<PAGE>
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
[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
MAN SANG HOLDINGS, INC.
- -------------------------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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.:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
MAN SANG HOLDINGS, INC.
21/F RAILWAY PLAZA
39 CHATHAM ROAD SOUTH
TSIMSHATSUI, KOWLOON, HONG KONG
-----------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FRIDAY, NOVEMBER 15, 1996
-----------------------
To the Shareholders of Man Sang Holdings, Inc.:
An Annual Meeting of Shareholders of Man Sang Holdings, Inc. (the
"Company") will be held at 431 East Central Boulevard, Suite 900, Orlando,
Florida at 10:00 a.m., on Friday, November 15, 1996 for the following purposes:
1. To elect seven directors of the Company to hold office until the
next annual meetings of shareholders or until their successors are duly
elected and qualified.
2. To consider a proposal to adopt the Man Sang Holdings, Inc. 1996
Stock Option Plan.
3. To consider a proposal to ratify the appointment of Deloitte
Touche Tohmatsu as the Company's independent certifying accountants.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on October 25, 1996 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you are
planning to attend the meeting, you are urged to complete, date and sign the
enclosed proxy card and return it promptly.
YOUR VOTE IS IMPORTANT! PLEASE PROMPTLY MARK, DATE, SIGN, AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE. IF YOU ARE ABLE TO ATTEND THE MEETING AND WISH
TO VOTE YOUR SHARES PERSONALLY, YOU MAY DO SO AT ANY TIME BEFORE THE PROXY IS
VOTED.
By Order of the Board of Directors
/s/ SAM SIO
----------------------------------
Sam Sio
SECRETARY
Hong Kong
October 25, 1996
<PAGE>
MAN SANG HOLDINGS, INC.
21/F RAILWAY PLAZA
39 CHATHAM ROAD SOUTH
TSIMSHATSUI, KOWLOON, HONG KONG
-----------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 15, 1996
-----------------------
This Proxy Statement is being furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Man Sang Holdings, Inc. (the
"Company") for use at the 1996 Annual Meeting of Shareholders of the Company
and at any adjournment thereof (the "Annual Meeting"). The Annual Meeting is
scheduled to be held at 431 East Central Boulevard, Suite 900, Orlando, Florida
32801, on Friday, November 15, 1996 at 10:00 a.m. local time. The Proxy
Statement and the enclosed form of proxy will first be sent to shareholders on
or about October 25, 1996.
PROXIES
The shares represented by any proxy in the enclosed form, if such proxy is
properly executed and is received by the Company prior to or at the Annual
Meeting prior to the closing of the polls, will be voted in accordance with the
specifications made thereon. Proxies on which no specification has been made by
the shareholder will be voted FOR the election to the Board of Directors of the
nominees of the Board of Directors named herein, FOR the adoption of the Man
Sang Holdings, Inc. 1996 Stock Option Plan and FOR the ratification of the
appointment of the designated independent accountants. Proxies are revocable by
written notice received by the Secretary of the Company at any time prior to
their exercise or by executing a later dated proxy. Proxies will be deemed
revoked by voting in person at the Annual Meeting.
VOTING SECURITIES
Shareholders of record at the close of business on October 25, 1996 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. On
the Record Date, the total number of shares of common stock of the Company,
$.001 par value per share (the "Common Stock"), outstanding and entitled to vote
was 4,304,699. The holders of all outstanding shares of Common Stock are
entitled to one vote for each share of Common Stock registered in their names on
the books of the Company at the close of business on the Record Date. In
addition to the Common Stock, the Company had 100,000 shares of Series A
Preferred Stock (the "Series A Preferred Stock") outstanding and entitled to
vote as of the Record Date. The holders of Series A Preferred Stock, as a
class, are entitled to one-third voting control, or an aggregate of 2,152,350
votes at the Annual Meeting, in all matters voted on by the shareholders of the
Company.
QUORUM AND OTHER MATTERS
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the eligible votes represented by the outstanding shares of
Common Stock and Series A Preferred Stock entitled to vote at the Annual Meeting
is necessary to constitute a quorum.
Shares of Common Stock and Series A Preferred Stock represented by a
properly dated, signed and returned proxy will be counted as present at the
Annual Meeting for purposes of determining a quorum, without regard to whether
the proxy is marked as casting a vote or abstaining. If a quorum is present, in
person or by proxy, a plurality vote of shares of Common Stock and Series A
Preferred Stock present and entitled to vote at the Annual Meeting, will be
necessary for the election of directors pursuant to proposal 1 and the
ratification of independent accountants pursuant to proposal 3. Accordingly,
abstentions and broker non-votes will not effect the outcome of the election of
directors or the ratification of the appointment of the Company's independent
accountants.
<PAGE>
If a quorum is present, the affirmative vote, in person or by proxy, of a
majority of shares of Common Stock and Series A Preferred Stock present and
entitled to vote at the Annual Meeting, will be necessary for the adoption of
the stock option plan pursuant to proposal 2 listed in the Notice of Meeting.
Broker non-votes are treated as not being present in person or by proxy at the
Annual Meeting and, therefore, will not affect the outcome of the voting on any
of the proposals hereunder. Abstentions are treated as being present and,
because the affirmative vote of a majority of the shares of Common Stock and
Series A Preferred Stock present and entitled to vote on a particular proposal
is necessary for adoption of such proposal, the effect of an abstention is a
vote against the proposal.
The Board of Directors is not aware of any matters that are expected to
come before the Annual Meeting other than those referred to in this Proxy
Statement. If any other matter should come before the Annual Meeting, the
persons named in the accompanying proxy intend to vote such proxies in
accordance with their best judgment.
Under the laws of the State of Nevada, dissenters rights are not available
to shareholders of the Company with respect to any matter scheduled to be
brought before the Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
Seven directors are to be elected to serve until the next annual meeting of
shareholders and until their successors are elected and shall have qualified.
The Board of Directors has nominated Ricky Cheng Chung Hing, Cheng Tai Po, Sam
Sio Kam Seng, Amy Yan Sau Man, Sonny Hung Kwok Wing, Matthew Lai Chau Ming and
Ernest Yuen Ka Lok to serve as directors (the "Nominees"). Ricky Cheng Chung
Hing, Cheng Tai Po, Sam Sio Kam Seng and Amy Yan Sau Man are currently serving
as directors of the Company. The remaining Nominees are nominated to serve as
directors of the Company for the first time. Directors shall be elected by
shareholders holding a plurality of the votes represented by the shares of
Common Stock and Series A Preferred Stock present at the Annual Meeting. In the
event that any one of the Nominees is unable or declines to serve as a director,
the Board of Directors intends to substitute another person of their choice as
nominee, in his place and stead, or to present such lesser number of directors
in accordance with the Company's Bylaws. The Board of Directors has no reason
to believe that any Nominee will be unable to serve or decline to serve as a
director. Any vacancy occurring between shareholders' meetings, including
vacancies resulting from an increase in the number of directors, may be filled
by the Board of Directors. A director elected to fill a vacancy shall hold
office until the next annual shareholders' meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE TO THE BOARD OF DIRECTORS.
