SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
PACIFIC MAGTRON INTERNATIONAL CORP.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PACIFIC MAGTRON INTERNATIONAL CORP.
1600 California Circle
Milpitas, CA 95035
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 30, 2000
The 2000 Annual Meeting of Shareholders of Pacific Magtron International
Corp. will be held at the offices of Pacific Magtron at 1600 California Circle,
Milpitas, California 95035 on Friday, June 30, 2000, at 10:00 a.m., Pacific
Time.
MATTERS TO BE VOTED ON:
1. Election of six directors; and
2. Ratification of the selection of BDO Seidman, LLP as the independent
public accountants for the Company's fiscal year 2000.
The close of business on May 31, 2000 has been fixed as the record date for
the determination of the shareholders of record entitled to notice of, and to
vote at, this meeting or any adjournment thereof. The list of shareholders
entitled to vote at this meeting is available at the offices of Pacific Magtron
International Corp.,1600 California Circle, Milpitas, CA 95035, for examination
by any shareholder.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THIS MEETING, PLEASE SIGN, DATE
AND RETURN THE ENCLOSED PROXY, WHICH IS SOLICITED BY AND ON BEHALF OF THE BOARD
OF DIRECTORS. THE GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE SUCH
PROXY OR TO VOTE IN PERSON SHOULD YOU LATER DECIDE TO ATTEND THIS MEETING.
By Order of the Board of Directors
Theodore S. Li
President
Milpitas, California
June 7, 2000
<PAGE>
PROXY STATEMENT
TABLE OF CONTENTS
GENERAL INFORMATION.......................................................... 1
Who Can Vote.............................................................. 1
Voting by Proxies......................................................... 1
How You May Revoke Your Proxy Instructions................................ 1
How Votes are Counted..................................................... 2
Cost of this Proxy Solicitation........................................... 2
Attending the Annual Meeting.............................................. 2
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?.............................. 2
WHO SHOULD I CALL IF I HAVE QUESTIONS?....................................... 2
PROPOSALS.................................................................... 3
PROPOSAL NO. 1 - ELECT SIX DIRECTORS...................................... 3
PROPOSAL NO. 2 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS............ 5
INFORMATION ABOUT THE NOMINEES............................................... 4
ABOUT THE BOARD AND ITS COMMITTEES........................................... 6
ABOUT THE EXECUTIVE OFFICERS................................................. 7
EXECUTIVE COMPENSATION....................................................... 7
STOCK OPTION GRANTS IN 1999 AND
1999 STOCK OPTION EXERCISES AND YEAR-END OPTION VALUES..................... 8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.................. 8
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION................ 8
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE...................... 10
OWNERSHIP OF OUR COMMON STOCK BY PRINCIPAL STOCKHOLDERS
AND OUR MANAGEMENT......................................................... 10
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................... 11
STOCK PRICE PERFORMANCE GRAPH................................................ 11
OTHER MATTERS................................................................ 13
SHAREHOLDER PROPOSALS........................................................ 13
ANNUAL REPORT................................................................ 13
<PAGE>
PROXY STATEMENT
Your vote is very important. For this reason, the Board of Directors is
requesting that you allow your common stock to be represented at the Annual
Meeting by the persons who are named on the enclosed Proxy Card. This Proxy
Statement is being sent to you in connection with this request and has been
prepared for the Board by our management. "We," "our," "PMIC" and the "Company"
refer to Pacific Magtron International Corp. The Proxy Statement is first being
sent to our shareholders on or about June 7, 2000.
GENERAL INFORMATION
WHO CAN VOTE
You are entitled to vote your common stock if our records showed that you held
your shares as of May 31, 2000. At the close of business on that date,
10,100,000 shares of common stock were outstanding and entitled to vote. Each
share of common stock has one vote. The enclosed Proxy Card shows the number of
shares that you are entitled to vote. Your individual vote is confidential and
will not be disclosed to third parties.
