`UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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by the Registrant ☒
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))
☒
Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material Pursuant to Rule 240.14a-12
TRIO-TECH INTERNATIONAL
(Name
of Registrant as Specified In Its Charter)
_________________________
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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☒ No
fee required.
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computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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of securities to which transaction applies:
_____________
(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):
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aggregate value of transaction: _____________
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Total fee paid:
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paid previously with preliminary materials:
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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.
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Paid: _____________
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Filing Party:
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(4)
Date Filed:
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On December 3, 2019
NOTICE
IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Trio-Tech International, a California corporation (the
“Company”), will be held at our U.S. Corporate office,
located at 16139 Wyandotte Street, Van Nuys, California 91406, on
Tuesday, December 3, 2019 at 10:00 A.M. local time for the
following purposes, as set forth in the attached Proxy
Statement:
1.
Election of
directors to hold office until the next Annual Meeting of
Shareholders;
2.
To hold a
non-binding, advisory vote on the compensation of our named
executive officers;
3.
To hold a non-binding, advisory vote on the frequency of the
advisory vote on the compensation of our named executive
officers;
4.
Transaction of such
other business as may properly come before the meeting or any
adjournment thereof.
The
Board of Directors of the Company (the “Board of
Directors” or the “Board”) has fixed the close of
business on October 7, 2019 as the record date for determining the
shareholders entitled to notice of and to vote at the Annual
Meeting and any adjournment and postponements thereof.
The Securities and Exchange Commission permits proxy materials to
be furnished over the Internet rather than in paper form.
Accordingly, most shareholders will receive a notice in the mail
regarding the availability of this proxy statement, Annual Report
on Form 10-K for fiscal 2019 and other proxy materials
(the "Notice") via Internet. This electronic process provides fast,
convenient access to the materials, reduces the impact on the
environment and reduces our printing and mailing costs. If you
received a Notice by mail, you will not receive a printed copy of
the proxy materials in the mail. The Notice instructs you on how to
access and review all of the important information contained in the
Proxy Statement and Annual Report. The Notice also instructs you on
how you may submit your vote over the Internet. If you would like
to receive a printed copy of the proxy materials, please follow the
instructions for requesting such materials included in the
Notice.
Shareholders are cordially invited to attend the
Annual Meeting in person. Whether you plan to attend the
Annual Meeting or not, please vote by telephone or
electronically via the Internet. Alternatively, if you received a
paper copy, you may sign, and date the enclosed Proxy Card
and return it without delay in the enclosed postage-prepaid
envelope. If you do
attend the Annual Meeting, you may withdraw your Proxy and vote
personally on each matter brought before the meeting.
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By Order of the Board of Directors
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A.
CHARLES WILSON
Chairman
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October
24, 2019
Van Nuys, California
IMPORTANT
WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO VOTE
PROMPTLY OVER THE INTERNET, BY TELEPHONE, OR IF YOU REQUESTED TO
RECEIVE PRINTED PROXY MATERIALS, BY MAILING A PROXY OR VOTING
INSTRUCTION CARD IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE TO
ENSURE YOUR REPRESENTATION AT THE MEETING.
THANK YOU FOR ACTING PROMPTLY
Important Notice Regarding the Availability of Proxy Materials for
the Shareholder Meeting to be held on December 3, 2019: The Proxy
Statement and our 2019 Annual Report to Shareholders
are available at
http://www.triotech.com/ind_rel.htm, which does not have
“cookies” that identify visitors to the
site.
TABLE OF CONTENTS
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FOR THE ANNUAL MEETING OF SHAREHOLDERS
OF
TRIO-TECH INTERNATIONAL
To Be Held on December 3,
2019
This Proxy Statement is furnished in connection
with the solicitation of the enclosed Proxy on behalf of the Board
of Directors (the “Board”) of Trio-Tech International,
a California corporation (“Trio-Tech” or the
“Company”), for use at the annual meeting of
shareholders of the Company (the “Annual Meeting”) to
be held at our U.S. Corporate office, located at 16139
Wyandotte Street, Van Nuys, California 91406, on Tuesday, December
3, 2019 at 10:00 A.M. local time, for the purposes of electing
directors and certain non-binding advisory votes as described below
and such other business as may properly come before the Annual
Meeting. For directions to our U.S. Corporate office, please call
our corporate office at 818-787-7000. This Proxy Statement and the
enclosed proxy card are intended to be electronically available to
shareholders on or about October 24, 2019.
The
Company’s principal executive offices are located at Block
1008 Toa Payoh North, Unit 03-09 Singapore 318996.
Record Date and Voting Securities
The Board of Directors fixed the close of business
on October 7, 2019 as the record date for shareholders entitled to
notice of and to vote at the Annual Meeting. As of that date, there
were 3,673,055 shares of the
Company’s common stock (the “Common Stock”)
outstanding and entitled to vote, the holders of which are entitled
to one vote per share.
Voting Generally
The
presence in person or by proxy of holders of a majority of the
shares entitled to vote at the Annual Meeting is necessary to
constitute a quorum at the Annual Meeting. Abstentions will be
counted for purposes of determining the presence of a
quorum.
Because
a shareholder’s broker may not vote on behalf of the
shareholder on the election of directors or on Proposals 2 or 3
described in this Proxy Statement unless the shareholder provides
specific instructions by completing and returning the voting
instruction form, for a shareholder’s vote to be counted, we
ask that our shareholders communicate their voting decisions to the
broker or other nominee before the date of the Annual Meeting or
give a proxy to vote their shares at the meeting.
In
the election of directors, a shareholder may cumulate his/her votes
for one or more candidates, but only if each such candidate’s
name has been placed in nomination prior to the voting and the
shareholder has given notice at the meeting, prior to the voting,
of his intention to cumulate his votes. If any shareholder has
given such notice, all shareholders may cumulate their votes for
the candidates in nomination. If the voting for directors is
conducted by cumulative voting, each share will be entitled to a
number of votes equal to the number of directors to be elected.
These votes may be cast for a single candidate or may be
distributed among two or more candidates in such proportions as the
shareholder thinks fit. The five candidates receiving the highest
number of affirmative votes will be elected. Abstentions will be
counted for purposes of determining the presence of a quorum, but
votes against a candidate or withheld from voting (whether by
abstention, broker non-votes or otherwise) will not be counted
and will have no legal effect on the vote. Discretionary authority
to cumulate votes is solicited hereby.
The approval, on an advisory, non-binding basis,
of the compensation of our Named Executive Officers (as defined
under the heading “EXECUTIVE COMPENSATION” below) as
described under Proposal 2 of this Proxy Statement requires the
affirmative vote of a majority of the shares present or represented
by proxy at the Annual Meeting and entitled to vote thereon.
Abstentions from voting will have the same effect as voting against
the proposal. Broker non-votes are not considered present or voted
for the proposal and thus will have the effect of reducing the
number of affirmative votes required to achieve a majority for such
matter by reducing the total number of shares from which the
majority is calculated.
For
purposes of Proposal 3, the advisory vote regarding the frequency
of the advisory vote on executive compensation, the option of one
year, two years or three years that receives the highest number of
votes cast by shareholders will be the frequency for the advisory
vote on executive compensation deemed recommended by the Company's
shareholders. Abstentions, withheld votes and broker non-votes will
have no effect in determining the frequency option that is
recommended by shareholders.
Deadline for Voting by Proxy
In order to be counted, votes cast by proxy
must be received prior to the Annual Meeting.
