Tech Electro Industries, Inc.
4300 Wiley Post Road
Dallas, Texas 75244
(972) 239-7151
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 18, 1997
To the Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Meeting") of Tech Electro Industries, Inc., a Texas corporation (the
"Company"), which will be held at 2121 Avenue of the Stars, Tenth Floor, Los
Angeles, California, at 10:00 a.m., California time, on Friday, July 18, 1997,
to consider and act upon the following matters, all as more fully described in
the accompanying Proxy Statement which is incorporated herein by this reference:
1. To elect a board of five directors to serve until the next
annual meeting of the Company'sstockholders or until their respective successors
have been elected and qualify;
2. To consider and take action concerning approval of the
Company's 1997 Incentive Stock Option Plan;
3. To ratify the selection and appointment of Deloitte & Touche,
LLP as the Company'sindependent public accountants for fiscal year 1997; and
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Stockholders of record of the Company's Common Stock, Series A
Preferred Stock, and Series B Preferred Stock at the close of business on June
18, 1997, the record date fixed by the Board of Directors, are entitled to
notice of, and to vote at, the Meeting.
THOSE WHO CANNOT ATTEND ARE URGED TO SIGN, DATE, AND OTHERWISE COMPLETE
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. ANY
STOCKHOLDER GIVING A PROXY HAS THE RIGHT TO REVOKE IT ANY TIME BEFORE IT IS
VOTED.
BY ORDER OF THE BOARD OF DIRECTORS
Sadasuke Gomi
Secretary
Los Angeles, California
June 24, 1997
<PAGE>
Tech Electro Industries, Inc.
4300 Wiley Post Road
Dallas, Texas 75244
(972) 239-7151
---------------
PROXY STATEMENT
---------------
The following information is in connection with the solicitation of
proxies for the Annual Meeting of Stockholders of Tech Electro Industries, Inc.,
a Texas corporation (the "Company"), to be held at 2121 Avenue of the Stars,
Tenth Floor, Los Angeles, California, at 10:00 a.m., California time, on July
18, 1997, and adjournments thereof (the "Meeting"), for the purposes stated in
the Notice of Annual Meeting of Stockholders preceding this Proxy Statement.
SOLICITATION AND REVOCATION OF PROXIES
A form of proxy is being furnished herewith by the Company to each
stockholder and, in each case, is solicited on behalf of the Board of Directors
of the Company for use at the Meeting. Stockholders are requested to complete,
date and sign the accompanying proxy and return it promptly to the Company. Your
execution of the enclosed proxy will not affect your right as a stockholder to
attend the Meeting and to vote in person. Any stockholder giving a proxy has the
right to revoke it at any time by either (i) a later-dated proxy, (ii) a written
revocation sent to and received by the Secretary of the Company prior to the
Meeting, or (iii) attendance at the Meeting and voting in person.
The entire cost of soliciting these proxies will be borne by the
Company. The Company may pay persons holding shares in their names or the names
of their nominees for the benefit of others, such as brokerage firms, banks,
depositaries, and other fiduciaries, for costs incurred in forwarding soliciting
materials to their principals. Members of the Management of the Company may also
solicit some stockholders in person, or by telephone, telegraph or telecopy,
following solicitation by this Proxy Statement, but will not be separately
compensated for such solicitation services. It is estimated that this Proxy
Statement and accompanying Proxy will first be mailed to stockholders on or
before June 24, 1997.
Proxies duly executed and returned by stockholders and received by the
Company before the Meeting will be voted FOR the election of all five of the
nominee-directors specified herein, FOR the approval of the Company's 1997
Incentive Stock Option Plan, and FOR the ratification of the selection and
appointment of Deloitte & Touche, LLP as the Company's independent public
accountants for fiscal year 1997, unless a contrary choice is specified in the
proxy. Where a specification is indicated as provided in the proxy, the shares
represented by the proxy will be voted and cast in accordance with the
specification made. As to other matters, if any, to be voted upon, the persons
designated as proxies will take such actions as they, in their discretion, may
deem advisable. The persons named as proxies were selected by the Board of
Directors of the Company and each of them is a director of the Company.
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<PAGE>
STOCKHOLDERS' VOTING RIGHTS
Only holders of record of the Company's Common Stock, $0.01 par value
("Common Stock"), Series A Preferred Stock, $1.00 par value ("Series A Stock"),
and Series B Preferred Stock, $1.00 par value ("Series B Stock"), at the close
of business on June 18, 1997 (the "Record Date") will be entitled to notice of,
and to vote at, the Meeting. On such date there were 2,446,875 shares of Common
Stock outstanding, 280,700 shares of Series A Stock outstanding, and 65,000
shares of Series B Stock outstanding, with one vote per share and all voting as
one class.
With respect to the election of directors, assuming a quorum is
present, the five candidates receiving the highest number of votes are elected.
See "Nomination and Election of Directors." To ratify the adoption of the 1997
Incentive Stock Option Plan, assuming a quorum is present, the affirmative vote
of stockholders holding a majority of the voting power represented at the
Meeting is required. To ratify the selection and appointment of Deloitte &
Touche, LLP, assuming a quorum is present, the affirmative vote of stockholders
holding a majority of the voting power represented at the Meeting is required. A
quorum is the presence in person or by proxy of shares representing a majority
of the voting power of the Common Stock, Series A Stock, and Series B Stock.
