UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed
by the Registrant
þ
|
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))
|
|
|
þ
|
Definitive
Proxy Statement
|
|
|
☐
|
Definitive
Additional Materials
|
|
|
☐
|
Soliciting
Material under Rule 14a-12
|
Borqs
Technologies, Inc.
|
(Name
of Registrant as Specified In Its Charter)
|
|
|
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
|
Payment
of Filing Fee (Check the appropriate box):
|
☐
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
(1)
|
Title
of each class of securities to which transaction applies:
|
|
|
|
|
(2)
|
Aggregate
number of securities to which transaction applies:
|
|
|
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
|
|
|
|
|
(4)
|
Proposed
maximum aggregate value of transaction:
|
|
|
|
|
(5)
|
Total
fee paid:
|
|
|
|
|
☐
|
Fee
paid previously with preliminary materials.
|
|
☐
|
Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of
its filing.
|
|
(1)
|
Amount
Previously Paid:
|
|
|
|
|
(2)
|
Form,
Schedule or Registration Statement No.:
|
|
|
|
|
(3)
|
Filing
Party:
|
|
|
|
|
(4)
|
Date
Filed:
|
|
|
|
Building
B23-A,
Universal Business Park
No. 10 Jiuxianqiao Road
Chaoyang District, Beijing 100015,
China
Dear
Shareholders:
You
are invited to attend the Annual Meeting of Shareholders (the “
Annual Meeting
”) of Borqs Technologies,
Inc. (the “
Company
”) on December 18, 2018, which will be held at our office at Building B23-A, Universal
Business Park, No. 10 Jiuxianqiao Road, Chaoyang District, Beijing 10015, China, at 10:00 a.m. Beijing Time. Enclosed with
this letter are your Notice of Annual Meeting of Shareholders, Proxy Statement and Proxy voting card. The Proxy
Statement included with this notice discusses each of our proposals to be considered at the Annual Meeting. Please review our
annual report for the fiscal year ended December 31, 2017, which will be on our website at
http://www.borqs.com
(under
“
About Us - Investor Relations
”).
At
this year’s meeting, you will be asked to: (1) elect two (2) “Class I” directors, each of whom will be elected
for a term of three years; (2) ratify the appointment of Ernst and Young Hua Ming LLP as our independent registered public accounting
firm for the fiscal year ending December 31, 2018; and (3) transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
The
Board of Directors has fixed the close of business on October 26, 2018 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 “
Record Date
”).
The
Board of Directors believes that a favorable vote for each candidate for a position on the Board of Directors and for the ratification
of Ernst and Young Hua Ming LLP in Proposal 2 is in the best interest of the Company and its shareholders and recommends a vote
"FOR" all candidates and all other matters. Accordingly, we urge you to review the accompanying material carefully and
to return the enclosed proxy promptly. On the following pages, we provide answers to frequently asked questions about the Annual
Meeting.
You
are welcome to attend the Annual Meeting in person. Whether or not you expect to attend the meeting, you are requested to read
the enclosed proxy statement and to sign, date and return the accompanying proxy as soon as possible. This will assure your representation
and a quorum for the transaction of business at the meeting.
Sincerely,
|
|
|
|
/s/ Pat
Chan
|
|
Pat
Chan
|
|
Chairman of the
Board of Directors
|
|
Beijing,
China
October
30, 2018
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
Meeting
Date: December 18, 2018
To
the Shareholders of Borqs Technologies, Inc.:
The
2018 Annual Meeting of Shareholders will be held at our office at Building B23-A, Universal Business Park, No. 10 Jiuxianqiao
Road, Chaoyang District, Beijing 10015, China at 10:00 a.m. Beijing Time. During the Annual Meeting, shareholders will be asked
to:
(1)
|
Elect
two (2) “Class I” directors, each of whom will be elected for a three year term, or until the election and qualification
of their successors;
|
(2)
|
Ratify
the appointment of Ernst and Young Hua Ming LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2018; and
|
(3)
|
Transact
any other business properly brought before the Annual Meeting or any adjournments thereof.
|
The
Board of Directors has fixed the close of business on October 26, 2018, as the record date for determining the shareholders entitled
to notice of, and to vote at, the Annual Meeting or any adjournments thereof. If you are a shareholder as of October 26, 2018,
you may vote at the meeting. The date of disseminating this Notice of Meeting and Proxy Statement is on or about November 6, 2018.
For
a period of 10 days prior to the Annual Meeting, a shareholders list will be kept at our office and shall be available for inspection
by shareholders during usual business hours. A shareholders list will also be available for inspection at the Annual Meeting.
You
are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, you are requested to read
the enclosed proxy statement and to sign, date and return the accompanying proxy as soon as possible. This will assure your representation
and a quorum for the transaction of business at the meeting. If you attend the meeting in person, the proxy will not be used if
you so request by revoking it as described in the proxy statement.
By order
of our Board of Directors
|
|
|
|
/s/ Anthony
K. Chan
|
|
Anthony
K. Chan
|
|
Chief Financial
Officer
|
|
IMPORTANT
NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18,
2018
:
This
communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage
you to access and review all of the important information contained in the proxy materials before voting.
The
Notice, Proxy Statement and the Annual Report on Form 10-K for the fiscal year ended December 31, 2017 are available at https://www.cstproxy.com/borqs/2018.
If you want to receive a paper or e-mail copy of these documents, you must request one. There is no charge to you for requesting
a copy. Please make your request for a copy as instructed below on or before December 8, 2018 to facilitate timely delivery.
To
request by phone: 866-894-0536
To
request on the Internet: https://www.cstproxy.com/borqs/2018
If
you have any questions about accessing materials or voting, please call Sandra Dou, the Company’s Sr. Manager of Investor
Relations, at +86-170-9006-3138.
TABLE
OF CONTENTS
|
Page No.
|
|
|
The Proxy Procedure
|
i
|
|
|
Questions and Answers About the Meeting
|
1
|
|
|
Governance of the Company
|
5
|
|
|
Proposal 1 - Election of Directors
|
8
|
|
|
Proposal 2 - Ratification of Appointment of
Independent Registered Public Accountant
|
11
|
|
|
Executive Compensation and Related Information
|
12
|
|
|
Security Ownership of Certain Beneficial Owners
and Management
|
21
|
|
|
Certain Relationships and Related Transactions
|
24
|
|
|
Requirements for Advance Notification of Nominations
and Shareholder Proposals
|
27
|
|
|
Other Matters
|
27
|
THE
PROXY PROCEDURE
In
lieu of a paper copy of the proxy materials, on or about November 6, 2018, we will first disseminate to our shareholders of record
and beneficial owners of ordinary shares of Borqs Technologies, Inc. (which may be referred to in this proxy statement as “
we
,”
“
us
,” “
Borqs
,” or the “
Company
”) a Notice of Internet Availability of
Proxy Materials (the “
Notice
”) in connection with the solicitation of proxies by our board of directors (“
Board
”)
for our annual meeting of shareholders to be held on December 18, 2018, at 10:00 a.m. Beijing Time at our office at Building B23-A,
Universal Business Park, No. 10 Jiuxianqiao Road, Chaoyang District, Beijing 10015, China (referred to as the “
Annual
Meeting
”). Shareholders who received the notice will have the ability to access this proxy statement and the accompanying
proxy card over the Internet and to request a paper copy of the proxy materials by internet, email, or telephone. Our Board encourages
you to read this document thoroughly and to take this opportunity to vote on the matters to be decided at the Annual Meeting.
Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. In
addition, shareholders may request to receive proxy materials in printed form by mail or electronically on an ongoing basis. A
shareholder’s election to receive proxy materials by mail or electronically by email will remain in effect until the shareholder
terminates such election.
QUESTIONS
AND ANSWERS ABOUT THE MEETING
What
am I voting on?
At
this year’s meeting, you will be asked to:
(1)
|
Elect
two (2) “Class I” directors, each of whom will be elected for a term of three years, or until the election and
qualification of their successors;
|
(2)
|
Ratify
the appointment of Ernst and Young Hua Ming LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2018; and
|
|
|
(3)
|
Transact any other
business properly brought before the Annual Meeting or any adjournments thereof.
|
Who
is entitled to vote at the Annual Meeting, and how many votes do they have?
Shareholders
of record at the close of business on October 26, 2018 (the “
Record Date
”) may vote at the Annual Meeting.
Pursuant to the rights of our shareholders contained in our charter documents each ordinary share has one vote. There were 31,303,350
ordinary shares outstanding on October 26, 2018. From December 8, 2018 through December 17, 2018, you may inspect a list of shareholders
eligible to vote. If you would like to inspect the list, please call Sandra Dou, the Company’s Sr. Manager of Investor Relations,
at +86-170-9006-3138 to arrange a visit to our offices. In addition, the list of shareholders will be available for viewing by
shareholders at the Annual Meeting.
How
do I vote?
You
may vote over the Internet, by telephone, by mail or in person at the Annual Meeting. Please be aware that if you vote by telephone
or over the Internet, you may incur costs such as telephone and Internet access charges for which you will be responsible.
Vote
by Internet.
You can vote via the Internet at https://www.cstproxy.com/borqs/2018. You will need to use the control number
appearing on your proxy card to vote via the Internet. You can use the Internet to transmit your voting instructions up until
11:59 p.m. Beijing Time on December 17, 2018. Internet voting is available 24 hours a day. If you vote via the Internet, you do
not need to vote by telephone or return a proxy card.
Vote
by Telephone.
You can vote by telephone by calling the toll-free telephone number 866-894-0536
.
You will need to
use the control number appearing on your proxy card to vote by telephone. You may transmit your voting instructions from any touch-tone
telephone up until 11:59 p.m. Beijing Time on December 17, 2018. Telephone voting is available 24 hours a day. If you vote by
telephone, you do not need to vote over the Internet or return a proxy card.
Vote
by Mail.
If you received a printed proxy card, you can vote by marking, dating and signing it, and returning it in the
postage-paid envelope provided to Borqs Technologies, Inc., Building B23-A, Universal Business Park, No. 10 Jiuxianqiao Road,
Chaoyang District, Beijing 10015, China. Please promptly mail your proxy card to ensure that it is received prior to the closing
of the polls at the Annual Meeting.
Vote
in Person at the Meeting.
If you attend the Annual Meeting and plan to vote in person, we will provide you with a ballot
at the Annual Meeting. If your shares are registered directly in your name, you are considered the shareholder of record and you
have the right to vote in person at the Annual Meeting. If your shares are held in the name of your broker or other nominee, you
are considered the beneficial owner of shares held in street name. As a beneficial owner, if you wish to vote at the Annual Meeting,
you will need to bring to the Annual Meeting a legal proxy from your broker or other nominee authorizing you to vote those shares.
If
you vote by any of the methods discussed above, you will be designating Pat Chan, our Chief Executive Officer, and Anthony Chan,
our Chief Financial Officer, as your proxies, and they will vote your shares on your behalf as you indicate.
Submitting
a proxy will not affect your right to attend the Annual Meeting and vote in person.
If
your shares are held in the name of a bank, broker or other nominee, you will receive separate voting instructions from your bank,
broker or other nominee describing how to vote your shares. The availability of Internet voting will depend on the voting process
of your bank, broker or other nominee. Please check with your bank, broker or other nominee and follow the voting instructions
it provides.
Can
I receive future materials via the internet?
If
you vote by internet, simply follow the prompts for enrolling in electronic proxy delivery service. This will reduce the Company’s
printing and postage costs in the future, as well as the number of paper documents you will receive.
What
is a proxy?
A
proxy is a person you appoint to vote on your behalf. By using the methods discussed above, you will be appointing each of
Pat Chan, our Chief Executive Officer and Anthony Chan, our Chief Financial Officer, as your proxies. Each of them will vote
on your behalf, and will have the authority to appoint a substitute to act as proxy. If you are unable to attend the
Annual Meeting, please vote by proxy so that your ordinary shares may be voted.
How
will my proxy vote my shares?