Revocability of
Proxies
Any Proxy given may be revoked by the shareholder
at any time before it is voted by delivering written notice of
revocation to the Secretary of the Company, by filing with the
Secretary of the Company a Proxy bearing a later date, or by
attending the Annual Meeting and voting in person. All Proxies
properly executed and returned will be voted in accordance with the
instructions specified thereon. If no instructions are specified,
Proxies will be voted FOR the election of the five nominees for directors
named under “Election of Directors” (Proposal
1), FOR the approval, on a non-binding, advisory basis, of
the compensation of our Named Executive Officers (Proposal 2),
and FOR a frequency of EVERY THREE YEARS for future
advisory votes on executive compensation (Proposal
3).
ELECTION
OF DIRECTORS
Information With Respect to Directors
A majority of the independent directors of our
Board has nominated the persons listed below for election to the
Board at the Annual Meeting, to hold office until the next Annual
Meeting and until their respective successors are elected and
qualified. There is one vacancy on the Board of Directors. The
Board does not intend to fill the vacancy at this time due to the
costs associated therewith. It is intended that the Proxies
received, unless otherwise specified, will be voted
FOR
the five nominees named below, all of
whom are incumbent directors of the Company and, with the exception
of Mr. Yong and Mr. Ting, are “independent” as
specified in Section 803 of the NYSE American (formely the NYSE
MKT) rules and Rule 10A-3 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”). It is not
contemplated that any of the nominees will be unable or unwilling
to serve as a director but, if that should occur, the persons
designated as proxies will vote in accordance with their best
judgment. In no event will Proxies be voted for a greater number of
persons than the number of nominees named in this Proxy Statement.
The following chart and accompanying narrative set forth, as of
October 7, 2019, the names of each of the five nominees for
election as a director, his principal occupation, age, the year he
became a director of the Company, and additional biographical
data.
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NAME
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AGE
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PRINCIPAL OCCUPATION
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A.
Charles Wilson
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95
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Chairman of the
Board of Trio-Tech International
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Chairman of the
Board of Ernest Packaging Solutions, Inc.
Attorney at Law and
Business Consultant,
Chairman of the
Board of Daico Industries, Inc.
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S. W.
Yong
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66
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Chief
Executive Officer and President of Trio-Tech
International
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Richard
M. Horowitz
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78
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President of
Management Brokers Insurance, Inc.
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Jason
T. Adelman
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50
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Founder
and Chief Executive Officer of Burnham Hill Capital Group
LLC
Director of
Glowpoint Inc.
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Victor
H. M. Ting
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65
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Chief
Financial Officer and Corporate Vice President of Trio-Tech
International
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A. Charles Wilson
Mr. Wilson has served as a director of Trio-Tech
since 1966, and was President and Chief Executive Officer of the
Company from 1981 to 1989. In 1989, he was elected Chairman of the
Board. Mr. Wilson is also Chairman of the Board of Ernest
Packaging Solutions, Inc. and Chairman
of Daico Industries, Inc. as well as an attorney admitted to
practice law in California and a business
consultant.
In
determining that Mr. Wilson should serve on the Company’s
Board of Directors, the Board has considered, among other
qualifications, his professional background and experience, his
leadership skills as a result of his ten years serving as President
and Chief Executive Officer of the Company, his service as a
Chairman on other corporate boards and his broad range of knowledge
of the Company’s history and business through his 53 years of
service as a director of the Company.
S. W. Yong
Mr.
Yong has been a director, Chief Executive Officer and President of
Trio-Tech since 1990. He joined Trio-Tech International Pte. Ltd.
in Singapore in 1976 and was appointed as its Managing Director in
August 1980. Mr. Yong holds a Master’s Degree in Business
Administration, a Graduate Diploma in Marketing Management and a
Diploma in Industrial Management.
In
determining that Mr. Yong should serve on the Company’s Board
of Directors, the Board has considered, among other qualifications,
his 43 years history with the Company, his intimate knowledge of
the Company’s business and operations and the markets in
which the Company operates, as well as the Company’s
customers and suppliers, and his detailed in-depth knowledge of the
issues, opportunities, and challenges facing the Company and its
principal industries.
Richard M. Horowitz
Mr. Horowitz has served as a director of Trio-Tech
since 1990. He has been President of Management Brokers
Insurance, Inc. since 1974. Mr. Horowitz holds a
Master’s Degree in Business
Administration from Pepperdine University. Mr. Horowitz was the subject of an SEC
administrative proceeding arising out of the sale of certain
annuity products in 2007 by Management Brokers Insurance,
Inc. The proceeding was wholly unrelated to the
Company’s business and was settled in March 2014 without
requiring Mr. Horowitz to admit to any of the allegations.
The Board believes that the proceeding and the actions alleged
thereunder do not impinge upon Mr. Horowitz’s ability or
integrity as a director of the Company.
In
determining that Mr. Horowitz should serve on the Company’s
Board of Directors, the Board has considered, among other
qualifications, his extensive experience and expertise in
administration and management based on his position as President of Management Brokers, Inc. for
more than 45 years and his broad range of knowledge of the
Company’s history and business through his 29 years of
service as a director of the Company.
Jason T. Adelman
Mr.
Adelman was elected to the Board of Trio-Tech in April 1997.
Mr. Adelman is the Founder and Chief Executive Officer of Burnham
Hill Capital Group, LLC, a privately held financial services
holding company headquartered in New York City. Mr. Adelman
serves as Managing Member of Cipher Capital Partners LLC, a private
investment fund. Prior to founding Burnham Hill Capital Group, LLC
in 2003, Mr. Adelman served as Managing Director of Investment
Banking at H.C. Wainwright and Co., Inc. Mr. Adelman graduated Cum
Laude with a B.A. in Economics from the University of Pennsylvania
and earned a JD from Cornell Law School where he served as Editor
of the Cornell International Law Journal. In 2019, Mr. Adelman has
been appointed to Glowpoint's Board of
Directors.
In
determining that Mr. Adelman should serve on the Company’s
Board of Directors, the Board has considered, among other
qualifications, his experience and expertise in finance,
accounting, banking and management based on his positions as
Chief
Executive Officer of Burnham Hill
Capital Group LLC for 15 years and Managing Member of Cipher Capital Partners
LLC for 14 years, as well as Managing Director of Investment Banking in the New
York offices of H. C. Wainwright & Co.
Victor H. M. Ting
Mr.
Ting was appointed as a director of Trio-Tech on September 16,
2010. Mr. Ting is the Corporate Vice-President and Chief Financial
Officer of the Company. Mr. Ting joined Trio-Tech as the Financial
Controller for the Company’s Singapore subsidiary in 1980. He
was promoted to the level of Business Manager during 1985 and in
December 1989 he was promoted to the level of Director of Finance
and Sales & Marketing, and later he was promoted to the level
of General Manager of the Singapore subsidiary. Mr. Ting was
elected Vice-President and Chief Financial Officer of Trio-Tech
International in November 1992. Mr. Ting holds a Bachelor of
Accountancy Degree and Master’s Degree in Business
Administration.
In
determining that Mr. Ting should serve on the Company’s Board
of Directors, the Board has considered, among other qualifications,
his expertise in finance, accounting and management based on his 27
years history as Vice-President and
Chief Financial Officer of the Company and his intimate
knowledge of the Company’s operations.
Vote Required for Election
The
five persons receiving the highest number of affirmative votes will
be elected as directors of the Company. Votes against a nominee or
withheld from voting (whether by abstention, broker non-votes or
otherwise) will have no legal effect on the vote.
The
Board recommends a vote FOR each of the nominees for director.
ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION
Pursuant
to Section 14A of the Exchange Act, we are required to provide
shareholders with the opportunity to vote to approve, on a
non-binding, advisory basis, the compensation which we paid to our
Named Executive Officers for the fiscal year ended June 30, 2019.
This advisory vote, commonly known as a “Say-on-Pay”
vote, gives our shareholders the opportunity to express their views
on the Company’s executive compensation policies and programs
and the compensation paid to our Named Executive Officers for the
fiscal year ended June 30, 2019.