Under the Company's bylaws and Texas law, shares represented by proxies
that reflect abstentions or "broker non-votes" (i.e., shares held by a broker or
nominee which are represented at the Meeting, but with respect to which such
broker or nominee is not empowered to vote on a particular proposal) will be
counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Any shares represented at the Meeting but
not voted (whether by abstention, broker non-vote or otherwise) will have no
impact in the election of directors, except to the extent that the failure to
vote for an individual results in another individual receiving a larger
proportion of votes. Any shares represented at the Meeting but not voted
(whether by abstention, broker non-vote or otherwise) with respect to the
proposals to ratify the selection and appointment of Deloitte & Touche, LLP or
the adoption of the 1997 Incentive Stock Option Plan will have the effect of a
no vote for any of such proposals.
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<PAGE>
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the Record Date, the only persons
known to the Company to be the beneficial owners of more than 5% of the
Company's Common Stock, Series A Stock, and Series B Stock:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Common Series A Series B
Stock Stock Stock
-------- -------- ---------
Amount Amount Amount
and and and
Nature of Nature of Nature of % of
Beneficial % of Beneficial % of Beneficial % of Voting
Name and Address Ownership(1) Class(2) Ownership(1) Class(2) Ownership(1) Class(2) Power(3)
- ---------------- ------------ -------- ------------ -------- ------------ -------- --------
Craig D. La Taste 459,149 18.70%
4300 Wiley Post Rd. Direct(4) 0 0 0 0 16.13%
Dallas, TX 75244
Synergy System Limited 385,000 14.66%
3A Lauderdale Road Direct(5) 0 0 0 0 7.34%
Maida Vale
London W9 1LT
United Kingdom
Equator Holdings, Inc. 385,000 14.66%
Block 126 #19-372 Direct(5) 0 0 0 0 7.34%
Bukit Merah View
Singapore 151126
Fleet Security Investment Ltd. 385,000 14.66%
P.O. Box 901 Direct(5) 0 0 0 0 7.34%
Road Town
British Virgin Islands
</TABLE>
-3-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Common Series A Series B
Stock Stock Stock
-------
Amount Amount Amount
and and and
Nature of Nature of Nature of % of
Beneficial % of Beneficial % of Beneficial % of Voting
Name and Address Ownership(1) Class(2) Ownership(1) Class(2) Ownership(1) Class(2) Power(3)
- ---------------- ------------ -------- ------------ -------- ------------ -------- --------
Asean Broker Limited 385,000 14.66%
Flat 1, 51 Queens Gate Terrace Direct(5) 0 0 0 0 7.34%
London, SW7 5PL
United Kingdom
Eurasia Securities, Ltd. 385,000 14.66%
No. 11 Jalan Medang Direct(5) 0 0 0 0 7.34%
Bukit Bandaraya
59100 Kuala Lumpur
Malaysia
Placement & Acceptance, Inc. 190,000 7.42% 5,000
No. 18 Jalan Sri Semantan 1 Direct(6) (through 1.78% 0 0 3.04%
Damansara Heights ownership of
50490 Kuala Lumpur 5,000 units)
</TABLE>
(1) Except as otherwise indicated and subject to applicable community
property and similar laws, the Company assumes that each named person
has the sole voting and investment power with respect to his or her
shares (other than shares subject to options).
(2) Percent of class is based on the number of shares outstanding on the
Record Date. In addition, shares which a person had the right to
acquire within 60 days are also deemed outstanding in calculating the
percentage ownership of the person but not deemed outstanding as to any
other person. Does not include shares issuable upon exercise of any
warrants, options or other convertible rights issued by the Company
which are not exercisable within 60 days from the date hereof.
-4-
<PAGE>
(3) In order to reflect the voting rights of the Common Stock, Series A
Stock and Series B Stock as of the Record Date, the above percentage is
not based on shares which a holder has the right to acquire within 60
days, if such right has not been exercised as of the Record Date.
However, all shares which a holder has the right to acquire within 60
days are accounted for in the percentage of class calculations for each
of the individual type of securities accounted for in this table. See
footnote 2 above.
(4) Mr. La Taste, a Director of the Company has direct ownership of 463,729
shares of Common Stock, and as of March 1, 1995, as a partner of La
Taste Enterprises (with his two children), he is owner of 16,667 shares
of Common Stock which shares have been included in the percent of
shares shown herein. In addition, Mr. La Taste has been issued 35,000
options, each to acquire one share of Common Stock. 8,750 of such
options are currently exercisable and are included in the percent of
shares shown herein. Mr. La Taste's wife, Jacqueline Green La
Taste, is the owner of 24,212 shares of Common Stock which she received
in 1994 as an inheritance. Mr. La Taste disclaims any beneficial
interest in these shares. Mr. La Taste's children are beneficiaries of
the La Taste Children's Trust which owns 46,317 shares of Common Stock
of the Company. Mr. La Taste also disclaims any beneficial interest in
these shares.
(5) Includes, in each case, options to acquire 180,000 shares of Common
Stock which are currently exercisable.
(6) Includes options to acquire 100,000 shares of Common Stock which are
currently exercisable. Also includes 5,000 Units, each of which
consists of one share of Common Stock and one share of Series A Stock.
Each of the latter Series A Stock is currently convertible into two
shares of Common Stock, which Common Stock is accounted for in the
above calculation.