If
you are a shareholder of record, your proxy will vote according to your instructions. If you choose to vote by mail and complete
and return the enclosed proxy card but do not indicate your vote, your proxy will vote “FOR” the election of the nominated
slate of Class I directors (see Proposal 1) and “FOR” the ratification of Ernst and Young Hua Ming LLP (“
E&Y
”)
as our independent registered public accounting firm for the fiscal year ending December 31, 2018 (see Proposal 2). We do not
intend to bring any other matter for a vote at the Annual Meeting, and we do not know of anyone else who intends to do so. Your
proxies are authorized to vote on your behalf, however, using their best judgment, on any other business that properly comes before
the Annual Meeting.
If
your shares are held in the name of a bank, broker or other nominee, you will receive separate voting instructions from your bank,
broker or other nominee describing how to vote your shares. The availability of Internet voting will depend on the voting process
of your bank, broker or other nominee. Please check with your bank, broker or other nominee and follow the voting instructions
your bank, broker or other nominee provides.
You
should instruct your bank, broker or other nominee how to vote your shares. If you do not give voting instructions to
the bank, broker or other nominee, the bank, broker or other nominee will determine if it has the discretionary authority to
vote on the particular matter. Under applicable rules, brokers have the discretion to vote on routine matters, such as
the ratification of the selection of accounting firms, but do not have discretion to vote on non-routine matters. Under
the regulations applicable to New York Stock Exchange member brokerage firms (many of whom are the record holders of our
ordinary shares), the uncontested election of directors is no longer considered a routine matter. Matters related to
executive compensation are also not considered routine. As a result, if you are a beneficial owner and hold your shares in
street name, but do not give your broker or other nominee instructions on how to vote your shares with respect to these
matters, votes may not be cast on your behalf. If your bank, broker or other nominee indicates on its proxy card that it does
not have discretionary authority to vote on a particular proposal, your shares will be considered to be “broker
non-votes” with regard to that matter. Broker non-votes will be counted as present for purposes of determining whether
enough votes are present to hold our Annual Meeting, but a broker non-vote will not otherwise affect the outcome of a vote on
a non-routine matter that requires a majority of the votes of shares present in person or represented by proxy and entitled
to vote. With respect to a non-routine matter that requires a favorable vote of a majority of the outstanding shares, a broker
non-vote has the same effect as a vote against the proposal. With regard to the proposals for this Annual Meeting, the
election of directors is “non-routine” and the ratification of auditors is “routine.” In tabulating
the voting result for the election of directors, shares that constitute broker non-votes and abstentions are not considered
votes cast. In tabulating the voting results for the ratification of auditors, abstentions are not considered as votes cast
and broker non-votes are considered votes cast.
How
do I change my vote?
If
you are a shareholder of record, you may revoke your proxy at any time before your shares are voted at the Annual Meeting by:
|
●
|
Notifying
our corporate Secretary Pat Chan, in writing at Building B23-A, Universal Business Park, No. 10 Jiuxianqiao Road, Chaoyang District,
Beijing 10015, China, that you are revoking your proxy;
|
|
●
|
Submitting
a proxy at a later date via the Internet, or by signing and delivering a proxy card relating to the same shares and bearing a
later date than the date of the previous proxy prior to the vote at the Annual Meeting, in which case your later-submitted proxy
will be recorded and your earlier proxy revoked; or
|
|
●
|
Attending
and voting by ballot at the Annual Meeting.
|
If
your shares are held in the name of a bank, broker or other nominee, you should check with your bank, broker or other nominee
and follow the voting instructions provided.
What
constitutes a quorum?
The
holders of a majority of the Company’s eligible votes as of the Record Date, either present or represented by proxy, constitute
a quorum. A quorum is necessary in order to conduct the Annual Meeting. If you choose to have your shares represented by proxy
at the Annual Meeting, you will be considered part of the quorum. Both abstentions and broker non-votes are counted as present
for the purpose of determining the presence of a quorum. If a quorum is not present at the Annual Meeting, the the Chairman of the board may adjourn the meeting to a later date. If an adjournment is for more than 30 days or a new record date
is fixed for the adjourned meeting, we will provide notice of the adjourned meeting to each shareholder of record entitled to
vote at the meeting.
What
vote is required to approve each proposal?
Election
of Directors
. For Proposal 1, the election of directors, the nominees will be elected by a majority of the votes of the
ordinary shares present in person or represented by proxy and entitled to vote at the Annual Meeting. You may choose to vote,
or withhold your vote, separately for each nominee. A properly executed proxy or voting instructions marked “WITHHOLD”
with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, although
it will be counted for the purposes of determining whether there is a quorum.
Ratification
of the Appointment of Independent Registered Public Accounting Firm
. For Proposal 2, the affirmative vote of the holders
of ordinary shares entitled to vote and present at the meeting must exceed the votes cast against the proposal, in order for the
proposal to be approved.
Other
Proposals
. Any other proposal that might properly come before the meeting will require the affirmative vote of
the holders of ordinary shares entitled to vote and present at the meeting to exceed the votes cast against the proposal for
the proposal to be approved, except when a different vote is required by law and/or our memorandum and articles of
association. On any such proposal, abstentions will be counted as present and entitled to vote on that matter for purposes of
establishing a quorum, but will not be counted for purposes of determining the number of votes cast.
Abstentions
and broker non-votes with respect to any matter will be counted as present and entitled to vote on that matter for purposes
of establishing a quorum. Abstentions will be counted for purposes of determining the number of votes cast and accordingly
will have the same effect as votes against on the outcome of voting with respect to any of the proposals for this
Annual Meeting. Broker non-votes will have no effect on the outcome of voting with respect to Proposal 1. In tabulating the
voting results for the ratification of auditors, broker non-votes are considered votes cast with respect to Proposal 2 and
therefore will have an effect on the outcome of such proposal.
What
percentage of our ordinary shares do our directors and officers own?
As
of October 26, 2018, our current directors and executive officers beneficially owned approximately 7.2% of our ordinary shares
outstanding. See the discussion under the heading “Security Ownership of Certain Beneficial Owners and Management”
on page 21 for more details.
Who
is soliciting proxies, how are they being solicited, and who pays the cost?
We,
on behalf of our Board, through our directors, officers, and employees, are soliciting proxies primarily by mail. Further, proxies
may also be solicited in person, by telephone, or facsimile. We will pay the cost of soliciting proxies. We will also reimburse
stockbrokers and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy
and solicitation materials to the owners of our ordinary shares.
Who
is our Independent Registered Public Accounting Firm, and will they be represented at the Annual Meeting?
E&Y
has served as the independent registered public accounting firm auditing and reporting on our financial statements for the fiscal
years ended December 31, 2016 and 2017. E&Y has been appointed by our Board to serve as our independent registered public
accounting firm for the fiscal year ended December 31, 2018. We expect that representatives of E&Y will not be present at
the Annual Meeting.
What
are the recommendations of our Board?
The
recommendations of our Board are set forth together with the description of each proposal of this proxy statement. In summary,
the Board recommends a vote:
|
●
|
FOR
the election of the two nominated Class I directors (see Proposal 1); and
|
|
●
|
FOR
the ratification of Ernst and Young Hua Ming LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2018 (see Proposal 2).
|
With
respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board or,
if no recommendation is given, in their own discretion.
If
you sign and return your proxy card but do not specify how you want to vote your shares, the persons named as proxy holders on
the proxy card will vote in accordance with the recommendations of the Board.
GOVERNANCE
OF THE COMPANY
In
accordance with our memorandum and articles of association, our Board is divided into three classes, with the number of directors
in each class to be as nearly equal as possible. Our existing Class I directors will serve until the Annual Meeting,
our existing Class II directors will serve until our 2019 annual general meeting, and our existing Class III directors will serve
until our 2020 annual general meeting. Commencing at our 2018 annual general meeting, and at each following annual general meeting,
directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third annual
general meeting following their election.
Our
board of directors, which is elected by our shareholders, is responsible for directing and overseeing our business and affairs.
In carrying out its responsibilities, the board selects and monitors our top management, provides oversight of our financial reporting
processes, and determines and implements our corporate governance policies.
Our
board of directors and management are committed to good corporate governance to ensure that we are managed for the long-term benefit
of our shareholders, and we have a variety of policies and procedures to promote such goals. To that end, during the past year,
our board and management periodically reviewed our corporate governance policies and practices to ensure that they remain consistent
with the requirements of the U.S. securities laws, rules of the Securities and Exchange Commission (the “SEC”), and
the listing standards of The Nasdaq Stock Market (“Nasdaq”).
Meetings
of the Board of Directors
Our
board of directors held 7 regular meetings in 2017. Each director attended at least 50% of the aggregate number of meetings of
the board and committees on which such director served that were held during 2017.
Code
of Business Conduct and Ethics
Our
Code of Business Conduct and Ethics for Employees (“Code of Ethics”) applies to all of our employees, including our
chief executive officer, chief financial officer and principal accounting officer. Our Code of Ethics is available on our corporate
website,
www.borqs.com
. If we amend or grant a waiver of one or more of the provisions of our Code of Ethics, we intend
to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to or waivers from provisions of
our Code of Ethics that apply to our principal executive officer, principal financial officer and principal accounting officer
by posting the required information on our website.
Shareholder
Communications with the Board of Directors
Shareholders
and other parties interested in communicating directly with the board of directors may do so by writing to: Board of Directors,
c/o Borqs Technologies, Inc., Building B23-A, Universal Business Park, No. 10 Jiuxianqiao Road, Chaoyang District, Beijing 100015,
China, or by e-mail to sandra.dou@borqs.net. Shareholders and others may direct their correspondence to our Secretary.
Independence
of the Board of Directors
Nasdaq
listing standards require that a majority of our Board be independent directors. An “independent director” is a person,
other than an officer or employee of the Company or its subsidiaries, who has no relationship which in the opinion of the Company’s
board of directors would interfere with the director’s exercise of independent judgment in carrying out the responsibilities
of a director. Our Board has determined that Mr. Joseph Wai Leung Wong, Mr. Jason Zixian Shen, Dr. Honghui Deng, Mr. Eric Tao
and Mr. Bill Huang are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules.
Our independent directors will hold regularly scheduled meetings at which only independent directors are present.
Board
Leadership Structure and Role in Risk Oversight
The
Board does not have a lead independent director. Pat Chan is our Chief Executive Officer and Chairman of the Board.
Committees
of the Board of Directors
Audit
Committee
The
members of our Audit Committee are Mr. Huang, Mr. Shen and Mr. Wong (chairman of the committee), each of whom is an independent
director. Each member of the Audit Committee is financially literate and our Board determined Mr. Wong qualifies as our “audit
committee financial expert,” as such term is defined in Item 401(h) of Regulation S-K. Our Audit Committee charter details
the responsibilities of the Audit Committee, including:
|
●
|
the appointment, compensation, retention, replacement,
and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged
by us;
|
|
●
|
pre-approving all audit and non-audit services
to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing
pre-approval policies and procedures;
|
|
●
|
reviewing and discussing with the independent
auditors all relationships the auditors have with us in order to evaluate their continued independence;
|
|
●
|
setting clear hiring policies for employees
or former employees of the independent auditors;
|
|
●
|
setting clear policies for audit partner rotation
in compliance with applicable laws and regulations;
|
|
●
|
obtaining and reviewing a report, at least annually,
from the independent auditors describing (i) the independent auditor’s internal quality-control procedures and (ii)
any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any
inquiry or investigation by governmental or professional authorities, within, the preceding five years respecting one or more
independent audits carried out by the firm and any steps taken to deal with such issues;
|
|
●
|
reviewing and approving any related party transaction
required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction;
and
|
|
●
|
reviewing with management, the independent auditors,
and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators
or government agencies and any employee complaints or published reports that raise material issues regarding our financial
statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial
Accounting Standards Board, the SEC or other regulatory authorities.
|
Compensation
Committee
The
members of our Compensation Committee are Mr. Huang, Mr. Shen (chairman of the committee), and Mr. Wong, each of whom is an independent
director. Our Compensation Committee charter details the principal functions of the Compensation Committee, including:
|
●
|
reviewing and approving on an annual basis the
corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive
Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any)
of our Chief Executive Officer’s based on such evaluation in executive session at which the Chief Executive Officer
is not present;
|
|
●
|
reviewing and approving the compensation of
all of our other executive officers;
|
|
●
|
reviewing our executive compensation policies
and plans;
|
|
●
|
implementing and administering our incentive
compensation equity-based remuneration plans;
|
|
●
|
assisting management in complying with our proxy
statement and annual report disclosure requirements;
|
|
●
|
approving all special perquisites, special cash
payments and other special compensation and benefit arrangements for our executive officers and employees;
|
|
●
|
producing a report on executive compensation
to be included in our annual proxy statement; and
|
|
●
|
reviewing, evaluating and recommending changes,
if appropriate, to the remuneration for directors.
|
The
charter also provides that the Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation
consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of
the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel
or any other adviser, the Compensation Committee will consider the independence of each such adviser, including the factors required
by Nasdaq and the SEC.