We
are asking our shareholders to indicate their support for the
fiscal 2019 compensation of our Named Executive Officers as
described in this Proxy Statement by approving the following
resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to the Company’s
named executive officers, as disclosed in the Company’s Proxy
Statement for the 2019 Annual Meeting of Shareholders pursuant to
the compensation disclosure rules of the Securities and Exchange
Commission, including the Compensation Discussion and Analysis,
compensation tables and accompanying narrative disclosure, is
hereby APPROVED.”
The
Board of Directors believes that the Company’s executive
compensation program effectively reflects the goals and objectives
described in the Compensation Discussion and Analysis and the
Executive Compensation sections of this Proxy Statement and the
overall compensation philosophy of the Company.
The
vote on this Proposal 2 is advisory only and therefore is not
binding on the Company, the Board of Directors or the Compensation
Committee. However, the Board of Directors and the Compensation
Committee will review and consider the voting results in crafting
their approach to future executive compensation
matters.
The Board of Directors recommends a
vote FOR approval of the above advisory
resolution.
ADVISORY RESOLUTION ON THE FREQUENCY OF THE SHAREHOLDERS’ SAY
ON PAY VOTE
Pursuant
to Section 14A of the Exchange Act, we are also required to provide
our shareholders with the opportunity to vote to advise on whether
the Say-on-Pay vote should occur every one, two or three years, the
so-called “Say-on-Frequency” vote. Under
this Proposal 3, shareholders may vote to hold a Say-on-Pay vote
every year, every two years or every three years. Shareholders may
also abstain from voting. This is an advisory vote and is,
therefore, non-binding.
At
the 2013 Annual Meeting of Shareholders, the Company’s
shareholders voted to conduct future advisory votes on executive
compensation on an “every one year” basis. The Board of
Directors had recommended in the proxy statement for the 2013
Annual Meeting a vote for the “every three years”
option. The Board of Directors had made such recommendation based
on its conclusion that an advisory vote on an “every three
years” basis would provide the Company’s shareholders
with sufficient time to evaluate the effectiveness of its overall
compensation philosophy, policies and practices in the context of
the Company’s long-term business results, while avoiding more
emphasis on short term variations in compensation and business
results. The Board continues to believe that a Say-on-Pay vote
once every three years is optimal for the Company, permitting the
Company's shareholders to observe and evaluate the impact of any
changes to the Company's executive compensation policies which have
occurred since the last Say-on-Pay vote on executive
compensation.
While
this vote is advisory and non-binding, the Board of Directors and
the Compensation Committee will take into consideration the outcome
of the vote in setting a policy with respect to the frequency of
future advisory votes on executive compensation. When considering
the frequency of future advisory votes on executive compensation,
the Board of Directors and the Compensation Committee may decide
that it is in the best interests of our shareholders and the
Company to hold an advisory vote on executive compensation more or
less frequently than the frequency receiving the most votes cast by
our shareholders. If the policy is determined in accordance with
the Board’s recommendation for the “every three
years” option, the next Say-on-Pay vote would be held at the
2022 annual meeting of shareholders.
We
are required to have a Say-on-Frequency vote at least once every
six years. The next Say-on-Frequency vote would held be no later
than the annual meeting of shareholder to be held in
2025.
The Board of Directors recommends that you
vote FOR “THREE
YEARS” (i.e., once
every three years) as the frequency of future advisory votes on
executive compensation.
Corporate Governance Program
Our
Board of Directors has established a written Corporate Governance
Program to address significant corporate governance issues that may
arise. It sets forth the responsibilities and qualification
standards of the members of the Board of Directors and is intended
as a governance framework within which the Board of Directors,
assisted by its committees, directs our affairs.
Code of Ethics
The
Company has adopted a written code of business conduct and ethics
applicable to all directors, officers, management and employees and
a separate code of ethics applicable to its principal executive
officer, principal financial officer and principal accounting
officer or controller or persons performing similar
functions. A copy of the Company's code of business conduct
and ethics and code of ethics may be obtained, without charge, upon
written request to the Secretary of the Company at 16139 Wyandotte
Street, Van Nuys, California 91406.
Board Leadership Structure
The
Board of Directors believes it is important to select its Chairman
and the Company’s Chief Executive Officer in the manner it
considers in the best interests of the Company at any given point
in time. The Chairman of the Board and CEO of the Company are held
by separate persons as an aid in the Board's oversight of
management. The duties of the non-executive Chairman of the Board
include:
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presiding
over all meetings of the Board;
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preparing
the agenda for Board meetings in consultation with the CEO and
other members of the Board;
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calling
and presiding over meetings of the independent
directors;
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managing
the Board's process for annual director self-assessment and
evaluation of the Board and of the CEO; and
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presiding
over all meetings of shareholders.
The
Board believes that there may be advantages to having an
independent chairman for matters such as communications and
relations between the Board, the CEO, and other senior management;
assisting the Board in reaching consensus on particular strategies
and policies; and facilitating robust director, Board, and CEO
evaluation processes.
Risk Management
The
Chief Executive Officer, Chief Financial Officer, and senior
management are primarily responsible for identifying and managing
the risks facing the Company, and the Board of Directors oversees
these efforts. The Chief Executive Officer and Chief Financial
Officer report to the Board of Directors regarding any risks
identified and steps it is taking to manage those risks. In
addition, the Audit Committee identifies, monitors and analyzes the
priority of financial risks, and reports to the Board of Directors
regarding its financial risk assessments.
Certain Relationships and Related Transactions
The Board’s Audit Committee is responsible
for review, approval, or ratification of “related-person
transactions” between the Company or its subsidiaries and
related persons. Under SEC rules, a related person is a director,
officer, nominee for director, or 5% shareholder of the Company and
their immediate family members. The Company's code of business
conduct and ethics provides guidance to the Audit Committee for
addressing actual or potential conflicts of interests that may
arise from transactions and relationships between the
Company and its executive officers or directors. Potential
conflicts relating to other personnel must be addressed by the
Chief Executive Officer or the Chief Financial
Officer. There were no related party transactions during
the fiscal year ended June 30, 2019 for which disclosure would be
required under SEC rules.
BOARD MEETINGS AND
COMMITTEES
The
Board held three regularly scheduled and special meetings during
the fiscal year ended June 30, 2019. All of the directors attended
(in person or by telephone) at least 75% of the meetings of the
Board and any committees of the Board on which they served during
the last full fiscal year. Directors are expected to use their best
efforts to be present at the Annual Meeting of Shareholders. All of
our directors attended the Annual Meeting of Shareholders held on
December 4, 2018.
The
Company does not have a standing nominating committee. The Board
consists of five directors, three of whom are
“independent” (as defined under the rules of the NYSE
American upon which the Company’s securities are listed),
namely Jason T. Adelman, Richard M. Horowitz and A. Charles Wilson.
Pursuant to a resolution adopted by the Board, a majority of the
independent directors, following a discussion with the entire
Board, has the sole and ultimate responsibility to determine and
nominate Board candidates for election at the Annual Meeting.
Although nominations are made by a majority of the independent
directors, the three current independent directors value the input
of the entire Board and thus discuss proposed nominees at the Board
level before the ultimate nomination determinations are made by the
independent directors. The Board does not believe that it is
necessary, at this time, given the Board composition and such Board
resolution, to have a separately constituted nominating committee.
At such time as the Board composition changes, the Board may elect
to establish a separate nominating committee.