-5-
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the shares
of the Company's Common Stock, Series A Stock, and Series B Stock beneficially
owned as of the Record Date by all directors, nominees, executive officers
identified in the Summary Compensation Table below, and all current directors
and executive officers of the Company as a group:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Common Series A Series B
Stock Stock Stock
------- -------- ---------
Amount Amount Amount
and and and
Nature of Nature of Nature of % of
Beneficial % of Beneficial % of Beneficial % of Voting
Name and Address Ownership(1) Class(2) Ownership(1) Class(2) Ownership(1) Class(2) Power(3)
- ---------------- ------------ -------- ------------ ------- ------------ -------- --------
Craig D. La Taste 459,149 18.70% 0 0 0 0 16.13%
4300 Wiley Post Rd. Direct(4)
Dallas, TX 75244
Director
David L. Arnold 116,898 4.78% 0 0 0 0 4.19%
4300 Wiley Post Rd. Direct(5)
Dallas, TX 75244
Director
Kim Yeow Tan 385,000 14.66% 0 0 0 0 7.34%
4300 Wiley Post Rd. Indirect(6)
Dallas, TX 75244
Vice-President and Director
</TABLE>
-6-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Common Series A Series B
Stock Stock Stock
------- --------- ---------
Amount Amount Amount
and and and
Nature of Nature of Nature of % of
Beneficial % of Beneficial % of Beneficial % of Voting
Name and Address Ownership(1) Class(2) Ownership(1) Class(2) Ownership(1) Class(2) Power(3)
- ---------------- ------------ -------- ------------ ----- ------------ -------- --------
William Kim Wah Tan 190,000 7.42% 5,000 1.78% 0 0 3.04%
4300 Wiley Post Rd. Indirect(7) (through
Dallas, TX 75244 ownership of
Chairman of the Board, 5,000 Units)
President, Chief
Executive Officer and Director
Sadasuke Gomi 385,000 14.66% 0 0 0 0 7.34%
4300 Wiley Post Rd. Indirect(8)
Dallas, TX 75244
Vice-President,
Secretary and Director
Julie Sansom-Reese 1,125(9) * 0 0 0 0 0
4300 Wiley Post Rd. Direct
Dallas, TX 75244
Chief Financial Officer
All Officers and 1,537,172 52.43% 5,000 1.78% 0 0 38.04%
Directors as a Group (through
(6 Persons) ownership of
5,000 Units)
</TABLE>
(1) Except as otherwise indicated and subject to applicable community
property and similar laws, the Company assumes that each named person
has the sole voting and investment power with respect to his or her
shares (other than shares subject to options).
-7-
<PAGE>
(2) Percent of class is based on the number of shares outstanding on the
Record Date. In addition, shares which a person had the right to
acquire within 60 days are also deemed outstanding in calculating the
percentage ownership of the person but not deemed outstanding as to any
other person. Does not include shares issuable upon exercise of any
warrants, options, or other convertible rights issued by the Company
which are not exercisable within 60 days from the date hereof.
Ownership of less than 1% is indicated by an asterisk.
(3) In order to reflect the voting rights of the Common Stock, Series A
Stock and Series B Stock as of the Record Date, the above percentage is
not based on shares which a holder has the right to acquire within 60
days, if such right has not been exercised as of the Record Date.
However, all shares which a holder has the right to acquire within 60
days are accounted for in the percentage of class calculations for each
of the individual type of securities accounted for in this table. See
footnote 2 above.
(4) Mr. La Taste, a Director of the Company, has direct ownership of
463,729 shares of Common Stock. As a partner of La Taste Enterprises
with his two children, he is beneficial owner of 16,667 shares of
Common Stock which shares have been included in the percent of shares
shown herein. In addition, Mr. La Taste has been issued 35,000 options,
each to acquire one share of Common Stock. 8,750 of such options are
currently exercisable and are included in the percent of shares shown
herein. Mr. La Taste's wife, Jacqueline Green La Taste, is the
owner of 24,212 shares of Common Stock which she received in 1994 as an
inheritance. Mr. La Taste disclaims any beneficial interest in these
shares. Mr. La Taste's children are beneficiaries of the La Taste
Children's Trust which owns 46,317 shares of Common Stock of the
Company. Mr. La Taste also disclaims any beneficial interest in these
shares.
(5) Mr. Arnold, a Director of the Company sold 16,667 shares of Common
Stock of the Company to La Taste Enterprises on March 1, 1995.
(6) All shares reported hereunder are held by Eurasia Securities, Inc., of
which Mr. Kim Yeow Tan is a director.
(7) All shares reported hereunder are held by Placement and Acceptance,
Inc., of which Mr. William Kim Wah Tan is a director.
(8) All shares reported hereunder are held by Fleet Security Investments,
Inc., of which Mr. Gomi is a director.
(9) Consists of options to acquire 1,125 shares of common stock which are
exercisable within sixty days of the date of this Proxy Statement.
-8-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 31, 1996, Craig D. La Taste, a director of the Company,
guaranteed a $200,000 promissory note of the Company to Nations Bank Texas, N.A.