Section
16(a) Beneficial Ownership and Reporting Compliance
Our
directors and officers, and any persons who own more than 10% of our ordinary shares, are required under Section 16(a) of the
Exchange Act to file initial reports of beneficial ownership and reports of changes in beneficial ownership with the SEC (“Section
16(a) filings”). Specific due dates have been established by the SEC, and we are required to disclose in this report any
failure to file by those dates. Based solely upon our review of the copies of such reports for fiscal 2017 as furnished to us,
we believe that all directors, officers, and greater-than-10% beneficial owners have made all required Section 16(a) filings on
a timely basis for 2017.
REPORT
OF THE AUDIT COMMITTEE
The
following Report of the Audit Committee shall not be deemed incorporated by reference into any of our filings under the Securities
Act of 1933, as amended, or the Exchange Act, except to the extent we specifically incorporate it by reference therein.
The
Audit Committee of the Board has:
|
●
|
reviewed
and discussed the Company’s audited financial statements for the year ended December 31, 2017 with management;
|
|
●
|
discussed
with the Company’s independent auditors the matters required to be discussed by 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; and
|
|
●
|
received
the written disclosures and letter from the independent auditors required by the applicable requirements of the Public Accounting
Oversight Board regarding the independent auditor communications with the Audit Committee concerning independence, and has discussed
with E&Y matters relating to its independence.
|
In
reliance on the review and discussions referred to above, the Audit Committee recommended to the Board that the financial statements
audited by E&Y for the fiscal year ended December 31, 2017 be included in its Annual Report on Form 10-K for such fiscal year.
The
Audit Committee and the Board have also, respectively, recommended and approved the selection of the Company’s current independent
auditor, which approval is subject to ratification by the Company’s shareholders.
Submitted
by:
The
Audit Committee of the Board of Directors
/s/
Joseph Wai Leung Wong, Chairman
/s/
Bill Huang
/s/
Jason Zexian Shen
PROPOSAL
1 — ELECTION OF DIRECTORS
Nominees
for Election
Class
I has two director positions up for election at the Annual Meeting. The Board has determined it is in the best interest of the
Company to authorize the nomination of Lawrence Chow and Ji Li for a new Class I term. Accordingly, the Board has authorized the
nomination of these two nominees to serve as Class I directors. Existing Class I directors Bill Huang and Honghui Deng are not
being nominated for re-election.
Subsequent
to shareholder approval of this proposal, the Board will have a total of seven members, divided into three classes as follows:
Class
|
|
Term
|
|
Directors
|
|
|
|
|
|
Class I
|
|
Class I directors
serve for a term of three years, and are elected by the shareholders at the beginning of each term. The next full 3-year term
for Class I directors extends from the date of the 2018 annual meeting to the date of the 2021 annual meeting.
|
|
1.
Lawrence Chow
2.
Ji Li
|
|
|
|
|
|
Class II
|
|
Class II directors
serve for a term of three years, and are elected by the shareholders at the beginning of each term. The next full 3-year term
for Class II directors extends from the date of the 2019 annual meeting to the date of the 2022 annual meeting.
|
|
3.
Jason Zexian Shen
4.
Joseph Wai Leung Wong
|
|
|
|
|
|
Class III
|
|
Class III directors
serve for a term of three years, and are elected by the shareholders at the beginning of each term. The next full 3-year term
for Class III directors extends from the date of the 2020 annual meeting to the date of the 2023 annual meeting.
|
|
5.
Pat Sek Yuen Chan
6.
Yaqi Feng
7.
Eric Tao
|
Our
Board has nominated two Class I director candidates for election at the Annual Meeting, who are the same individuals listed above
in position numbers 1 and 2. Each nominee has agreed, if elected, to serve a three-year term or until the election and qualification
of his successor. If any nominee is unable to stand for election, which circumstance we do not anticipate, the Board may provide
for a lesser number of directors or designate a substitute. In the latter event, shares represented by proxies may be voted for
a substitute nominee.
If
a quorum is present at the Annual Meeting, then nominees will be elected by a majority of the votes of the ordinary shares present
in person or represented by proxy and entitled to vote at the meeting. There is no cumulative voting in the election of directors.
The
following biographical information is furnished as to each nominee for election as a Class I director:
Dr.
Lawrence W. Chow, Director Nominee
Dr.
Lawrence W. Chow has been nominated to serve as a Class I director. Dr. Chow has almost 30 years of experience in the ICT industry.
He has extensive working experience with large and complex global FinTech, Telco + Network Equipment Provider & Education
industries with successful track record of delivering outstanding commercial and technical results in companies ranging from Fortune
500 organizations to small start-ups. Currently, he is serving as Director and Strategic Partner for QLIK Greater China since
2017. Dr. Chow previously served as Managing Partner at SAP China from 2012 to 2015, CTO/NEP Technology Officer of Sun Micro Greater
China from 2002 to 2008 and Director of Strategic Alliance for PeopleSoft Inc., North Asia, from 2000 to 2001. He started his
career in 1989 at various Silicon Valley technology companies including Xerox Corporation, Amdahl Corporation and Sun Microsystems.
At Sun Micro, Dr. Chow served as the Chief Technical Consultant from 1993 to 1999 for the Greater China region. Dr. Chow received
two Bachelor’s Degrees in Computer Science and Information System from Oregon State University in 1988 and earned a Master’s
Degree in Computer Science from Pacific W. University in 1993. He received another Master’s Degree in Education Management
from Tarlac State University in 2011. Dr. Chow received his PhD in Education Management from HKMA/Tarlac State University in 2015.
In considering Dr. Chow’s eligibility to serve as a director, the Board has considered Dr. Chow’s particular expertise
in computer information systems.
Ji
Li, Director Nominee
Ji
Li has been nominated to serve as a Class I director. Mr. Li has over 20 years of experiences in technology
and telecommunication industries. He also has investment experience in such industries. Since 2014, Mr. Li has been an angel investor
in companies in the telecommunication industry. Mr. Li served as General Manager of Vinko Technology Inc. from 2010 to 2014, where
he led the development of telecom payment system. He previously served as Chief Executive Officer and General Manager of Wuhan
HSC Technology Inc. from 2006 to 2007. Mr. Li founded AngelCare Inc. and served as its Chief Executive Officer from 2005 to 2006.
He also founded Fiberxon, Inc. and served as its VP and Deputy General Manager from 2001 to 2004. Mr. Li also served as General
Manager of UTStarcom Inc.’s Shenzhen office, where he led the development of telecom switches utilizing soft switch technology.
Mr. Li received his Master of Science in Information Engineering from Huazhong University of Science and Technology in China.
In considering Mr. Li’s eligibility to serve as a director, the Board has considered Mr. Li’s investment experience
in technology companies.
Compensation
of Directors
During
2017, our nonemployee directors were entitled to receive cash compensation and an option to purchase ordinary shares. All nonemployee
directors receive an annual fee of $30,000, and the chairperson of the Audit Committee receives an additional $18,000 per year
and the chairperson of the Compensation Committee receives an additional $5,000 per year. Directors are entitled to be reimbursed
for their reasonable expenses incurred in attending meetings of the Board and committees of the Board. The following table sets
forth the compensation paid to each person who served as a member of our Board in 2017. Pat Chan, our Chief Executive Officer
and Chairman of the Board, did not receive any additional compensation for his service as a director, and his compensation is
detailed in the Summary Compensation Table and related disclosures.
Director
Compensation Table
The
table below shows the compensation received by each of our non-employee directors during 2017. Our non-employee directors do not
receive fringe or other benefits.
Name
|
|
Fees
earned or paid in cash
($)
|
|
|
Stock
awards
($)
|
|
|
Option
awards
($)
|
|
|
Non-equity incentive plan compensation
($)
|
|
|
Nonqualified deferred compensation earnings
($)
|
|
|
All other compensation
($)
|
|
|
Total
($)
|
|
Pat Sek Yuen Chan
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Honghui Deng
|
|
|
30,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
112,410
|
|
Yaqi Feng
|
|
|
30,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
112,410
|
|
Bill Huang
|
|
|
30,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
112,410
|
|
Jason Zexian Shen
|
|
|
35,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
117,410
|
|
Eric Tao
|
|
|
30,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
112,410
|
|
Joseph Wai Leung
Wong
|
|
|
48,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
130,410
|
|
Name
|
|
Grant Date
|
|
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
|
Option Exercise
Price
($)
|
|
|
Grant Date
Fair
Value of
Option
Awards
($)
|
|
Honghui Deng
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
Yaqi Feng
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
Bill Huang
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
Jason Zexian Shen
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
Eric Tao
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
Joseph Wai Leung Wong
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
The
values of the option awards represent grant-date fair values without regard to forfeitures.
2017
Equity Awards for Directors
Our
director compensation policy provides for annual grants of stock options to the nonemployee directors as follows:
|
●
|
annual grant of an option to purchase 30,000
ordinary shares, commencing on October 15, 2017;
|
|
●
|
options to vest 25% on the first anniversary
of the grant date, and 1/48th each of the next 36 months thereafter; and
|
|
●
|
exercise price equal to the closing price of
the ordinary shares as traded on Nasdaq on the day immediately before the grant date.
|
The
following table provides options held by our nonemployee directors as of December 31, 2017.
Name
|
|
Grant
date
|
|
Vesting
Start
date
|
|
Number of securities underlying unexercised options
vested (#)
|
|
|
Number of securities underlying unexercised options unvested (#)
|
|
|
Option exercise price
($)
|
|
|
Option Expiration date
|
Honghui Deng
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Yaqi Feng
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Bill Huang
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Jason Zexian Shen
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Eric Tao
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Joseph Wai Leung Wong
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Vote
Required and Recommendation of the Board
The
affirmative vote of the holders of a majority of the ordinary shares present in person or represented by proxy and entitled to
vote on the nominees will be required to approve each nominee.
Abstentions
will have the same effect as votes against this proposal and broker non-votes will have no effect on the outcome of this
proposal.
The
Board recommends a vote “FOR” each of the nominees.
PROPOSAL
2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The
Audit Committee of the Board has appointed E&Y as our independent registered public accounting firm to audit our financial
statements for the fiscal year ending December 31, 2018. E&Y has also served as our independent registered public accounting
firm for the fiscal years ended December 31, 2017 and 2016.
Shareholders
ratification of the selection of E&Y as our independent registered public accounting firm is required by our
Memorandum and Articles of Association. Should the shareholders fail to ratify the selection of E&Y as our independent
registered public accounting firm, the Audit Committee will reconsider whether to retain that firm for fiscal year 2018. In
making its recommendation to the Board that shareholders ratify the appointment of E&Y as our independent registered
public accounting firm for the fiscal year ending December 31, 2018, the Audit Committee considered whether E&Y’s
provision of non-audit services is compatible with maintaining the independence of our independent registered public
accounting firm.
Audit
Fees
The
following table sets forth the aggregate fees for audit and other services provided by E&Y, our independent registered public
accounting firm for the years ended December 31, 2016 and 2017:
|
|
2016
|
|
|
2017
|
|
Audit fees (1)
|
|
$
|
685,000
|
|
|
$
|
741,000
|
|
Tax service fee (2)
|
|
|
-
|
|
|
$
|
30,000
|
|
Total fees
|
|
$
|
685,000
|
|
|
$
|
771,000
|
|
(1)
|
The audit services relate to the audit of our
annual financial statements, the review of the financial statements included in our quarterly reports, statutory audits and
review of documents provided in connection with statutory or regulatory filings.
|
(2)
|
The tax service relates to a tax study regarding
the merger in August 2017.
|
In
accordance with its charter, the audit committee is required to pre-approve all audit and non-audit services to be performed by
the independent auditors and the related fees for such services other than prohibited non-auditing services as promulgated under
rules and regulations of the SEC (subject to the inadvertent de minimus exceptions set forth in the Sarbanes-Oxley Act of 2002
and the SEC rules). Subsequent to the merger in August 2017, all services performed by E&Y for our benefit were pre-approved
by the audit committee in accordance with its charter and all applicable laws, rules and regulations.