The Board has also adopted a resolution addressing
the nomination process and related matters and it states, among
other things, that the Board believes that the continuing service
of qualified incumbents promotes stability and continuity in the
boardroom, contributing to the Board's ability to work as a
collective body, while giving the Company the benefit of the
familiarity and insight into the Company's affairs that its
directors have accumulated during their tenure. The resolution
further states that the Board will evaluate the performance of its
Board members on an annual basis in connection with the nomination
process. The Board may solicit recommendations for nominees from
persons that the Board believes are likely to be familiar with
qualified candidates, including without limitation members of the
Board and management of the Company. The Board may also determine
to engage a professional search firm to assist in identifying
qualified candidates if the need arises. In addition, the
Board has the authority to retain third-party consultants to
provide advice regarding compensation issues. The Board has not adopted specific minimum
qualifications for a position on the Company’s Board or any
specific skills or qualities that the Board believes are necessary
for one or more of its members to possess. However, the Board will
consider various factors including without limitation the
candidate’s qualifications, the extent to which the
membership of the candidate on the Board will promote diversity
among the directors, and such other factors as the Board may deem
to be relevant at the time and under the then existing facts and
circumstances. The Company does not have a formal policy
with regard to the consideration of diversity in identifying
nominees for director. The Board of Directors seeks to nominate
directors with a variety of skills and experience so that the Board
will have the necessary expertise to oversee the Company’s
business. The Company did not receive
any recommendations as to nominees for election of directors for
the Annual Meeting of Shareholders to be held on December 3,
2019.
The
Board will consider candidates proposed by shareholders of the
Company and will evaluate all such candidates upon criteria similar
to the criteria used by the Board to evaluate other candidates.
Shareholders desiring to propose a nominee for election to the
Board must do so in writing sufficiently in advance of an annual
meeting so that the Board has the opportunity to make an
appropriate evaluation of such candidate and his or her
qualifications and skills and to obtain information necessary for
preparing all of the disclosures required to be included in the
Company’s proxy statement for the related meeting should such
proposed candidate be nominated for election by shareholders.
Shareholder candidate proposals should be sent to the attention of
the Secretary of the Company at 16139 Wyandotte Street, Van Nuys,
California 91406.
The Board has a standing Compensation Committee,
which currently consists of the three independent directors, namely
Jason T. Adelman, Richard M. Horowitz and A. Charles Wilson,
Chairman. The Compensation Committee determines salary and bonus
arrangements. The Compensation Committee met three times during the
fiscal year ended June 30, 2019. The Compensation Committee has a
written charter. For the fiscal year ended June 30, 2019,
the Compensation Committee did not retain a third-party consultant
to review the Company’s current policies and procedures with
respect to executive compensation.
The
Board has a separately-designated standing Audit Committee
established in accordance with Section 3(a)(58)(A) of the Exchange
Act. The members thereof consist of Jason T. Adelman, Richard M.
Horowitz and A. Charles Wilson, Chairman. The Board of Directors
has determined that the Audit Committee has at least one financial
expert, namely A. Charles Wilson. The Board of Directors has
affirmatively determined that Mr. Wilson does not have a material
relationship with the Company that would interfere with the
exercise of independent judgment and is “independent”
as independence is defined in Section 803 of the rules of the NYSE
American. Pursuant to its written charter, which charter was
adopted by the Board of Directors, the Audit Committee is charged
with, among other responsibilities, selecting our independent
public accountants, reviewing our annual audit and meeting with our
independent public accountants to review planned audit procedures.
The Audit Committee also reviews with the independent public
accountants and management the results of the audit, including any
recommendations of the independent public accountants for
improvements in accounting procedures and internal controls. The
Audit Committee held six meetings during the fiscal year ended June
30, 2019. Each of the members of the Audit Committee satisfies the
independence standards specified in Section 803 of the rules of the
NYSE American and Rule 10A-3 under the Exchange Act.
Our
directors play a critical role in guiding our strategic direction
and overseeing our management. In order to compensate them for
their substantial time commitment, we provide a mix of cash and
equity-based compensation. We do not provide pension or retirement
plans for non-employee directors. Our employee directors, S.W. Yong
and Victor Ting, do not receive separate compensation for Board
service.
During the fiscal year ended June 30, 2019,
Richard M. Horowitz and Jason T. Adelman, as non-employee
directors, received quarterly fees in an amount equal to $8,750 for
each quarter and for service on the various committees of which
they are a member. A. Charles Wilson, as a non-employee director,
Chairman of the Board, Chairman of the Audit Committee and
Chairman of the Compensation Committee, received $17,500 in
quarterly fees for each quarter and for service on the various
committees of which he is a member. The directors were also
reimbursed for out-of-pocket expenses incurred in attending
meetings.
Each of our directors is entitled to participate
in our 2017 Directors Equity Incentive Plan (“2017 Directors
Plan”). Messrs. Yong and Ting, as employees of the Company,
are also entitled to participate in our 2017 Employee Stock
Option Plan (“2017 Employee Plan”). On April 11, 2019, pursuant to the 2017 Directors
Plan, Mr. Wilson was granted an option to purchase 40,000 shares,
and Messrs. Horowitz and Adelman each were granted an option to
purchase 20,000 shares of Common Stock at an exercise price of
$3.28 per share. Each such option vested immediately upon grant and
will terminate five years from the date of grant unless terminated
sooner upon termination of the optionee’s status as a
director or otherwise pursuant to the 2017 Directors
Plan. The exercise price under the options was
set at 100% of fair market value (as defined in the 2017 Directors
Plan) of the Company’s Common Stock on the date of grant of
each such option. Information regarding option grants to Messrs.
Yong and Ting are described under EXECUTIVE COMPENSATION
below.
As
of June 30, 2019, there were 164,000 shares available for grant
under the 2017 Directors Plan and 140,000 shares under the 2017
Employee Plan.
The
Compensation Committee reviewed the average directors’ fees
for comparable public companies. The Compensation Committee
believes that the director fees paid to its directors were and are
substantially less than the fees paid to directors of comparable
public companies. Directors’ compensation may be increased
based on the profitability of the Company.
The following table contains information on
compensation for our non-employee members of our Board of Directors
for the fiscal year ended June 30, 2019.
|
|
|
Name
|
Fees
Earned or Paid in Cash ($)
|
|
|
|
A. Charles Wilson
(2)
|
70,000
|
39,600
|
109,600
|
|
Richard M. Horowitz
(3)
|
35,000
|
19,800
|
54,800
|
|
Jason T. Adelman
(4)
|
35,000
|
19,800
|
54,800
|
(1)
The option awards
are based on the fair value of stock options on the grant date
computed in accordance with FASB ASC Topic 718.
(2)
The
total shares underlying option awards outstanding as of June 30,
2019 were 205,000.
(3)
The
total shares underlying option awards outstanding as of June 30,
2019 were 102,500.
(4)
The
total shares underlying option awards outstanding as of June 30,
2019 were 102,500.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The
following table sets forth, as of September 30, 2019, certain
information regarding the beneficial ownership of the Common Stock
by (i) all persons known by the Company to be the beneficial owners
of more than 5% of its Common Stock, (ii) each of the directors of
the Company, (iii) each of the Named Executive Officers, and (iv)
all executive officers and directors of the Company as a group. To
the knowledge of the Company, unless otherwise indicated, each of
the shareholders has sole voting and investment power with respect
to shares beneficially owned, subject to applicable community
property and similar statutes.
|
Name
|
|
Amount of Shares Owned Beneficially (1)
|
|
|
|
|
|
|
|
|
|
S. W.
Yong (2)
|
|
582,818
|
|
15.4%
|
|
A.