The note was secured by a certificate of deposit held by the Company in a
principal amount exceeding the amount of the debt. Mr. La Taste is also
director, President, and Chief Executive Officer of Computer Components
Corporation, a direct wholly-owned subsidiary of the Company ("CCC"). In
addition, he is a director of Vary Brite Technologies, Inc., a Texas corporation
which is also a wholly owned subsidiary of the Company ("VBT") and a director,
President and Chief Executive Officer of Universal Battery Corporation, a Texas
corporation in which CCC has a 67% interest ("UBC"). The loan was paid in full
in March, 1997.
CCC is also the maker of two unsecured notes given to evidence cash
loans in like amounts in favor of Jacqueline La Taste, wife of Craig D. La
Taste, in the aggregate principal amount of $245,000. The first note is in the
principal amount of $145,000, with interest accruing and payable monthly at
10.25% per annum. The second note is in the principal amount of $100,000, with
interest accruing and payable monthly at the rate of 9.5% per annum. In December
1995, Mrs. La Taste agreed to extend the maturity dates of these notes to March
31, 1997. This loan was paid in full in March, 1997.
The Company leases its office and warehouse premises from La Taste
Enterprises, a partnership comprised of Mr. La Taste and members of his family.
The current lease is for a three year term ending May 31, 1997 and provides for
monthly rental payments of $4,800. During the years ended December 31, 1995 and
1996, the Company paid to La Taste Enterprises annual rent in the amount of
$57,600. CCC has entered into a new lease, commencing June 1, 1997 and
terminating on December 31, 2001 for the same space at an annual base rent of
$67,200.
NOMINATION AND ELECTION OF DIRECTORS
The Company's directors are to be elected at each annual meeting of
stockholders. At this Meeting, five directors are to be elected to serve until
the next annual meeting of stockholders or until their successors are elected
and qualify. The nominees for election as directors at this Meeting set forth in
the table below are all recommended by the Board of Directors of the Company.
In the event that any of the nominees for director should become unable
to serve if elected, it is intended that shares represented by proxies which are
executed and returned will be voted for such substitute nominee(s) as may be
recommended by the Company's existing Board of Directors.
The five nominee-directors receiving the highest number of votes cast
at the Meeting will be elected as the Company's directors to serve until the
next annual meeting of stockholders or until their successors are elected and
qualify.
-9-
<PAGE>
The following table sets forth certain information concerning the
nominees for election as directors and accounts for all of the current directors
(all of such nominees being continuing members of the Company's present Board of
Directors) and officers of the Company with the exception of Ms. Julie A.
Sansom-Reese who is currently the Chief Financial Officer of the Company and is
noted below as a significant employee:
<TABLE>
<S> <C> <C> <C>
Nominee Principal Occupation Age
William Kim Wah Tan Investor, President, Chief Executive 54
Officer, and Chairman of the Board
of the Company
Kim Yeow Tan Investor, Director and Vice President of the 51
Company
Sadasuke Gomi Investor, Director and Vice President and Secretary 25
of the Company
Craig D. La Taste Director of the Company, 71
President, Chief Executive Officer,
and Director of CCC, Chief Executive
Officer, President and Director of UBC,
and Director of VBT
David L. Arnold Director of the Company, 61
Director, Vice President, and Secretary of CCC,
President and Director of VBT,
Vice President and Director of UBC
</TABLE>
WILLIAM KIM WAH TAN was elected President, Chief Executive Officer,
Director, and Chairmanof the Board of Directors of the Company in February
1997. Mr. William Kim Wah Tan has been active asan entrepreneur in the fields
of finance, general insurance, property development and management for thepast
twenty years. He has held senior management positions in a number of financing,
insurance, textile,property development and related businesses. Mr. William
Kim Wah Tan is the brother of Mr. Kim Yeow Tan.
KIM YEOW TAN was elected Director and Vice-President of the Company in
February 1997. Mr.Kim Yeow Tan has been active as an entrepreneur in the fields
of finance, general insurance, property development and management for the past
fifteen years. He has held senior management positions in finance companies,
insurance companies, textile and property development and related businesses.
Mr. Kim Yeow Tan is a graduate of the Malayan Teachers Training College and
holds a Bachelor of Science Degree inBusiness Administration from Century
University, United States. He is the brother of Mr. William Kim Wah Tan.
SADASUKE GOMI was elected Director, Vice-President, and Secretary of
the Company in February 1997. Mr. Gomi is a graduate of Meii University in
Japan, where he received a bachelor's degree in commerce in 1995. During the
past five years, Mr. Gomi's principal occupation has been that of a private
investor, as well as a student.
CRAIG D. LA TASTE served as President, Chief Executive Officer and Chairman
of the Board of Directors of the Company throughout the 1996 fiscal year. He
resigned as President, Chief Executive
-10-
<PAGE>
Officer and Chairman of the Board of Directors of the Company in February 1997.
Mr. La Taste remains as Director of the Company as well as President, Chief
Executive Officer, and Director of CCC, the operating division of the Company.
In addition, Mr. La Taste is Director of VBT and a Director, President and Chief
Executive Officer of UBC. From 1963 to July, 1991, Mr. La Taste was President of
Dunbar Associates, Inc., a Dallas, Texas-based electronic components sales firm
("Dunbar Associates"), which merged into CCC. From June 1991 to the present, Mr.
La Taste has served as President of CCC. Mr. La Taste earned a BSEE degree from
Southern Methodist University, Dallas, Texas.