Auditor
Representatives at Annual Meeting
We
expect that representatives of E&Y will not be present at the Annual Meeting.
Vote
Required and Recommendation of the Board
The
affirmative vote of the holders of ordinary shares entitled to vote must exceed the votes cast against this proposal for the proposal
to be approved.
Abstentions
will have the same effect as votes against this proposal. In addition, this proposal is a “routine” matter on
which brokers and nominees can vote on behalf of their clients if clients do not furnish voting instructions, therefore,
broker non-votes are considered votes cast and will have an effect on the outcome of this proposal.
The
Board recommends that shareholders vote “FOR” ratification of the appointment of Ernst & Young Hua Ming LLP as
our independent registered public accounting firm for the fiscal year ending December 31, 2018 as described in this Proposal 2.
EXECUTIVE
COMPENSATION AND RELATED INFORMATION
Executive
Officers and Directors
Set
forth below is information regarding the Company's current directors and executive officers as of the date of this proxy statement.
The executive officers serve at the pleasure of the Board of Directors.
Name
|
|
Age
|
|
Position
|
|
Class
|
Board of Directors
|
|
|
|
|
|
|
Pat
Sek Yuen Chan
|
|
54
|
|
Founder,
Chairman of the Board, Chief Executive Officer and President
|
|
III
|
Honghui Deng*
|
|
49
|
|
Director
|
|
I
|
Yaqi Feng
|
|
35
|
|
Director
|
|
III
|
Bill Huang*
|
|
56
|
|
Director
|
|
I
|
Jason Zexian Shen
|
|
64
|
|
Director
|
|
II
|
Eric Tao
|
|
41
|
|
Director
|
|
III
|
Joseph Wai Leung
Wong
|
|
63
|
|
Director
|
|
II
|
|
|
|
|
|
|
|
Executive Officers
|
|
|
|
|
|
|
Bob Xiao Bo Li,
Ph.D.
|
|
56
|
|
Founder, Executive
Vice President of Corporate Affairs and China Sales
|
|
|
Anthony K. Chan
|
|
64
|
|
Chief Financial
Officer, Executive Vice President of Corporate Finance
|
|
|
Simon Sun
|
|
51
|
|
Executive Vice
President and Co-General Manager of Connected Solutions Business Unit
|
|
|
Hareesh Ramanna
|
|
57
|
|
Executive Vice
President and Co-General Manager of Connected Solutions Business Unit
|
|
|
George Thangadurai
|
|
55
|
|
Executive Vice
President and President of International Business
|
|
|
Gene Wuu, Ph.D.
|
|
63
|
|
Executive Vice
President and General Manager of MVNO Business Unit
|
|
|
*
Class I directors are not standing for re-election at this Annual Meeting.
There
are no family relationships between any of our directors or executive officers. There is no arrangement or understanding between
any of the directors or officers of the Company and any other person pursuant to which any director or officer was or is to be
selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management shareholders
will exercise their voting rights to continue to elect the current directors to the Company’s Board. There are no arrangements,
agreements or understandings between non-management directors that may directly or indirectly participate in or influence the
management of the Company’s affairs. There are no agreements or understandings for any officer or director to resign at
the request of another person, and none of the officers or directors are acting on behalf of, or will act at the direction of,
any other person.
The following is a brief description of the business experience during the past five years of our executive
officers and directors as of the date of this proxy statement who are not up for election at this Annual Meeting:
Pat
Sek Yuen Chan,
54, is the Chairman of our board of directors, as well as our Chief Executive Officer and President. He was
a founder and Chairman of the board of directors of Borqs International Holding Corp (“Borqs International”), and
since 2007 he served as Borqs International’s Chief Executive Officer and President. Mr. Chan has over 20 years of experience
in the mobile network communications sector. Prior to founding Borqs, Mr. Chan served as Senior Vice President and General Manager
of the infrastructure business unit of UTStarcom Inc., a telecommunications equipment company, from 2000 to 2007. Earlier, Mr.
Chan was an engineering manager in Motorola responsible for the development of the GPRS switching. Mr. Chan is an established
entrepreneur and has received many awards, including the “High-Caliber Talent from Overseas Award” from the PRC government,
and “2012 Beijing Entrepreneur of the Year” from Silicon Dragon. Mr. Chan received his bachelor’s degree in
computer science from the University of Toronto and his master’s degree in computer science from the University of British
Columbia. In considering Mr. Chan’s eligibility to serve as a director, the Board has considered Mr. Chan’s involvement
since the founding of the Company and his experience in the technology and telecommunication industries.
Yaqi
Feng,
35, served as one of our directors since July 2015, and was our Chief Operating Officer and Secretary from July 2015
until August 2018. Ms. Feng has been working as the Executive Director of the Global Business Department in Pacific Securities
Co., Ltd. since 2013, where she is responsible for Chinese companies’ overseas IPOs, cross border M&A transactions,
and global investment management. From 2012 to 2013, she worked as the Managing Director of Regeneration Capital Group LLC in
New York, where she was responsible for IPOs and listing projects for emerging market companies, business development, project
due diligence as well as transaction management. From 2010 to 2012, Ms. Feng worked as a VP for Griffin Financial Group, a mid-sized
investment bank; in this capacity she was responsible for public offerings, private placements, deal structuring, financial modeling
as well as institutional sales. She also served as a manager for Asian Legend Asset Management Inc. a private equity firm based
in China and New York that specialized in China related projects, from 2009 to 2010. Ms. Feng worked as an associate in the New
York office of the Jun He law firm from 2007 to 2008. Ms. Feng received an LL.M from Boston University School of Law and an LL.B
from the School of International Law, China University of Political Science and Law in Beijing, China, where she also earned a
B.A. in Business. In considering Ms. Feng’s eligibility to serve as a director, the Board has considered Ms. Feng’s
experience in cross-border investments.
Jason
Zexian Shen,
64, served as one of our directors since July 2015. Mr. Shen started his own business in 2012 to open Jason Z.
Shen CPA Firm, a local CPA accounting firm in the State of New York. From 2007 to 2012, Mr. Shen worked in the AIG Corporate Comptrollers
in New York as a senior accountant. He worked in Alliance Building Services from 2006 to 2007. He was the accounting manager in
Gandhi Engineering, Inc. from 1994 to 2001, and the accounting manager in Berger Lehman Associates, PC from 2001 to 2006. Mr.
Shen has worked as the accounting manager in the New China News Agency Hong Kong Office (Now Liaison Office of the Central People’s
Government in Hong Kong from 1982 to 1991. Mr. Shen graduated from Peking University with the Bachelor’s Degree in Economy
in 1982 and Master’s Degree in Accounting from Binghamton University in 1993. He is the Certified Public Accountant licensed
in the State of New York. In considering Mr. Shen’s eligibility to serve as a director, the Board has considered Mr. Shen’s
accounting and finance experience in the United States.
Eric
Tao, Ph.D.
, 41, is a founding member of Keytone Ventures and since 2008 a partner of this leading venture capital firm in
China focusing in technology investments. He has over 10 years of technology venture investment experience and five years of venture
operations experience. His active investments include Borqs, Garena, Kuyun Interactive, Zebra, Wisjoy, InnoSpark, LP Amina, Lattice
Power, China Eastern Clean Energy, Zhongte Logistics and Vega Interactive; while past investments included Greatwall Software,
AMEC, TechFaith (NASDAQ: CNTF) and InvenSense (NASDAQ: INVN). Previously Dr. Tao worked as a founding member of the KPCB China
Fund, covering mostly mobile internet and technology investments, and as an investment manager at Qualcomm Ventures, covering
strategic investments globally. Dr. Tao was the co-founder and served as Vice President of Business Development of Clean Coal
Energy in Silicon Valley. Dr. Tao received his B.S. degree from Tsinghua University, M.S. and Ph.D. degrees in engineering from
Stanford University. He holds three international patents and two U.S. patents. In considering Mr. Tao’s eligibility to
serve as a director, the Board has considered Mr. Tao’s expertise in computer software and technology investments.
Joseph
Wai Leung Wong
, 63, has served as one of our directors since August 2017, and was a member of the Borqs International board
of directors from 2012 to 2017. Mr. Wong has over 29 years of experience in cross border investments and business operations.
Mr. Wong was Executive Director of Credit Agricole (Suisse) Hong Kong from 2006 to 2012. From 1988 to 2006, Mr. Wong was a partner
in the Tax Department of Deloitte Touche Tohmatsu Hong Kong, serving high net worth clients on cross border investment tax planning,
and advising on initial public offerings in Hong Kong. Mr. Wong is a member of the Cordlife Group Limited board of directors,
where he is also Chairman of the Audit Committee and a member of the Remuneration Committee Mr. Wong received his Bachelor’s
degree from the University of Calgary in Alberta, Canada, and is a member of Hong Kong Independent Non-Executive Director Association.
In considering Mr. Wong’s eligibility to serve as a director, the Board has considered Mr. Wong’s accounting experience.
Bob
Li,
56, is a founder of Borqs and has served as its Executive Vice President, Corporate Affairs and China Sales since the
founding of the company in 2007. Dr. Li has over 20 years of experience in research and development and management in the wireless
communications, semiconductor and mobile internet industries. He was the Co-founder and served as Executive Vice President and
Chief Technology Officer of Cellon International, a handset design company, from Oct 1999 to June 2007. Dr. Li received his bachelor’s
degree from National University of Defense Technology, his master’s degree from University of Electronic Science and Technology
of China, both in electrical engineering, and his Ph.D. in electrical and computer engineering from MacMaster University.
Anthony
Chan,
64, is Borqs’s Chief Financial Officer and Executive Vice President, Corporate Finance and joined the company
in April 2015. Mr. Chan has over 30 years of experience in U.S. and China cross border investments and business operations. From
July 2013 until March 2015, Mr. Chan served as the President of Asia Sourcing for Portables Unlimited in New York, a distributor
of T-Mobile USA. From March 2009 until July 2013, he served as the CFO for Tianjin Tong Guang Digital Broadcasting Co. Ltd, a
mobile communications products company. For the 20 years prior to that, he was involved in multiple investment and technology
transfer projects between China, the U.S and Europe, in the areas of communication products, chemical fibers, textile machinery
and medical equipment. Mr. Chan received both his bachelor’s and MBA degrees from the University of California at Berkeley.
Simon
Sun,
51, is the Executive Vice President, Co-General Manager of Borqs’s Connected Solutions Business Unit and has served
the company since November 2013. Mr. Sun has over 20 years of experience in research and development and product engineering in
the mobile industry. He served as the Co-Founder and Chief Executive Officer of Nollec Wireless, Ltd., a mobile handset design
house, from July 2007 to October 2013. He was the VP of engineering for CEC Wireless, another mobile handset design house in China
from September 2006 to June 2007. Mr. Sun received his bachelor’s degree in Industrial Engineering from Tianjin University
of China.
Hareesh
Ramanna,
57, is our Executive Vice President, Co-General Manager of Connected Solutions Business Unit, Managing Director of
India Operations and Head of Software Development, and has served our company since July 2009. Mr. Ramanna has over 20 years of
experience in the mobile industry. Prior to joining us, he served as a Senior Director and Head of Mobile Devices Software in
Global Software Group, Motorola India Electronic Limited from May 1992 to November 2008. Mr. Ramanna received his bachelor’s
degree in Electronics and Communication from National Institute of Engineering in 1983, Post-Graduation Certification from Indian
Institute of Science and an advanced leadership Certification from McGill University in collaboration with Lancaster University
of UK and Indian Institute of Management in Bangalore.