Charles Wilson (3)
|
|
500,500
|
(4)
|
12.9%
|
|
Richard
M. Horowitz (5)
|
|
446,864
|
|
11.8%
|
|
Jason
T. Adelman (6)
|
|
102,500
|
|
2.7%
|
|
Victor
H. M. Ting (7)
|
|
186,266
|
|
5.0%
|
|
Hwee
Poh Lim (8)
|
|
81,983
|
|
2.2%
|
|
Siew
Kuan Soon
|
|
21,350
|
|
0.6%
|
|
All
Directors and Executive
|
|
|
|
|
|
Officers
as a group (7 persons)
|
|
1,922,281
|
(9)
|
45.3%
|
|
FMR
LLC
|
|
270,996
|
(10)
|
7.4%
|
|
Renaissance
Technologies LLC
Peter
J. Abrahamson
|
|
293,380
212,500
|
(11)
(12)
|
8.0%
5.8%
|
|
|
|
|
|
|
(1)
The
percent of class is based upon 3,673,055 shares outstanding. The
number of shares indicated and the percentage shown for each
individual assumes the exercise of options that are presently
exercisable or may become exercisable within 60 days from September
30, 2019 which are held by that individual or by all executive
officers and directors as a group, as the case may be. The address
for each of the directors and executive officers above is in care
of the Company at Block 1008 Toa Payoh North Unit 03-09
Singapore.
(2)
Includes
an aggregate of 98,750 shares of the Common Stock that may be
acquired upon the exercise of options which are presently
exercisable or which may become exercisable within 60 days from
September 30, 2019 at exercise prices from $3.26 to $5.98 per
share.
(3)
Includes
an aggregate of 205,000 shares of the Common Stock that may be
acquired upon the exercise of options which are presently
exercisable at exercise prices from $2.69 to $5.98 per
share.
(4)
The
shares are held in a revocable family trust.
(5)
Includes
an aggregate of 102,500 shares of the Common Stock that may be
acquired upon the exercise of options which are presently
exercisable at exercise prices from $2.69 to $5.98 per
share.
(6)
Represents
shares that may be acquired upon the exercise of options that are
presently exercisable at exercise prices from $2.69 to $5.98 per
share.
(7)
Includes
an aggregate of 64,375 shares of the Common Stock that may be
acquired upon the exercise of options which are presently
exercisable or which may become exercisable within 60 days from
September 30, 2019 at exercise prices from $3.26 to
$5.98.
(8)
Includes
an aggregate of 1,250 shares of the Common Stock that may be
acquired upon the exercise of options which are presently
exercisable or which may become exercisable within 60 days from
September 30, 2019 at an exercise price of $3.75 per
share.
(9)
Includes
an aggregate of 574,375 shares of the Common Stock that may be
acquired upon the exercise of options which are presently
exercisable or which may become exercisable within 60 days from
September 30, 2019 at exercise prices from $2.69 to $5.98 per
share.
(10)
Based
on Form 13G filed by FMR LLC on February 13, 2019. The address of
FMR LLC is 245 Summer Street, Boston, MA 02210.
(11)
Based on Form 13G filed by Renaissance
Technologies LLC and Renaissance
Technologies Holdings Corporation on February 13, 2019. The address
of Renaissance Technologies is
800 Third Ave, New York, NY 10022.
(12)
Based on Form 13G filed by Peter J.
Abrahamson on July 26, 2019. The
address of Peter J. Abrahamson is 24156 N. Coventry Ln Lake Barrington, IL
60010-7334.
The
Company does not know of any arrangements that may at a subsequent
date result in a change of control of the Company.
The
following persons were our only executive officers as of October 7,
2019:
S. W. Yong - Mr. Yong, age 66, is our President and Chief
Executive Officer. He is also a member of our Board of
Directors. Biographical information
regarding Mr. Yong is set forth under the section entitled
“Election of Directors.”
Victor H. M. Ting
- Mr. Ting, age 65, is our Corporate
Vice-President and Chief Financial Officer. He is also a
member of our Board of Directors.
Biographical information regarding Mr. Ting is set forth under the
section entitled “Election of
Directors.”
Hwee Poh Lim
- Mr. Lim, age 60, is our Corporate
Vice-President-Testing. Mr. Lim joined Trio-Tech in 1982 and became
the Quality Assurance Manager in 1985. He was promoted to the
position of Operations Manager in 1988. In 1990 he was promoted to
Business Manager and was responsible for the Malaysian operations
in Penang and Kuala Lumpur. Mr. Lim became the General Manager of
the Company’s Malaysia subsidiary in 1991. In February 1993,
all test facilities in Southeast Asia came under Mr. Lim’s
responsibility. He holds diplomas in Electronics &
Communications and Industrial Management and a Master’s
Degree in Business Administration. He was elected Corporate
Vice-President-Testing in July 1998.
S. K. Soon – Ms.
Soon, age 61, joined Trio-Tech Singapore in 1981 and became the
Personnel and Administration Manager in 1985. In 1991, she was
promoted to Group Logistics Manager and was responsible for the
overall logistics and human resources functions for our operations
in Asia. Effective July 1, 2015, she was appointed as Corporate
Vice-President and currently oversees the Company's Logistics and
Human Resources functions in Asia.
EQUITY COMPENSATION PLAN
INFORMATION
The
Company previously had two equity plans, one entitled the 2007
Employee Stock Option Plan (the “2007 Employee Plan”,
and one entitled the 2007 Directors Equity Incentive Plan (the
“2007 Directors Plan), each of which was previously approved
by the Company’s shareholders. The purpose of these two plans
was to enable the Company to attract and retain top-quality
employees, officers, directors and consultants and to provide them
with an incentive to enhance shareholder return. On September 24,
2017, each of the 2007 Employee Plan and 2007 Director Plan
terminated in accordance with its terms and no further options may
be granted pursuant to the 2007
Employee Plan or the 2007 Directors Plan. However, there
remains outstanding options to purchase shares that were granted
pursuant to those plans.
The
Company’s 2017 Employee Plan and 2017 Directors Plan were
approved by the Board on September 14, 2017 and by the shareholders
on December 4, 2017. The purpose of these two plans is also to
enable the Company to attract and retain top-quality employees,
officers, directors and consultants and to provide them with an
incentive to enhance shareholder return as well as contributing to
the Company’s long-term growth and profitability
objectives.
The
following table provides information as of June 30, 2019 with
respect to the following compensation plans of the Company under
which equity securities of the Company are authorized for
issuance:
EQUITY COMPENSATION PLAN
INFORMATION
|
|
Plan
Category
|
Number of securities
to be issued upon exercise of outstanding options
|
Weighted average
exercise price of outstanding options
|
Number of securities
remaining available for future issuance under equity compensation
plans (excluding securities reflected in
|
|
|
|
|
|
|
Equity compensation
plans approved by shareholders:
|
|
|
|
|
2007 Employee
Plan
|
77,500
|
$3.69
|
-
|
|
2017 Employee
Plan
|
136,000
|
$4.53
|
164,000
|
|
2007 Directors
Plan
|
300,000
|
$3.40
|
-
|
|
|
160,000
|
$4.63
|
140,000
|
|
Total
|
673,500
|
$3.95
|
-
|
COMPENSATION
DISCUSSION AND ANALYSIS
The Compensation Committee
The
Compensation Committee reviews and approves corporate goals and
objectives relating to the compensation of the Chief Executive
Officer; reviews goals and objectives of other executive officers;
establishes the performance criteria (including both long-term and
short-term goals) to be considered in light of those goals and
objectives; evaluates the performance of the executives; determines
and approves the compensation level for the Chief Executive
Officer; and reviews and approves compensation levels of other key
executive officers.
Compensation Objectives
The
Company operates in a highly competitive and rapidly changing
industry. The key objectives of the Company’s executive
compensation programs are to:
●
attract, motivate
and retain executives who drive Trio-Tech’s success and
industry leadership;
●
provide each
executive, from Vice-President to Chief Executive Officer, with a
base salary based on the market value of that role, and the
individual’s demonstrated ability to perform that
role;
●
motivate executives
to create sustained shareholder value by ensuring all executives
have an “at risk” component of total compensation that
reflects their ability to influence business outcomes and financial
performance.