2
<PAGE>
INFORMATION REGARDING NOMINEES
The following table sets forth information with respect to each Nominee for
election as a director. The information as to age, principal occupation and
directorships held has been furnished by each such nominee.
SERVED AS
DIRECTOR
PRINCIPAL CONTINUOUSLY
NAME AND AGE OCCUPATION (1) SINCE
------------ -------------- ------------
Ricky Cheng Chung Hing (35).... President and Chairman of the Board 1996
Cheng Tai Po (43).............. Vice Chairman 1996
Sam Sio Kam Seng (37).......... Chief Executive Officer 1996
Amy Yan Sau Man (33)........... Vice President 1996
Sonny Hung Kwok Wing (33)...... Vice President (2) (5)
Matthew Lai Chau Ming (44)..... Senior Manager of Vickers Ballas (5)
HK Ltd., an investment banking firm,
since 1996 (3)
Ernest Yuen Ka Lok (33)........ Partner in the law firm of Ivan (5)
Tang & Co. since 1996 (4)
______________
(1) Unless indicated otherwise in the table or in the section of this Proxy
Statement captioned "Information Regarding Executive Officers," the
individuals named in the table have held their positions for more than five
years.
(2) Prior to joining the Company, effective November 1, 1996, Mr. Hung served
as Deputy Manager of Dah Sing Bank from February, 1996 to October, 1996 and
as Branch Manager for the Hong Kong Bank from 1991 to February, 1996.
(3) Prior to joining Vickers Ballas HK Ltd., Mr. Lai served as Senior Manager
of Sun Hung Kai Investment Company from 1972 to 1996.
(4) Prior to joining Ivan Tang & Co., Mr. Yuen was employed as a consultant by
Ivan Tang & Co. from 1994 to 1996. From 1992 to 1994, Mr. Yuen was
employed as an Assistant Solicitor by Van Langenbery & Lau.
(5) Nominated for first term as director.
INFORMATION REGARDING EXECUTIVE OFFICERS
The following table sets forth the names, ages and offices of the present
executive officers of the Company. The periods during which such persons have
served in such capacities are indicated in the description of business
experience of such persons below. Information with respect to non-employee
directors is set forth above.
Ricky Cheng Chung Hing (35)...... President and Chairman
Cheng Tai Po (43)................ Vice Chairman
Sam Sio Kam Seng (37)............ Chief Executive Officer
Amy Yan Sau Man (33)............. Vice President
Frederick Cheng Hok Kai (32)..... Vice President and Chief Financial
Officer
Sonny Hung Kwok Wing (33)........ Vice President
Officers and directors are elected on an annual basis. The present terms
for each director will expire at the next annual meeting of shareholders or at
such time as a successor is duly elected. Officers serve at the discretion of
the Board of Directors. See "Beneficial Ownership of Common Stock."
3
<PAGE>
Ricky Cheng Chung Hing and Cheng Tai Po are brothers. Other than the
foregoing, there are no family relationships among any of the directors or
officers of the Company.
The following is a biographical summary of the business experience of the
present executive officers of the Company.
CHENG CHUNG HING, RICKY. Mr. Cheng co-founded the Man Sang Group and has
served as Chairman of the Board of Directors and President of the Company since
January 8, 1996 and of Man Sang Group since inception in 1980. Mr. Cheng has
over 15 years experience in the pearl business and is responsible for overall
planning, strategic formulation and business development of the Company.
CHENG TAI PO. Mr. Cheng co-founded the Man Sang Group and has served as
Vice-Chairman of the Company since January 8, 1996 and of Man Sang Group since
inception. Mr. Cheng has over 12 years experience in the pearl business and is
responsible for purchasing and production of Chinese cultured pearls as well as
overall planning, strategic formulation and business planning of the Company.
SIO KAM SENG, SAM. Mr. Sio has served as Chief Executive Officer and a
Director of the Company since January 8, 1996 and of the Man Sang Group since
1995. Mr. Sio also served as Chief Financial Officer up to June 1, 1996. Mr.
Sio is responsible for overall planning, strategic formulation, business
development and daily operations. Mr. Sio has over 15 years experience in
sales, marketing and administrative management. Prior to joining the Company,
from 1992 to 1995, Mr. Sio served as Assistant General Manager of Sime Insurance
Brokers Group, a publicly traded Malaysia based insurance brokerage company.
From 1989 to 1992, Mr. Sio served as Area Manager for Hong Kong Bank Insurance
Group. Mr. Sio is an associate of the Institute of Administrative Management of
the United Kingdom.
YAN SAU MAN, AMY. Ms. Yan has served as Vice President and a Director of
the Company since January 8, 1996. Ms. Yan has over 12 years experience in the
pearl business. Ms. Yan joined Man Sang Group in 1984 and is responsible for
overall marketing and sales activities of the Company as well as assisting in
overall planning, strategic formulation and business development of the Company.
CHENG HOK KAI, FREDERICK. Mr. Cheng has served as Vice President and
Deputy Chief Financial Officer of the Company since February of 1996. In June
of 1996, Mr. Cheng assumed the position of Chief Financial Officer. From 1992
until joining the Company, Mr. Cheng served as Finance Manager, and as Deputy
General Manager since 1993, of Sum Tat Holdings Ltd., a construction and
property development company in Hong Kong. Previously, Mr. Cheng served as a
senior accountant with Price Waterhouse for 3 years. Mr. Cheng received a
bachelor's degree of science in Finance and Accounting from the University of
Salford, U.K., and a master's degree of Commerce in Accounting from the
University of New South Wales, Australia. He is an associate of the Australian
Society of Certified Practicing Accountants, an associate of the Hong Kong
Society of Accountants, an associate of the Australian Institute of Corporate
Managers, Secretaries and Administrators and also an associate of the Chartered
Institute of Company Secretaries.
HUNG KWOK WING, SONNY. Mr. Hung joined the Company as Vice President
effective November 1, 1996. Prior to joining the Company, Mr. Hung was employed
as Deputy Manager of Dah Sing Bank from February, 1996 to October, 1996 and as
Branch Manager of the Hong Kong Bank from 1991 to February, 1996. Mr. Hung is
responsible for formulation and execution of corporate policies and participates
in the development and implementation of corporate planning programs. Mr. Hung
received bachelor's degrees in Finance and Banking from San Francisco State
University and a master's degree in Business Administration from the University
of Strathclyde, U.K.
4
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT
Under the securities laws of the United States, the Company's directors,
its executive officers, and any persons holding more than ten percent of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Specific due dates for these reports have
been established and the Company is required to disclose in its Proxy Statement
any failure to file by these dates during its most recent fiscal year. During
1995, the Company had no class of equity securities registered under Section 12
of the Securities Exchange Act of 1934 and, therefore, no reports were required
to be filed pursuant to Section 16(a) of the Exchange Act.
