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
(AMENDMENT NO. )
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 Commission only (as permitted
by Rule 14a-6(e) (2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
LOTUS PACIFIC, INC.
(Name of Registrant as Specified in its Charter)
Payment of Filling Fee (check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rule 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 filling 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 filling for which the offsetting
fee was previously. Identify the previous filling by registration
statement number, or the Form or Schedule and the date of its filling.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filling Party:
(4) Date Filed:
LOTUS PACIFIC, INC.
October 28, 1998
Dear Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Lotus Pacific, Inc., on Wednesday, December 2, 1998, at 2:00 p.m., the
Eastern Time. The meeting will be held at 200 Centennial Avenue, Suite 201,
Piscataway, NJ 08854.
At the Annual Meeting, You will be asked to consider and vote upon the
following proposals: (i) the election of six (6) directors of the Company,
and (ii) the ratification of Schiffman, Hughes Brown as independent auditors
of the Company for the fiscal year ending June 30, 1999. During the meeting,
I will also review with you the affairs and process of the Company during
the fiscal year ended June 30, 1998. You will have the opportunity to ask
questions about the Company that may be of general interest to shareholders.
The enclosed Proxy Statement more fully describes the details of the
business to be conducted at the Annual Meeting.
After careful consideration, the Company's Board of Directors has unanimously
approved the proposals and recommends that you vote IN FAVOR OF each such
proposal.
It is important that your shares be represented at this meeting in order
that the presence of a quorum may be assured. Whether or not you plan to
attend the meeting, you are urged to vote your shares by dating, signing
and mailing the enclosed proxy card in the envelop provided.
On behalf of the Board of Directors, thank you for your continued support.
Sincerely,
/s/ James Yao
James Yao
President & Chairman of the Board
LOTUS PACIFIC, INC.
200 Centennial Avenue, Suite 201
Piscataway, NJ 08854
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held December 2, 1997
NOTICE is hereby given that the Annual Meeting of Shareholders of
Lotus Pacific, Inc., a Delaware corporation (the "Company"), will be held
in accordance with its By-laws at 200 Centennial Avenue, Suite 201,
Wednesday, December 2, 1998, at 2:00 p.m., the Eastern Time, for the
following purposes:
(1) To elect six (6) directors for term ending the 1999 Annual
Meeting of Shareholders and until their successors are elected and qualified;
(2) To ratify the appointment of Schiffman, Hughes Brown as independent
auditors of the Company for the fiscal year ending June 30, 1999; and
(3) To conduct such other business as may properly come before the
meeting and any adjournments thereof.
The Common Stock of the Company should be represented as fully as possible
at the Annual Meeting. Therefore, it will be appreciated if you will date,
sign and return the enclosed proxy at your earliest convenience. You may,
of course, change or withdraw your proxy at any time prior to the voting at
the meeting. However, returning the proxy in a timely manner will assure
your representation at the Annual Meeting.
The Board of Directors has fixed the close of business on October 26,
1998, as the record date for the determination of holders of Common Stock
of the Company entitled to notice of, and to vote at, the Annual Meeting and
any adjournments thereof.
By Order of the Board of Directors
Gary Huang, Secretary
October 28, 1998
LOTUS PACIFIC, INC.
200 Centennial Avenue, Suite 201
Piscataway, NJ 08854
Telephone: (732) 885-1750
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 2, 1998
This Proxy Statement is furnished to holders of the Company's common
stock, par value $.001 per share (the "Common Stock") in connection
with the solicitation of proxies by the Board of Directors of Lotus Pacific,
Inc., a Delaware corporation (the "Company"), for use at the Annual
Meeting of Shareholders of the Company to be held at 200 Centennial Avenue,
Suite 201, Piscataway, NJ 08854, on December 2, 1998 at 2:00 p.m., the
Eastern Time, and at any and all postponements or adjournments thereof
(the "Annual Meeting") for the purposes of :
(1) electing six (6) directors for term ending the 1999 Annual Meeting
of Shareholders and until their successors are elected and qualified;
(2) ratifying the appointment of Schiffman, Hughes Brown as independent
auditors of the Company for the fiscal year ending June 30, 1999; and
(3) conducting such other business as may properly come before the
meeting and any adjournments or postponements of the meeting.
Shares of Common Stock represented by each proxy, if properly executed
and returned to the Company prior to the Annual Meeting, will be vote as
directed, but if not otherwise specified, will be vote to APPROVE the
election of six (6) directors to hold office until the next Annual Meeting,
as recommended by the Board of Directors.