What Our Compensation Program is Designed to Reward
Our compensation program is designed to reward
each individual executive officer’s contribution to
the advancement of the Company’s overall performance and
execution of our goals, ideas and objectives. It is designed to
reward and encourage exceptional performance at the individual
level in the areas of organization, creativity and responsibility
while supporting the Company’s core values and ambitions.
This in turn aligns the interest of our executive officers with the
interests of our shareholders, and thus with the interests of the
Company.
Determining Executive Compensation
The
Compensation Committee reviews and approves the compensation
program for executive officers annually after the closing of each
fiscal year. Reviewing the compensation program at such time allows
the Compensation Committee to consider the overall performance of
the past fiscal year and the financial and operating plans for the
upcoming fiscal year in determining the compensation program for
the upcoming fiscal year.
The
Compensation Committee also annually reviews market compensation
levels with comparable jobs in the industry to determine whether
the total compensation for our officers remains in the targeted
median pay range. This assessment includes evaluation of base
salary, annual incentive opportunities, and long-term incentives
for the key executive officers of the Company. The Company did not
hire any compensation consultants in connection with setting
executive compensation for the fiscal year ended June 30,
2019.
The
Compensation Committee’s compensation decisions are based on
the Company’s operation performance, the performance and
contribution of each individual officer, and the compensation
budget and objectives of the Company. The Compensation Committee
also considers other factors, such as the experience and potential
of the officer and the market compensation level for a similar
position.
Role of Executive Officers in Determining Executive
Compensation
The
Compensation Committee determines compensation for the Chief
Executive Officer, which is based on different factors, such as
level of responsibility and contributions to the performance of the
Company. The Chief Executive Officer recommends the compensation
for the Company's executive officers (other than the compensation
of the Chief Executive Officer) to the Compensation Committee. The
Compensation Committee reviews the recommendations made by the
Chief Executive Officer and determines the compensation of the
Chief Executive Officer and the other executive officers. The Chief
Executive Officer is not present during voting on, or deliberations
concerning, his compensation.
Components of Executive Compensation
The
Company’s compensation program has three major components:
(1) base annual salary; (2) potential annual cash incentive
awards that are based primarily on financial performance of the
Company or its relevant business operating units; and
(3) long-term incentive compensation in the form of stock
options.
Base Salary
Base
salaries are provided as compensation for day-to-day
responsibilities and services to the Company and to meet the
objective of attracting and retaining the talent needed to run the
business.
Base
salary for our executive officers was determined utilizing various
factors.
One
factor that was taken into account in determining base salary for
our executive officers was the compensation policies of other
companies comparable in size to and within substantially the same
industry as Trio-Tech. Keeping our executive officers’
salaries in line with the market ensures the Company’s
competitiveness in the marketplace in which the Company competes
for talent.
Another
factor taken into account in determining base salary for our
executive officers was salaries paid by us to our executive
officers during the immediately preceding year and increases in the
cost of living.
The
Compensation Committee will review the Company’s financial
condition, macroeconomic conditions and adjust base salaries at
least quarterly in order to ascertain the appropriate time to
restore base salaries to pre-reduction levels.
The
salary for each of our Named Executive Officers for the fiscal year
ended June 30, 2019 and the percentage increase in their salary
from the prior fiscal year’s salary were as
follows:
|
|
|
|
|
S.
W. Yong, President and Chief Executive Officer
|
$256,810
|
4.05%
|
|
Victor H. M. Ting, Corporate Vice President
and Chief Financial Officer
|
$149,776
|
3.23%
|
|
Hwee Poh Lim,
Corporate Vice President - Testing
|
$100,213
|
4.81%
|
|
Siew Kuan Soon,
Corporate Vice President
|
$94,561
|
3.37%
|
(1)
Percent increase is
based on the increase in base salary in the currency of Singapore.
The appreciation of Singapore dollars against U.S. dollars is
excluded in the calculation. The base cash compensation for the
above named officers of the Company, each of whom resides in
Singapore, in fiscal year ended June 30, 2019, was denominated in
the currency of Singapore. The exchange rate therefore was
established as of June 30, 2019 and was computed to be 1.3642
Singapore dollars to each U.S. dollar.
Singapore executive
officers’ base salaries are credited with a compulsory
contribution ranging from 2.2% to 9.3% of base salary as required
under Singapore’s provident pension fund.
Bonuses
In
November 2016, the Compensation Committee approved the bonus
formulae for Company's executive officers, as intended to satisfy
the requirements of Section 162(m) of the Code.
The
bonus for each of our Named Executive Officers for the fiscal year
ended June 30, 2019 was as follows:
|
|
|
|
S.
W. Yong, President and Chief Executive Officer
|
$114,366
|
|
Victor H. M. Ting, Corporate Vice President
and Chief Financial Officer
|
$57,954
|
|
Hwee Poh Lim,
Corporate Vice President - Testing
|
$32,861
|
|
Siew Kuan Soon,
Corporate Vice President
|
$23,834
|
Option Grants
Stock
options are intended to align the interests of key executives and
shareholders by placing a portion of the key executives’
compensation at risk, tied to long-term shareholder value creation.
Stock options are granted at 100% of the “fair market
value” (as defined under the applicable plan) of the
Company’s Common Stock on the date of grant. The Compensation Committee believes that stock
options are flexible and relatively inexpensive to implement when
compared with cash bonuses. It also has no negative impact on the
Company’s cash flow. The Compensation Committee believes that
long-term incentives in the form of stock options can better
encourage the executive officers to improve operations and increase
profits for the Company through participation in the growth in
value of the Company’s Common Stock.
The
Compensation Committee views any option grant portion of our
executive officer compensation packages as a special form of
long-term incentive compensation to be awarded on a limited and
non-regular basis. The objective of these awards is to ensure that
the interests of our executives are closely aligned with those of
our shareholders. These awards provide rewards to our executive
officers based upon the creation of incremental shareholder value
and the attainment of long-term financial goals. Stock options
produce value to our executive officers only if the price of our
stock appreciates, thereby directly linking the interests of our
executive officers with those of our shareholders.
Awards
of stock options are determined based on the Compensation
Committee’s subjective determination of the amount of awards
necessary, as a supplement to an executive officer’s base
salary, to retain and motivate the executive
officer.
In fiscal year 2019, we granted the following
stock options to the following Named Executive Officers pursuant to
the 2017 Directors
Plan, and 2017 Employee Plan as
indicated below.
|
Executives
|
|
|
|
|
S. W. Yong,
President and Chief Executive Officer
|
-
|
40,000
|
40,000
|
|
Victor H. M. Ting,
Corporate Vice President and Chief Financial Officer
|
-
|
20,000
|
20,000
|
|
Hwee Poh Lim,
Corporate Vice President-Testing
|
-
|
5,000
|
5,000
|
|
Siew Kuan Soon,
Corporate Vice President
|
-
|
0
|
0
|
REPORT OF THE AUDIT
COMMITTEE
During
the fiscal year ended June 30, 2019, the Audit Committee
fulfilled its duties and responsibilities as outlined in its
charter. The Audit Committee reviewed and discussed the
Company’s audited consolidated financial statements and
related footnotes for the fiscal year ended June 30, 2019, and
the independent auditor’s report on those financial
statements, with the Company’s management and Mazars LLP
(“Mazars”), the Company’s independent auditor.
Management presented to the Audit Committee that the
Company’s financial statements were prepared in accordance
with accounting principles generally accepted in the United States
of America. The Audit Committee has discussed with Mazars the
matters required to be discussed with the Audit Committee by the
statement on Auditing Standards No. 61, as amended (AICPA,
Professional Standards,
Vol. 1 AU Section 380) as adopted by the Public Company Accounting
Oversight Board in Rule 3200T. The Audit Committee’s review
included a discussion with management and the independent auditor
of the quality (not merely the acceptability) of the
Company’s accounting principles, the reasonableness of
significant estimates and judgments, and the disclosures in the
Company’s financial statements, including the disclosures
relating to critical accounting policies.
