<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or 240.14a-12
</TABLE>
SINA.com
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
--------------------------------------------------------------------------------
<PAGE> 2
SINA.COM
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 21, 2000
The Annual Meeting of Stockholders (the "Annual Meeting") of SINA.com, a
Cayman Islands company (the "Company"), will be held at the Westin Santa Clara,
located at 5101 Great American Parkway, Santa Clara, California, U.S.A. on
Tuesday, November, 21, at 10:00 a.m., local time, for the following purposes:
1. To elect two directors to serve until the 2003 Annual Meeting;
2. To ratify the appointment of PricewaterhouseCoopers as the independent
auditors of the Company for the fiscal year ending 2001; and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors, are
more fully described in the Proxy Statement which is attached and made a part of
this Notice.
The Board of Directors has fixed the close of business on October 10, 2000
as the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
/s/ VICTOR K. LEE
--------------------------------------
Victor K. Lee
Chief Financial Officer and Secretary
Sunnyvale, California
October 11, 2000
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE OF
RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY.
<PAGE> 3
SINA.COM
VICWOOD PLAZA
ROOMS 1801-4
18TH FLOOR
199 DES VOEUX ROAD
CENTRAL, HONG KONG
------------------------
PROXY STATEMENT
------------------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of SINA.com, a Cayman Islands company (the
"Company"), of proxies in the enclosed form for use in voting at the Annual
Meeting of Stockholders (the "Annual Meeting") to be held at the Westin Santa
Clara, located at 5101 Great American Parkway, Santa Clara, California, U.S.A.
on Tuesday, November 21, 2000, at 10:00 a.m., local time, and any adjournment or
postponement thereof.
This Proxy Statement, the enclosed proxy card and the Company's Annual
Report to Stockholders for the fiscal year ended June 30, 2000, including
financial statements, were first mailed to stockholders entitled to vote at the
meeting on or about October 12, 2000.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention:
Secretary) a written notice of revocation or a duly executed proxy bearing a
later date, or by attending the Annual Meeting and voting in person.
RECORD DATE; VOTING SECURITIES
The close of business on October 10, 2000 has been fixed as the record date
(the "Record Date") for determining the holders of ordinary shares of the
Company entitled to notice of and to vote at the Annual Meeting. At the close of
business on the Record Date, the Company had approximately 41,184,887 ordinary
shares outstanding and held of record by approximately 454 stockholders.
VOTING AND SOLICITATION
Each outstanding Ordinary Share on the Record Date is entitled to one vote
on all matters. Ordinary shares may not be voted cumulatively.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector") with the assistance of the
Company's transfer agent. The Inspector will also determine whether or not a
quorum is present. The nominees for election as directors at the Annual Meeting
will be elected by a plurality of the votes of the ordinary shares present in
person or represented by proxy at the meeting. The Inspector will treat
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum and as negative votes for purposes of
determining the approval of any matter submitted to the stockholders for a vote.
Any proxy which is returned using the form of proxy enclosed and which is
not marked as to a particular item will be voted FOR the election of directors
and FOR ratification of the appointment of the designated independent auditors
and as the proxy holders deem advisable on other matters that may come before
the meeting, as the case may be with respect to the item not marked. If a broker
indicates on the enclosed proxy or its substitute that it does not have
discretionary authority as to certain shares to vote on a particular matter
("broker non-votes"), those shares will not be considered as present with
respect to that matter. The Company believes that the tabulation procedures to
be followed by the Inspector are consistent with the general requirements of
Cayman law concerning voting of shares and determination of a quorum.
<PAGE> 4
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy solicitation materials for the Annual Meeting and reimbursements
paid to brokerage firms and others for their expenses incurred in forwarding
solicitation materials regarding the Annual Meeting to beneficial owners of the
Company's ordinary shares. The Company may conduct further solicitation
personally, telephonically or by facsimile through its officers, directors and
employees, none of whom will receive additional compensation for assisting with
the solicitation.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our Articles of Association currently authorize a Board of not less than
two directors and the classification of the Board into three classes serving
staggered terms. At each annual general meeting, one-third of the directors will
retire from office by rotation. The directors to retire in every year will be
those who have been in office the longest since their last election. A retiring
director will remain in office until the close of the meeting at which he or she
retires, and will be eligible for re-election at that meeting. The Company
currently has six directors after Director Yoshitaka Kitao resigned from the
Board of Directors on August 7, 2000. In accordance with the Company's Articles
of Association, the Board of Directors has fixed the number of directors
constituting the Board at six.
NOMINEES
At the Annual Meeting, the stockholders will elect two directors to serve
until the 2003 Annual Meeting of Stockholders or until their respective
successors are elected and qualified. In the event any nominee is unable or
unwilling to serve as a director at the time of the Annual Meeting, the proxies
may be voted for the balance of those nominees named and for any substitute
nominee designated by the present Board or the proxy holders to fill such
vacancy, or for the balance of the nominees named without nomination of a
substitute, or the size of the Board may be reduced in accordance with the
Bylaws of the Company. The Board has no reason to believe that any of the
persons named below will be unable or unwilling to serve as a nominee or as a
director if elected.
Assuming a quorum is present, the two nominees receiving the highest number
of affirmative votes of shares entitled to be voted for them will be elected as
directors of the Company for the ensuing year. Unless marked otherwise, proxies
received will be voted FOR the election of each of the two nominees named below.
In the event that additional persons are nominated for election as directors,
the proxy holders intend to vote all proxies received by them in such a manner
as will ensure the election of as many of the nominees listed below as possible,
and, in such event, the specific nominees to be voted for will be determined by
the proxy holders.
The names of the nominees, their ages as of October 11, 2000 and certain
other information about them are set forth below:
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
--------------- --- -------------------- --------------
<S> <C> <C> <C>
Zhidong Wang................... 33 President, Chief Executive Officer July 1997
and Director
Yongji Duan.................... 54 President and Chief Executive August 1997
Officer, Stone Group Corporation
</TABLE>
Zhidong Wang has served as both our President and a director since
incorporation of SINA.com in 1997. He has also served as our Chief Executive
Officer since August 1999. Mr. Wang co-founded Beijing Stone Rich Sight
Information Technology Co., Ltd., or BSRS, a software development company and
one of our subsidiaries, in December 1993 and served as its President and Chief
Executive Officer from October 1993 to May 1999. In February 1991, Mr. Wang also
founded and served as the Vice President and Chief Technology Officer of
Suntendy Electronic Information Technology and Research Company, a software
company, until April 1993. Mr. Wang holds a B.S. degree in Electrical
Engineering from Beijing University.
2
<PAGE> 5
Yongji Duan has served as our director since August 1997. Mr. Duan also
served as a director for Rich Sight Investment Limited, one of our subsidiaries,
from May 1993 through May 1999. Mr. Duan has served as the Director of Stone
Group Corporation, a holding company, since February 1991 and is now the
Chairman of Stone Group Corporation. Mr. Duan has also served as President and
Chief Executive Officer of Stone Electronic Technology Limited, a diversified
electronics and consumer products company, since 1990. Mr. Duan holds a M.S. in
Aeronautics Materials from Beijing Aeronautic College and a B.S. from Qinghua
University.