COMMITTEES AND ATTENDANCE OF THE BOARD OF DIRECTORS
The Company presently maintains no standing committees of its board of
directors. The Company intends to evaluate the creation of a standing Audit
Committee and a standing Compensation Committee at such time as the board deems
appropriate.
During the year ended March 31, 1996, the Board of Directors held two
formal meetings. Each director (during the period in which each such director
served) attended at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors, plus (ii) the total number of meetings held
by all committees of the Board of Directors on which the director served.
COMPENSATION OF DIRECTORS
The Company reimburses each director for all expenses of attending board
meetings. The Company has established a fee of $600 to be paid to each non-
employee director for each Board of Directors meeting or committee meeting
attended. Otherwise, no compensation of any nature is paid to employee
directors.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information concerning cash and non-cash
compensation paid or accrued for services in all capacities to the Company
during the year ended March 31, 1996 of the Chief Executive Officer and each of
the next four most highly compensated executive officers of the Company whose
compensation exceeded $100,000 (the "Named Officers").
<TABLE>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------
OTHER ANNUAL STOCK
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS (#)
- --------------------------- ---- ---------- --------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Ricky Cheng Chung Hing (3).. 1996 194,049 - 41,000 (1)(2) -
President and Chairman of 1995 51,726 - 48,890 (1)(2) -
the Board 1994 51,726 - 34,761 (1)(2) -
Sam Sio Kam Seng (3)........ 1996 55,727 - - -
Chief Executive Officer 1995 - - - -
1994 - - - -
Cheng Tai Po................ 1996 194,049 - - -
Vice Chairman 1995 43,967 - - -
1994 39,829 - - -
</TABLE>
_____________
(1) Although the officers receive certain perquisites such as Company provided
life insurance and medical insurance, the value of such perquisites did not
exceed the lesser of $50,000 or 10% of the officer's salary and bonus.
5
<PAGE>
(2) In addition to the amounts referred to in note (1) above, Ricky Cheng Chung
Hing is provided the right to use a leasehold property of the Company at no
cost as his personal residence. The estimated fair rental value of such
leasehold property was $41,000.
(3) Ricky Cheng Chung Hing served as the chief executive officer of the Company
during each of the referenced periods. Sam Sio Kam Seng joined the Company
and assumed the position of chief executive officer after fiscal year 1995.
EMPLOYMENT CONTRACTS
The Company has no employment agreements with any of its officers or
employees. The salaries of the Company's principal officers have been fixed for
the fiscal year ending March 31, 1997 at $285,000 for Ricky Cheng Chung Hing,
plus a $41,000 housing allowance, $285,000 for Cheng Tai Po, $91,000 for Sam Sio
Kam Seng, $65,000 for Frederick Cheng Hok Kai and $65,000 for Amy Yan Sau Man,
plus a discretionary performance bonus.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table is furnished as of October 25, 1996, to indicate
beneficial ownership of shares of the Company's Common Stock by (1) each
shareholder of the Company who is known by the Company to be a beneficial owner
of more than 5% of the Company's Common Stock, (2) each director, nominee for
director and Named Officer of the Company, individually, and (3) all officers
and directors of the Company as a group. The information in the following table
was provided by such persons.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership (1)(2) of Class (2)
- ------------------- --------------------------- ------------
Cafoong Limited (2) . . . . . . . . . . 1,357,875(2) 31.5%
21/F Railway Plaza
39 Chatham Road South
Tsimshatsui, Kowloon, Hong Kong
Ricky Cheng Chung Hing (2) . . . . . . 814,725(2) 18.9%
Cheng Tai Po (2) . . . . . . . . . . . 543,150(2) 12.6%
Sam Sio Kam Seng . . . . . . . . . . . -0- *
Amy Yan San Man . . . . . . . . . . . -0- *
Sonny Hung Kwok Wing . . . . . . . . . -0- *
Matthew Lai Chau Ming . . . . . . . . . -0- *
Ernest Yuen Ka Lok . . . . . . . . . . -0- *
All executive officers and directors
as a group (8 persons) . . . . . . . . 1,357,875 31.5%
_____________
(1) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them,
subject to community property laws, where applicable, and the information
contained in the footnotes to the table.
(2) Ricky Cheng Chung Hing and Cheng Tai Po own 60% and 40%, respectively, of
the stock, and are directors, of Cafoong Limited and, accordingly, may be
attributed beneficial ownership of the shares owned by Cafoong Limited.
6
<PAGE>
SERIES A PREFERRED STOCK
The following table is furnished as of October 25, 1996, to indicate
beneficial ownership of shares of the Company's Series A Preferred Stock by (1)
each shareholder of the Company who is known by the Company to be a beneficial
owner of more than 5% of the Company's Series A Preferred Stock, (2) each
director, nominee for director and Named Officer of the Company, individually,
and (3) all officers and directors of the Company as a group. The information
in the following table was provided by such persons.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership (1) of Class
------------------- ------------------------ ---------
Cafoong Limited (1) . . . . . . . . . . 100,000(1) 100.0%
21/F Railway Plaza
39 Chatham Road South
Tsimshatsui, Kowloon, Hong Kong
Ricky Cheng Chung Hing (1) . . . . . . 60,000(1) 60.0%
Cheng Tai Po (1) . . . . . . . . . . . 40,000(1) 40.0%
All executive officers and directors
as a group (8 persons) . . . . . . . . 100,000(1) 100.0%
_____________
(1) Ricky Cheng Chung Hing and Cheng Tai Po own 60% and 40%, respectively, of
the stock, and are directors, of Cafoong Limited and, accordingly, may be
attributed beneficial ownership of the shares owned by Cafoong Limited.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
During the past three years, the Company has loaned funds to and received
advances from Ricky Cheng Chung and Cheng Tai Po, the founders and principal
shareholders of the Company. Advances to Ricky Cheng Chung Hing totaled $-0- at
March 31, 1996. The maximum amount advanced to Ricky Cheng Chung Hing during
the past three years was $1,132,500. Advances to Cheng Tai Po totaled $-0- at
March 31, 1996. The maximum amount advanced to Cheng Tai Po during the past
three years was $1,089,000. All such advances were made on a non-interest
bearing basis and without definitive repayment terms.
During the same period, Ricky Cheng Chung Hing and Cheng Tai Po advanced
funds to the Company on a non-interest bearing basis and repayable on demand.
Advances from Ricky Cheng Chung Hing totaled $345,000 at March 31, 1996 (this
amount was fully settled on May 30, 1996) and advances from Cheng Tai Po totaled
$-0- at March 31, 1996. The maximum amount owed to Ricky Cheng Chung Hing and
to Cheng Tai Po during the past three years was $1,104,000 and $459,000,
respectively.