VOTING BY PROXIES
If your common stock is held by a broker, bank or other nominee (i.e., in
"street name"), you will receive instructions from it that you must follow in
order to have your shares voted. If you hold your shares in your own name as a
holder of record, you may instruct the Proxies how to vote your common stock by
signing, dating and mailing the Proxy Card in the envelope provided. Of course,
you can always come to the meeting and vote your shares in person. If you give
us a proxy without giving specific voting instructions, your shares will be
voted by the Proxies as recommended by the board of directors. We are not now
aware of any other matters to be presented at the Annual Meeting except for
those described in this Proxy Statement. However, if any other matters not
described in the Proxy Statement are properly presented at the meeting, the
Proxies will use their own judgment to determine how to vote your shares. If the
meeting is adjourned, your common stock may be voted by the Proxies on the new
meeting date as well, unless you have revoked your proxy instructions prior to
that time.
HOW YOU MAY REVOKE YOUR PROXY INSTRUCTIONS
You may revoke your proxy instructions by any of the following procedures:
* Send us another signed proxy with a later date;
* Send a letter to our secretary revoking your proxy before your common stock
has been voted by the Proxies at the meeting; or
* Attend the Annual Meeting and vote your shares in person.
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HOW VOTES ARE COUNTED
Inspectors of election will be appointed for the meeting. The inspectors of
election will determine whether or not a quorum is present and will tabulate
votes cast by proxy or in person at the Annual Meeting. If you have returned
valid proxy instructions or attend the meeting in person, your common stock will
be counted for the purpose of determining whether there is a quorum, even if you
wish to abstain from voting on some or all matters introduced at the meeting. If
a broker indicates on the proxy that it does not have discretionary authority as
to certain shares to vote on a particular matter, those shares will be
considered as present and entitled to vote with respect to that matter.
COST OF THIS PROXY SOLICITATION
We will pay the cost of this proxy solicitation. We will, upon request,
reimburse brokers, banks and other nominees for their expenses in sending proxy
material to their principals and obtaining their proxies. We will solicit
proxies by mail, except for any incidental personal solicitation made by our
directors, officers and employees, for which they will not be paid.
ATTENDING THE ANNUAL MEETING
If you are a holder of record and you plan to attend the Annual Meeting, please
indicate this when you vote. If you are a beneficial owner of common stock held
by a broker or bank, you will need proof of ownership to be admitted to the
meeting. A recent brokerage statement or letter from a broker or bank showing
your current ownership and ownership of our shares on the record date are
examples of proof of ownership. Although you may attend the meeting, you will
not be able to vote your common stock held in street name in person at the
meeting and will have to vote through your broker or bank. If you want to vote
in person your common stock held in street name, you will have to get a proxy in
your name from the registered holder.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
PROPOSAL 1: ELECTION OF SIX DIRECTORS
The six nominees for director who receive the most votes will be elected. There
is no cumulative voting. Therefore, if you do not vote for a nominee or you
indicate "withhold authority to vote" for any nominee on your proxy card, your
vote will not count for or against any nominee.
PROPOSAL 2: RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The affirmative vote of a majority of the votes cast at the Annual Meeting is
required to ratify the selection of independent auditors. Therefore, if you
"abstain" from voting, it has the same effect as if you voted "against" this
proposal.
WHO SHOULD I CALL IF I HAVE QUESTIONS?
If you have questions about the Annual Meeting or voting, please call Hui
"Cynthia" Lee, our Corporate Secretary. Ms. Lee may be reached at (408)
956-8888.
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PROPOSALS
PROPOSAL NO. 1 - ELECT SIX DIRECTORS
NUMBER OF DIRECTORS TO BE ELECTED
An entire Board of Directors, consisting of six directors, is to be elected at
the Annual Meeting. Each Director elected will hold office until the next annual
meeting and the election of their successors. If any director resigns or
otherwise is unable to complete his or her term of office, the Board will elect
another director for the remainder of the resigning director's term. Our
Articles of Incorporation call for a Board consisting of not fewer than one
member.
VOTE REQUIRED
Under Nevada law, when directors are to be elected to office each stockholder is
entitled to one vote for each share of stock standing in the stockholder's name
on the records of the corporation.
NOMINEES OF THE BOARD
The Board has nominated the following individuals to serve on our Board of
Directors until the next annual meeting and the election of their successors:
Theodore S. Li
Hui Lee
Jey Hsin Yao
Betty Li
Hank C. Ta
Limin Ha
All of these nominees are currently serving on the Board. Each of the nominees
has agreed to be named in this proxy statement and to serve if elected.
See "Information about the Nominees" on the following page for information
regarding each of the Nominees listed above.
We know of no reason why any of the listed nominees would not be able to serve.