If the Annual Meeting is postponed or adjourned for any reason, at any
subsequent reconvening of the Annual Meeting, all proxies will be voted
in the same manner as such proxies would have been vote at the original
convening of the Annual Meeting (except for proxies which have theretofore
effectively been revoked or withdrawn), notwithstanding that they have been
effectively voted on the same or any other matter at a previous meeting.
The Board of Directors knows of no other business to be presented at
the Annual Meeting. If any other business is properly presented, the
persons named in the enclosed proxy have authority to vote on such matters
in accordance with such proxy holders' discretion. A shareholder executing
a proxy may revoke it at any time before it is voted by giving written
notice to the Secretary of the Company, or by attending and voting in
person.
VOTING AND SOLICITATION
The affirmative vote of the holders of a plurality of the outstanding
shares of Common Stock present or represented by proxy at the Annual
Meeting at which a quorum is present is required to elect each of the
six (6) directors nominated for election to the Company's Board of
Directors. Only shareholders of record of the Company's Common Stock at
the close of business on October 26, 1998 will be entitled to notice of,
and to vote, at the Annual Meeting, or at any adjournment thereof (the
"Record Date". As of October 26,1998, there were 47,499,304 shares of
Common Stock outstanding and entitled to vote.
Each share of the Common Stock is entitled to one vote for each director
to be elected and upon all other matters to be brought to a vote by
shareholders at the forthcoming Annual Meeting. Under the Company's
Bylaws, no cumulative voting is permitted in an election of directors.
In the election of directors, votes may be cast in favor of or withheld
with respect to each nominee. Votes that are withheld and broker non-votes
with respect to the election of directors will be excluded entirely from
the vote and will have no effect. Abstentions and broker non-votes will be
counted as present for purposes of determining the existence of a quorum.
All other matters properly brought before the Annual Meeting will be
decided by a majority of the vote cast on the matter at the Annual Meeting.
The cost of soliciting these proxies, consisting of the printing, handing
and mailing of the proxy card and related material, and the actual expense
incurred by brokerage houses, custodians and fiduciaries in forwarding
proxy material to the beneficial owners of stock, will be paid by the
Company. In addition to the use of the mails, proxies may be solicited by
officers, directors, regular employees and other representatives of the
Company to solicit proxies by telephone, facsimile, electronic means,
or in person. These persons will receive no extra compensation for
their services. The Company reserves the right to have an outside
solicitor conduct the solicitation of proxies and to pay such solicitor
for its services.
The Annual Report on Form 10-K of the Company for the fiscal year ended
June 30, 1998, will be mailed, by November 6, 1998, to all stockholders
entitled to notice of and to vote at the Annual Meeting. The Annual Report
is not incorporated into this Proxy Statement and is not considered proxy
soliciting material.
PROPOSAL NO. 1. ELECTION OF DIRECTORS
At the Annual Meeting, six (6) directors are to be elected by the
shareholders to serve until the next Annual Meeting and until their
successors shall be elected and qualified, or until their resignation
or removal. In the event any nominee is unable to or declines to serve
as a director at the time of Annual Meeting, the proxies will be voted
for an additional nominee who will be designated by the current Board of
Directors to fill the vacancy. As of the date of this Proxy Statement,
the Board of Directors is not aware of any nominee who is unable or will
decline to serve as director.
With respect to election of directors, assuming a quorum is present,
the six nominees receiving the highest number (plurality) of votes in
person or by proxy at the Annual Meeting will be elected as directors.
A quorum is the presence in person or by proxy of shares representing
a majority of the outstanding shares of the Common Stock.
NOMINEES FOR THE BOARD OF DIRECTORS
Set forth below is a description of the backgrounds of each of the
nominees for directors of the Company:
JAMES YAO, 44, was elected Chairman and President of the Company in
January 1997. He has over 16 years of business experience in multinational
companies as well as new ventures in textile and apparel industry, most
recently with Yao Investment Corp. and Lotus International Holdings Corp.,
where he serves as Chairman. Mr. Yao graduated from Miya Gawa University
in Tokyo, Japan.
DAVID LEUNG, 53, joined the Company as Vice President in January 1997.
Prior to joining the Company, Mr. Leung served as General Manager of
Shenzhen New Technology Development Co., Ltd. in Shenzhen, China. He also
serves as a director of Lotus International Holdings Corp. Mr. Leung was
a research fellow with Electronics Research Institute in Guangzhou, China,
under Academia Sinica from 1984 to 1992. Mr. Leung had a BS from Beijing
Institute of Technology.
JAMES LIU, 43, has been a director and Vice President of the Company
since January 1997. Prior to his joining the Company, Mr. Liu served as
President of JBL International Inc. in New York, NY. He is a director of
Lotus International Holdings Corp. From 1983 to 1990, he was a manager
in charge of international trade in Jiangsu Provincial Government of the
People's Republic of China. He graduated with a BA degree from Nanjing
University, China.