During the year ended March 31, 1994, the Company sold its 25% interest in
New Land Group Limited to Ricky Cheng Chung Hing at its cost of HK$500,000. The
Company believes that the terms of such sale were at least as favorable as could
have been obtained from nonaffiliated third parties.
Finally, during the past three years, Ricky Cheng Chung Hing has utilized a
leasehold property of the Company as a personal residence at no cost to Mr.
Cheng. See "Executive Compensation."
7
<PAGE>
PROPOSAL 2
APPROVAL OF THE COMPANY'S 1996
STOCK OPTION PLAN
In October of 1996, the Company's Board of Directors adopted and approved a
stock option plan for the Company, the Man Sang Holdings, Inc. 1996 Stock Option
Plan (the "1996 Plan"), under which stock options awards may be made to
employees, directors and consultants of the Company. A copy of the 1996 Plan is
attached hereto as Annex A. The purpose of the 1996 Plan is to promote the
interests of the Company and its shareholders by establishing a direct link
between the financial interests of participating employees, directors and
consultants and the performance of the Company and enabling the Company to
attract and retain highly competent employees, directors and consultants. No
options have been granted to date under the 1996 Plan and the amount of benefits
to be received under the 1996 Plan by any particular person or group is not
determinable at this time. See "New Benefit Plans" below.
GENERAL PROVISIONS
DURATION OF THE 1996 PLAN; SHARE AUTHORIZATION. The 1996 Plan became
effective on the date it was adopted by the Board of Directors, subject to the
approval of the Company's shareholders, and it will remain effective until the
tenth anniversary of the effective date unless terminated earlier by the Board
of Directors. If shareholder approval is not obtained, the 1996 Plan will not
be implemented and any options granted under the 1996 Plan will be void.
The maximum number of shares of Common Stock which may be issued or
delivered and as to which awards may be granted under the 1996 Plan will be
1,000,000 shares. The exercise price for a stock option must be at least equal
to 100% of the fair market value of the Common Stock on the date of grant of
such stock option for "incentive options" and 85% of the fair market value of
the Common Stock on the date of grant of such stock option for "non-qualified
options".
The shares of Common Stock to be issued or delivered under the 1996 Plan
will be authorized and unissued shares or previously issued and outstanding
shares of Common Stock reacquired by the Company. Shares of Common Stock
covered by any unexercised portions of terminated options and shares of Common
Stock subject to any awards which are otherwise surrendered by plan participants
without receiving any payment or other benefit with respect thereto may again be
subject to new awards under the 1996 Plan.
PLAN ADMINISTRATION. The 1996 Plan will be administered by a Compensation
Committee to be appointed by the Board of Directors with the advise and
recommendations of senior management. The Compensation Committee will be
comprised solely of non-employee directors of the Company. The Compensation
Committee will determine the employees who will be eligible for and granted
awards, determine the amount and type of awards, establish rules and guidelines
relating to the 1996 Plan, establish, modify and determine terms and conditions
of awards and take such other action as may be necessary for the proper
administration of the 1996 Plan.
PLAN PARTICIPANTS. Any employee of the Company may be selected by the
Compensation Committee to receive an award under the 1996 Plan. Presently,
there are approximately 509 employees eligible to participate in the 1996 Plan.
Additionally, non-employee directors of the Company will be eligible to receive
awards of options under the Plan. Finally, key consultants, as determined by
the Compensation Committee, may receive awards of non-qualified options under
the 1996 Plan.
AWARDS AVAILABLE UNDER 1996 PLAN
Awards under the 1996 Plan may take the form of stock options meeting the
requirements of Section 422 of the Internal Revenue Code of 1986 ("Incentive
Stock Options") and stock options which do not meet such requirements ("Non-
Qualified Stock Options"). Only employees of the Company are eligible to
receive Incentive Stock Options under the 1996 Plan. The duration of each
option will be determined by the
8
<PAGE>
Compensation Committee, but no option will be exercisable more than ten years
from the date of grant (or, with respect to Incentive Stock Options granted
to persons holding ten percent or more of the outstanding Common Stock, five
years from the date of grant). The exercise price for incentive stock
options must be at least equal to 100% of the fair market value of the Common
Stock on the date of grant of such option (or, with respect to Incentive
Stock Options granted to persons holding ten percent or more of the
outstanding Common Stock, 110% of the fair market value of the Common Stock).
The exercise price will be payable in cash or in such other form as the
Compensation Committee may approve in the applicable award agreement,
including, without limitation, by a cashless exercise or the delivery to the
Company of shares of Common Stock owned by the participant.
The options may be subject to restrictions on exercise, such as exercise in
periodic installments or upon attainment of specified performance criteria, as
determined by the Compensation Committee. Stock options granted under the 1996
Plan will not be transferable except by will or the laws of descent and
distribution and may be exercised only by a participant during his or her
lifetime.
Unless otherwise determined by the Compensation Committee and provided in
the applicable option agreement, options will be exercisable within three months
of any termination of employment, including termination due to disability, death
or normal retirement (but not later than the expiration date of the option).
TERMINATION AND AMENDMENT
The Board may amend or terminate the 1996 Plan at any time but, without an
optionee's consent, no such action will affect or in any way impair the rights
of such optionee under any award granted prior to such action, and no amendment
will be made without the approval of the Company's shareholders if such approval
is required to maintain the compliance of the 1996 Plan with Rule 16b-3 of the
Securities and Exchange Commission or Section 422 of the Internal Revenue Code
of 1986.
ANTIDILUTION PROVISIONS
The amount of shares authorized to be issued under the 1996 Plan, and the
terms of outstanding stock options, shall be adjusted to prevent dilution or
enlargement of rights in the event of any stock dividend, reorganization,
reclassification, recapitalization, stock split, combination, merger,
consolidation or other capitalization change of similar effect.
WITHHOLDING OBLIGATIONS
The Company has the right to deduct from an optionee's salary, bonus or
other compensation any taxes required to be withheld with respect to options
granted under the 1996 Plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal federal income tax
consequences of awards under the 1996 Plan based upon current federal income tax
laws. The summary is not intended to be exhaustive and, among other things,
does not describe state, local or foreign tax consequences.
An optionee is not subject to federal income tax either at the time of
grant or at the time of exercise of an Incentive Stock Option. However, some
optionees are subject to the "alternative minimum tax" and the amount by which
the fair market value of the Common Stock subject to an Incentive Stock Option
on the date of exercise exceeds the exercise price will generally be added to
the optionee's income for purposes of calculating his or her alternative minimum
taxable income. If an optionee does not dispose of shares of Common Stock
acquired through the exercise of an Incentive Stock Option within one year after
their receipt and within two years after the date of grant of the Incentive
Stock Option (either event, a "disqualifying disposition") the taxable income
recognized upon the sale of such shares will be taxed at the long-term capital
gains rate.