However, if any nominee is unavailable for election, the Proxies would vote your
shares to approve the election of any substitute nominee proposed by the Board.
The Board may also choose to reduce the number of Directors to be elected, as
permitted by our Bylaws.
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INFORMATION ABOUT THE NOMINEES
THEODORE S. LI
(age 42)
Mr. Li has served as the President, Treasurer and a Director of the Company
since 1998 and as the President and a Director of PMI since 1995. He is
responsible for the Company's operations, technical functions and finance. Mr.
Li received his bachelor of science in computer science from the University of
Oregon. Mr. Li is married to Ms. Betty Li.
HUI "CYNTHIA" LEE
(age 37)
Ms. Lee has served as the Secretary and a Director of the Company since 1998,
and as a Director and Vice President, Sales and Purchasing of PMI since 1995 She
is responsible for the Company's sales and purchasing functions. She received
her bachelor of language and literature from Chang Chi University in Taiwan. Ms.
Lee is married to Dr. Yao.
JEY HSIN YAO, PH.D.
(age 37)
Dr. Yao has served as a Director of the Company since 1998 and as a Director and
the Secretary of PMI since 1995. He has been employed at Fujitsu as a senior
researcher since 1992. He received his bachelor of science in electrical
engineering from National Taiwan University, and his master and Ph.D degrees
from the Department of Electrical Computer Engineering of the University of
California, Santa Barbara. Dr. Yao is married to Ms. Lee.
BETTY LI
(age 39)
Ms. Li has served as a Director of the Company since 1998, and as a Director of
PMI since 1995. She has been an engineer with Motorola since 1988. Ms. Li is
married to Mr. Li.
HANK C. TA
(age 42)
Mr. Ta has been a Director of the Company since 1999. Mr. Ta has been the
President and Chief Executive Officer of CC Integration/MicroAge since 1992.
This company is an authorized reseller from Compaq, Cisco and Hewlett Packard.
He received his bachelor of science in electrical engineering from San Jose
State University.
LIMIN HU, PH.D
(age 37)
Dr. Hu has been a Director of the Company since 1999. Dr. Hu has been a
President for Hugo Technologies, Inc. since February 1996. In that capacity he
provides consulting services in system integration and architecture,
client/sewer and database management systems, Internet and networking, software
and cross-platform development, and multimedia systems. From December 1994 to
January 1996 he was a Vice President and General Manager for Teknekron Systems
LLC. He received his bachelor of science in electrical engineering from National
Taiwan University, ROC and his Ph.D in electrical engineering and computer
science from the University of California, Berkeley.
YOUR DIRECTORS RECOMMEND A VOTE FOR THE ELECTION
OF THE SIX NOMINEES UNDER PROPOSAL NO. 1
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PROPOSAL NO. 2 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Our Board of Directors, acting upon the recommendation of the Audit
Committee, has selected the firm of BDO Seidman, LLP, 125 South Market Street,
San Jose, California 95113, as independent accountants to examine our financial
statements for the fiscal year ending December 31, 2000, and to perform other
appropriate accounting services. A resolution will be presented to the Annual
Meeting to ratify this selection. The affirmative vote of a majority of the
number of votes entitled to be cast by the common stock represented at the
meeting is needed to ratify the selection. If the shareholders do not ratify the
appointment of BDO Seidman, LLP the selection of independent accountants will be
reconsidered by our Board of Directors.
For the years ended December 31, 1999 and 1998, BDO Seidman, LLP provided
our audit services which included examination of our annual consolidated
financial statements, review of unaudited quarterly financial information,
assistance and consultation in connection with the filing of our Annual Report
on Form 10-K with the Securities and Exchange Commission and other filings with
the Commission, and consultation in connection with various audit-related and
accounting matters. The consolidated financial statements and schedule of the
Company for the year ended December 31, 1997 were audited by Meredith, Cardozo,
Lanz & Chiu LLP, whose practice has been combined with BDO Seidman, LLP. None of
the financial statements prepared by BDO Seidman, LLP contained any adverse or
disclaimer of opinion, nor were they modified as to uncertainty, audit scope, or
accounting principles.
We do not expect that representatives of BDO Seidman, LLP will be present
at the annual meeting.
The Proxies will vote in favor of ratifying the selection of BDO Seidman,
LLP unless instructions to the contrary are indicated on the accompanying proxy
form.