CONTINUING DIRECTORS
Set forth below are the names of the Class II and Class III Directors,
their ages as of October 11, 2000 and certain other information about them:
CLASS II DIRECTORS (TERM ENDING IN 2001)
<TABLE>
<CAPTION>
NAME OF DIRECTOR AGE PRINCIPAL OCCUPATION
---------------- --- --------------------
<S> <C> <C>
Daniel Chiang.................. 43 Chairman of the Board
Ter Fung Tsao.................. 55 Chairman, Standard Foods Taiwan Ltd.
</TABLE>
Daniel Chiang served as the President and Chief Executive Officer of
Sinanet.com, an Internet content and services company, from June 1996 until it
merged into SINA.com in March 1999. Mr. Chiang currently serves as our Chairman
of the Board. Prior to joining Sinanet.com in June 1996, Mr. Chiang was the
President of Trend Micro, Inc., an Internet virus protection and content
security company, from December 1993 to May 1996. Mr. Chiang received a M.A. in
Political Economy from University of Texas, Dallas and a B.A. in Diplomacy from
National Cheng-Chi University in Taiwan.
Ter Fung Tsao has served as our director since March 1999. Mr. Tsao has
served as Chairman of Standard Foods Taiwan Ltd., a packaged food company, since
1986. Before joining Standard Foods Taiwan Ltd., Mr. Tsao worked in several
positions within The Quaker Oats Company, a packaged food company, in the United
States and Taiwan. Mr. Tsao received a B.S. in Civil Engineering from Cheng Kung
University in Taiwan, a M.S. in Sanitary Engineering from Colorado State
University, and a Ph.D. in Food and Chemical Engineering from Colorado State
University.
CLASS III DIRECTORS (TERM ENDING IN 2002)
<TABLE>
<CAPTION>
NAME OF DIRECTOR AGE PRINCIPAL OCCUPATION
---------------- --- --------------------
<S> <C> <C>
Pehong Chen.................... 42 Chief Executive Officer, President and Chairman of
the Board, Broadvision, Inc.
Lip-Bu Tan..................... 40 General Partner, Walden International Investment
Group
</TABLE>
Pehong Chen has served as our director since March 1999. Mr. Chen has been
the Chief Executive Officer, President and Chairman of the Board of Broadvision,
Inc., a software applications company, since May 1993. Prior to founding
Broadvision, Mr. Chen was Vice President of MultiMedia Technology at Sybase,
Inc., an enterprise software company, from 1992 to 1993. From 1989 to 1992, Mr.
Chen founded and was president of Gain Technology, a multimedia software tools
company, which was acquired by Sybase. Mr. Chen holds a Ph.D. in Computer
Science from University of California, Berkeley, a M.S. in Computer Science from
Indiana University, and a B.S. from National Taiwan University.
Lip-Bu Tan has served as our director since March 1999. Since 1984, Mr. Tan
has been the General Partner of Walden International Investment Group, an
international venture capital firm. Mr. Tan is currently a director of
Accelerated Networks, Inc., a broadband access product company, Centillium
Communications, Inc., a communication integrated circuit company, Creative
Technology Ltd., a multimedia technology company, Integrated Silicon Solutions,
Inc., a semiconductor company, MediaRing.com Ltd., an Internet communications
technology company, and several other private companies. He holds a M.S. in
Nuclear Engineering from the Massachusetts Institute of Technology and a M.B.A.
from the University of San Francisco, where he serves on the Board of Trustees.
Mr. Tan received his B.S. from Nanyang University, Singapore.
3
<PAGE> 6
There are no family relationships among any of the directors or executive
officers of SINA.com.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the period from July 1, 1999 through June 30, 2000 (the "last fiscal
year"), the Board met eight times and took action by unanimous written consent
on one occasion. During the last fiscal year, each directors attended 75% or
more of the meetings held by the Board, with the exception of Pehong Chen,
Yongji Duan and Ter Fung Tsao. Mr. Chen and Mr. Tsao each attended five meetings
in the last fiscal year. Mr. Duan attended four meetings in the last fiscal
year. The Board has an Audit Committee, a Compensation Committee and a Share
Administration Committee. The Board does not have a nominating committee or a
committee performing the functions of a nominating committee. Each committee
member attended 75% or more of the meetings held by the committees he served.
Nominations that are intended to be included in the Company's proxy
statement for the 2001 Annual Meeting must be submitted no later than June 12,
2001. See "Deadline for Receipt of Stockholder Proposals for 2001 Annual
Meeting."
The Audit Committee consists of directors Pehong Chen, Lip-Bu Tan and Ter
Fung Tsao, three of the Company's non-employee directors. The Audit Committee
recommends the engagement of the firm of certified public accountants to audit
the financial statements of the Company and monitors the effectiveness of the
audit effort, the Company's financial and accounting organization and its system
of internal accounting controls. The Audit Committee did not meet during the
last fiscal year.
The Compensation Committee consists of directors Pehong Chen and Lip-Bu
Tan, and held one meeting during the last fiscal year. Its functions are to
establish and administer the Company's policies regarding annual executive
salaries and cash incentives and long-term equity incentives. The Compensation
Committee administers and grants stock options under the Company's stock option
plans to executive officers.
The Share Administration Committee consists of Daniel Chiang and Zhidong
Wang and held four meetings during the last fiscal year. The Share
Administration Committee grants stock options to non-executive employees under
the Company's stock plans and makes recommendations to the Board regarding these
matters.
COMPENSATION OF DIRECTORS
Except for reimbursement for reasonable travel expenses relating to
attendance at board meetings and the grant of stock options, directors other
than Mr. Chiang are not currently compensated for their services as directors.
Mr. Chen was granted an non-qualified option to purchase 110,000 shares of
common stock of Sinanet.com in May 1998 under Sinanet.com's 1997 Stock Plan,
which was converted into an option to purchase 70,762 ordinary shares at an
exercise price of $.23 per share as a result of our acquisition of Sinanet.com.
These options became fully vested upon the closing of the acquisition.
In addition, Mr. Chiang, our Chairman of the Board, received on August 31,
1999, an option to purchase 226,291 ordinary shares of SINA.com at an exercise
price of $1.00 per share. This option vests in equal installments over 48
months. Mr. Chiang is allowed to exercise this option immediately, subject to
repurchase by us at cost if Mr. Chiang were to leave SINA.com.
On October 12, 1999, Mr. Chiang received an option to purchase an
additional 150,000 ordinary shares of SINA.com at an exercise price of $7.33 per
share. This option vests completely one year after the vesting commencement
date, which is August 31, 1999. Mr. Chiang is allowed to exercise this option
immediately, subject to repurchase by us at cost if Mr. Chiang were to leave
SINA.com.
As compensation for services rendered as the Chairman of the Board, Mr.
Chiang received $25,000 for fiscal year ended June 30, 1999 and, $129,333.26 for
fiscal year ended June 30, 2000.