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The Company will not receive any tax deduction in connection with the
exercise of an Incentive Stock Option unless there is a disqualifying
disposition. If there is a disqualifying disposition, the optionee will be
treated as receiving compensation subject to ordinary income tax in the year of
the disqualifying disposition and the Company will be entitled to an equal
deduction for compensation expense. The tax will be imposed on the lesser of
(i) the difference between the fair market value of the stock at the time of
exercise and the exercise price or (ii) the amount of gain realized on the
disposition. Any appreciation in value after the time of exercise will be taxed
as capital gain and will not result in any deduction by the Company.
If Non-Qualified Stock Options are granted to an optionee, there are no
federal income tax consequences at the time of grant. Upon exercise of the
option, the optionee will recognize ordinary income in an amount equal to the
difference between the exercise price and the fair market value of the Common
Stock on the date of exercise. When the optionee thereafter sells the shares,
the difference between any amount realized on such sale and the fair market
value of the shares at the time of exercise will be taxed as capital gain or
loss, which will be short-term or long-term, depending on whether the applicable
capital gain holding period has been satisfied.
NEW PLAN BENEFITS
No options have been granted to date under the 1996 Plan. Accordingly, the
amount of benefits to be received under the 1996 Plan by any particular person
or group is not determinable at this time.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
COMPANY'S 1996 STOCK OPTION PLAN.
PROPOSAL 3
INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte Touche Tohmatsu as independent
auditors for the year ending March 31, 1997, and recommends that the
shareholders vote for ratification of such appointment. Deloitte Touche
Tohmatsu were also the Company's independent auditors in fiscal years 1996 and
served as the independent auditors for Man Sang International (B.V.I.) Limited
with respect to the financial statements of such company for fiscal years 1995
and 1994. In the event of a negative vote on such ratification, the Board of
Directors will reconsider its selection.
Representatives of Deloitte Touche Tohmatsu are expected to be present at
the Annual Meeting, will be afforded an opportunity to make a statement if they
desire to do so, and are expected to be available to respond to appropriate
inquiries from shareholders.
Following the acquisition of Man Sang International (B.V.I.) Limited by
UNIX Source America, Inc., on March 21, 1996, the Company's Board of Directors
selected Deloitte Touche Tohmatsu to serve as its new independent accountants
and dismissed Mantyla, McReynolds & Associates, Certified Public Accountants, of
Salt Lake City, Utah, which previously served as the independent accountants for
UNIX Source America, Inc.
Mantyla, McReynolds & Associates' reports on the financial statements of
UNIX Source America for the fiscal years 1995 and 1994 contain no adverse
opinion or disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope, or accounting principles. In connection with its
audits for fiscal years 1995 and 1994 and through March 21, 1996, there were no
disagreements with Mantyla, McReynolds & Associates on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements if not resolved to the satisfaction of Mantyla,
McReynolds & Associates would have caused them to make reference thereto in its
reports on the financial statements for such years.
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The information described above regarding the Company's decision to dismiss
Mantyla, McReynolds & Associates as its independent accountants and select
Deloitte Touche Tohmatsu as its new independent accountants, along with a letter
from Mantyla, McReynolds & Associates stating that it agrees with the above
information regarding the Company's change of accountants, was fully disclosed
in a Form 8-K filed with the SEC on March 28, 1996.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF
THE APPOINTMENT OF DELOITTE TOUCHE TOHMATSU AS INDEPENDENT ACCOUNTANTS FOR THE
COMPANY.
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
In order for shareholder proposals to be included in the Company's Proxy
Statement and proxy relating to the Company's 1997 Annual Meeting of
Shareholders, such proposals must be received by the Company at its principal
executive offices not later than July 15, 1997.
EXPENSES OF SOLICITATION
All of the expenses of soliciting proxies from shareholders, including the
reimbursement of brokerage firms and others for their expenses in forwarding
proxies and proxy statements to the beneficial owners of the Company's Common
Stock, will be borne by the Company.
OTHER MATTERS
The Board of Directors does not intend to bring any other matters before
the Annual Meeting and has not been informed that any other matters are to be
presented by others. In the event any other matters properly come before the
Annual Meeting, the persons named in the enclosed form of proxy will vote all
such proxies in accordance with their best judgment on such matters.
Whether or not you are planning to attend the Annual Meeting, you are urged
to complete, date and sign the enclosed proxy and return it in the enclosed
stamped envelope at your earliest convenience.
By Order of the Board of Directors
/s/ Sam Sio
----------------------------------
Sam Sio
SECRETARY
Hong Kong
October 25, 1996
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MAN SANG HOLDINGS, INC.
1996 STOCK OPTION PLAN
1. PURPOSE. The purpose of this MAN SANG HOLDINGS, INC. 1996 STOCK OPTION
PLAN ("Plan") is to encourage ownership of common stock, $.001 par value
("Common Stock"), of MAN SANG HOLDINGS, INC., a NEVADA corporation (the
"Company"), by eligible key employees, consultants and directors of the Company
and its Affiliates (as defined below) and to provide increased incentive for
such employees, consultants and directors to render services and to exert
maximum effort for the business success of the Company. In addition, the
Company expects that this Plan will further strengthen the identification of
employees, consultants and directors with the shareholders. Certain options to
be granted under this Plan are intended to qualify as Incentive Stock Options
("ISOs") pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended ("Code"), while other options granted under this Plan will be
nonqualified options which are not intended to qualify as ISOs ("Nonqualified
Options"), either or both as provided in the agreements evidencing the options
as provided in Section 6 hereof. As used in this Plan, the term "Affiliates"
means any "parent corporation" of the Company and any "subsidiary corporation"
of the Company within the meaning of Sections 424(e) and (f), respectively, of
the Code.
2. ADMINISTRATION.
2.1 COMPOSITION OF THE COMPENSATION COMMITTEE. This Plan shall be
administered by the Compensation Committee (the "Committee") designated by the
Board of Directors of the Company (the "Board"), which shall also designate the
Chairman of the Committee. If the Company is governed by Rule 16b-3 promulgated
by the Securities and Exchange Commission ("Commission") pursuant to the
Securities Exchange Act of 1934, as amended ("Exchange Act"), no director shall
serve as a member of the Committee unless the director is a "non-employee
director" within the meaning of such Rule 16b-3. Members of such Committee
shall only be eligible to receive stock options under this Plan if such stock
options are granted in accordance with Rule 16b-3.
2.2 COMMITTEE ACTION. The Committee shall hold its meetings at such
times and places as it may be determine. A majority of its members shall
constitute a quorum, and all determinations of the Committee shall be made by
not less than a majority of its members. Any decision or determination reduced
to writing and signed by a majority of the members shall be fully effective as
if it had been made by a majority vote of its members at a meeting duly called
and held. The Committee may designate the Secretary of the Company or other
Company employees to assist the Committee in the administration of this Plan,
and may grant authority to such persons to execute award agreements or other
documents on behalf of the Committee and the Company. Any duly constituted
committee of the Board satisfying the qualifications of this Section 2 may be
appointed as the Committee.