George
Thangadurai,
55, is our Executive Vice President, President of International Business and has served our company since November
2014. Previously, Mr. Thangadurai worked for Intel more than two decades in various senior technical and management roles including
GM of Strategy & Product Management for the Mobile PC business and GM of Client Services business. He was part of the founding
team that established the Center for Development for Telematics (C-DOT) in India. Mr. Thangadurai received his MSEE in Computer
Engineering from the University of Rhode Island, USA, his B.E. degree in Electronics and Communication from Madurai University,
India and has 7 issued patents and 3 research publications.
Gene
Wuu,
63, is our Executive Vice President, General Manager of our MVNO Business Unit and has served our company since the beginning
of 2009 when he was our Vice President of Product Management. Prior to joining us, he served as a Senior Vice President and Chief
Technology Officer of UTStarcom, a telecommunications equipment company, from 2003 to 2009. He had overseen the product and business
development of UTStarcom core network during the growing period of the company. Before his tenure at UTStarcom, Dr. Wuu had worked
for Telcordia Technologies (formerly Bellcore, now Ericson) and the Bell system for 17 years focusing on Core network and OSS
products Dr. Wuu received his bachelor’s degree in electronics engineering from the National Taiwan Institute of Technology
in 1980 and his Ph.D. in computer science from the State University of New York at Stony Brook.
Compensation
Tables
Summary
Compensation Table
The
Company has opted to comply with the executive compensation disclosure rules applicable to emerging growth companies. The scaled disclosure rules require compensation disclosure for the Company’s principal executive officer and its two most highly
compensated executive officers other than the principal executive officer whose total compensation for 2017 exceeded $100,000.
Pat Chan is our principal executive officer. During 2017, the two most highly compensated executive officers other than Mr. Chan
whose total compensation exceeded $100,000 were Bob Li, EVP Corporate Affairs and China Sales, and Anthony Chan, Chief Financial
Officer. Pat Chan, Bob Li, and Anthony Chan are referred to in this proxy statement as our named executive officers.
The
following table provides information regarding the compensation awarded to, or earned by, the named executive officers for the
past two fiscal years.
Name and principal position
|
|
Fiscal
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock awards
($)
|
|
|
Option awards
($)
|
|
|
Non-equity incentive plan compensation ($)
|
|
|
Nonqualified deferred compensation earnings
($)
|
|
|
All other compensation ($)
|
|
|
Total
($)
|
|
Pat Sek Yuen Chan,
|
|
|
2017
|
|
|
|
369,793
|
|
|
|
70,345
|
|
|
|
-
|
|
|
|
813.092
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,253,230
|
|
Chief Executive Officer
|
|
|
2016
|
|
|
|
303,143
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
303,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bob Xiao Bo Li,
|
|
|
2017
|
|
|
|
259,400
|
|
|
|
1,202
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
260,642
|
|
EVP Corporate Affairs & China Sales
|
|
|
2016
|
|
|
|
252,486
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
252,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anthony K. Chan,
|
|
|
2017
|
|
|
|
218,000
|
|
|
|
35,844
|
|
|
|
-
|
|
|
|
536,581
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
790,425
|
|
Chief Financial Officer
|
|
|
2016
|
|
|
|
150,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
The
options and bonus were granted pursuant to agreement between the executives and the Company. The values of the option awards represent
grant-date fair values without regard to forfeitures.
Outstanding
Equity Awards at 2017 Year-End
The
following table provides information regarding each unexercised stock option held by the named executive officers as of December
31, 2017.
Name
|
|
Grant date
|
|
Vesting Start date
(1)
|
|
Number of securities underlying unexercised options vested
(#)
|
|
|
Number of securities underlying unexercised options unvested (#)
|
|
|
Options exercise
price
($)
(2)
|
|
|
Option Expiration date
|
Pat Sek Yuen Chan
|
|
10/24/2009
|
|
10/24/2009
|
|
|
47,234
|
|
|
|
-
|
|
|
$
|
2.230
|
|
|
12/3/2019
|
|
|
7/23/2011
|
|
7/23/2011
|
|
|
30,060
|
|
|
|
-
|
|
|
$
|
2.920
|
|
|
7/23/2021
|
|
|
5/26/2012
|
|
5/26/2012
|
|
|
1,719
|
|
|
|
-
|
|
|
$
|
2.920
|
|
|
5/26/2022
|
|
|
4/27/2013
|
|
4/27/2013
|
|
|
3,211
|
|
|
|
-
|
|
|
$
|
4.860
|
|
|
4/27/2023
|
|
|
5/30/2015
|
|
5/30/2015
|
|
|
1,281
|
|
|
|
702
|
|
|
$
|
4.860
|
|
|
5/30/2025
|
|
|
2/12/2017
|
|
1/1/2017
|
|
|
212,555
|
|
|
|
70,851
|
|
|
$
|
7.180
|
|
|
1/1/2027
|
Bob Xiao Bo Li
|
|
10/24/2009
|
|
10/24/2009
|
|
|
28,340
|
|
|
|
-
|
|
|
$
|
2.230
|
|
|
12/3/2019
|
|
|
7/23/2011
|
|
7/23/2011
|
|
|
30,239
|
|
|
|
-
|
|
|
$
|
2.920
|
|
|
7/23/2021
|
|
|
5/26/2012
|
|
5/26/2012
|
|
|
675
|
|
|
|
-
|
|
|
$
|
2.920
|
|
|
5/26/2022
|
|
|
4/27/2013
|
|
4/27/2013
|
|
|
1,818
|
|
|
|
-
|
|
|
$
|
4.860
|
|
|
4/27/2023
|
|
|
8/16/2014
|
|
5/24/2014
|
|
|
779
|
|
|
|
-
|
|
|
$
|
4.860
|
|
|
8/16/2024
|
|
|
5/30/2015
|
|
5/30/2015
|
|
|
503
|
|
|
|
276
|
|
|
$
|
4.860
|
|
|
5/30/2025
|
Anthony K. Chan
|
|
2/12/2017
|
|
1/1/2017
|
|
|
129,894
|
|
|
|
59,043
|
|
|
$
|
7.180
|
|
|
1/1/2027
|
(1)
|
25% of the options vest on the first anniversary
of the vesting start date and 1/48 of the options vest each month thereafter over the next three years.
|
(2)
|
Exercise price represents the exercise price
of the options granted, as determined by the Board, on the grant date. See the accompanying notes to the audited financial
statements — critical accounting policies and estimates, and stock-based compensation, for a discussion of the valuation
of the Company’s options and ordinary shares.
|
Borqs
Technologies, Inc. Equity Incentive Plan
In
connection with our acquisition of Borqs International by way of merger, we assumed the obligations under outstanding stock options
issued under the Borqs International 2007 Global Share Plan, as adjusted to give effect to the merger. Those outstanding options
to purchase shares of Borqs International were converted into options to purchase 2,825,273 of our ordinary shares, with exercise
prices ranging from $2.12 to $9.10 per share.
Effective
August 18, 2017, we adopted the Borqs Technologies, Inc. 2017 Equity Incentive Plan (“Equity Incentive Plan”), with
five million ordinary shares issuable pursuant to equity awards under the plan. The number of ordinary shares reserved for issuance
under the Equity Incentive Plan will increase automatically on January 1 of each of 2018 through 2027 by a number of shares that
is equal to 5% of the aggregate number of outstanding ordinary shares as of the immediately preceding December 31. Our Board may
reduce the size of this increase in any particular year. Outstanding awards under the 2007 Global Share Plan were assumed under
the Equity Incentive Plan as of our acquisition of Borqs International by way of merger on August 18, 2017. At December 31, 2017,
2,825,273 shares were issuable pursuant to options outstanding under the Equity Incentive Plan, with a weighted average exercise
price of $5.07 per share.
In
addition, the following shares will be available for grant and issuance under our Equity Incentive Plan:
|
●
|
shares subject to options or share appreciation
rights granted under our Equity Incentive Plan that cease to be subject to the option or stock appreciation right for any
reason other than exercise of the option or share appreciation right;
|
|
●
|
shares subject to awards granted under our Equity
Incentive Plan that are subsequently forfeited or repurchased by us at the original issue price;
|
|
●
|
shares subject to awards granted under our Equity
Incentive Plan that otherwise terminate without shares being issued;
|
|
●
|
shares surrendered, cancelled or exchanged for
cash or a different award (or combination thereof).
|
Shares
that otherwise become available for grant and issuance because of the provisions above will not include shares subject to awards
that initially became available due to our substitution of outstanding awards granted by another company in an acquisition of
that company or otherwise.
Eligibility.
The Equity Incentive Plan provides for the grant of incentive stock options to our employees and any parent and subsidiary
corporations’ employees and for the grant of nonqualified share options, restricted shares, restricted share units, share
appreciation rights, share bonuses and performance awards to our employees, directors and consultants and our parent and subsidiary
corporations employees and consultants. No more than 5,000,000 shares may be issued as incentive stock options under the Equity
Incentive Plan. In addition, no participant in the plan may receive awards for more than 2,000,000 shares in any calendar year,
except that new employees are eligible to be granted up to a maximum of award of 4,000,000 shares.
Administration.
The Equity Incentive Plan is administered by the Board or by our Compensation Committee; in this plan description we refer
to the Board or Compensation Committee as the plan administrator. The plan administrator determines the terms of all awards.
Types
of Awards.
The Equity Incentive Plan allows for the grant of options, restricted shares, restricted share units, share appreciation
rights, share bonuses and performance awards.
Award
Agreements.
All awards under the Equity Incentive Plan are evidenced by an award agreement which shall set forth the number
of shares subject to the award and the terms and conditions of the award, which shall be consistent with the Equity Incentive
Plan.
Term
of Awards.
The term of awards granted under the Equity Incentive Plan is ten years.
Vesting
Schedule and Price.
The plan administrator has the sole discretion in setting the vesting period and, if applicable, exercise
schedule of an award, determining that an award may not vest for a specified period after it is granted and accelerating the vesting
period of an award. The plan administrator determines the exercise or purchase price of each award, to the extent applicable.
Transferability.
Unless the plan administrator provides otherwise, the Equity Incentive Plan does not allow for the transfer of awards other
than by will or the laws of descent and distribution. Unless otherwise permitted by the plan administrator, options may be exercised
during the lifetime of the optionee only by the optionee or the optionee’s guardian or legal representative.
Changes
in Capitalization.
In the event there is a specified type of change in our capital structure without our receipt of consideration,
such as a share split, or if required by applicable law, appropriate adjustments will be made to the share maximums and exercise
prices, as applicable, of outstanding awards under the Equity Incentive Plan.
Change
in Control Transactions.
In the event of specified types of mergers or consolidations, a sale, lease, or other disposition
of all or substantially all of our assets or a corporate transaction, outstanding awards under our Equity Incentive Plan may be
assumed or replaced by any surviving or acquiring corporation; the surviving or acquiring corporation may substitute similar awards
for those outstanding under our Equity Incentive Plan; outstanding awards may be settled for the full value of such outstanding
award (whether or not then vested or exercisable) in cash, cash equivalents, or securities (or a combination thereof) of the successor
entity with payment deferred until the date or dates the award would have become exercisable or vested; or outstanding awards
may be terminated for no consideration. The plan administrator, may, on a discretionary basis, accelerate, in full or in part,
the vesting and exercisability of the awards.
Governing
Law and Compliance with Law.
The Equity Incentive Plan and awards granted under it are governed by and construed in accordance
with the laws of the British Virgin Islands. Shares will not be issued under an award unless the issuance is permitted by applicable
law.
Amendment
and Termination.
The Equity Incentive Plan terminates ten years from the date it was approved by our shareholders, unless
it is terminated earlier by our Board. Our Board may amend or terminate our Equity Incentive Plan at any time. Our Board generally
may amend the plan without shareholder approval unless required by applicable law.
Employment
Agreements and Other Arrangements with Named Executive Officers
Under
our employment agreement with Pat Sek Yuen Chan, Mr. Chan serves as our President and Chief Executive Officer at a base salary
of $303,143, In the event Mr. Chan’s employment is terminated upon the occurrence of a merger with another company that
has been in a loss position for three years or declared bankruptcy, dissolved or liquidated, or if changes in the law result in
the company or Mr. Chan unable to legally perform the contract, the Company will pay Mr. Chan an appropriate subsidy and compensation
pursuant to the terms of the arrangement and in accordance with the provisions of relevant Chinese laws and regulations. Mr. Chan
also agreed not to hold any appointment for any other entity that has a competitive relationship with the Company during, and
for one year following the termination of, his employment arrangement with us.