JEREMY WANG, 43, was elected Director in March 1997. In the past ten
years, he worked at AT&T Bell Laboratories and Merck & Co. He held various
responsibilities in system engineering, development and product management
in the telecommunications industry. Mr. Wang had an MS in Chemical
Engineering from University of Virginia, and a MS in Computer Science from
New Jersey Institute of Technology.
SIMON GU, 43, has been a director since September 1997. Mr. Gu has more
than twelve years of experience in electronics and computer industries,
and has been a senior computer engineer at AT&T since 1990. He held several
senior technology positions at US Army Armament Research, Development and
Engineering Center and Information Department of Town & County International,
Inc. from 1987 to 1990. Mr. Gu holds a Master of Sciences in computer
sciences from Polytechnic University of New York and a BS in computer
sciences from Kean College of New Jersey.
GARY HUANG, 42, has been Treasurer and Secretary of the Company since
January 1997 and Chief Financial Officer since July 1998. Prior to joining
the Company, Mr. Huang served as Senior Accountant / Financial Analyst at
Rightiming Electronics Corp. with overall responsibilities in accounting,
financial reporting and treasury functions. He holds an MBA in finance from
University of New Haven and an MA in Economics from Yale University.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES FOR DIRECTORS NAMED ABOVE.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
BOARD OF DIRECTORS MEETINGS
The Board of Directors held a total of nine meetings during the fiscal
year ended June 30, 1998. Each incumbent director attended at least 75%
of the aggregate number of meetings of the Board of Directors.
AUDIT COMMITTEE
The Audit Committee acts on behalf of the Board of Directors with respect
to the Company's financial statements, record-keeping, auditing practices
and matters relating to the Company's independent public accountants. The
Audit Committee currently consists of Messrs. Jeremy Wang, Simon Gu and
Gary Huang.
COMPENSATION COMMITTEE
The Compensation Committee reviews and makes recommendations to the Board
of Directors the appropriate compensation of directors and executive
officers of the Company. The Compensation Committee currently consists of
Messrs. James Yao and Jeremy Wang.
NOMINATING COMMITTEE
The Company does not have a standing nominating committee. The functions
customarily attributable to a nominating committee are performed by the
Board of Directors.
PROPOSAL NO. 2. RATIFICATION OF SELECTION OF
INDEPENDENT AUDITORS
The firm of Schiffman Hughes Brown has been the Company's independent
auditors since 1994. The Board of Directors has selected that firm to
continue in this capacity for the fiscal year ending June 30, 1999. The
Company is asking the shareholders to ratify the selection by the Board
of Directors of Schiffman Hughes Brown, as independent auditors, to audit
the accounts and record of the Company for the year ending June 30, 1999,
and to perform other appropriate services. A representative of Schiffman
Hughes Brown is not expected to attend the Annual Meeting.
Schiffman Hughes Brown is a member of the SEC Practice Section (SECPS)
of the AICPA Division for Accounting Firms Peer Review program.
The Board of Directors recommends a vote IN FAVOR OF the ratification
of the selection of Schiffman Hughes Brown. In the event that a majority
of the shares voted at the Annual Meeting do not vote for the ratification,
the Board of Directors will reconsider such selection. Under all circum-
stances, the Board of Directors retains the corporate authority to change
the auditors at a later date.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the number of
shares of Common Stock beneficially owned as of September 30,1998, by
(i) all holders of shares of Common Stock (the "Shareholders") known by
the Company to own beneficially more than 5% of the outstanding shares
of the Common Stock, (ii) the executive officers of the Company named in
the table under "Executive Compensation- Compensation of Executive Officers"
(iii) each director and nominee for director of the Company and (iv) all
directors and officers of the Company as a group.
DIRECTORS, NOMINEES AMOUNT AND NATURE OF
AND OFFICERS BENEFICIAL OWNERSHIP
James Yao ...................... 180,000 (1)
Chairman & President
David Leung .................... 500,000 (1)
Director & Vice President
James Liu ...................... 180,000 (1)
Director & Vice President
Jeremy Wang .................... 180,000 (2)
Director
Simon Gu ....................... 0
Director
Gary Huang ..................... 0
Chief Financial Officer, Secretary & Director
All directors and executive officers
As a group ..................... 1,040,000
FIVE PERCENT SHAREHOLDERS
Lotus International Holdings Corp... 8,286,670 (3)
Yao Investment Corp................. 8,000,000 (3)
Rightiming Electronics Corp......... 6,000,000
Evolving Investments Ltd............ 3,100,000 (4)
Hothfield Investment Ltd............ 2,600,000
- -----------------------------------------------
(1) Options with an exercise price of $6.00 per share, expiring on
May 15, 2002.