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2.3 COMMITTEE EXPENSES. All expenses and liabilities incurred by the
Committee in the administration of this Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants or other persons.
3. STOCK RESERVED. Subject to adjustment as provided in Section 6.11
hereof, the aggregate number of shares of Common Stock that may be optioned
under this Plan is 1,000,000. The shares subject to this Plan shall consist of
authorized but unissued shares of Common Stock and shares previously issued and
held in treasury by the Company and such number of shares shall be and is hereby
reserved for sale for such purpose. Any of such shares which may remain unsold
and which are not subject to outstanding options at the termination of this Plan
shall cease to be reserved for the purpose of this Plan, but until termination
of this Plan or the termination of the last of the options granted under this
Plan, whichever last occurs, the Company shall at all times reserve a sufficient
number of shares to meet the requirements of this Plan. Should any option
expire or be canceled prior to its exercise in full, the shares theretofore
subject to such option may again be made subject to an option under this Plan.
4. ELIGIBILITY. The persons eligible to participate in this Plan as a
recipient of options ("Optionee") shall include only key employees, consultants
and directors of the Company or its Affiliates at the time the option is
granted. An employee or consultant who has been granted an option hereunder may
be granted an additional option or options, if the Committee shall so determine.
5. GRANT OF OPTIONS.
5.1 COMMITTEE DISCRETION. The Committee shall have sole and absolute
discretionary authority (i) to determine, authorize, and designate those key
employees, consultants and directors of the Company or its Affiliates who are to
receive options under this Plan, (ii) to determine the number of shares of
Common Stock to be covered by such options and the terms thereof, and (iii) to
determine the type of option granted: ISOs, Nonqualified Options or a
combination of ISOs and Nonqualified Options; provided that consultants and
directors who are not employees of the Company may not receive any ISOs. The
Committee shall thereupon grant options in accordance with such determination as
evidenced by a written option agreement. Subject to the express provisions of
this Plan, the Committee shall have discretionary authority to prescribe, amend
and rescind rules and regulations relating to this Plan, to interpret this Plan,
to prescribe and amend the terms of the option agreements (which need not be
identical) and to make all other determinations deemed necessary or advisable
for the administration of this Plan.
5.2 SHAREHOLDER APPROVAL. All options granted under this Plan are
subject to, and may not be exercised before, the approval of this Plan by the
shareholders prior to the first anniversary date of the Board meeting held to
approve this Plan, by the affirmative vote of the holders of a majority of the
outstanding shares of the Company present, or represented by proxy, and entitled
to vote thereat or written consent in accordance with the laws of the State of
Nevada; provided that if such approval by the shareholders of the Company is not
forthcoming, all options previously granted under this Plan shall be void.
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5.3 LIMITATION ON INCENTIVE STOCK OPTIONS. The aggregate fair market
value (determined in accordance with Section 6.2 of this Plan at the time the
option is granted) of the Common Stock with respect to which ISOs may be
exercisable for the first time by any Optionee during any calendar year under
all such plans of the Company and its Affiliates shall not exceed $100,000.
6. TERMS AND CONDITIONS. Each option granted under this Plan shall be
evidenced by an agreement, in a form approved by the Committee, which shall be
subject to the following express terms and conditions and to such other terms
and conditions as the Committee may deem appropriate.
6.1 OPTION PERIOD. The Committee shall promptly notify the Optionee
of the option grant and a written agreement shall promptly be executed and
delivered by and on behalf of the Company and the Optionee, provided that the
option grant shall expire if a written agreement is not signed by said Optionee
(or his agent or attorney) and returned to the Company within 60 days from date
of receipt by the Optionee of such agreement. The date of grant shall be the
date the option is actually granted by the Committee, even though the written
agreement may be executed and delivered by the Company and the Optionee after
that date. Each option agreement shall specify the period for which the option
thereunder is granted (which in no event shall exceed ten years from the date of
grant in the case of an ISO) and shall provide that the ISO shall expire at the
end of such period. If the original term of an option is less than ten years
from the date of grant, the option may be amended prior to its expiration, with
the approval of the Committee and the Optionee, to extend the term so that the
term as amended is not more than ten years from the date of grant. However, in
the case of an ISO granted to an individual who, at the time of grant, owns
stock possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or its Affiliate ("Ten Percent Stockholder"),
such period shall not exceed five years from the date of grant.
6.2 EXERCISE PRICE. The exercise price of each share of Common Stock
subject to each option granted pursuant to this option is granted and, in the
case of ISOs, shall not be less than 100% of the fair market value of a share of
Common Stock on the date the option is granted, as determined by the Committee.
In the case of ISOs granted to a Ten Percent Stockholder, the exercise price
shall not be less than 110% of the fair market value of a share of Common Stock
on the date the option is granted. The exercise price of each share of Common
Stock subject to a Nonqualified Option under this Plan shall be determined by
the Committee prior to granting the option. The Committee shall set the
exercise price for each share subject to a Nonqualified Option at such price as
the Committee in its sole discretion shall determine, provided that the exercise
price of each share of Common Stock subject to a Nonqualified Option shall not
be less than 85% of the fair market value of a share of Common Stock on the date
the option is granted as determined by the Committee.
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For all purposes under this Plan, the fair market value of a share of
Common Stock on a particular date shall be equal to the mean of the reported
high and low sales prices of the Common Stock on the Nasdaq Stock Market on that
date, or if no prices are reported on that date, on the last preceding date on
which such prices of the Common Stock are so reported. If the Common Stock is
not traded on the Nasdaq Stock Market at the time a determination of its fair
market value is required to be made hereunder, its fair market value shall be
deemed to be equal to the average between the closing bid and ask prices of the
Common Stock on the most recent date the Common Stock was publicly traded. In
the event the Common Stock is not publicly traded at the time a determination of
its value is required to be made hereunder, the determination of its fair market
value shall be made by the Committee in such manner as it deems appropriate.
6.3 EXERCISE PERIOD. The Committee may provide in the option
agreement that an option may be exercised immediately or over the period of the
grant and in whole or in increments. However, no portion of any option may be
exercisable by an Optionee prior to the approval of this Plan by the
shareholders of the Company.