YOUR DIRECTORS RECOMMEND A VOTE FOR PROPOSAL NO. 2
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ABOUT THE BOARD AND ITS COMMITTEES
THE BOARD
We are governed by a Board of Directors, and various committees of the Board
which meet throughout the year. The Board of Directors held no meetings and
acted by unanimous written consent seven times during 1999. Directors discharged
their responsibility throughout the year through informal telephonic conferences
and other communications with the Chairman and others regarding our business.
COMMITTEES OF THE BOARD
The Board has one committee, the Audit Committee. The function of this Committee
is described below along with the current membership and number of meetings held
during 1999.
AUDIT COMMITTEE
Our Audit Committee is composed of Hank C. Ta and Limin Hu, PhD. The charter of
our Audit Committee is to review, examine and discuss with our management and
auditors, as the case may be, those matters that primarily relate to financial
controls and audit. Its duties include the review, examination and discussion of
the following:
* the findings of the independent auditors resulting from their audit and
certification of our financial statements;
* our accounting principles for corporate and tax reporting purposes, including
actual or impending changes in financial accounting requirements that may
materially affect us;
* the adequacy of our financial and accounting controls, including particular
regard for the scope and performance of the internal auditing function; and
* recommendations by the independent auditors or the internal auditing staff
with respect to changes in our policies or practices.
Mr. Ta and Dr. Hu were appointed to the Audit Committee in April 1999, and the
committee held no meetings during 1999.
DIRECTOR COMPENSATION
Directors currently receive no cash compensation for their services in that
capacity. Reasonable out-of-pocket expenses may be reimbursed to directors in
connection with attendance at meetings. We did not grant any options to our
non-employee directors in 1999.
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LIMITATION OF LIABILITY OF DIRECTORS
Nevada law permits the inclusion of a provision in the articles of incorporation
of a corporation limiting or eliminating the potential monetary liability of
directors to a corporation or its shareholders by reason of their conduct as
directors. These sections do not permit any limitation on, or the elimination
of, liability of a director for disloyalty to his corporation or its
shareholders, failing to act in good faith, engaging in intentional misconduct
or a knowing violation of the law, obtaining an improper personal benefit or
paying a dividend that was illegal under Nevada law. Accordingly, the provisions
limiting or eliminating the potential monetary liability of directors permitted
by the Nevada law apply only to the "duty of care" of directors, that is, to
unintentional errors in their deliberations or judgments and not to any form of
"bad faith" conduct. Our Articles of Incorporation eliminate the personal
monetary liability of directors to the extent allowed under Nevada law.
ABOUT THE EXECUTIVE OFFICERS
Theodore S. Li and Hui "Cynthia" Lee are our principal executive officers.
For information regarding Mr. Li and Ms. Lee, please refer to "Information About
the Nominees" beginning on Page 4. All executive officers are appointed by and
serve at the discretion of the Board for continuous terms. Neither of our
executive officers have employment agreements with the Company.
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid by us to the
chief executive officer and the most highly compensated executive officers and
key employees whose total remuneration exceeded $100,000 for services rendered
in all capacities to us during the last three completed fiscal years.
Annual Compensation(1)
Name and Principal ---------------------- All Other
Position Year Salary Bonus Compensation(2)
-------- ---- ------ ----- ---------------
Theodore Li 1999 $120,000 -- $2,300
President, Chief Executive 1998 120,000 -- 2,300
Officer, Treasurer and 1997 120,000 $250,000 2,300
Director
Hui "Cynthia" Lee 1999 120,000 -- 2,500
Secretary and Director 1998 97,500 -- 2,495
1997 75,540 250,000 2,205
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(1) No executive officer named in the Compensation Table received personal
benefits or perquisites in excess of the lesser of $50,000 or 10% of his or
her aggregate salary and bonus.
(2) Consists of contributions made by the Company on behalf of the executive
officer to the PMI Pension/Profit Sharing Plan.