On October 12, 1999, Yongji Duan, a director of SINA.com, received an
option to purchase 75,000 ordinary shares of SINA.com at an exercise price of
$7.33 per share. This option vests in equal installments
4
<PAGE> 7
over 48 months. Mr. Duan is allowed to exercise this option immediately, subject
to repurchase by us at cost if Mr. Duan were to leave SINA.com.
On April 12, 2000, each of the non-employee directors including Pehong
Chen, Yongji Duan, Yoshitaka Kitao, Lip Bu Tan and Ter Fung Tsao received an
option to purchase 37,500 ordinary shares of SINA.com at an exercise price of
$17.00 per share. These options vested fully upon grant.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
PricewaterhouseCoopers has served as the Company's independent auditors
since May 20, 1999 and has been appointed by the Board to continue as the
Company's independent auditors for the fiscal year ending June 30, 2001. In the
event that ratification of this selection of auditors is not approved by a
majority of the ordinary shares voting at the Annual Meeting in person or by
proxy, the Board will reconsider its selection of auditors.
A representative of PricewaterhouseCoopers is expected to be present at the
Annual Meeting. This representative will have an opportunity to make a statement
and will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING JUNE 30, 2001.
5
<PAGE> 8
INFORMATION REGARDING BENEFICIAL OWNERSHIP OF
PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information that has been provided
to the Company with respect to the beneficial ownership of our ordinary shares
as of September 30, 2000 by:
- each shareholder known to us to own beneficially more than 5% of the
ordinary shares;
- each director;
- each of our executive officers listed in the Summary Compensation Table
in this Proxy Statement; and
- all our directors and executive officers as a group.
Percentage of beneficial ownership is based on 41,184,887 ordinary shares
outstanding as of September 30, 2000, together with options that are exercisable
within 60 days of September 30, 2000 for each shareholder. Beneficial ownership
is determined in accordance with the rules of the SEC.
<TABLE>
<CAPTION>
NUMBER OF
OPTIONS
EXERCISABLE
NUMBER OF WITHIN
ORDINARY SHARES 60 DAYS OF
BENEFICIALLY SEPTEMBER 30, EXCLUDING INCLUDING
BENEFICIAL OWNERS OWNED 2000 OPTIONS OPTIONS
----------------- --------------- ------------- --------- ---------
<S> <C> <C> <C> <C>
Entities affiliated with Lip-Bu Tan(1)..... 5,288,373 37,500 12.8% 12.9%
Entities affiliated with Yongji Duan(2).... 3,841,080 187,500 9.3% 9.7%
Dell U.S.A. L.P.(3)........................ 2,539,062 -- 6.2% 6.2%
Zhidong Wang(4)............................ 1,500,589 1,070,761 3.6% 6.1%
Daniel Chiang(5)........................... 1,924,392 376,291 4.7% 5.5%
Pehong Chen................................ 43,732 108,262 * *
Entities affiliated with Ter Fung
Tsao(6).................................. 1,849,555 37,500 4.5% 4.6%
James Sha(7)............................... 759,442 -- 1.8% 1.8%
Daniel Mao(8).............................. 900,706 -- 2.2% 2.2%
Victor K. Lee.............................. 56,815 243,750 * *
Hurst Lin(9)............................... 536,406 -- 1.3% 1.3%
All directors and executive officers as a
group (10 persons)(10)................... 15,953,648 2,090,812 38.7% 41.7%
---------- --------- ---- ----
</TABLE>
---------------
* Less than one percent of the outstanding ordinary shares.
(1) Represents the shares owned by the entities affiliated with Lip-Bu Tan, a
director of SINA.com, as follows:
- 1,486,008 shares held by China Walden Venture Investments Ltd.
- 445,321 shares held by CWV Investment, L.P.
(Mr. Tan is a director of and owns an interest in China Walden
Management Ltd, which is a general partner of CWV Investments, L.P. and
serves as fund manager for China Walden Venture Investments Ltd. The
address for both entities is 1501 CITIC Tower, 1 Tim Mei Avenue,
Central, Hong Kong.)
- 108,955 shares held by InfoTech Ventures, Ltd.
- 174,330 shares held by WIIG Global Ventures Pte, Ltd.
(Mr. Tan is a director of and owns an interest in Walden International
Investment Group (S) Pte. Ltd., which serves as a fund manager for these
entities. The address for both entities is 396 Alexandra Road, #16-03 BP
Tower, Singapore 119954.)
6
<PAGE> 9
- 1,305,821 shares held by Pacven Walden Ventures III, L.P.
- 1,546,564 shares held by Pacven Walden Ventures IV, L.P.
- 28,828 shares held by Pacven Walden Ventures IV Associates Fund, L.P.
(Mr. Tan is a director of and owns an interest in Pacven Walden
Management Co. Ltd., which is a general partner of the general partners
of these entities. Address for these entities is 750 Battery Street,
Suite 700, San Francisco, CA 94111.)
- 190,746 shares held by Seed Ventures II Limited.
(Mr. Tan is a director of and owns an interest in Seed Ventures
Management, which serves as a fund manager for this entity. The address
for this entity is 396 Alexandria Road, #16-03 BP Tower, Singapore
119954.)
Mr. Tan shares voting and investment power with respect to the shares
held by the entities described above. He disclaims beneficial ownership
of the shares in which he has no pecuniary interest.
- 1,800 shares held by a trust controlled by Mr. Tan.
- Includes 37,500 shares issuable to Mr. Tan upon exercise of options
exercisable on or before November 29, 2000.
The 5,288,373 share total does not include 1,201,923 shares held by CTI
Ltd., a wholly-owned subsidiary of Creative Technology Ltd. for whom Mr.
Tan serves as a director. The address of CTI Ltd. is 31 International
Business Park, Creative Resource, Singapore 609921.
(2) Includes 1,392,286 shares held by Beijing Stone Electronic Technology Ltd.,
1,820,493 shares held by Stone Electronic Technology Ltd., and 628,301
shares held by Springbend Holding Limited. Stone Group Corporation holds an
interest in Stone Electronic Technology Limited and Springbend Holding
Limited. Stone Group Corporation and Stone Electronic Technology Limited
together own Beijing Stone Electronic Technology Limited. Also includes
75,000 shares issuable to Ms. Jufen Liu and 112,500 shares to Mr. Duan upon
exercise of options exercisable on or before November 29, 2000. Ms. Liu, a
consultant to SINA.com, is a director of the Stone Group Corporation. Mr.
Duan, a director of SINA.com, is the Chairman of Stone Group Corporation
and the President and Chief Executive Officer of Stone Electronic
Technology Limited. He disclaims beneficial ownership of the shares held by
these entities and by Ms. Liu except to the extent of his pecuniary
interest in such entities. The address for Stone Group Corporation is No.
2, Haidian Street, Zhong Guan Cun, Beijing, China.