6.4 PROCEDURE FOR EXERCISE. Options shall be exercised by the
delivery by the Optionee of written notice to the Secretary of the Company
setting forth the number of shares of Common Stock with respect to which the
option is being exercised. The notice shall be accompanied by, at the election
of the Optionee and as permitted by the Committee in the Agreement granting such
options, (i) cash, cashier's check, bank draft, or postal or express money order
payable to the order of the Company, (ii) certificates representing shares of
Common Stock theretofore owned by the Optionee duly endorsed for transfer to the
Company, (iii) an election by the Optionee to have the Company withhold the
number of shares of Common Stock the fair market value, less the exercise price,
of which is equal to the aggregate exercise price of the shares of Common Stock
issuable upon exercise of the option, or (iv) any combination of the preceding,
equal in value to the full amount of the exercise price. Notice may also be
delivered by telecopy provided that the exercise price of such shares is
received by the Company via wire transfer on the same day the telecopy
transmission is received by the Company. The notice shall specify the address
to which the certificates for such shares are to be mailed. An option to
purchase shares of Common Stock in accordance with this Plan, shall be deemed to
have been exercised immediately prior to the close of business on the date (i)
written notice of such exercise and (ii) payment in full of the exercise price
for the number of share for which options are being exercised, are both received
by the Company and the Optionee shall be treated for all purposes as the record
holder of such shares of Common Stock as of such date.
As promptly as practicable after receipt of such written notice and
payment, the Company shall deliver to the Optionee certificates for the number
of shares with respect to which such option has been so exercised, issued in the
Optionee's name or such other name as Optionee directs; provided, however, that
such delivery shall be deemed effected for all purposes when a stock transfer
agent of the Company shall have deposited such certificates in the United States
mail, addressed to the Optionee at the address specified pursuant to this
Section 6.4.
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6.5 TERMINATION OF EMPLOYMENT. If an employee to whom an option is
granted ceases to be employed by the Company or its affiliates for any reason
other than death or disability or if a director or consultant to whom an option
is granted ceases to serve on the Board or as a consultant for any reason other
than death or disability, any option which is exercisable on the date of such
termination of employment or cessation of serving on the Board or cessation of
service as a consultant shall expire three-months from the date of such
termination or cessation but in no event may the option be exercised after its
expiration under the terms of the option agreement.
6.6 DISABILITY OR DEATH. In the event the Optionee dies or is
determined under this Plan to be disabled while the Optionee is employed by the
Company or its Affiliates, acts as consultant or while serves on the Board of
the Company, the options previously granted to the Optionee may be exercised (to
the extent the Optionee would have been entitled to do so at the date of death
or the determination of disability) at any time and from time to time, within a
three-month period after such death or determination of disability, by the
Optionee, the guardian of the Optionee's estate, the executor or administrator
of the Optionee's estate or by the person or persons to whom the Optionee's
rights under the option shall pass by will or the laws of descent and
distribution, but in no event may the option be exercised after its expiration
under the terms of the option agreement. An Optionee shall be deemed to be
disabled if, in the opinion of a physician selected by the Committee, the
Optionee is incapable of performing services for the Company of the kind the
Optionee was performing at the time the disability occurred by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or to be of long, continued and indefinite duration. The date
of determination of disability for purposes hereof shall be the date of such
determination by such physician.
6.7 TRANSFERABILITY. An option granted pursuant to this Plan shall
not be assignable or otherwise transferable by the Optionee otherwise than by
Optionee's will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the code or Title I of the
Employee Retirement Income Security Act, as amended, or the rules thereunder.
During the lifetime of an Optionee, an option shall be exercisable only by such
Optionee. Any heir or legatee of the Optionee shall take rights granted herein
and in the option agreement subject to the terms and conditions hereof and
thereof. No such transfer of any option to heirs or legatees of the Optionee
shall be effective to bind the Company unless the Company shall have been
furnished with written notice thereof and a copy of such evidence as the
Committee may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions hereof.
6.8 INCENTIVE STOCK OPTIONS. Each option agreement may contain such
terms and provisions as the Committee may determine to be necessary or desirable
in order to qualify under the Code of option designated as an incentive stock
option.
6.9 NO RIGHTS AS SHAREHOLDER. No Optionee shall have any rights as a
shareholder with respect to shares covered by an option until the option is
exercised by written notice and accompanied by payment as provided in Section
6.4 above.
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6.10 EXTRAORDINARY CORPORATE TRANSACTIONS. The existence of
outstanding options shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, exchanges, or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issuance of Common Stock or other securities or subscription
rights thereto, or any issuance of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise. If the Company recapitalizes or
otherwise changes its capital structure, or merges, consolidates, sells all of
its assets or dissolves (each of the forgoing a "Fundamental Change"), then
thereafter upon any exercise of an option theretofore granted the Optionee shall
be entitled to purchase under such option, in lieu of the number of shares of
Common Stock as to which option shall then be exercisable, the number and class
of shares of stock and securities to which the Optionee would have been entitled
pursuant to the terms of the Fundamental Change if, immediately prior to such
Fundamental Change, the Optionee had been the holder of record of the number of
shares of Common Stock as to which such option is then exercisable. If (i) the
Company shall not be the surviving entity in any merger or consolidation (or
survives only as a subsidiary of another entity), (ii) the Company sells all or
substantially all of its assets to any other person or entity (other than a
wholly-owned subsidiary), (iii) any person or entity (including a "group" as
contemplated by Section 13(d)(3) of the Exchange Act) acquires or gains
ownership or control of (including, without limitation, power to vote) more than
50% of the outstanding shares of Common Stock, (iv) the Company is to be
dissolved and liquidated, or (v) as a result of or in connection with a
contested election of directors, the persons who were directors of the Company
before such election shall cease to constitute a majority of the Board (each
such event in clauses (i) through (v) above is referred to herein as a
"Corporate Change"), the committee, in its sole discretion, may accelerate the
time at which all or a portion of an Optionee's options may be exercised for a
limited period of time before or after a specified date.
6.11 CHANGES IN CAPITAL STRUCTURE. If the outstanding shares of
Common Stock or other securities of the Company, or both, for which the option
is then exercisable shall at any time be changed or exchanged by declaration of
a stock dividend, stock split, combination of shares or recapitalization, the
number and kind of shares of Common Stock or other securities which are subject
to this Plan or subject to any options theretofore granted, and the exercise
prices, shall be appropriately and equitably adjusted so as to maintain the
proportionate number of shares or other securities without changing the
aggregate exercise price.
6.12 ACCELERATION OF OPTIONS. Except as hereinbefore expressly
provided, (i) the issuance by the Company of shares of stock of any class of
securities convertible into shares of stock of any class, for cash, property,
labor or services, upon direct sale, upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, (ii) the payment of a dividend
in property other than Common Stock, or (iii) the occurrence of any similar
transaction, and in any case whether or not for fair value, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock
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subject to options thereto fore granted or the purchase price per share, unless
the Committee shall determine in its sole discretion that an adjustment is
necessary to provide equitable treatment to Optionee. Notwithstanding anything
to the contrary contained in this Plan, the Committee may in its sole discretion
accelerate the time at which any option may be exercised, including, but not
limited to, upon the occurrence of the events specified in this Section 6.