Under
our employment agreement with Anthony Chan, Mr. Chan serves as our Chief Financial Officer and receives monthly compensation in
the amount of $21,000 per month, subject to periodic review and adjustment. The term of Mr. Chan’s employment agreement
is two years unless both parties mutually agree to extend the term. We may terminate the agreement without any reason by giving
Mr. Chan not less than two months’ prior notice in writing or salary in lieu thereof. We may also terminate this agreement
without any notice period or termination payment under limited circumstances set forth in Mr. Chan’s employment agreement.
Under
our employment agreement with Bob Li, Mr. Li serves as Senior Vice President for Commercial Affairs at a base salary of $252,486,
subject to review and adjustment. The contract will be terminated upon expiration of the term, if it is terminated in the probationary
period, by mutual agreement or in the case of investigation of Mr. Chan for criminal liability. We may also voluntarily terminate
the agreement in certain circumstance, as described in the agreement. In the event Mr. Chan’s employment is terminated upon
the occurrence of a merger with another company, when the company has been in a loss position for three years, when the company
has declared bankruptcy, dissolution or liquidation, or if changes in the law result in the company or Mr. Chan unable to legally
perform the contract, the Company will pay Mr. Li an appropriate subsidy and compensation pursuant to the terms of the arrangement
and in accordance with the provisions of relevant Chinese laws and regulations.
Director
Compensation
During
2017, our nonemployee directors were entitled to receive cash compensation and an option to purchase ordinary shares. All nonemployee
directors receive an annual fee of $30,000, and the chairperson of the Audit Committee receives an additional $18,000 per year
and the chairperson of the Compensation Committee receives an additional $5,000 per year. Directors are entitled to be reimbursed
for their reasonable expenses incurred in attending meetings of the Board and committees of the Board. The following table sets
forth the compensation paid to each person who served as a member of our Board in 2017. Pat Chan, our Chief Executive Officer
and Chairman of the Board, did not receive any additional compensation for his service as a director, and his compensation is
detailed in the Summary Compensation Table and related disclosures.
Director
Compensation Table
The
table below shows the compensation received by each of our non-employee directors during 2017. Our non-employee directors do not
receive fringe or other benefits.
Name
|
|
Fees
earned or paid in cash
($)
|
|
|
Stock
awards
($)
|
|
|
Option
awards
($)
|
|
|
Non-equity incentive plan compensation
($)
|
|
|
Nonqualified deferred compensation earnings
($)
|
|
|
All other compensation
($)
|
|
|
Total
($)
|
|
Pat Sek Yuen Chan
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Honghui Deng
|
|
|
30,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
112,410
|
|
Yaqi Feng
|
|
|
30,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
112,410
|
|
Bill Huang
|
|
|
30,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
112,410
|
|
Jason Zexian Shen
|
|
|
35,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
117,410
|
|
Eric Tao
|
|
|
30,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
112,410
|
|
Joseph Wai Leung Wong
|
|
|
48,000
|
|
|
|
-
|
|
|
|
82,410
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
130,410
|
|
Name
|
|
Grant
Date
|
|
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
|
Option
Exercise
Price
($)
|
|
|
Grant
Date
Fair
Value of
Option
Awards
($)
|
|
Honghui Deng
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
Yaqi Feng
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
Bill Huang
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
Jason Zexian Shen
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
Eric Tao
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
Joseph Wai Leung Wong
|
|
11/18/2017
|
|
|
30,000
|
|
|
|
5.30
|
|
|
$
|
82,410
|
|
The
values of the option awards represent grant-date fair values without regard to forfeitures.
2017
Equity Awards for Directors
Our
director compensation policy provides for annual grants of stock options to the nonemployee directors as follows:
|
●
|
annual grant of an option to purchase 30,000
ordinary shares, commencing on October 15, 2017;
|
|
●
|
options to vest 25% on the first anniversary
of the grant date, and 1/48th each of the next 36 months thereafter; and
|
|
●
|
exercise price equal to the closing price of
the ordinary shares as traded on Nasdaq on the day immediately before the grant date.
|
The
following table provides options held by our nonemployee directors as of December 31, 2017.
Name
|
|
Grant
date
|
|
Vesting
Start
date
|
|
Number of securities underlying unexercised options vested
(#)
|
|
|
Number of securities underlying unexercised options unvested (#)
|
|
|
Option exercise price
($)
|
|
|
Option Expiration date
|
Honghui Deng
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Yaqi Feng
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Bill Huang
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Jason Zexian Shen
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Eric Tao
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Joseph Wai Leung Wong
|
|
11/18/2017
|
|
10/15/2017
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
5.30
|
|
|
10/15/2027
|
Compensation
Committee Interlocks and Insider Participation
As
of the date of this proxy statement, no officer or employee serves as a member of the Compensation Committee. None of our executive
officers serves as a member of the Board or Compensation Committee of any entity that has one or more executive officers serving
on our Board or Compensation Committee.
Limitation
of Liability and Indemnification of Directors and Officers
Our
memorandum and articles of association, the BVI Business Companies Act, (as amended), and the common law of the British Virgin
Islands allow us to indemnify our officers and directors from certain liabilities. Our memorandum and articles of association
provides that we may indemnify, hold harmless and exonerate against all direct and indirect costs, fees and expenses of any type
or nature whatsoever, any person who (a) is or was a party or is threatened to be made a party to any proceeding by reason of
the fact that such person is or was a director, officer, key employee, adviser of our company; or (b) is or was, at the request
of our company, serving as a director of, or in any other capacity is or was acting for, another Enterprise.
We
will only indemnify the individual in question if the relevant indemnitee acted honestly and in good faith with a view to the
best interests of our company and, in the case of criminal proceedings, the indemnitee had no reasonable cause to believe that
his conduct was unlawful. The decision of our directors as to whether an indemnitee acted honestly and in good faith and with
a view to the best interests of our company and as to whether such indemnitee had no reasonable cause to believe that his conduct
was unlawful is, in the absence of fraud, sufficient for the purposes of our charter, unless a question of law is involved.
The
termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by
itself, create a presumption that the relevant indemnitee did not act honestly and in good faith and with a view to the best interests
of our company or that such indemnitee had reasonable cause to believe that his conduct was unlawful.
We
may purchase and maintain insurance, purchase or furnish similar protection or make other arrangements including, but not limited
to, providing a trust fund, letter of credit, or surety bond in relation to any indemnitee or who at our request is or was serving
as a Director, officer or liquidator of, or in any other capacity is or was acting for, another Enterprise, against any liability
asserted against the person and incurred by him in that capacity, whether or not we have or would have had the power to indemnify
him against the liability as provided in our memorandum and articles of association.
We
have insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and officers
against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or officer, including
claims relating to public securities matters, and to us with respect to payments that may be made by us to these officers and
directors pursuant to our indemnification obligations or otherwise as a matter of law.
We
have entered into indemnification agreements with each of our directors and executive officers that may be broader than the specific
indemnification provisions contained in the BVI Companies Act, 2004 or our charter. These indemnification agreements require us,
among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status
or service. These indemnification agreements also require us to advance all expenses incurred by the directors and executive officers
in investigating or defending any such action, suit or proceeding. We believe that these agreements are necessary to attract and
retain qualified individuals to serve as directors and executive officers.
At
present, we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers,
employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened
litigation that may result in claims for indemnification.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table presents information as to the beneficial ownership of our ordinary shares as of October 26, 2018, by:
|
●
|
each shareholder known by us to be the beneficial
owner of more than 5% of our ordinary shares;
|
|
●
|
each of our named executive officers; and
|
|
●
|
all of our directors and executive officers
as a group.
|
Beneficial
ownership is determined in accordance with the rules of the Securities and Exchange Commission and thus represents voting or investment
power with respect to our securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the
table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property
laws where applicable. Ordinary shares subject to options that are currently exercisable or exercisable within 60 days of October
26, 2018 are deemed to be outstanding and to be beneficially owned by the person holding the options for the purpose of computing
the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership
of any other person.
Percentage
ownership of our ordinary shares is based on 31,307,522 ordinary shares outstanding on October 26, 2018. Unless otherwise indicated,
the address of each of the individuals and entities named below is c/o Borqs Technologies, Inc., Building B23-A, Universal Business
Park No. 10, Jiuxianqiao Road, Chaoyang District, Beijing, 100015 China.
|
|
Shares Beneficially
Owned
|
|
|
|
Number of Shares
|
|
|
%
|
|
Name and Address of Beneficial Owners
(1)
|
|
|
|
|
|
|
5% Holders
|
|
|
|
|
|
|
Zhengqi International Holding Limited
(11)
|
|
|
3,431,074
|
|
|
|
11.0
|
|
Intel Capital Corporation
(5)
|
|
|
4,016,696
|
|
|
|
12.8
|
|
Norwest Venture Partners
(6)
|
|
|
3,533,482
|
|
|
|
11.3
|
|
Asset Horizon International Limited
(2)
|
|
|
3,470,821
|
|
|
|
11.1
|
|
Keytone Ventures LP
(3)
|
|
|
3,198,861
|
|
|
|
10.2
|
|
GSR Entities
(4)
|
|
|
2,747,607
|
|
|
|
8.8
|
|
|
|
|
|
|
|
|
|
|
Directors and Executive Officers
|
|
|
|
|
|
|
|
|
Pat Sek Yuen Chan
(7)(10)
|
|
|
1,030,178
|
|
|
|
3.3
|
|
Honghui Deng
(12)
|
|
|
38,750
|
|
|
|
*
|
|
Yaqi Feng
(19)
|
|
|
68,750
|
|
|
|
*
|
|
Bill Huang
(20)
|
|
|
8,750
|
|
|
|
*
|
|
Jason Zexian Shen
(12)
|
|
|
38,750
|
|
|
|
*
|
|
Joseph Wai Leung Wong
(20)
|
|
|
8,750
|
|
|
|
*
|
|
Bob Li, Ph.D.
(8)(10)
|
|
|
406,207
|
|
|
|
1.3
|
|
Anthony K. Chan
(9)(10)
|
|
|
189,523
|
|
|
|
*
|
|
Eric Tao
(18)
|
|
|
8,750
|
|
|
|
*
|
|
Simon Sun
(13)
|
|
|
34,150
|
|
|
|
*
|
|
Hareesh Ramanna
(14) (10)
|
|
|
214,547
|
|
|
|
*
|
|
George Thangadurai
(15)
|
|
|
139,734
|
|
|
|
*
|
|
Gene Wuu, Ph.D.