(3) Includes 135,216 shares owned by MSD Portfolio, L.P., which is affiliated
with MSD Capital, L.P., the private investment firm for Michael Dell,
Chairman and Chief Executive Officer of Dell Computer Corporation. Dell
U.S.A. L.P. is a wholly owned investment vehicle of Dell Computer
Corporation. The address for Dell U.S.A. L.P. is 1 Dell Way, Roundrock, TX
78682. The address for MSD Portfolio, L.P. is c/o MSD Capital, L.P., 780
Third Avenue, 43rd Floor, New York, NY 10017. Dell U.S.A. L.P. and MSD
Portfolio, L.P. disclaim beneficial ownership of the shares in which each
has no pecuniary interest.
(4) Includes 1,070,761 shares held by Fraser Heritage Limited which is
controlled by Mr. Wang and his wife. Also includes 590 shares acquired by
Mr. Wang through the Company's Employee Stock Purchase Plan and another
429,238 shares of which 312,268 shares are subject to repurchase upon
cessation of employment. Also includes 1,076,761 shares issuable upon
exercise of options exercisable on or before November 29, 2000.
(5) Includes 10,972 shares held by his wife, 375,000 shares held DEPM
Investors, L.P. where Mr. Chiang and his wife serve as general partners,
169,471 shares held by Fongnien Daniel Chiang 1999 Grantor Retained Annuity
Trust and 444 shares acquired by Mr. Chiang through the Company's Employee
Stock Purchase Plan. Also includes 376,291 shares issuable upon exercise of
options exercisable on or before November 29, 2000. Also includes 480,769
shares held by Trend Micro, Inc. where Mr. Chiang's wife serves as a
director and Chief Technology Officer. Mr. Chiang disclaims beneficial
ownership of the shares held by Trend Micro, Inc. except to the extent of
his pecuniary interest therein.
7
<PAGE> 10
(6) Includes 43,553 shares held by Standard Foods of Taiwan, Ltd. and 393,877
shares held by Crosslink Technology Partners, LLC. Includes 37,500 shares
issuable to Mr. Tsao upon exercise of options exercisable on or before
November 29, 2000. Mr. Tsao is a director of Standard Foods of Taiwan and
Crosslink Technology Partners, LLC. Mr. Tsao disclaims beneficial ownership
of the shares held by these entities except to the extent of his pecuniary
interest therein. His address is c/o Helen Hsiao, 8F, Suite 801, 136,
Jean-Ai Road, SEC. 3, Taipei, Taiwan.
(7) Mr. Sha resigned from SINA.com effective as of September 26, 1999. Includes
30,000 shares held by his child, 30,000 shares held by his sister, and
30,000 shares held by his father. Mr. Sha disclaims beneficial ownership of
the shares owned by these individuals.
(8) Includes 581,250 shares subject to repurchase upon cessation of employment.
(9) Includes 109,377 shares subject to repurchase upon cessation of employment.
(10) Includes 9,565,083 shares held by entities affiliated with certain
directors as described in notes 1, 2, 5 and 6. Also includes 1,002,895
shares subject to our right of repurchase at cost upon cessation of
employment. Does not include 759,442 shares owned by Jim Sha.
Except as otherwise indicated, the address of each person listed in the
table is c/o SINA.com, Vicwood Plaza, Units 01-03, 18th Floor, 1999 Des Voeux
Road, Central, Hong Kong, and the persons named in the table have sole voting
and investment power with respect to all ordinary shares shown as beneficially
owned by them, subject to community property laws where applicable.
8
<PAGE> 11
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation earned by (a) the individuals
who served as the Company's Chief Executive Officer during the fiscal year ended
June 30, 2000, (b) the three other most highly compensated individuals who
served as an executive officer of the Company during the fiscal year ended June
30, 2000; and (c) the compensation received by each such individual during the
preceding fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
-------------------- SECURITIES
FISCAL SALARY BONUS UNDERLYING ALL OTHER
NAME YEAR ($) ($) OPTIONS(#) COMPENSATION($)
---- ------ --------- ------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Zhidong Wang................................. 2000 $147,246 1,499,999(1) 13,000(2)
President, Chief Executive 1999 79,000 $16,667 -- 13,000(2)
Officer and Director
James C.J. Sha(3)............................ 2000 58,333 -- --
Former Chief Executive Officer 1999 83,000 -- 1,500,000 --
Daniel Mao(4)................................ 2000 175,000 -- -- --
Chief Operating Officer 1999 72,916 -- 900,000 --
Victor K. Lee(5)............................. 2000 80,679 $35,000(6) 300,000 --
Chief Financial Officer 1999 -- -- -- --
Hurst Lin(7)................................. 2000 108,749 -- 150,000 --
Vice President, Business 1999 75,000 -- -- --
Development and General Manager of U.S.
Operations
</TABLE>
---------------
(1) Mr. Wang acted in a capacity similar to that of a Chief Executive Officer
from July 1997 until March 1999 and assumed the title of Chief Executive
Officer on August 31, 1999. In August 1999 and in October 1999, Mr. Wang
received an option to purchase 429,238 ordinary shares and 1,070,761
ordinary shares of SINA.com, respectively.
(2) Includes $2,000 paid on behalf of Mr. Wang as a housing allowance during
the fiscal year. In addition to the housing allowance, Mr. Wang lived in a
rent-free apartment located in Beijing, China, and owned by Beijing Stone
Electronic Technology Limited, one of our shareholders. The fair market
value of this is estimated to be $11,000.
(3) Mr. Sha joined SINA.com as our Chief Executive Officer in March 1999. On
August 31, 1999, Mr. Sha resigned as Chief Executive Officer and resigned
as a director on September 26, 1999.
(4) Mr. Mao served as our Chief Operating Officer from March 1999 to June 1999
and resumed the position in September 1999. He briefly served as our Acting
Chief Financial Officer from September 1999 to November 1999 and as our
Executive Vice President of Business and Corporate Development from June
1999 to August 1999.
(5) Mr. Lee joined us as our Chief Financial Officer in November 1999.
(6) Includes a signing bonus of $20,000.
(7) Since September 1999, Mr. Lin has served as our General Manager of U.S.
Operations.
We have entered into employment agreements with Zhidong Wang, James C.J.
Sha, Victor Lee and Daniel Mao as described below.
In September 1997, Mr. Wang entered into an employment agreement with
Beijing Stone Rich Sight Information, one of our subsidiaries. This agreement
provided for his initial monthly salary of HK$50,000. The initial term of the
agreement is for a period of three years. After that, the agreement may continue
until terminated by either party. The agreement requires a three months prior
written notice for termination. The agreement contains a non-compete clause for
one year after termination of his employment. The agreement also requires that
Mr. Wang sell his interest in the Ad Company or ICP Company to BSRS when allowed
9
<PAGE> 12
under Chinese law or to an employee or group of employees designated by BSRS
upon the termination of his employment with the Company.
In January 1999, we entered into an employment agreement with Mr. Sha, our
former director and Chief Executive Officer. This agreement entitles Mr. Sha to
an annual salary ranging from $150,000 - $200,000 and an option to purchase
1,500,000 ordinary shares of SINA.com. This option vests over a three-year
period. One-third (33%) of the shares subject to the option vests on the first
anniversary of Mr. Sha's employment date and the remainder vests ratably over
the following two years on a monthly basis. This option, however, allowed him to
exercise immediately, subject to repurchase by us at cost upon cessation of his
employment. Under this agreement, if we terminate Mr. Sha without cause, the
vesting of his options will accelerate by six months. In addition, if we enter
into a change-of-control transaction, the vesting of Mr. Sha's option will
accelerate so that all unvested shares would become fully vested upon the
closing of the transaction.