(2) Options with an exercise price of $6.00 per share, expiring
on May 30, 2002.
(3) James Yao serves as a director of Lotus International Holdings
Corp. and owns Yao Investment Corp.
(4) The number indicated above does not include its 8 million shares
of warrants. The exercise price for these warrants is $3.00 per share,
and will expire on May 5, 2002.
EXECUTIVE COMPENSATION
The following table sets forth all annual compensation paid to each
executive officer by the Company as of September 30, 1998 (Note 1).
Name and Annual Other Annual
Principal Position Year Salaries Compensation
James Yao 1998 $68,000 None
President & Chairman 1997 $68,000 Note 2
David Leung 1998 None None
Vice President 1997 None Note 2
& Director
James Liu 1998 $68,000 None
Vice President 1997 $68,000 Note 2
& Director
Gary Huang 1998 $50,000 None
Chief Financial 1997 $36,000 None
Officer & Secretary
___& Secretary_________________________________
Note 1. All executive officers were appointed in January 1997, and
Mr. Gary Huang was appointed as CFO in July 1998.
Note 2. As part of its compensation plan, the Company issued 180,000
shares of stock options to James Yao, 500,000 shares to David
Leung, and 180,000 shares to James Liu on May 15, 1997. Those
stock options are currently exercisable at $6.00 per share and
shall expire on May 15, 2002. As of September 30, 1998, no
stock options were exercised. See"Security Ownership of Certain
Beneficial Owners and Management".
COMPENSATION OF DIRECTORS
Members of the Board of Directors are not paid a fee for attending
Board of Directors or committee meetings, but are reimbursed for their
travel expenses to and from the meetings.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Executive officers and directors of the Company are required to file
initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission pursuant to Section 16 (a) of the
Securities Exchange Act of 1934. The Company has reviewed such reports
received by it and believes that all of its executive officers and
directors complied with all applicable Section 16 (a) filing requirements
for the fiscal year ended June 30, 1998.
OTHER MATTERS WHICH MAY COME BEFORE THE MEETING
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting other than that stated in the
Notice of Annual Meeting. However, if any other matter should properly
come before this Annual Meeting it is the intention of the persons named
in the enclosed proxy to vote in accordance with their judgment on such
matter.
SHAREHOLDER PROPOSALS
Shareholders are entitled to submit proposals on matters appropriate
for shareholder action consistent with the regulations of the Securities
and Exchange Commission. If a shareholder intends to present a proposal
at next year's Annual meeting of Shareholders, the proposal must be
received by the Secretary of the Company not later than July 31, 1999
in order to be included in the Company's proxy statement and form of
proxy relating to that Meeting. Under the rules of the Securities and
Exchange Commission, shareholders submitting such proposals are required
to have held shares of the Company's Common Stock amounting to at least
$1,000 in market value or one percent of the Common Stock outstanding
for at least one year prior to the date on which such proposals are
submitted. Further, such shareholders must continue to own at least that
amount of the Company's Common Stock through the date on which the Annual
Meeting is held.
By order of the Board of Directors
Gary Huang
Secretary
Piscataway, NJ
October 28, 1998
PROXY
LOTUS PACIFIC, INC.
SHAREHOLDERS' PROXY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints James Yao and James Liu, with full
power of substitution, attorneys, agents and proxies to vote on behalf
of the undersigned at the Annual Meeting of Shareholders of Lotus
Pacific, Inc. to be held on Wednesday, December 2, 1998 at 2:00 p.m.
or at any adjournment thereof:
1. Proposal to elect James Yao, David Leung, James Liu, Jeremy Wang,
Simon Gu and Gary Huang as directors until the next Annual Meeting
or until their successors have been duly qualified and elected.
( ) FOR all nominees listed above ( ) WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
Below) listed above
------------------------------------------------------------------
(Instruction: To Withhold Authority to Vote for Any Individual Nominee,
Write That Nominee's Name in the Space Provided Above)
2. Proposal to ratify the Board of Directors' selection of Schiffmman,
Hughes Brown to serve as the Company's independent auditors for the
fiscal year ending June 30, 1999.
( ) FOR ( ) AGAINST ( ) ABSTAIN
The Proxies are authorized to vote, in their discretion, upon such
other business as may properly come before the meeting.
-------------------------
Signature
Dated: _________, 1998 -------------------------
Signature, if held jointly
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by the President
or other authorized officer. If a partnership, please sign in part-
nership name by an authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