(16) (10)
|
|
|
98,968
|
|
|
|
*
|
|
All directors and officers as a group (13 persons)
(10)
|
|
|
2,285,807
|
|
|
|
7.2
|
|
(1)
|
Unless otherwise indicated, the business address of each of the individuals is Building B23-A, Universal Business Park, No.10 Jiuxianqiao Road, Chaoyang District, Beijing 100015, China.
|
(2)
|
Fung Bik Wah is the sole director of Asset Horizon International Limited and is deemed as to have voting and dispositive control over shares held by of record by Asset Horizon International Limited. The business address of Asset Horizon International Limited is Unit C, 8/F, Jonsim Place, 228 Queen’s Road East, Hong Kong.
|
(3)
|
The general partner of Keytone Ventures, L.P. is Keytone Capital Partners, L.P. (“Keytone Partners”), and Keytone Partners and Keytone Investment Group, Ltd. (“Keytone Ltd”), the general partner of Keytone Partners, may be deemed to have sole voting power, and Joe Zhou, the sole member and director of Keytone Ltd, may be deemed to have sole voting power with respect to such shares and disclaims beneficial ownership of such shares except to the extent of such individual’s proportionate pecuniary interest therein. The address of Keytone Ventures, L.P. is P.O. Box 309, Ugland House, Grand Cayman, KY-1104, Cayman Islands.
|
(4)
|
Includes 2,451,709 ordinary shares issued to GSR Ventures II, L.P., 147,102 ordinary shares issued to GSR Associates II, L.P. and 2,842 ordinary shares issued to Banean Holdings Ltd. GSR Ventures II, L.P., GSR Associates II, L.P. and Banean Holdings Ltd. are collectively referred to as GSR Entities. The general partner of each of GSR Entities is GSR Partners II, L.P., whose general partner is GSR Partners II, Ltd., a company incorporated in the Cayman Islands, which is owned by Richard Lim, James Ding, Ryann Yap, Alexander Pan and Kevin Fong. Each of these individuals exercise shares voting and investment power over the shares held of record by GSR Ventures II, L.P. and GSR Associates II, L.P. and disclaims beneficial ownership of such shares except to the extent of such individual’s proportionate pecuniary interest therein. The business address of GSR Entities is Floor 4, Willow House, Cricket Square, Grand Cayman KY1-9010, Cayman Islands.
|
(5)
|
Intel Corporation, a publicly-listed corporation, is the parent company of Intel Capital Corporation and is deemed as to have voting and dispositive control over shares held by Intel Capital Corporation. Wendell Brooks, Robert Swan and Susie Giordano may be deemed to share voting power and investment power with respect to the shares held by Intel Corporation and Intel Capital Corporation. Each individual listed herein disclaims beneficial ownership with respect to all such shares except to the extent of his or her pecuniary interest therein. The business address of Intel Corporation and Intel Capital Corporation is 2200 Mission College Blvd., M/S RNB 6-59, Santa Clara, CA 95054.
|
(6)
|
The general partner of Norwest Venture Partners X, LP is Genesis VC Partners X, LLC. The managing member of Genesis VC Partners X, LLC is NVP Associates, LLC and Promod Haque, Jeffrey Crowe and Matthew Howard are the Co-CEOs of NVP Associates, LLC. Each of these individuals exercises shared voting and investment power over the shares held of record by Norwest Venture Partners X, LP and disclaims beneficial ownership of such shares except to the extent of such individual’s proportionate pecuniary interest therein. The business address of Norwest Venture Partners X, LP is 525 University Avenue, # 800, Palo Alto, CA 94301.
|
(7)
|
Includes 726,716 ordinary shares and 303,462 options that are or will be vested within 60 days from October 26, 2018, out of a total of 350,903 ordinary shares subject to options.
|
(8)
|
Includes 354,842 ordinary shares and 51,365 options that are or will be vested within 60 days from October 26, 2018, out of a total of 51,446 ordinary shares subject to options.
|
(9)
|
Includes 12,395 ordinary shares and 177,128 options that are or will be vested within 60 days from October 26, 2018, out of a total of 188,937 ordinary shares subject to options.
|
(10)
|
Includes such shareholder’s pro rata portion of the 1,278,776 ordinary shares that were held in escrow and returned on August 3, 2018 to the Borqs shareholders immediately prior to the business combination on August 18, 2017.
|
(11)
|
Includes 966,136 shares subject to repurchase. Zhengqi International Holding Limited, the Company’s former sponsor (“Zhengqi”), is a wholly-owned indirect subsidiary of Pacific Securities Capital Management Co. Ltd., a company incorporated in the People’s Republic of China, which, in turn, is a wholly owned subsidiary of Pacific Securities Co. Ltd., a company incorporated in the People’s Republic of China (“Pacific Securities”). Jian Tu serves as a director and as Chairman of the Strategic Planning Committee of Pacific Securities, and Guoxiong Luo serves as Assistant Chairman and the Head of Global Business Department of Pacific Securities.
|
(12)
|
Includes 30,000 ordinary shares and 8,750 options that are or will be vested within 60 days from October 26, 2018, out of a total of 30,000 ordinary shares subject to options.
|
(13)
|
Including 34,150 options that are or will be
vested within 60 days from October 26, 2018, out of a total of 34,716 ordinary shares subject to options.
|
(14)
|
Including 41,319 ordinary shares and 173,228
options that are or will be vested within 60 days from October 26, 2018, out of a total of 214,147 ordinary shares subject
to options.
|
(15)
|
Including 139,734 options that are or will be
vested within 60 days from October 26, 2018, out of a total of 141,702 ordinary shares subject to options.
|
(16)
|
Including 24,791 ordinary shares and 74,177
options that are or will be vested within 60 days from October 26, 2018, out of a total of 75,264 ordinary shares subject
to options.
|
(17)
|
Includes 60,000 ordinary shares and 8,750 options
that are or will be vested within 60 days from October 26, 2018, out of a total of 30,000 ordinary shares subject to options.
|
(18)
|
Includes 8,750 options that are or will be vested
within 60 days from October 26, 2018, out of a total of 30,000 ordinary shares subject to options.
|
Securities
Authorized for Issuance Under Equity Compensation Plans
The
following table summarizes information about ordinary shares that may be issued upon the exercise of options, warrants and rights
under all of our equity compensation plans as of October 26, 2018.
Plan Category
|
|
Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options,
Warrants
and Rights
|
|
|
Weighted-Average
Exercise Price of
Outstanding
Options,
Warrants
and Rights
|
|
|
Number of Securities Remaining
Available for Future Issuance
Under Equity Compensation
Plans (Excluding Securities
Reflected in the First Column)
|
|
Equity compensation plans approved by shareholders (1)
|
|
|
2,574,384
|
|
|
$
|
5.065
|
|
|
|
3,965,847
|
|
Equity compensation plans not approved by shareholders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
2,574,384
|
|
|
$
|
5.065
|
|
|
|
3,965,847
|
|
(1)
|
The number of ordinary shares reserved for issuance
under the Equity Incentive Plan will increase automatically on January 1 of each of 2018 through 2027 by a number of shares
that is equal to 5% of the aggregate number of outstanding ordinary shares as of the immediately preceding December 31.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Policies
and Procedures for the Review and Approval of Related-Person Transactions
Our
Board adopted a written related person transactions policy that sets forth the policies and procedures for the review and approval
or ratification of related person transactions. Our policy requires that a “related person” (as defined in paragraph
(a) of Item 404 of Regulation S-K) must promptly disclose to our general counsel any “related person transaction”
(defined as any transaction that is reportable by us under Item 404(a) of Regulation S-K in which we are or will be a participant
and the amount involved exceeds $120,000 and in which any related person has or will have a direct or indirect material interest)
and all material facts with respect thereto. The general counsel will promptly communicate such information to our Audit Committee
or another independent body of our Board. No related person transaction will be entered into without the approval or ratification
of our Audit Committee or another independent body of our Board. It is our policy that directors interested in a related person
transaction will recuse themselves from any such vote. Our policy does not specify the standards to be applied by our Audit Committee
or another independent body of our Board in determining whether or not to approve or ratify a related person transaction, although
such determinations will be made in accordance with BVI law.
Related-Person
Transactions
Intel
and Qualcomm
In
the last three years, our Connected Solutions BU has worked closely with chipset partners, including Intel and Qualcomm, to develop
new connected devices and commercially launch Android-based devices in 11 countries, and as of June 30, 2018, more than 10 million
mobile devices sold worldwide have BorqsWare software platform solutions embedded. Intel and Qualcomm are, or previously were,
shareholders of the Company in the last three years, and we developed the reference Android software platform and hardware platform
for their phones and tablets. We provided software services and hardware to Intel in 2015 and 2016. See “Note 17 - Related
Party Transactions” to our financial statements included in our Annual Report on Form 10-K for the fiscal year ended December
31, 2017, a copy of which will be disseminated to our shareholders on or about November 6, 2018 in connection with this Annual
Meeting.
Repurchase
of Shares from Zhengqi
On
January 10, 2018, we entered into a stock repurchase agreement (“Stock Repurchase Agreement”) with Zhengqi, pursuant
to which we agreed to repurchase 966,136 of our ordinary shares that were originally issued and sold to Zhengqi on August 18,
2017, at an aggregate purchase price of approximately $10 million, or $10.40 per share. In addition, Zhengqi forfeited all of
its rights to 1,278,776 shares held in escrow and which shares would instead be treated as part of the merger consideration shares
under the Merger Agreement (as defined below) pursuant to which the Company acquired Borqs International. The Stock Repurchase
Agreement provides that those shares will be treated in the following manner: transfer 51,151 shares (4% of the total) into the
indemnity escrow account; and deliver 1,227,625 shares to the former Borqs International shareholders based on their respective
proportionate interests in the merger consideration (See “Pacific Related Person Transactions”). The Company is working
with Zhengqi to satisfy certain conditions and make necessary arrangements before completing the repurchase. As of the date of
this proxy statement, the 1,278,776 escrow shares were forfeited and released from escrow and the Company had obtained the consent
of its existing lenders with respect to the transaction. The return and cancellation of the 966,136 shares remain in process.
We anticipate closing the transaction in 2018. The funds used in the repurchase were the same amount of funds provided by Zhengqi
when the shares were sold to Zhengqi on August 18, 2017 under the Backstop and Subscription Agreement between the Company, Zhengqi
and EarlyBirdCapital, Inc. (“EBC”).
Pacific
Related Person Transactions
In
this section, reference to “Pacific” means “Pacific Special Acquisition Corp.,” the public company whose
securities were traded on The Nasdaq Stock Market prior to our acquisition of Borqs International by way of merger in August 2017.
In
July 2015, Pacific issued an aggregate of 1,437,500 ordinary shares (“founder shares”) to its initial shareholders
for an aggregate purchase price of $25,000 in cash, or approximately $0.017 per share. On or about August 3, 2015, Zhengqi transferred
an aggregate of 410,000 ordinary shares to the members of Pacific’s board of directors (other than Mr. Shen, who purchased
30,000 ordinary shares directly from Pacific) and Pacific’s Chief Executive Officer and Chief Operating Officer. All of
the founder shares were placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent, at the time of
Pacific’s initial public offering (“IPO”).
Pacific’s
initial shareholders agreed not to transfer, assign or sell any of their founder shares (except to certain permitted transferees)
until, (i) with respect to 50% of the founder shares, the earlier of (i) August 18, 2018 or (ii) the date on which the closing
price of our ordinary shares equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations
and recapitalizations) for any 20 trading days within any 30-trading day period commencing after August 18, 2017, and (ii) with
respect to the remaining 50% of the founder shares, upon August 18, 2018. one year after the date of the consummation of our initial
business combination, or earlier, in either case, the transfer restrictions may be lifted earlier upon our consummation of, subsequent
to our initial business combination, we consummated a subsequent liquidation, merger, stock exchange or other similar transaction
that which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other
property. As of the date of this proxy statement, such lock-up period has expired.
In
a private placement that closed simultaneously with the closing of Pacific’s IPO, including the closing of the over-allotment
option, Zhengqi purchased an aggregate of 497,671 units at a price of $10.40 per share.
Until
August 18, 2017, Pacific’s Chairman made available to Pacific, through one of his affiliates, office space, utilities and
secretarial and administrative services, as Pacific required from time to time. Pacific agreed to pay an affiliate of the Chairman
$10,000 per month for these services. Pacific believed, based on rents and fees for similar services in the Shanghai area, that
the fee charged by Pacific’s Chairman was at least as favorable as Pacific could have obtained from an unaffiliated person.
Pacific
paid each of Pacific’s independent directors an annual retainer of $30,000 (to be prorated for a partial term), payable
in arrears commencing on October 20, 2016 and ending on August 18, 2017. Zhengqi paid Mr. Boris, one of Pacific’s directors,
a $50,000 consulting fee as compensation for advisory services provided by Mr. Boris to Zhengqi prior to Pacific’s IPO in
connection with selecting potential underwriters, attorneys, accountants and other necessary professionals for such offering.
Additionally, on January 10, 2017, Pacific entered into an agreement (the “Director’s Agreement”) to pay Mr.
Boris certain additional fees to act a special director to Pacific’s board of directors in Pacific’s efforts in closing
our acquisition of Borqs International by way of merger. Such agreement became effective December 23, 2016 and continued until
August 18, 2017. The Company paid Mr. Boris a cash fee of $50,000. In addition, as of December 23, 2016, Zhengqi sold Mr. Boris
80,000 ordinary shares at a purchase price of $0.017 per share provided that a portion of such shares were subject to forfeiture
and were to be transferred to Mr. Boris following the consummation of our acquisition of Borqs International by way of merger.
Prior
to Pacific’s IPO, Zhengqi advanced Pacific an aggregate of $90,917 and loaned Pacific $300,000 to cover expenses related
to that offering. This advance and loan were repaid from the proceeds of Pacific’s IPO not placed in the trust account.