In September 1999, Mr. Sha terminated his employment and entered into a
termination agreement with us. Under this agreement, we accelerated the vesting
of 541,666 shares he purchased through the exercise of early exercise option and
repurchased 958,334 ordinary shares at cost. Mr. Sha paid back the principal sum
of $361,000 with interest of the loan made by us. The remainder of the loan was
offset by the purchase price for the 958,333 shares repurchased from him by us.
Mr. Mao is a party to an offer letter dated January 11, 1999. Under the
offer letter Mr. Mao is entitled an option to purchase 900,000 ordinary shares
of SINA.com. This options vests over a four-year period. One-fourth (25%) of the
shares subject to the option vests on the first anniversary of Mr. Mao's
employment date and the remainder vests ratably over the following three years
on a monthly basis. This option, however, allowed him to exercise immediately,
subject to repurchase by us at cost upon cessation of his employment. Under this
agreement, the vesting of his options will accelerate by one year in the event
that Mr. Mao's employment is terminated by the Company.
Mr. Lee is a party to an offer letter dated November 18, 1999. This offer
letter entitles Mr. Lee to an option to purchase 300,000 ordinary shares of
SINA.com. This options vests over a four-year period. Three-sixteenth (18.75%)
of the shares subject to the option vests at the end of ninth month from Mr.
Lee's effective employment date and the remainder vests ratably over the
following thirty-nine months on a monthly basis. This option, however, allowed
him to exercise immediately, subject to repurchase by us at cost upon cessation
of his employment. Under this agreement, the vesting of his options will
accelerate by six months in the event that Mr. Lee's employment is terminated
without cause by the Company. In addition, if we enter into a change-of-control
transaction, the vesting of Mr. Lee's option will accelerate by six months at
the time of closing of such transaction.
10
<PAGE> 13
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides certain information with respect to stock
options granted to the Named Executive Officers in the last fiscal year. In
addition, as required by Securities and Exchange Commission rules, the table
sets forth the hypothetical gains that would exist for the options based on
assumed rates of annual compound stock price appreciation during the option
term.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
--------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT VALUE AT ASSUMED
NUMBER OF OF TOTAL OPTIONS/ ANNUAL RATES OF STOCK
SECURITIES SARS GRANTED EXERCISE PRICE APPRECIATION
UNDERLYING TO EMPLOYEES OF BASE FOR OPTION TERM(2)
OPTIONS/SARS IN FISCAL PRICE EXPIRATION ------------------------
NAME GRANTED(#) YEAR(%)(3) ($/SH)(4) DATE 5%($) 10%($)
---- ------------ ----------------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Zhidong Wang........... 429,238 9.4% $1.00 8/31/09 $ 270,386 $ 685,210
1,070,761 23.53% 7.33 10/12/09 4,935,992 12,508,772
James C.J. Sha......... -- -- -- -- -- --
Daniel Mao............. -- -- -- -- -- --
Victor K. Lee.......... 300,000 6.59% 7.33 11/18/09 1,382,939 3,504,640
Hurst Lin.............. 150,000 3.30% 1.00 8/31/09 94,334 239,061
</TABLE>
---------------
(1) No stock appreciation rights were granted to the Named Executive Officers in
the last fiscal year. Each of these options was granted pursuant to the
Company's 1999 Stock Plan or 1999 Executive Stock Plan and is subject to the
terms of such plan. Each of these options granted to Mr. Wang and Mr. Lin
vests over a four-year term and vests ratably on a monthly basis. The option
granted to Mr. Lee vests over a four-year period. Three-sixteenth (18.75%)
of the shares subject to the option granted to Mr. Lee vests at the end of
ninth month from Mr. Lee's effective employment date and the remainder vests
ratably over the following thirty-nine months on a monthly basis.
(2) The potential realizable value illustrates value that might be realized upon
exercise of the options immediately prior to the expiration of their terms,
assuming the specified compounded rates of appreciation of the market price
per share for the date of grant to the end of the option term. Actual gains,
if any, on stock option exercise are dependent upon a number of factors,
including the future performance of the ordinary shares and the timing of
option exercises, as well as the optionees' continued employment throughout
the vesting period. There can be no assurance that the amounts reflected in
this table will be achieved.
(3) The Company granted stock options representing 4,549,845 shares to employees
in the last fiscal year.
(4) The exercise price may be paid in cash, in ordinary shares valued at fair
market value on the exercise date or through a cashless exercise procedure
involving a same-day sale of the purchased shares. The Company may also
finance the option exercise by loaning the optionee sufficient funds to pay
the exercise price for the purchased shares and the federal and state income
tax liability incurred by the optionee in connection with such exercise.
11
<PAGE> 14
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information with respect to stock
options exercised by the Named Executive Officers during the fiscal year ended
June 30, 2000. In addition, the table sets forth the number of shares covered by
stock options as of the fiscal year ended June 30, 2000, and the value of
"in-the-money" stock options, which represents the positive spread between the
exercise price of a stock option and the market price of the shares subject to
such option at the end of the fiscal year ended June 30, 2000.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES VALUE FISCAL YEAR END(#) FISCAL YEAR END($)
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($)(1) UNEXERCISABLE(2) UNEXERCISABLE(3)
---- ----------- ---------- ------------------ ------------------
<S> <C> <C> <C> <C>
Zhidong Wang..................... 429,238 3,863,142 1,070,761/-- $19,589,572/--
James C.J. Sha(4)................ 1,500,000 16,995,000 --/-- --/--
Daniel Mao....................... 900,000 10,197,000 --/-- --/--
Victor K. Lee.................... 56,250 392,063 243,750/-- $4,459,406/--
Hurst Lin........................ 150,000 1,350,000 /-- $/--
</TABLE>
---------------
(1) Value realized is calculated based on the fair market value of the Company's
ordinary shares on the date of exercise minus the exercise price of the
option and does not necessarily indicate that the optionee sold such stock.
(2) No stock appreciation rights (SARs) were outstanding during fiscal 2000.
(3) Based on the $25.625 per share closing price of the Company's ordinary
shares on The Nasdaq Stock Market on June 30, 2000, less the exercise price
of the options.
(4) On June 17, 1999, Mr. Sha was granted an option to purchase 1,500,000
ordinary shares at an exercise price of $0.67 per share, which he exercised
on July 19, 1999. These shares were subject to a right of repurchase held by
us which lapses over a three-year period. Upon Mr. Sha's resignation as a
director in September 1999, we repurchased 958,334 shares from him at cost.
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934
that might incorporate future filings, including this Proxy Statement, in whole
or in part, the following report and the Stock Performance Graph which follows
shall not be deemed to be incorporated by reference into any such filings.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During fiscal year ended June 30, 2000, the Compensation Committee of
SINA.com's Board of Directors (the "Committee") consisted of Mr. Pehong Chen and
Mr. Lip-Bu Tan. The members of the Compensation Committee are independent
non-employee directors.