7. AMENDMENTS OR TERMINATION. The Board may amend, alter or discontinue
this Plan, but no amendment or alteration shall be made which would impair the
rights of any Optionee, without his consent, under any option theretofore
granted, or which, without the approval of the shareholders, would: (i) except
as is provided in Section 6.11 of this Plan, increase the total number of shares
reserved for the purposes of this Plan, (ii) change the class of persons
eligible to participate in this Plan as provided in Section 4 of this Plan,
(iii) extend the applicable maximum option period provided for in Section 6.1 of
this Plan, (iv) extend the expiration date of this Plan set forth in Section 14
of this Plan, (v) except as provided in Section 6.11 of this Plan, decrease to
any extent the exercise price of any option granted under this Plan or (vi)
withdraw the administration of this Plan from the Committee.
8. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. This Plan, the grant and
exercise of options thereunder, and the obligation of the Company to sell and
deliver shares under such options, shall be subject to all applicable federal
and state laws, rules and regulations and to such approvals by any governmental
or regulatory agency as may be required. The Company shall not be required to
issue or deliver any certificates for shares of Common Stock prior to the
completion of any registration or qualification of such shares under any federal
or state law or issuance of any ruling or regulation of any government body
which the Company shall, in its sole discretion, determine to be necessary or
advisable. Any adjustments provided for in Sections 6.10, .11 and .12 of this
Plan shall be subject to any shareholder action required by Nevada corporate
law.
9. PURCHASE FOR INVESTMENT. Unless the options and shares of Common Stock
covered by this Plan have been registered under the Securities Act of 1933, as
amended, or the Company has determined that such registration is unnecessary,
each person exercising an option under this Plan may be required by the Company
to give a representation in writing that such person is acquiring such shares
for his or her own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof.
10. TAXES.
10.1 The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required in connection
with any options granted under this Plan.
10.2 Notwithstanding the terms of Section 10.1, each Optionee must
pay all taxes required to be withheld by the Company or paid by the Optionee in
connection with the exercise of a Nonqualified Option.
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11. REPLACEMENT OF OPTIONS. The Committee from time to time may permit an
Optionee under this Plan to surrender for cancellation any unexercised
outstanding option and receive from the Company in exchange an option for such
number of shares of Common Stock as may be designated by the Committee. The
Committee may, with the consent of the person entitled to exercise any
outstanding option, amend such option, including reducing the exercise price of
any option to not less than the fair market value of the Common Stock at the
time of the amendment and extending the term thereof.
12. NO RIGHT TO EMPLOYMENT. Employees shall be considered to be in the
employment of the Company so long as they remain employees of the Company or its
Affiliates. Any questions as to whether and when there has been a termination
of such employment and the cause of such termination shall be determined by the
Committee, and its determination shall be final. Nothing contained herein shall
be construed as conferring upon the Optionee the right to continue in the employ
of the Company or its Affiliates, nor shall anything contained herein be
construed or interpreted to limit the "employment at will" relationship between
the Optionee and the Company or its Affiliates. The option agreements may
contain such provisions as the Committee may approve with reference to the
effect of approved leaves of absence.
13. LIABILITY OF COMPANY FOR NON-ISSUANCE OF SHARES AND TAX CONSEQUENCES.
The Company and any Affiliates which is in existence or hereafter comes into
existence shall not be liable to an Optionee or other persons as to:
13.1 The non-issuance or sale of shares as to which the Company has
been unable to obtain from any regulatory body having jurisdiction the authority
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any shares hereunder; and
13.2 Any tax consequence expected, but not realized, by any Optionee
or other person due to the exercise of any option granted hereunder.
14. EFFECTIVENESS AND EXPIRATION OF PLAN. This Plan shall be effective on
the date of adoption by the Board. If the shareholders of the Company fail to
approve this Plan within twelve months of the date of the Board adoption, this
Plan shall terminate and all options previously granted under this Plan shall
become void and of no effect. This Plan shall expire ten years after the date
of the Board adopts this Plan and thereafter no option shall be granted pursuant
to this Plan.
15. NON-EXCLUSIVITY OF THIS PLAN. Neither the adoption by the Board nor
the submission for approval of this Plan to the shareholders of the Company
shall be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable, including
without limitation, the granting of restricted stock or stock options otherwise
than under this Plan, and such arrangements may be either generally applicable
or applicable only in specific cases.
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<PAGE>
16. GOVERNING LAW. This Plan and any agreements hereunder shall be
interpreted and construed in accordance with the laws of the State of Nevada and
applicable federal law.
17. CASHLESS EXERCISE. The Committee also may allow cashless exercises as
permitted under the Federal Reserve Board's Regulation T, subject to applicable
securities law restrictions, or by any other means which the Committee
determines to be consistent with this Plan's purpose and applicable law. The
proceeds from such a payment shall be added to the general funds of the Company
and shall be used for general corporate purposes.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing by directors of the Company, Man Sang Holdings, Inc. has caused these
presents to be duly executed in its name and behalf by its proper officers
thereunto duly authorized as of this 17th day of October, 1996.
MAN SANG HOLDINGS, INC.
ATTEST:
By: /s/ Ricky Cheng
-----------------------------------
/s/ Sam Sio Name: Ricky Cheng
- -------------------- Title: President
Secretary
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<PAGE>
MAN SANG HOLDINGS, INC.
21/F RAILWAY PLAZA
39 CHATHAM ROAD SOUTH
TSIMSHATSUI, KOWLOON, HONG KONG
Proxy for Annual Meeting of Shareholders to be held on November 15, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Cheng Chung Hing, Ricky and Cheng Tai Po,
and each of them, as Proxies, with full power of substitution in each of them,
in the name, place and stead of the undersigned, to vote at an Annual Meeting of
Shareholders (the "Meeting") of Man Sang Holdings, Inc., a Nevada corporation
(the "Company"), on November 15, 1996, at 10:00 a.m., or at any adjournment or
adjournments thereof, in the manner designated below, all of the shares of the
Company's common stock that the undersigned would be entitled to vote if
personally present.
1. GRANTING _________ WITHHOLDING _________ authority to vote for the
election as directors of the Company the following nominees: Ricky Cheng Chung
Hing, Cheng Tai Po, Sam Sio Kam Seng, Amy Yan Sau Man, Sonny Hung Kwok Wing,
Matthew Lai Chau Ming and Ernest Yuen Ka Lok.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME.)
2. Proposal to adopt the Man Sang Holdings, Inc. 1996 Stock Option Plan.
_________ FOR _________ AGAINST _________ ABSTAIN
3. Proposal to ratify the appointment of Deloitte Touche Tohmatsu as the
Company's independent certifying accountants.
_________ FOR _________ AGAINST _________ ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting or any adjournments thereof.
<PAGE>
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ABOVE. IF NO
INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR EACH OF PROPOSALS 2 AND 3
AND FOR THE ELECTION OF ALL NOMINEES AS DIRECTORS.
Please sign exactly as your name
appears hereon. When shares are
held by joint tenants, both should
sign. When signing as an attorney,
executor, administrator, trustee,
guardian, or corporate officer,
please indicate the capacity in
which signing.
DATED: ___________________ , 199__
__________________________________
Signature
__________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE