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STOCK OPTION GRANTS IN 1999 AND
1999 STOCK OPTION EXERCISES AND YEAR-END OPTION VALUES
There were no stock options granted to executive officers in 1999, no stock
options are held by executive officers, and no stock options were exercised in
1999.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company did not have a Compensation Committee, and the entire Board of
Directors made executive officer compensation decisions. Both Mr. Theodore Li
and Ms. Hui "Cynthia" Lee were executive officers of the Company and
participated in the deliberations of the Company's Board of Directors concerning
executive officer compensation. Beginning in 2000, the Company plans on
implementing a Compensation Committee, which will be comprised of at least a
majority of non- employee directors.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report relates to compensation decisions made by the Company's Board.
This report shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act of 1933 (the "Securities Act") or the Exchange Act of 1934
(the "Exchange Act"), except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
WHAT IS OUR COMPENSATION PHILOSOPHY?
Decisions on compensation of the Company's executive officers were made by the
Board of Directors (the "Board"). The Company plans on creating a Compensation
Committee comprised of at least a majority of non-employee Directors (the
"Committee"). For fiscal 1999, the Board followed the belief that compensation
should be based upon the following subjective principles:
* Compensation should reflect and promote the Company's values, and reward
individuals for contributions to the Company's success.
* Compensation should be related to the value created for stockholders.
* Compensation programs should integrate the long- and short-term strategies of
the Company.
* Compensation should integrate the long- and short-term strategies of the
Company.
* Compensation programs should be designed to attract and retain executives
critical to the success of the Company.
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Executive compensation is comprised of salary. Due to the level of compensation
received by the officers of the Company, the Board has not yet deemed it
necessary to adopt a policy regarding the one million-dollar cap on
deductibility of certain executive compensation under Section 162(m) of the
Internal Revenue Code.
BASE SALARY
Salary recommendations were submitted to the Board by senior management on
request. In evaluating these recommendations, the Board took into account
management's efforts and the performance of the Company. The Board also took
into account (i) management's consistent commitment to the long-term success of
the Company through the development of new and improved products and (ii) the
amount of Company common stock owned by each executive.
The Board attempted to assimilate the foregoing factors when it rendered its
compensation decisions; however, the Board recognizes that its decisions are
primarily subjective in nature due to the subjective nature of the criteria. The
Board did not assign any specified weight to the criteria it considers.
Salary recommendations are fixed at levels that the Board believes are
sufficient, especially in light of the fact that Mr. Li and Ms. Lee are major
shareholders of the Company, which the Board believes aligns their interests
with the other shareholders. In the past three fiscal years, the Board has not
increased the annual salary for the Chief Executive Officer, and the average
annual salary increase for Ms. Lee has been approximately 26%.
OPTIONS
The new Compensation Committee will administer the Company's Stock Option Plan
(the "Plan"). All employees of the Company are eligible to participate in the
Plan. The exercise price of options granted under the Plan will not be less than
the fair market value of the Company's common stock on the day of grant. No
options have been granted to the Chief Executive Officer or Ms. Lee, primarily
because Mr. Li and Ms. Lee are already major shareholders of the Company. The
Board believes Mr. Li's and Ms. Lee's stockholding align their interests with
the long-term goals of the Company and the other shareholders.
CHIEF EXECUTIVE OFFICER
The Board's evaluation process of the Chief Executive Officer's compensation was
comprised of the same components that were utilized in evaluating other members
of senior management. Mr. Li's salary was not increased.
The Board of Directors
Theodore S. Li
Hui "Cynthia" Lee
Jey Hsin Yao, Ph.D.
Betty Li
Hank C. Ta
Limin Hu, Ph.D
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Such officers,
directors and shareholders are required by the SEC to furnish the Company with
copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it, and
written representations from certain reporting persons that no Forms were
required for such persons, the Company believes that during fiscal year ended
December 31, 1999 its officers, directors and greater than 10% beneficial owners
have complied with all filing requirements applicable to them.
OWNERSHIP OF OUR COMMON STOCK BY PRINCIPAL STOCKHOLDERS
AND OUR MANAGEMENT
The following table sets forth information, as of May 31, 2000 with respect
to the number of shares of our common stock beneficially owned by individual
directors, by all directors and officers as a group, and by persons who we know
own more than 5% of our common stock. We have no other class of voting stock
outstanding. The address of each shareholder listed below is 1600 California
Circle, Milipitas, California 95035.