The following is a report of Committee describing the compensation policies
applicable to the Company's executive officers during the fiscal year ended June
30, 2000. The Committee is responsible for establishing and monitoring the
general compensation policies and compensation plans of the Company, as well as
the specific compensation levels for executive officers. It also administers the
granting of options to executive employees under the Company's stock option
plans. Executive officers who are also directors have not participated in
deliberations or decisions involving their own compensation.
GENERAL COMPENSATION POLICY
Under the supervision of the Board of Directors, the Company's compensation
policy is designed to attract and retain qualified key executives critical to
the Company's growth and long-term success. It is the objective of the Board of
Directors to have a portion of each executive's compensation contingent upon the
12
<PAGE> 15
Company's performance as well as upon the individual's personal performance.
Accordingly, each executive officer's compensation package is comprised of three
elements: (i) base salary which reflects individual performance and expertise,
(ii) variable bonus awards payable in cash and tied to the achievement of
certain performance goals that the Board of Directors establishes from time to
time for the Company and (iii) long-term stock-based incentive awards which are
designed to strengthen the mutuality of interests between the executive officers
and the Company's stockholders.
The summary below describes in more detail the factors which the Board of
Directors considers in establishing each of the three primary components of the
compensation package provided to the executive officers.
BASE SALARY
The level of base salary is established primarily on the basis of the
individual's qualifications and relevant experience, the strategic goals for
which he or she has responsibility, the compensation levels at companies which
compete with the Company for business and executive talent, and the incentives
necessary to attract and retain qualified management. Base salary is adjusted
each year to take into account the individual's performance and to maintain a
competitive salary structure. Company performance does not play a significant
role in the determination of base salary.
CASH-BASED INCENTIVE COMPENSATION
Cash bonuses are awarded on a discretionary basis to executive officers on
the basis of their success in achieving designated individual goals and the
Company's success in achieving specific company-wide goals.
LONG-TERM INCENTIVE COMPENSATION
The Company has utilized its stock option plans to provide executives and
other key employees with incentives to maximize long-term stockholder values.
Awards under this plan by the Board of Directors take the form of stock options
designed to give the recipient a significant equity stake in the Company and
thereby closely align his or her interests with those of the Company's
stockholders. Factors considered in making such awards include the individual's
position in the Company, his or her performance and responsibilities, and
internal comparability considerations.
Each option grant allows the executive officer to acquire shares of
ordinary shares at a fixed price per share (the fair market value on the date of
grant) over a specified period of time (up to 10 years). The options typically
vest in periodic installments over a four-year period, contingent upon the
executive officer's continued employment with the Company, although exceptions
may be made when deemed necessary or appropriate. Accordingly, the option will
provide a return to the executive officer only if he or she remains in the
Company's service, and then only if the market price of the ordinary shares
appreciates over the option term. In addition to the stock option plans,
executive employees are eligible to participate in the Company's 1999 Employee
Stock Purchase Plan.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Zhidong Wang has served as the Company's President and Chief Executive
Officer since August 1999. His base salary for fiscal 2000 was $160,000 and
targeted cash based incentive compensation of $40,000. Other compensation paid
to Mr. Wang included housing allowances and a rent-free apartment owned by
Beijing Stone Electronic Technology Limited, one of our shareholders. Mr. Wang
was awarded options to purchase a total of 1,499,999 ordinary shares of the
Company during fiscal year 2000. In connection with the exercise of the option
to purchase 429,238 ordinary shares of the Company on September 27, 1999, we
provided a loan to Mr. Wang pursuant to a full recourse note, in the principal
amount of $429,238.50 with an interest rate of 5.87% per annum, due on September
27, 2004.
The factors discussed above in "Base Salary," "Cash-Based Incentive
Compensation," and "Long-Term Incentive Compensation" were also applied in
establishing the amount of Mr. Wang's salary and stock option
13
<PAGE> 16
grant. Significant factors in establishing Mr. Wang's compensation include his
performance and responsibilities, and internal comparability considerations.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Committee has considered the impact of Section 162(m) of the Internal
Revenue Code adopted under the Omnibus Budget Reconciliation Act of 1993, which
section disallows a deduction for any publicly held corporation for individual
compensation exceeding $1 million in any taxable year for the CEO and four other
most highly compensated executive officers, respectively, unless such
compensation meets the requirements for the "performance-based" exception to
Section 162(m). As the cash compensation paid by the Company to each of its
executive officers is expected to be below $1 million and the Committee believes
that options granted under the Company's 1999 Stock Plan and 1999 Executive
Stock Plan to such officers will meet the requirements for qualifying as
performance-based, the Committee believes that Section 162(m) will not affect
the tax deductions available to the Company with respect to the compensation of
its executive officers. It is the Committee's policy to qualify, to the extent
reasonable, its executive officers' compensation for deductibility under
applicable tax law. However, the Company may from time to time pay compensation
to its executive officers that may not be deductible.
Compensation Committee:
/s/ Pehong Chen
/s/ Lip-Bu Tan
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the compensation committee serves as a member of the board of
directors or compensation committee of any other entity that has one or more
executive officers serving as a member of our board of directors or compensation
committee. See "Related Party Transactions" for a description of transactions
between SINA.com and entities affiliated with the members of the compensation
committee.
CERTAIN TRANSACTIONS
Since July 1, 1999, we have not been a party to any transaction or series
of similar transactions in which the amount involved exceeded $60,000 and in
which any director, executive officer or holder of more than 5% of our ordinary
shares had or will have a direct or indirect material interest other than:
- standard compensation arrangements which are described under
"Management -- Compensation of Executive Officers'
- the transactions described below.
TRANSACTIONS WITH STONE GROUP CORPORATIONS
Mr. Yongji Duan, our director, is a director and the Chairman of the Stone
Group Corporation. Stone Group Corporation is also a 5% shareholder of the
Company. See "Principal Shareholders." In 1997, we deposited $242,000 with
Beijing Stone Finance Company, which is also an entity affiliated with Stone
Group. This deposit carries a stated interest of 10% per annum and as of June
30, 2000, the total amount of deposit plus accrued interest was $121,000. Our
financial statements reflect that we may not collect on this remaining amount.
We believe that these transactions were entered into on terms and conditions no
less favorable to SINA.com than those that could have been obtained from an
unaffiliated party.
In October 1999, we granted an option to purchase 75,000 ordinary shares
each to Mr. Yongji Duan and Ms. Jufen Liu.
14
<PAGE> 17
STOCK TRANSACTIONS
Since July 1, 1999, we have issued:
- An aggregate of 7,675,661 Series C preference shares $8.32 per share in
October and November 1999 to forty-two investors; and
- An aggregate of 4,600,000 ordinary shares in connection with our initial
public offering in April 2000.
The table below summarizes purchases of preference shares by our executive
officers, directors and 5% shareholders and persons and entities associated with
them in the private placement transactions described above. Shares held by
affiliated persons and entities have been aggregated. See "Principal
Shareholders" for more information regarding affiliated shareholders.