On
November 9, 2016, Zhengqi loaned Pacific $500,000, to be used for expenses relating to investigating and selecting a target business
and other working capital requirements. The convertible promissory note issued in connection therewith, as amended on February
9, 2017, was non-interest bearing, due and paid on August 18, 2017. The convertible promissory note was convertible, in whole
or in part, at the election of Zhengqi, upon the consummation of an initial business combination, into units at a price of $10.00
per unit. The promissory note was repaid in full in cash on August 18, 2017.
Members
of Pacific’s management advanced to Pacific an aggregate of $229,061 to cover expenses related to identifying targets for
an initial business combination. The advances were non-interest bearing, unsecured, due and repaid on August 18, 2017.
In
connection with Pacific’s April 18, 2017 meeting of shareholders Zhengqi loaned an aggregate of $612,000 to Pacific ($0.03
for each public share not redeemed for each month between April 20, 2017 until August 21, 2017). As a result, the pro rata portion
of the funds available in the trust account for ordinary shares that were not redeemed increased from approximately $10.40 per
share to approximately $10.52 per share. Zhengqi’s loan was repaid in full on August 18, 2017.
Pursuant
to the terms of the Merger Agreement, as amended on May 10, 2017 and June 29, 2017 (the “Merger Agreement”), and in
consideration of entering into the Backstop and Subscription Agreement described below, Zhengqi and its assignees, including EBC,
were entitled to receive 2,352,285 ordinary shares if Company performance targets were not achieved by June 30, 2018 (the “Escrowed
Shares”); if those targets were achieved, those shares (to the extent earned) would be delivered to the former shareholders
of Borqs International. These Escrowed Shares were issued on August 18, 2017 in the name of Zhengqi and deposited in escrow pursuant
to an escrow agreement (“Escrow Agreement”) with the Company’s transfer agent, Continental Stock Transfer &
Trust Company, as escrow agent (the “Escrow Agent”), with Zhengqi and EBC entitled to all voting rights and dividend
rights (other than equity securities paid as dividends). Any portion of these shares that were earned by the former shareholders
of Borqs International would be forfeited by Zhengqi and the Company would issue new equivalent shares to the former shareholders
of Borqs International, with four percent of these shares deposited in escrow to support indemnification obligations under the
Merger Agreement. In connection with our acquisition of Borqs International by way of merger, we amended our charter amended to
require, for future acquisitions by the Company prior to September 30, 2018 having a value in excess of $60 million, the approval
of at least two-thirds of the members of our then-serving board of directors, to grant Zhengqi information rights relating to
such acquisitions, and, if requested by Zhengqi, to provide a fairness opinion in respect of such acquisitions.
On
May 11, 2017, Pacific and Zhengqi entered into a Backstop and Subscription Agreement, pursuant to which Zhengqi agreed to purchase
up to $24.0 million of our ordinary shares through (i) open market or privately negotiated transactions with third parties, (ii)
a private placement at a price of $10.40 per share with consummation to occur concurrently with that of our acquisition of Borqs
International by way of merger or (iii) a combination thereof, in order to ensure that there was at least $24.0 million in the
trust account together with proceeds from any private placement to be conducted prior to the closing of our acquisition of Borqs
International by way of merger. Zhengqi was entitled, at its sole election, to purchase additional ordinary shares in excess of
such $24.0 million requirement, up to a total of $24.0 million purchased in total in connection with the Backstop and Subscription
Agreement. On August 16, 2017, $750,000 of the obligations of Zhengqi to purchase Pacific ordinary shares in the private placement
under the Backstop and Subscription Agreement were assigned to EBC. In connection with our merger with Borqs International and
as consideration for the Backstop and Subscription Agreement, Pacific sold 1,038,251 ordinary shares for an aggregate consideration
of approximately $10.8 million and we plan to repurchase 966,136 of these ordinary shares, as described under “— Repurchase
of Shares from Zhengqi.”
In
connection with our repurchase of 966,136 of our ordinary shares from Zhengqi, as of the date of this proxy statement, Zhengqi
has forfeited 1,278,776 of the Escrowed Shares, which shares were distributed in accordance with the Stock Repurchase Agreement
and Escrow Agreement.
Additionally,
as the Company did not expect to have achieved certain performance targets by June 30, 2018 as required by the Merger Agreement,
the parties agreed to release the remaining Escrowed Shares without undertaking the verification procedures outlined in the Merger
Agreement and Escrow Agreement. Accordingly, as of August 3, 2018, the Escrow Agent delivered 1,073,059 of the remaining Escrowed
Shares from the escrow account to Zhengqi and EBC.
Pursuant
to a registration rights agreement entered into on October 14, 2015, Pacific’s initial shareholders and EBC, and their permitted
transferees, can demand that we register the offer and sale of ordinary shares that they acquired on or prior to our initial public
offering. The holders of the majority of those founder shares are entitled to demand that we register these ordinary shares at
any time commencing May 18, 2018. The holders of the private units (or underlying securities) are entitled to demand that the
Company register these securities at any time after August 18, 2017. In addition, those holders have “piggy-back”
registration rights on registration statements filed after August 18, 2017. At the closing of our acquisition of Borqs International
by way of merger, the Company, Zhengqi, EBC and certain other investors amended and restated the registration rights agreement
to include similar registration rights with respect to ordinary shares issued as merger consideration in that merger, and the
ordinary shares acquired by Zhengqi and EBC in connection with the Backstop and Subscription Agreement.
Pursuant
to a registration rights agreement entered into on August 18, 2017 in connection with our merger with Borqs International, the
former holders of Borqs International shares and warrants, and their permitted transferees, can demand that we register the offer
and sale of ordinary shares that they acquired on or prior to the merger, subject to certain transfer restrictions in the lock-up
agreement and escrow arrangements entered into in connection with the merger. After May 18, 2018, the holders of the majority
of those shares are entitled to demand and “piggy-back” registration rights, subject to certain exceptions and customary
write-backs, provided that in all cases, we were not obligated to effect any such registration until August 18, 2018.
Independence
of the Board of Directors
The
independence of the members of our board of directors and committees is discussed in the sections above entitled “
Independence
of the Board of Directors
” and “
Committees of the Board of Directors
.”
REQUIREMENTS
FOR ADVANCE NOTIFICATION OF NOMINATIONS
AND
SHAREHOLDER PROPOSALS
Shareholder
proposals for director nominations and for other matters submitted pursuant to Rule 14a-8 promulgated under the Exchange Act and
our Memorandum and Articles of Association for inclusion in our Proxy Statement and form of proxy for our next Annual Meeting
must have been received by us no later than August 20, 2019 (assuming we have our next Annual Meeting on December 19, 2019), and
must comply with the requirements of the proxy rules promulgated by the SEC. We presently intend to schedule our next annual meeting
in December 2019, subject to change without further announcement except as required by proxy rules. Shareholder proposals should
be addressed to our corporate Secretary at Building B23-A, Universal Business Park, No. 10 Jiuxianqiao Road, Chaoyang District,
Beijing 10015, China.
Recommendations
from shareholders which are received after the applicable deadline likely will not be considered timely for consideration by our
Nominating and Corporate Governance Committee for next year’s annual meeting.
OTHER
MATTERS
The
Board does not intend to bring any other matters before the Annual Meeting and has no reason to believe any other matters will
be presented. If other matters properly do come before the Annual Meeting, however, it is the intention of the persons named as
proxy agents in the enclosed proxy card to vote on such matters as recommended by the Board, of if no recommendation is given,
in their own discretion.
The
Company will send instructions to shareholders entitled to notice of the Annual Meeting regarding how to access this proxy statement
and the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The Annual Report includes the financial statements
and management’s discussion and analysis of financial condition and results of operations. The costs of preparing, assembling,
mailing and soliciting the proxies will be borne by us. Proxies may be solicited, without extra compensation, by our officers
and employees by mail, telephone, facsimile, personal interviews and other methods of communication.
If
you and other residents at your mailing address own shares in street name, your broker or bank may have sent you a notice that
your household will receive only one copy of proxy materials for each company in which you hold shares through that broker or
bank. This practice of sending only one copy of proxy materials is known as householding. If you did not respond that you did
not want to participate in householding, you were deemed to have consented to the process. If the foregoing procedures apply to
you, your broker has sent one copy of our proxy statement to your address. If you want to receive separate copies of the proxy
materials in the future, or you are receiving multiple copies and would like to receive only one copy per household, you should
contact your stockbroker, bank or other nominee record holder, or you may contact us at the address or telephone number below.
In any event, if you did not receive an individual copy of this proxy statement, we will send a copy to you if you address your
written request to, or call, Anthony K. Chan, Chief Financial Officer of Borqs Technologies, Inc., Building B23-A, Universal Business
Park, No. 10 Jiuxianqiao Road, Chaoyang District, Beijing 10015, China, telephone number (86) 10-5975-6336.
Copies
of the documents referred to above that appear on our website are also available upon request by any shareholder addressed to
our corporate Secretary, Borqs Technologies, Inc., Building B23-A, Universal Business Park, No. 10 Jiuxianqiao Road, Chaoyang
District, Beijing 10015, China.
BORQS TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS – DECEMBER
18, 2018 AT 10:00 AM (BEIJING TIME)
|
|
CONTROL ID:
|
|
|
REQUEST ID:
|
|
|
|
|
|
|
The undersigned hereby appoint(s) each of Pat Chan and
Anthony Chan with the power of substitution and resubstitution to vote any and all shares of capital stock of Borqs
Technologies, Inc. (the "Company") which the undersigned would be entitled to vote as fully as the
undersigned could do if personally present at the Annual Meeting of the Company, to be held on December 18, 2018, at
10:00 A.M. Beijing Time, and at any adjournments thereof at Building B23-A, Universal Business Park, No. 10
Jiuxianqiao Road, Chaoyang District, Beijing 100015, China, hereby revoking any prior proxies to vote said stock,
upon the following items more fully described in the notice of any proxy statement for the Annual Meeting (receipt of
which is hereby acknowledged):
This proxy, when properly executed, will be voted in the
manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors
recommendations.
|
|
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
|
|
|
VOTING INSTRUCTIONS
|
If you vote by phone, fax or internet, please DO NOT mail your proxy card.
|
|
|
MAIL:
|
Please mark, sign, date, and return this Proxy Card promptly using the enclosed envelope.
|
|
INTERNET:
|
https://www.cstproxy.com/borqs/2018
|
|
PHONE:
|
866-894-0536
|
|
|
ANNUAL MEETING OF THE SHAREHOLDERS OF
BORQS TECHNOLOGIES, INC.
|
PLEASE
COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE:
☒
|
|
|
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
|
|
|
|
|
|
Proposal 1
|
|
|
FOR
|
|
WITHHELD
|
|
|
|
|
|
|
Election of Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence Chow
|
|
☐
|
|
☐
|
|
|
|
CONTROL ID:
|
|
|
Ji Li
|
|
☐
|
|
☐
|
|
|
|
REQUEST ID:
|
|
Proposal 2
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
To ratify the appointment of Ernst and Young Hua Ming LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARK “X” HERE IF YOU PLAN TO ATTEND
THE MEETING: ☐
|
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE; UNLESS OTHERWISE
INDICATED, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES ON PROPOSAL NUMBER 1 AND FOR APPROVAL ON PROPOSAL NUMBER 2.
In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
Please mark, sign, date and return this Proxy promptly using
the accompanying postage pre-paid envelope. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CELLULAR BIOMEDICINE
GROUP, INC.
|
|
MARK HERE FOR ADDRESS CHANGE ☐ New
Address (if applicable):
____________________________
____________________________
____________________________
IMPORTANT:
Please sign exactly as your name or
names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney,
trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
Dated: ________________________, 2018
|
|
|
|
(Print Name of Shareholder and/or Joint Tenant)
|
|
(Signature of Shareholder)
|
|
(Second Signature if held jointly)
|
Borqs Technologies (NASDAQ:BRQS)
Historical Stock Chart
From Aug 2024 to Sep 2024
Borqs Technologies (NASDAQ:BRQS)
Historical Stock Chart
From Sep 2023 to Sep 2024