Name of Beneficial Number of Shares Percent of
Owner and Address Beneficially Owned Common Stock
----------------- ------------------ ------------
Theodore S. Li(1) 4,500,000 45%
Hui "Cynthia" Lee(2) 4,500,000 45%
Betty Li(1) 4,500,000(3) 45%
Jey Hsin Yao(2) 4,500,000(3) 45%
All officers and Directors as a 9,000,000 89%
group (4 persons)
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(1) Mr. Li and Ms. Li are married.
(2) Ms. Lee and Dr. Yao are married.
(3) Is comprised of shares registered in the name of the listed person's
spouse.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On October 9, 1995, Mr. Li and Ms. Lee, each borrowed $90,000 from the
Company pursuant to promissory notes, which each bear interest at the rate of
five percent and are unsecured. With respect to both notes, principal and
interest are due on June 30, 2000. The accrued interest due pursuant to these
notes was $43,600 as of December 31, 1999. Mr. Li and Ms. Lee are both Directors
and executive officers of the Company.
During 1999 and 1998, the Company recognized $724,000 and $470,000,
respectively, in sales revenues from a company wholly-owned by Hank C. Ta, a
Director of the Company.
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative shareholder return on the
Company's Common Stock from July 18, 1998 through December 31,1999, based on the
market price of the Common Stock, with the cumulative total return of the NASDAQ
Market Index and a Peer Group Index comprised of the following companies engaged
in the sale or distribution of microcomputer products: Allstar Sys. Inc., ATS
Money System Inc., CDW Computer Ctrs. Inc., Chancellor Corp. , Compucom Sys.
Inc., Computone Corp. Com., Cumetrix Data Sys. Corp., Digital Commerce, Into.
Inc., Egan Sys. Inc., Emarketplace, Inc., European Micro Holdings, Inc.,
Government Technology Services, Inc., Henry Jack & Associates, Inc., Infonow
Corp., Insight Enterprises Inc., Latitute Communications Inc., Lifschultz
Industries, Inc. Lion, Inc. McGlen Internet Group Inc., Com, Merisel, Inc.,
MicroAge, Inc., National Instruments Corp., Optio Software Inc., PC Service
Source, Inc., Precis Smart Card System, Inc., Quartz Group, Inc., Sand
Technology, Inc., Savior Technology Group, Inc., Scansource Inc., SED
International Holdings, Inc., Software Spectrum, Inc., Tech Data Corp., Tech
Squared, Inc. Transnet Corp., Unicomp Inc., Viewcast, Inc., Vitech Amer Inc.,
Voicenet Inc.
The graph assumes that the value of the investment in the Company's Common
Stock and each index was $100 on July 18, 1998, and that any and all dividends
were reinvested. The comparisons in this table are not intended to forecast or
be indicative of possible future price performance.
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COMPARISON OF 17 MONTH CUMULATIVE TOTAL RETURN*
AMONG PACIFIC MAGTRON INTERNATIONAL CORP.,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND A PEER GROUP
Cumulative Total Return
-------------------------------------
07/18/98 12/98 12/99
-------- ----- -----
PACIFIC MAGTRON INTERNATIONAL CORP. 100.00 97.62 102.38
PEER GROUP 100.00 111.97 134.16
NASDAQ STOCK MARKET (U.S.) 100.00 110.58 204.98
----------
* $100 INVESTED ON 7/18/98 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
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OTHER MATTERS
Our Board is not presently aware of any matters to be presented at the
meeting other than those described above. However, if other matters properly
come before the meeting, it is the intention of the persons named in the
accompanying proxy to vote your proxy on such matters in accordance with their
judgment.
SHAREHOLDER PROPOSALS
Any shareholder desiring to have a proposal included in our proxy statement
for our 2000 Annual Meeting must deliver such proposal (which must comply with
the requirements of Rule 14a-8 promulgated under the Exchange Act) to our
principal executive offices a reasonable time before we begin to print and mail
our proxy statement. We recommend you deliver any proposal by March 15, 2001.
ANNUAL REPORT
Our Annual Report on Form 10-K with certified financial statements required
was filed for the fiscal year ended December 31, 1999 accompanies this Notice
and Proxy Statement and was mailed to all shareholders of record on or about
June 7, 2000. Any exhibit to the annual report on Form 10-K will be furnished to
any requesting person who sets forth a good faith representation that he or she
was a beneficial owner of our common stock on May 31, 2000. The fee for
furnishing a copy of any exhibit will be 25 cents per page plus $3.00 for
postage and handling.
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