<TABLE>
<CAPTION>
INITIAL
PUBLIC
INVESTORS SERIES C OFFERING
--------- --------- --------
<S> <C> <C>
Entities affiliated with Daniel Chiang.................. 650,240(1)
Entities affiliated with Dell U.S.A. L.P................ 2,539,062(2)
Entities affiliated with Yoshitaka Kitao................ 496,450(3) 8,000
James C.J. Sha.......................................... 39,204
Entities affiliated with Lip-Bu Tan..................... 627,647(4)
Entities affiliated with Ter Fung Tsao.................. 301,250(5)
</TABLE>
---------------
(1) Includes 480,769 shares held by Trend Micro, Inc., where Mr. Chiang's wife
serves as a director and Chief Technology Officer.
(2) Includes 135,216 shares held by MSD Portfolio, L.P., which is affiliated
with MSD Capital, L.P., the private investment firm for Michael Dell,
Chairman and Chief Executive Officer of Dell Computer Corporation.
(3) Represents the shares owned by the entities affiliated with Mr. Kitao as
follows:
- 120,192 shares held by SOFTBANK Contents Fund.
- 120,192 shares held by SOFTBANK Ventures, Inc.
- 240,385 shared held by SoftVen No. 2 Investment Enterprise Partnership.
- 15,681 shares held by E*O Investors, LLC.
(4) Represents the shares issued to the entities affiliated with Lip-Bu Tan, a
director of SINA.com, as follows:
- 150,046 shares held by China Walden Venture Investments Ltd.
- 19,614 shares held by InfoTech Ventures Ltd.
- 78,456 shares held by Pacven Walden Ventures III, L.P.
- 5,940 shares held by Pacven Walden Ventures IV Associates Fund, L.P.
- 318,672 shares held by Pacven Walden Ventures IV, L.P.
- 23,536 shares held by Seed Ventures II Limited.
- 31,383 shares held by WIIG Global Ventures Pte. Ltd.
Mr. Tan shares voting and investment power with respect to the shares held
by the entities above. He disclaims beneficial ownership of the shares in which
he has no pecuniary interest.
- Does not include 1,201,923 shares held by CTI Ltd., a wholly-owned
subsidiary of Creative Technology Ltd. for whom Mr. Tan serves as a
director.
15
<PAGE> 18
(5) Represents 254,208 shares held by Mr. Tsao, a director of SINA.com, and the
shares issued to the entities affiliated with Mr. Tsao as follows:
- 7,840 shares held by Standard Foods of Taiwan Ltd.
- 39,202 shares held by Crosslink Technology Partners, LLC.
OTHER TRANSACTIONS
Agreements Involving BSRS
Our subsidiary Beijing Stone Rich Sight Information Technology Co. Ltd., or
BSRS, has entered into agreements with two Chinese entities: Beijing SINA
Interactive Advertising Co., Ltd., a Chinese advertising company that is 75%
owned by Yan Wang, our general manager of China operations, and 25% owned by
BSRS, and which we refer to as the Ad Company, and Beijing SINA Internet
Information Services Co., Ltd. a Chinese Internet content provider that is 70%
owned by Zhidong Wang, our chief executive officer, and 30% owned by Yan Wang
and which we refer to as the ICP Company. We have amended our employment
agreements with Zhidong Wang and Yan Wang to require that they transfer their
interest in the Ad Company or ICP Company at the net book value to us when
allowed under Chinese law or to an employee or group of employees specified by
us upon termination of their employment with us. The ICP Company will also be
able to transact business with third parties not affiliated with BSRS. Both
entities are limited liability companies incorporated in China.
In total, there are six (6) agreements that govern the relationship among
the Ad Company, the ICP Company, BSRS and SINA.com:
- Business Cooperation Agreement between ICP Company and BSRS. Under this
agreement, BSRS will be a provider of technical services, including
maintaining and upgrading the server and software of www.sina.com.cn for
ICP Company in exchange for payments to be determined by the parties. In
addition, BSRS will license to ICP Company all copyrights associated with
www.sina.com.cn, the domain name of www.sina.com.cn and certain
trademarks all in exchange for payment to be determined by the parties.
- E-Commerce Cooperation Agreement between BSRS and the ICP Company. Under
this agreement, BSRS will provide ICP Company with the necessary software
and platform to conduct e-commerce business on www.sina.com.cn in
exchange for all the revenues generated from e-commerce transactions on
the website. The ICP Company will also receive any advertising space
generated by e-commerce transactions on the website.
- Equipment and Leased Line Transfer Agreement between ICP Company and
BSRS. Under this agreement, BSRS will transfer certain equipment to be
used for the operation of the www.sina.com.cn website in exchange for
payment equal to the net book value of such assets at the time of
transfer. In addition, BSRS will transfer its leased line with the Lease
Line Business Center of Beijing Telecommunications Administration to ICP
Company.
- Advertisement Publication and Cooperation Agreement between Ad Company
and ICP Company. Under this agreement, the Ad Company will purchase all
advertisement banner space of ICP Company at ICP Company's cost.
- Advertising Production and Technical Services Agreement between Ad
Company and BSRS. Under this agreement, BSRS will be a provider of
consulting services, including the technical work on all advertisements,
to the Ad Company in exchange for a fee to be determined by the parties.
- Advertising Agency Agreement between Ad Company and SINA.com. Under this
agreement, SINA.com will be the exclusive advertising agency to the Ad
Company in the overseas market in exchange for a commission to be
determined by the parties.
16
<PAGE> 19
In addition, BSRS has agreed to provide interest-free loans of RMB700,000
to Zhidong Wang and RMB300,000 to Yan Wang for purposes of setting up the ICP
Company and RMB750,000 to Zhidong Wang for purposes of setting up the Ad
Company.
Transactions with Dell Computer Corporation
We have entered into two (2) material agreements with Dell Computer
Corporation:
- Definitive Agreement between SINA.com and Dell. Under this agreement,
SINA.com will build a Dell storefront on SINAMall and provide advertising
and technical support in exchange for certain fees.
- License Agreement between SINA.com and Dell. Under this agreement
SINA.com is licensing its RichWin software to Dell.
We recognized $987,000 in revenue from these agreements in fiscal year ended
June 30, 2000.
Indebtedness of Management
On June 17, 1999, we granted Daniel Mao, our Chief Operating Officer, an
option to purchase 900,000 of our ordinary shares at an exercise price of $.6667
per share under our 1999 Stock Plan. This option was immediately exercisable
subject to our right to repurchase at cost any shares that remain unvested upon
cessation of employment. In connection with the exercise of this option on July
28, 1999, we provided a loan to Mr. Mao, pursuant to a full recourse note, in
the principal amount of $600,000 with an interest rate of 5.74% per annum, due
on July 28, 2004.
