, the Board may, in the future, decide to conduct advisory votes on a more or less frequent basis and may vary its
practice based on factors such as discussions with stockholders and the adoption of material changes to compensation programs.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE TO HAVE THE NON-BINDING
VOTE ON EXECUTIVE COMPENSATION OCCUR EVERY THREE YEARS.
23
OTHER INFORMATION
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding beneficial ownership of Zoom's Common Stock as of September
25, 2013 by (i) each person who is known by Zoom to own beneficially more than five percent (5%) of Zoom's outstanding Common
Stock, (ii) each of Zoom's Directors and named executive officers, as listed below in the Summary Compensation Table under the
heading "Executive Compensation", and (iii) all of Zoom's current Directors and executive officers as a group.
On September 25, 2013 there were 30,086,848 outstanding shares of Zoom's Common Stock. Unless otherwise noted, each
person identified below possesses sole voting and investment power with respect to the shares listed. The information contained
in this table is based upon information received from or on behalf of the named individuals or from publicly available information and
filings by or on behalf of those persons with the SEC.
Name and Address of Beneficial Owner (1)
|
|
Common stock beneficially owned
|
|
|
|
Number
|
|
|
Percent
|
|
Lei Gu (2)
|
|
|
5,133,347
|
|
|
|
17.16
|
%
|
Patrick Wong
|
|
|
0
|
|
|
|
0
|
%
|
Augustine Lo (2)
|
|
|
83,500
|
|
|
|
*
|
%
|
Chang Shan (2)
|
|
|
69,500
|
|
|
|
*
|
%
|
Cheng Wang (2)
|
|
|
69,500
|
|
|
|
*
|
%
|
Chin Hung (James) Lo (2)
|
|
|
0
|
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
All directors and executive officers
|
|
|
|
|
|
|
|
|
as a group (of 6 persons)
|
|
|
5,385,847
|
|
|
|
17.90
|
%
|
|
|
|
|
|
|
|
|
|
Spreadtrum Communications, Inc. (3)
|
|
|
1,676,300
|
|
|
|
5.57
|
%
|
* Less than one percent of shares outstanding.
(1) Unless otherwise indicated, the address for each stockholder listed in the above table is c/o Zoom Technologies, Inc., Sanlitun
SOHO, Building A, 11th Floor, No.8 Workers Stadium North Road, Chaoyang District, Beijing, China 100027.
(2) Includes options exercisable within 60 days.
(3) The address of Spreadtrum Communications, Inc. is Spreadtrum
Center, Building No.1, Lane 2288, Zuchongzhi Road, Zhangjiang, Pudong, Shanghai, China 201203. Leo Liyou Li is Chairman of the
board of directors of Spreadtrum and President and Chief Executive Officer of Spreadtrum.
24
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive
officers and persons who own more than ten percent of a registered class of our equity securities (collectively, "Reporting
Person") to file with the SEC initial reports of ownership and reports of changes in ownership of our Common Stock and other
equity securities of the Company. Reporting Persons are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms that they file. To our knowledge, based solely on a review of the copies of such reports furnished to us, we believe that
during fiscal year ended December 31, 2012 all Reporting Persons complied with all applicable filing requirements.
Compensation of Directors and Executive Officers
Summary Compensation Table
The following Summary Compensation Table sets forth the total compensation paid or accrued for the fiscal years ended
December 31, 2012 and 2011 for our principal executive officers.
Name and Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Option or Stock
Awards
(3)(4)
|
|
|
All Other
Compensation
|
|
|
Total
|
|
Lei Gu (1)(3)(4)(5)
|
|
|
2012
|
|
|
$
|
279,000
|
|
|
$
|
202,078
|
|
|
$
|
0
|
|
|
$
|
481,078
|
|
Chief Executive Officer
|
|
|
2011
|
|
|
$
|
216,000
|
|
|
$
|
107,524
|
|
|
$
|
0
|
|
|
$
|
323,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anthony K. Chan (2)(3)(4)(5)
|
|
|
2012
|
|
|
$
|
219,000
|
|
|
$
|
191,192
|
|
|
$
|
0
|
|
|
$
|
410,192
|
|
Chief Financial Officer
|
|
|
2011
|
|
|
$
|
156,000
|
|
|
$
|
123,475
|
|
|
$
|
0
|
|
|
$
|
279,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______
(1) Leo Gu became Chief Executive Officer of the Company on September 22, 2009.
(2) Anthony K. Chan became Chief Financial Officer of the Company on September 22, 2009.
On July 15,
2013, Mr. Chan resigned as a director of the Company and also resigned from the position of Chief Financial Officer. On July 15,
2013, the Board elected Mr. Patrick Wong to replace Mr. Chan as a Director and appointed Mr. Wong to fill the positions of Chief
Financial Officer ("CFO"), Corporate Secretary, and Principal Accounting Offer of the Company.
(3) The value of stock awards granted to Messrs. Gu and Chan in 2012 were based on the market value of the stock as of the date of
grant in the year 2011 which was $1.19 per share.
(4) Included were common stock granted to Messrs. Gu and Chan for their service as member of the Board of Directors; the value of
such stock was based on the market price as of the date of grant which was $1.34 per share.
(5) Included were common stock granted to Messrs. Gu and Chan as replacement for the cancellation of all of their stock options; the
value of such stock was based on the value of the market price as of the date of grant less the Black Scholes value of the cancelled
options, which difference was $1.019 per share.
25
Outstanding Equity Interests
The following table sets forth information concerning outstanding stock options for each named executive officer as of
December 31, 2012.
Outstanding Equity Awards at Fiscal Year-End
|
|
Number of Securities
Underlying Unexercised Options
|
|
|
|
|
|
Name
|
|
Exercisable
Options
|
|
|
Unexercisable
Options
|
|
|
Option
Weighted
Average
Exercise
Price
|
|
Option
Expiration
Date
|
Lei Gu
|
|
|
50,000
|
|
|
|
10,000
|
|
|
$
|
3.18
|
|
03/09/2013
|
Anthony K. Chan
|
|
|
75,000
|
|
|
|
15,000
|
|
|
$
|
3.18
|
|
03/09/2013
|
Option Exercises
Other information regarding options, including expiration of unexercised stock options can be found in the accompany notes to
the financial statements Note 15 - Stock Options in our annual report for the fiscal year ended December 31, 2012, filed with the SEC
on April 15, 2013.
Employment, Termination and Change of Control Agreements
The employment status of the Company's executives is "at-will" with no long-term employment agreement.
Director Compensation
The following table sets forth information concerning the compensation of our Non-Executive Directors for 2012.