The
Audit Committee recognizes the importance of maintaining the
independence of the Company’s independent auditor, both in
fact and appearance. The Audit Committee has evaluated
Mazars’s qualifications, performance, and independence,
including that of the lead audit partner. As part of its auditor
engagement process, the Audit Committee considers whether to rotate
the independent audit firm. The Audit Committee has established a
policy pursuant to which all services, audit and non-audit,
provided by the independent auditor must be pre-approved by the
Audit Committee or its delegate. The Audit Committee has concluded
that provision of the non-audit services described in that section
is compatible with maintaining the independence of Mazars. In
addition, the Audit Committee has received the written disclosure
and the letter from Mazars required by the applicable requirements
of the Public Company Accounting Oversight Board regarding
Mazars’ communications with the Audit Committee concerning
independence and has discussed with Mazars its
independence.
Based
on the above-described review, written disclosures, letter and
discussions, the Audit Committee recommended to the Board of
Directors of the Company that the audited financial statements for
the fiscal year ended June 30, 2019 be included in the
Company’s Annual Report on Form 10-K.
Dated
October 24, 2019
THE
AUDIT COMMITTEE
A.
Charles Wilson,
Chairman
Jason
T. Adelman
Richard
M. Horowitz
The
following table shows compensation information concerning
compensation awarded to, earned by or paid for services rendered to
the Company in all capacities during the fiscal years ended June
30, 2019 and 2018 by our Chief Executive Officer and our three most
highly compensated executive officers (other than our Chief
Executive Officer) who were serving as executive officers at the
end of the fiscal year ended June 30, 2019 (the “Named
Executive Officers”).
SUMMARY COMPENSATION TABLE
|
Name
and Principal Position
|
|
Fiscal
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Option
Awards
($)
(1)
|
|
All
Other
Compensation
($)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S. W. Yong (2)
|
|
2019
|
|
256,810
|
|
114,366
|
|
61,600
(3)
|
|
22,741
(4)
|
|
455,516
|
|
President and Chief Executive
Officer
|
|
2018
|
|
250,868
|
|
93,351
|
|
91,200
(5)
|
|
24,886
(6)
|
|
460,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Victor H. M. Ting (2)
|
|
2019
|
|
149,776
|
|
57,954
|
|
30,800 (7)
|
|
21,808 (8)
|
|
260,338
|
|
Corporate Vice President and Chief
Financial Officer
|
|
2018
|
|
147,485
|
|
49,513
|
|
45,600 (9)
|
|
21,873 (10)
|
|
264,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hwee Poh Lim
|
|
2019
|
|
100,213
|
|
32,861
|
|
7,700 (11)
|
|
23,321 (12)
|
|
164,094
|
|
Corporate Vice President -
Testing
|
|
2018
|
|
97,191
|
|
30,574
|
|
--
|
|
23,310 (13)
|
|
151,075
|
|
|
|
|
|
|
|
|
|
|
|
|
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Siew Kuan
Soon
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2019
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94,561
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23,834
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--
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19,305 (14)
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138,258
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Corporate Vice
President
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2018
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92,989
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21,571
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--
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23,126(15)
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127,673
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(1)
The
option awards are based on the fair value of stock options on the
grant date computed in accordance with ASC Topic 718.
(2)
Neither
Mr. Yong nor Mr. Ting received any fees for services rendered as a
director of Trio-Tech International.
(3)
A
stock option covering 40,000 shares of Common Stock was granted to
Mr. Yong pursuant to the 2017 Employee Plan on April 11, 2019. The
option has a five-year term and vests over the period as follows:
25% vesting on the grant date and the remaining balance vesting in
equal installments on the next three succeeding anniversaries of
the grant date.
(4)
The
amount shown in the other compensation column includes central
provident fund contributions of $5,608, car benefits of $11,551,
and director fees of $5,582 for service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Yong was 2.2% for fiscal 2019.
(5)
A
stock option covering 40,000 shares of Common Stock was granted to
Mr. Yong pursuant to the 2017 Employee Plan on March 23, 2018. The
option has a five-year term and vests over the period as follows:
25% vesting on the grant date and the remaining balance vesting in
equal installments on the next three succeeding anniversaries of
the grant date.
(6)
The
amount shown in the other compensation column includes central
provident fund contributions of $6,572, car benefits of $12,686,
and director fees of $5,628 for service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Yong was 2.6% for fiscal 2018.
(7)
A
stock option covering 20,000 shares of Common Stock was granted to
Mr. Ting pursuant to the 2017 Employee Plan on April 11, 2019. The
option has a five-year term and vests over the period as follows:
25% vesting on the grant date and the remaining balance vesting in
equal installments on the next three succeeding anniversaries of
the grant date.
(8)
The
amount shown in the other compensation column includes central
provident fund contributions of $6,729, car benefits of $10,710,
and director fees of $4,369 for the service as a director for
Trio-Tech Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned
by the Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Ting was 4.5% for fiscal 2019.
(9)
A
stock option covering 20,000 shares of Common Stock was granted to
Mr. Ting pursuant to the 2017 Employee Plan on March 23, 2018. The
option has a five-year term and vests over the period as follows:
25% vesting on the grant date and the remaining balance vesting in
equal installments on the next three succeeding anniversaries of
the grant date.
(10)
The
amount shown in the other compensation column includes central
provident fund contributions of $6,840, car benefits of $10,628,
and director fees of $4,405 for the service as a director for
Trio-Tech Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned
by the Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Ting was 4.6% for fiscal 2018.
(11)
A
stock option covering 5,000 shares of Common Stock was granted to
Mr. Lim pursuant to the 2017 Employee Plan on December 4, 2018. The
option has a five-year term and vests over the period as follows:
25% vesting on the grant date and the remaining balance vesting in
equal installments on the next three succeeding anniversaries of
the grant date.
(12)
The
amount shown in the other compensation column includes central
provident fund contributions of $9,368, car benefits of $11,768,
and director fees of $2,184 for service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Lim was 9.3% for fiscal 2019.
(13)
The
amount shown in the other compensation column includes central
provident fund contributions of $9,880, car benefits of $11,227,
and director fees of $2,202 for service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Lim was 10.2% for fiscal 2018.
(14)
The
amount shown in the other compensation column includes central
provident fund contributions of $8,232, car benefits of $8,889, and
director fees of $2,184 for service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Ms. Soon was 7.1% for fiscal 2019.
(15)
The
amount shown in the other compensation column includes central
provident fund contributions of $10,923, car benefits of $10,001,
and director fees of $2,202 for service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Ms. Soon was 10.1% for fiscal 2018.
Narrative Disclosure to Summary Compensation Table
Base Salary. Base salaries for the fiscal year ended June
30, 2019 for Messrs. Yong, Ting, Lim and Soon were $256,810,
$149,776, $100,213 and $94,561, respectively.
Bonuses. Bonuses for the fiscal year ended June 30, 2019 for
Messrs. Yong, Ting, Lim and Soon were $114,366, $57,954, $32,861
and $23,834 respectively.
Option Awards. Stock options are granted at 100% of the fair
market value of the Company’s Common Stock on the date of
grant. Awards of stock options are determined based on the
Compensation Committee’s subjective determination of amount
of awards necessary, as a supplement to an executive
officer’s base salary, to retain and motivate the executive
officer. Options covering 16,000 and 60,000 shares were granted on
Dec 4, 2018 and April 11, 2019 respectively pursuant to the 2017
Employee Plan, which options vest over the period as followings:
25% vesting on the grant date and the
remaining balance vesting in equal installments on the next three
succeeding anniversaries of the grant date in. Options
covering 60,000 shares were granted on March 23, 2018 pursuant to
the 2017 Employee Plan, which options vest over the period as
followings: 25% vesting on the grant
date and the remaining balance vesting in equal installments on the
next three succeeding anniversaries of the grant date
in.