DAVID L. ARNOLD served as Secretary and Vice President of the Company
throughout the 1996 fiscal year. He resigned from such positions in February
1997. Mr. Arnold remains a Director of the Company, and a Director, Vice
President, and Secretary of CCC. Mr. Arnold is also President and Director
of VBT, and Director and Vice President of UBC. From January 1987 to the
present, Mr. Arnold served as Vice President of Dunbar Associates which merged
into CCC. Mr. Arnold has served as Vice President of CCC since February 1997.
As Vice President, Mr. Arnold serves as manager of the battery pack operations.
Mr. Arnold earned a B.A. degree from Ohio Wesleyan University, Delaware, Ohio,
and a BSEE degree from Case Institute of Technology, Cleveland, Ohio.
No family relationship exist among any of the executive officers or
directors of Company or persons nominated or chosen to become directors or
executive officers, except that Messrs Kim Yeow Tan and William Kim Wah Tan are
brothers.
Significant Employees
The following table sets forth certain information concerning
significant employees of the Company.
<TABLE>
<S> <C> <C>
Name Age Position
------ --- ---------
Julie A. Sansom-Reese 34 Chief Financial Officer of the
Company
Randy Hardin 37 Vice-President of UBC
Jim Thompson 59 Vice-President of VBT
Bernard Silverman 43 Vice-President of VBT
</TABLE>
RANDY T. HARDIN is currently and has been Vice President of Sales and
Marketing of UBC since November 1996. From 1991 to 1996, Mr. Hardin was the
National Sales Manager of MK Battery, Inc., a distributor of sealed batteries.
Mr. Hardin is a graduate of Texas A&M University where he received a B.A.
in Political Science/Marketing in 1982.
JULIE A. SANSOM-REESE is currently and has been the Chief Financial
Officer of the Company since August 1996. Ms Sansom-Reese attended Odessa
Junior College, Odessa, Texas, and the University of Texas of the Permian Basin,
Odessa, Texas. Ms. Sansom-Reese earned a B.A. degree in Business fromTexas Tech
University, Lubbock, Texas. Since August, 1986, Ms. Sansom-Reese has also served
as Comptroller and Treasurer of CCC.
-11-
<PAGE>
JAMES L. THOMPSON is currently and has been the President and a
Director of VBT since November 1993. VBT is the wholly owned subsidiary of the
Company which is engaged in the design and engineering of specialized products
incorporating recent advances in technologies related to light emitting diodes
("LED"), lighting devices used in industrial and commercial products. From 1991
to 1993, Mr. Thompson served in the capacity of Vice President of Sales for
Texas Optoelectronics, Inc., a company involved in the sensors and
optoelectronics industry.
BERNARD SILVERMAN is currently and has been a Vice President of VBT
involved in marketing LED products for VBT since 1993. He also currently is and
has been a Director of VBT since June 1996. Prior to his current positions with
VBT, Mr. Silverman acted as Marketing Manager for Texas Optoelectronics, Inc.,
from 1992 to 1994, at which he time he acted as a Marketing Consultant for Texas
Optoelectronics, Inc. until 1995. Mr. Silverman is a graduate of Ohio State
University where in 1975 he received a Bachelor of Science degree in
mathematics.
SCOTT LaTASTE currently is and has been a Manufacturing Representative
and Importer for Dunbar Associates for over ten years. In 1991, Dunbar
Associates merged into CCC, a wholly owned subsidiary of the Company which is
currently in the battery assembly business and operates as a distributor of
electronic components. Mr. Scott La Taste graduated from the University of North
Texas in Denton, Texas in 1980 with a BBA degree in finance and accounting. Mr.
Scott La Taste is Mr. Craig D. La Taste's son.
INFORMATION CONCERNING THE BOARD OF
DIRECTORS AND CERTAIN COMMITTEES THEREOF
The business of the Company's Board of Directors is conducted through
full meetings of the Board. The Company does not have a nominating committee,
audit committee or compensation committee of the Board of Directors. The
nominees for election as directors at the Meeting were selected by the Board of
Directors of the Company.
There were two meetings of the Board of Directors of the Company during
the last fiscal year of the Company. Each of the incumbent directors of the
Company attended 75% or more of the aggregate of the total number of meetings of
the Board of Directors held during the period in which he was a director.
Compensation of Board of Directors
Directors' Fees. Effective May 9, 1997, for service on the Board of
Directors, directors receive a payment of $500.00 for each meeting attended in
person, plus reimbursement for travel expenses. Directors are entitled to
reimbursement for out-of-pocket expenses in connection with attendance at board
and committee meetings.
Options. As of the Record Date, the only director to which the Company
granted options was Craig D. La Taste. The options granted to Mr. La Taste are
non-qualified options to purchase 35,000 shares of Common Stock and are
exercisable as to 25% of the underlying shares of Common Stock on the date of
grant, November 7, 1996, 50% one year later, 75% two years later and 100% three
years later. All of the latter options are exercisable at $1.00 per share, the
fair market value as of the date of grant, and expire November 6, 2006. See
"Executive Compensation and Other Information -- Options" for further details.