On August 31, 1999, we granted Zhidong Wang, our President, Chief Executive
Officer and director, an option to purchase 429,238 of our ordinary shares at an
exercise price of $1.00 per share under our 1999 Stock Plan. This option was
immediately exercisable subject to our right to repurchase at cost any shares
that remain unvested upon cessation of employment. In connection with the
exercise of this option on September 27, 1999, we provided a loan to Mr. Wang
pursuant to a full recourse note, in the principal amount of $429,238.59 with an
interest rate of 5.87% per annum, due on September 27, 2004.
On August 31, 1999, we granted Hurst Lin, our Vice President of Business
Development and General Manager of U.S. Operations, an option to purchase
150,000 of our ordinary shares at an exercise price of $1.00 per share under our
1999 Stock Plan. This option was immediately exercisable subject to our right to
repurchase at cost any shares that remain unvested upon cessation of employment.
In connection with the exercise of this option on September 30, 1999, we
provided a loan to Mr. Lin, pursuant to a full recourse note, in the principal
amount of $150,000 with an interest rate of 5.87% per annum, due on September
30, 2004.
On November 18, 1999, we granted Victor Lee, our Chief Financial Officer,
an option to purchase 300,000 of our ordinary shares at an exercise price of
$7.33 per share under our 1999 Executive Stock Plan. This option was immediately
exercisable subject to our right of repurchase at cost any shares that remain
unvested upon cessation of employment. In connection with the exercise of this
option on December 30, 1999, we provided a loan to Mr. Lee, pursuant to a full
recourse note, in the principal amount of $412,312.50 with an interest rate of
6.11% per annum, due on December 30, 2004.
BSRS has agreed to enter into two loan agreements with Zhidong Wang,
pursuant to which we agreed to provide him an interest-free loan of RMB700,000
for the purposes of providing capital to the ICP Company and an interest-free
loan of RMB750,000 for the purpose of providing capital to the Ad Company. In
addition, BSRS has agreed to provide an interest-free loan of RMB300,000 to Wang
Yan for purposes of providing capital to the ICP Company. These loans will be
repayable within 3 years from the date the agreement was entered into, which
period may be extended or reduced as agreed by the parties.
17
<PAGE> 20
Director Stock Options
On April 12, 2000, each of the non-employee directors including Pehong
Chen, Yongji Duan, Yoshitaka Kitao, Lip Bu Tan and Ter Fung Tsao received an
option to purchase 37,500 ordinary shares of SINA.com at an exercise price of
$17.00 per share. These options vested fully upon grant.
Indemnification Agreements
We have entered into indemnification agreements with our officers and
directors containing provisions which may require us, among other things, to
indemnify our officers and directors against certain liabilities that may arise
by reason of their status or service as officers or directors, other than
liabilities arising from willful misconduct of a culpable nature, and to advance
their expenses incurred as a result of any proceeding against them as to which
they could be indemnified.
Registration Rights Agreements
Some of our shareholders are entitled to have their shares registered by us
for resale.
18
<PAGE> 21
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return data
for the Company's stock since April 13, 2000 the date on which the Company's
stock was first registered under Section 12 of the Securities Exchange Act of
1934, (as amended) to the cumulative return over such period of (i) the The
Nasdaq National Market Composite Index and (ii) the Morgan Stanley Internet
Index ("MOX"). The graph assumes that $100 was invested on April 13, 2000, the
date on which the Company completed the initial public offering of its ordinary
shares, in the ordinary shares of the Company and in each of the comparative
indices. The graph further assumes that such amount was initially invested in
the ordinary shares of the Company at a per share price of $17.00, the price to
which such stock was first offered to the public by the Company on the date of
its initial public offering. The stock price performance on the following graph
is not necessarily indicative of future stock price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG SINA.COM, THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE MORGAN STANLEY DEAN WITTER INTERNET INDEX
[PERFORMANCE GRAPH]<QC>
<TABLE>
<CAPTION>
---------------------------------------------------------------------
4/13/00 6/30/00
---------------------------------------------------------------------
<S> <C> <C>
SINA.com 100 124
The Nasdaq Stock Market (U.S.) Index 100 108
Morgan Stanley Dean Witter Index ("MOX") 100 95
---------------------------------------------------------------------
</TABLE>
---------------
* Assumes $100 invested on April 13, 2000 in stock or index, including
reinvestment of dividends. Fiscal year ending June 30, 2000.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Proposals of stockholders intended to be included in the Company's proxy
statement for the 2001 Annual Meeting of Stockholders must be received by Victor
Lee, SINA.com, 1313 Geneva Drive, Sunnyvale, CA 94089, no later than June 12,
2001. If the Company is not notified of a stockholder proposal by August 27,
2001, then the proxies held by management of the Company provide discretionary
authority to vote against such stockholder proposal, even though such proposal
is not discussed in the Proxy Statement.
19
<PAGE> 22
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than 10% of the Company's ordinary
shares (collectively, "Reporting Persons") to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and changes in
ownership of the Company's ordinary shares. Reporting Persons are required by
SEC regulations to furnish the Company with copies of all Section 16(a) reports
they file. To the Company's knowledge, based solely on its review of the copies
of such reports received or written representations from certain Reporting
Persons that no other reports were required, the Company believes that during
its fiscal year ended June 30, 2000, all Reporting Persons complied with all
applicable filing requirements.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented to
the Annual Meeting. If any other business is properly brought before the Annual
Meeting, proxies in the enclosed form will be voted in respect thereof as the
proxy holders deem advisable.
It is important that the proxies be returned promptly and that your shares
be represented. Stockholders are urged to mark, date, execute and promptly
return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
/s/ VICTOR LEE
--------------------------------------
Victor Lee
Chief Financial Officer and Secretary
October 11, 2000,
Sunnyvale, California
20
<PAGE> 23
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF SINA.COM FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 21, 2000
The undersigned stockholder of SINA.COM, a Cayman Islands company, (the
"Company") hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated October 11, 2000, and hereby
appoints Victor Lee and Edward Wu or either of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the Annual Meeting of
Stockholders of SINA.com to be held on Tuesday, November 21, 2000 at 10 a.m.,
local time, at 5101 Great American Parkway, Santa Clara, California, U.S.A. and
at any adjournment or postponement thereof, and to vote all shares of Common
Stock which the undersigned would be entitled to vote if then and there
personally present, on the matters set forth below:
1. ELECTION OF DIRECTORS:
___ FOR all nominees listed below (except as indicated).
___ WITHHOLD authority to vote for all nominees listed below.
If you wish to withhold authority to vote for any individual
nominee, strike a line through that nominee's name in the list below:
Zhidong Wang
Yongji Duan
2. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS AS THE
INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING JUNE 30, 2001:
____FOR ____AGAINST ____ABSTAIN
and, in their discretion, upon such other matter or matters that may properly
come before the meeting and any postponement(s) or adjournment(s) thereof.
PLEASE SIGN ON REVERSE SIDE AND RETURN IMMEDIATELY
<PAGE> 24
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF DIRECTORS; AND (2) FOR THE
PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS AS THE INDEPENDENT
AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING JUNE 30, 2001; AND AS SAID
PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.
________________________________
Signature Date:__________________________
________________________________
Signature Date:__________________________
(This Proxy should be marked, dated, signed by the stockholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.)