All Other Compensation. All other compensation includes
central provident fund contributions at a certain percentage of the
base salaries in accordance with Singapore law, car benefits and
director fees for service as a director for certain subsidiaries of
the Company.
The
Company does not generally provide its executive officers with
payments or other benefits at, following, or in connection with
retirement. The Company does not have a nonqualified deferred
compensation plan that provides for deferral of compensation on a
basis that is not tax-qualified for its executive
officers.
Outstanding Equity Awards at Fiscal Year-End
The
following table provides information concerning shares of our
Common Stock covered by exercisable and unexercisable options held
by the Named Executive Officers as of June 30, 2019, our last
completed fiscal year end. Ms. Soon held no equity awards at June
30, 2019.
OUTSTANDING EQUITY AWARDS AT JUNE 30, 2019
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(#)
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(#)
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Price
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Option
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Name
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S.
W. Yong
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10,000(1)
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30,000
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$3.28
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04/10/2024
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20,000(2)
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20,000
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$5.98
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03/22/2023
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18,750(3)
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6,250
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$4.14
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03/29/2022
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25,000(4)
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-
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$3.26
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03/20/2021
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25,000(5)
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-
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$3.26
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03/20/2021
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Victor
H.M. Ting
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5,000(1)
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15,000
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$3.28
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04/10/2024
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10,000(2)
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10,000
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$5.98
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03/22/2023
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9,375(3)
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3,125
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$4.14
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03/29/2022
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25,000(4)
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-
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$3.26
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03/20/2021
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15,000(5)
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-
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$3.26
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03/20/2021
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Hwee Poh
Lim
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1,250(6)
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3,750
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$3.75
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12/03/2023
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(1)
Stock option
granted on April 11, 2019 pursuant to the 2017 Employee Plan, that
will fully vest on April 10, 2022 (one-fourth of the grant vested
or will vest every year beginning on April 11,
2019).
(2)
Stock option
granted on March 23, 2018 pursuant to the 2017 Employee Plan, that
will fully vest on March 22, 2021 (one-fourth of the grant vested
or will vest every year beginning on March 23, 2018).
(3)
Stock option
granted on March 30, 2017 pursuant to the 2007 Employee Plan, that
will fully vest on March 29, 2020 (one-fourth of the grant vested
or will vest every year beginning on March 30, 2017).
(4)
Stock option
granted on March 21, 2016 pursuant to the 2007 Directors Plan,
which option was immediately exercisable in full.
(5)
Stock option
granted on March 21, 2016 pursuant to the 2007 Employee Plan, which
option was immediately exercisable in full.
(6)
Stock option
granted on December 4, 2018 pursuant to the 2017 Employee Plan,
that will fully vest on December 4, 2021 (one-fourth of the grant
vested or will vest every year beginning on December 4,
2018).
Employment Agreements
None of
our executive officers has employment agreements with the Company
other than standard offer letters signed by all employees upon
employment.
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The
Audit Committee has selected Mazars as the independent registered
public accounting firm for the fiscal year ended June 30, 2019. A
representative of Mazars is expected to be present at the Annual
Meeting and will have an opportunity to make statements and respond
to appropriate questions.
The following table shows the fees that we paid or
accrued for audit and other services provided by Mazars in
fiscal 2019 and 2018. All of the
services described in the following fee table were approved in
conformity with the Audit Committee’s pre-approval
process.
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Audit
Fees
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$220,520
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$228,690
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Tax
Fees
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10,450
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10,430
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All
Other Fees
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6,230
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7,450
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Total:
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$237,200
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$246,570
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Audit Fees
The
amounts set forth opposite “Audit Fees” above reflect
the aggregate fees billed by Mazars or to be billed for
professional services rendered for the audit of the Company’s
fiscal 2019 and fiscal 2018 annual financial statements and for the
review of the financial statements included in the Company’s
quarterly reports during such periods.
Tax
Fees
The
amounts set forth opposite “Tax Fees” above reflect the
aggregate fees billed for fiscal 2019 and 2018 for professional
services rendered for tax compliance and return preparation. The
compliance and return preparation services consisted of the
preparation of original and amended tax returns and support during
the income tax audit or inquiries.
The
Audit Committee’s policy is to pre-approve all audit services
and all non-audit services that our independent accountants are
permitted to perform for us under applicable federal securities
regulations. The Audit Committee’s policy utilizes an annual
review and general pre-approval of certain categories of specified
services that may be provided by the independent accountant, up to
pre-determined fee levels. Any proposed services not qualifying as
a pre-approved specified service, and pre-approved services
exceeding the pre-determined fee levels, require further specific
pre-approval by the Audit Committee. The Audit Committee has
delegated to the Chairman of the Audit Committee the authority to
pre-approve audit and non-audit services proposed to be performed
by the independent accountants. Since June 30, 2004, all services
provided by our auditors require pre-approval by the Audit
Committee. The policy has not been waived in any
instance.
All Other Fees
The
amounts set forth opposite “All Other Fees” above
reflect the aggregate fees billed for fiscal 2019 and 2018 for
professional services rendered for the Information Technology (IT)
audit. This is to ensure rigorous IT controls are in place for
maintaining appropriate internal controls over financial
reporting.
ADDITIONAL MEETING
INFORMATION
Shareholder Proposals
Shareholders who
wish to present proposals at the Annual Meeting to be held
following the end of the fiscal year ended June 30, 2020 should submit their proposals in
writing to the Secretary of the Company at the Company’s principal executive offices
located at Block 1008 Toa Payoh North, Unit 03-09 Singapore
318996. Proposals must be received no later than June 26,
2019 for inclusion in next year’s Proxy Statement and Proxy
Card. If a shareholder intends to present a proposal at the next
Annual Meeting but does not seek inclusion of that proposal in the
proxy statement for that meeting, the holders of Proxies for that
meeting will be entitled to exercise their discretionary authority
on that proposal if the Company does not have notice of the
proposal by September 9, 2020.
Proxy Solicitation
The
cost of soliciting the enclosed form of Proxy will be borne by the
Company. In addition, the Company will reimburse brokerage firms
and other persons representing beneficial owners of shares for
their expenses in forwarding solicitation material to such
beneficial owners. Directors, officers and regular employees of the
Company may, for no additional compensation, also solicit proxies
personally or by telephone, electronic transmission, telegram or
special letter.
Annual Report
The
Company’s Annual Report to Shareholders for the year ended
June 30, 2019 is being electronically available with this Proxy
Statement to shareholders entitled to notice of the meeting. The
Annual Report includes the consolidated financial statements,
unaudited selected consolidated financial data and
management’s discussion and analysis of financial condition
and results of operations.
Upon
the written request of any shareholder, the Company will provide,
without charge, a copy of the Company’s Annual Report on Form
10-K filed with the Commission for the year ended June 30,
2019. This request should be directed to the Corporate Secretary,
Trio-Tech International, 16139 Wyandotte St., Van Nuys, CA
91406.
The
shareholders and any other persons who would like to communicate
with the Board can access the website www.triotech.com and fill in
the contact form for any enquiries or information. The form will be
sent directly to the Secretary and the communications for specified
individual directors of the Board will be given to them personally
by the Secretary. In addition, the contact number is listed on the
website and the messages will be passed to the Board
accordingly.
At this
time, the Board knows of no other business that will come before
the Annual Meeting. However, if any other matters properly come
before the Annual Meeting, the persons named as Proxy holders will
vote on them in accordance with their best judgment.
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By Order of the Board
of Directors
A. CHARLES
WILSON
Chairman
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Trio Tech (AMEX:TRT)
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