-12-
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Compensation
Summary Compensation Table
The following table sets forth information for the fiscal year ended
December 31, 1996 and 1995, concerning compensation of the Chief Executive
Officer and the four most highly compensated executive officers of the Company
whose salary and bonus compensation was at least $100,000, for services in all
capacities to the Company and its subsidiaries or divisions in the fiscal year
ended December 31, 1996:
<TABLE>
SUMMARY COMPENSATION TABLE
--------------------------
<S> <C> <C> <C> <C> <C>
Long Term
Annual Compensation Compensation Payouts
------------------- --------------------
Securities
Name and Fiscal Year Underlying LTIP
Principal Position (1) Ended Dec. 31 Salary ($) Options/ SARs (#) Payouts ($)
- ---------------------- -------------- ---------- ----------------- -----------
Craig D. La Taste, 1996 $60,000.00 35,000 $99,651(3)
Chairman of the Board,
President and CEO (2)
1995 $41,999.89
</TABLE>
(1) No other executive officer received salary and bonuses in excess of
$100,000 in 1996 or 1995. The total amount of personal benefits paid to
the above named executive officer is less than the lesser of (i)
$50,000 or (ii) 10% of the total reported salary and bonus for such
individual for each such respective fiscal year.
(2) Craig D. La Taste served as Chairman of the Board, President and Chief
Executive Officer of the Company throughout the 1996 fiscal year. He
resigned as Chairman of the Board, President and Chief Executive
Officer of the Company in February 1997. He was replaced in all of
these capacities by Mr. William Kim Wah Tan. Mr. La Taste remains as a
Director of the Company as well as President, Chief Executive Officer
and Director of CCC, the operating division of the Company, Director of
VBT and Chief Executive Officer, President and Director of UBC.
(3) In 1981, Dunbar Associates established a non-qualified deferred
compensation plan for the benefit of its corporate officers. CCC
assumed such liability upon the merger with Dunbar Associates. The
accrued benefits under such plan were payable to Craig D. La Taste, who
was the Company's Chairman of the Board, President and Chief Executive
Officer through the 1996 fiscal year. The amount accrued under such
plan at December 31, 1995 was $99,651. Such amount was paid to Mr. La
Taste on December 10, 1996. There were no contributions to the plan
during the year ended December 31, 1996.
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The following table sets forth information on grants of stock options
to purchase the Company's Common Stock, made pursuant to the Company's 1995
Incentive Stock Option Plan during the fiscal year ended December 31, 1996, to
the executive officers identified in the Summary Compensation Table:
Options
<TABLE>
Option/SAR Grants in Last Fiscal Year
Individual Grants
------------------------------------------------------
<S> <C> <C> <C> <C>
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or Base
Name Granted (#)(2) Fiscal Year(3) Price ($/Share)(4) Expiration Date(5)
- ---- -------------- -------------- ------------------ ------------------
Craig D. La Taste, Chairman of 35,000 29.3% $1.00 per share November 6, 2006
the Board, President and Chief
Executive Officer(1)
</TABLE>
(1) Craig D. La Taste served as Chairman of the Board, President and Chief
Executive Officer of the Company throughout the 1996 fiscal year. He
resigned as Chairman of the Board, President and Chief Executive
Officer of the Company in February 1997. Mr. La Taste remains as a
Director of the Company as well as President, Chief Executive Officer,
and Director of CCC, the operating division of the Company, Director of
VBT, and Chief Executive Officer, President and Director of UBC.
(2) The amounts in the table represent shares of the Company's Common Stock
covered by stock options granted to the named individual under the
Company's 1995 Incentive Stock Option Plan.
(3) The number of shares of Company Common Stock covered by the options
granted to the named individual during the last completed fiscal year
of the Company equals the percentage set forth below of the total
number of shares of the Company Common Stock covered by all options
granted by the Company during such year.
(4) The exercise price of each option is the fair market value of the
Common Stock of the Company on the date of grant.
(5) Unless earlier terminated, these options are exercisable as to 25% of
the underlying shares of Common Stock on the date of grant, 50% one
year later, 75% two years later and 100% three years later, and expire
on November 6, 2006, 10 years from the date of grant.
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The following table provides certain information concerning exercises
of options to purchase the Company's Common Stock in the fiscal year ended
December 31, 1996, and unexercised options held as of December 31, 1996, by the
persons named in the Summary Compensation Table:
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year End Option/SAR Values
<TABLE>
<S> <C> <C> <C> <C>
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options/SARs at Fiscal Options/SARs at Fiscal Year
Year End(#) End($)(2)
Shares Acquired Value
Name on Exercise (1) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ----------- ------------- ----------- -------------
Craig D. La Taste 0 0 8,750 26,250 $10,937.50 $32,812.50
</TABLE>
(1) No stock options or SARs were exercised during the 1996 fiscal year by
the executive officers named in the Summary Compensation Table.
(2) As of June 19, 1997 valued at $2.25 per share.
Employment Agreement
CCC and Craig D. La Taste have entered into an employment agreement,
dated December 5, 1996, replacing an agreement previously entered into by the
Company and Mr. La Taste on February 1, 1996. The Agreement has a term
commencing on January 1, 1997 and terminating on December 31, 2002, and provides
for, among other things, minimum compensation of $75,000 during the year ending
December 31, 1997, and rising to $120,000 per year during the years ending
December 31, 2000 and 2001. The Agreement also provides that if Mr. La Taste's
employment is terminated by CCC without cause, Mr. La Taste will be entitled to
receive the amount remaining unpaid for the full term of the Agreement, plus an
amount equal to twice that sum.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 1996, the Board of Directors
of the Company and its subsidiaries, including CCC, determined compensation for
the executive officers of the Company and the subsidiaries, respectively. Mr. La
Taste was an executive officer and director of the Company and CCC when his
Employment Agreement with CCC replaced his Employment Agreement with the Company
and was approved. The Board of Directors serves the function of a Compensation
Committee for the Company.
APPROVAL OF THE 1997 INCENTIVE STOCK OPTION PLAN
1997 Incentive Stock Option Plan. On July 12, 1996, the Board of Directors
adopted the 1997 Incentive Stock Option Plan (the "1997 Plan"), the purpose of
which is to promote the interests of the Company by providing key employees with
an equity ownership in the Company and with an incentive for continuous
employment with the Company. Under the 1997 Plan, a maximum of 250,000 shares of
Common Stock may be issued. The 1997 Plan expires on December 31, 1999. No
options have been granted under the 1997 Plan. Thus, the benefits and amounts
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under the 1997 Plan are currently not determinable. Grants under the 1997 Plan
are made at the discretion of the Board of Directors. Accordingly, future grants
under the 1997 Plan are not yet determinable.
However, during the fiscal year ended December 31, 1996, the following stock
options were granted and received under the Company's 1995 Incentive Stock
Option Plan by: (1) the Chief Executive Officers of the Company and the other
executive officers of the Company as of December 31, 1996 whose total salary and
bonus for the year ended December 31, 1996 exceeded $100,000; (ii) all current
executive officers as a group; (iii) all current directors and nominees who are
not executive officers as a group; and (iv) all employees, including all
officers who are not executive officers as a group.
Plan Benefits
1995 Stock Option Plan
<TABLE>
<S> <C> <C>
Number of Shares of
Common Stock Exercise Price
Name and Position Underlying Options(2) (Per Share)
Craig D. La Taste, Chairman of the 35,000 $1.00
Board, President and Chief
Executive Officer(1)
All Current Executive Officers (1 2,250 $1.75
person)
Non-Executive Officer Current
Directors and Nominees (0 persons)
Non-Executive Officer Employees 82,250 $1.00-$1.75
(12 persons)
</TABLE>
(1) Although Mr. La Taste remains a director of the Company, he resigned
from the above positions in February 1997. No other executive officers
of the Company received a total salary and bonus for the year ended
December 31, 1996, exceeding $100,000.
(2) As of June 19, 1997 valued at $2.25 per share.
The Board of Directors will administer the 1997 Plan and has the power
to determine eligibility to receive options, the terms of any options including
the exercise price, the number of shares subject to the options and the vesting
schedule of any such options. The exercise price of all options granted under
the 1997 Plan must be at least equal to the fair market value of the shares of
Common Stock on the date of grant. The terms of all other options granted under
the Plan may not exceed 10 years.
The Company has not adopted any other deferred compensation or
retirement program for its employees. It may in the future adopt a pension plan,
profit sharing plan, employee stock ownership plan, stock bonus or some other
deferred compensation and/or retirement program.
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<PAGE>
Securities Subject to the Plan. Shares of stock which may be used under the 1997
Plan shall be authorized and unissued or treasury shares of Common Stock of the
Company. The maximum number of shares of Common Stock which may be issued under
the 1997 Plan shall be 250,000.
Terms and Conditions of the Options. The 1997 Plan provides that, each stock
option which is granted pursuant to the 1997 Plan ("Incentive Stock Option")
shall be exercisable as to 25% of the shares of Common Stock subject to the
Incentive Stock Option on the date of grant, 50% one year later, 75% two years
later and 100% three years later and unless a shorter period is provided by the
Board, may be exercised during a period of ten years from the date of the grant
thereof. The date an Incentive Stock Option is granted shall mean such date as
of which the Board selects a specific number of shares to a participant pursuant
to the 1997 Plan.
The price at which each share covered by an option under the 1997 Plan
may be purchased is 100% of the fair market value of a share of Common Stock on
the date the Incentive Stock Option is granted. The aggregate fair market value
(determined on the date the option is granted) of Common Stock subject to an
Incentive Stock Option granted to an optionee by the Board in a calendar year
shall not exceed $100,000.
An option terminates automatically if the participant holding the
option ceases to be employed by the Company or a subsidiary of the Company for
any reason (excluding death, disability or retirement) prior to the last day of
the term of the option. Upon the death of the optionee, any Incentive Stock
Option exercisable on the date of death may be exercised, provided such exercise
occurs within both the remaining option term and one year after the optionee's
death. Upon termination by reason of retirement or disability, an optionee may,
within thirty-six (36) months from the date of such termination of employment,
exercise any Incentive Stock Options to the extent such options were exercisable
at the date of such employment termination.
An option may not be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by will or by the laws of descent or
distribution, and may be exercised, during the lifetime of the optionee, only by
such optionee. Optionees do not have rights as stockholders with respect to
option shares until such options are exercised.
Duration of the Plan. No grants shall be made under the 1997 Plan after the last
day of the Company's 1999 fiscal year, provided however, that the 1997 Plan and
all options granted under the 1997 Plan prior to such date shall remain in
effect until such options have been exercised or terminated in accordance with
the 1997 Plan and the terms of such grants.
Administration and Amendment of the Plan. The 1997 Plan will be administered by
the Board of Directors. The Board of Directors will be empowered to interpret
and construe any provision of the 1997 Plan and may adopt such rules and
regulations for administering the 1997 Plan as it deems necessary.
The Board of Directors of the Company may at any time, insofar as is
permitted by law, alter, amend, suspend or discontinue the 1997 Plan with
respect to any shares not already subject to options; provide, however, that
without the approval of the stockholders no modification or amendment may
increase the number of shares subject to the 1997 Plan, extend the period during
which any stock option may be granted or exercised, or extend the term of the
1997 Plan.
Eligibility. Eligible Employees shall be selected by the Board from key
employees of the Company who occupy responsible positions and who have the
capability of making a substantial contribution to the success of the Company.
In making this selection, the Board shall consider any factors deemed relevant,
including the individual's functions, responsibilities, value of services to the
Company and past and potential contributions to the Company's
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<PAGE>
profitability and sound growth. All Incentive Stock Options granted pursuant to
the 1997 Incentive Stock Option Plan shall terminate upon the termination of the
optionee's employment, except by reason of death, retirement or disability, or
except as otherwise determined by the Board.
Options shall not be granted to any owner of 10% or more of the total
combined voting power of the Company and its subsidiaries.
The grant of an option pursuant to the 1997 Plan shall be evidenced by
a written Incentive Stock Option Agreement, executed by the holder of an
Incentive Stock option, stating the number of shares of Common Stock subject to
the Incentive Stock Option evidenced thereby, and in such form as the Board may
from time to time determine.
Federal Income Tax Consequences.
Following is a summary of some of the federal income tax consequences
of the grant and exercise of options under the Plan under currently applicable
provisions of the Code, regulations promulgated thereunder, and published
revenue rulings, revenue procedures, and court decisions which have interpreted
and applied those provisions. No discussion of state or local tax consequences
is included. Employees are advised to contact their own tax advisors and not to
rely solely on the following discussion to determine the tax consequences to
them of any transaction involving options granted under the Plan and of the
disposition of any shares of common stock received on exercise of an option.
A. Characterization of Incentive Options and Nonqualified options.
Incentive Options may be granted under the Plan. Specific statutory
rules must be observed to obtain the tax treatment for Incentive
Options. If these rules are not observed, a stock option will be
treated by the Internal Revenue Service ("IRS") as a Nonqualified
Option, with the tax consequences set forth below under the heading
"Nonqualified Options." Generally, the exercise of a stock option
denominated as an Incentive Option will qualify for the special tax
treatment described below. However, if applicable, any optionee
wishing to exercise an Incentive Option more than three months after
termination of employment with the Company should consult his or her
own tax advisor.
1. Incentive Options.
------------------
a. Tax Consequences to Optionee at Grant and
Exercise of Incentive Options. There will be no federal income tax
consequences for the Company or the optionee as aresult of the grant of an
Incentive Option. Furthermore, an optionee will not recognize any income when
he or she exercises an Incentive Option. However, the amount by which the fair
market value of the option shares at exercise exceeds the option exercise
price paid for those shares will be an adjustment to theoptionee's alternative
minimum taxable income for purposes of computing the alternative minimum tax.
In addition, the exercise by a retiree more than three months after
termination of employment and the exercise by an optionee who terminates
employment on account of disability more than one year after termination of
employment will be treated as the exercise of a Nonqualified Option (see
description below).
b. Tax Consequences to Optionee on Subsequent
Disposition of the Shares. Any gain or loss recognized by an optionee on
disposition of shares acquired by exercising an Incentive Option will be
taxed as long-term capital gain or loss as long as the disposition does not
occur within two years after the option was granted or within one year after
the receipt of the option shares. If the disposition occurs prior to the
satisfaction of either of
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<PAGE>
those holding periods, then the disposition will be treated as a disqualifying
disposition. As a result, the optionee will recognize ordinary income measured
by the smaller of (i) the amount received on disposition or (ii) the fair market
value of the excess of the fair market value of the stock at the date of
exercise over the option exercise price at exercise or when there is no longer a
substantial risk of forfeiture, whichever is later (the "Spread"). The optionee
may also have to recognize short or long-term capital gain if the amount
received on disposition is greater than the Spread at exercise.
2. Nonqualified Options.
---------------------
a. Tax Consequences to Optionee at Grant and
Exercise of Nonqualified Options. Under current federal income tax law, the
grant of a Nonqualified Option also will have no tax consequences to the
Company or the optionee. Generally, uponexercise of a Nonqualified Option
granted under the Plan, the Spread is taxable to the optionee as ordinary
income.
Property received for services that is subject to a
substantial risk of forfeiture generally is not included in the recipient's
income until the risk of forfeiture lapses. However, the optionee is entitled to
elect to recognize income on the date of transfer. Such election must be made
within 30 days of the transfer of the shares to the optionee, in which case the
results are the same as if the optionee were not
subject to a risk of forfeiture.
Generally, shares received on exercise of an option
under the 1997 Plan are not subject to restrictions on transfer or risks of
forfeiture and, therefore, the optioneewill recognize income on the date of
exercise of a Nonqualified Option. However, if the optionee is subject to
Section 16(b) of the Exchange Act ("Section 16(b)"), the Section 16(b)
restriction will be considered a substantial risk of forfeiture for tax
purposes. Under current law, employees who are eitherdirectors or officers of
the Company will be subject to restrictions under Section 16(b) of the
Exchange Act during their term of service and for up to six months after
termination of such service. Rule 16b-3 promulgated by the Commission
("Rule 16b-3") provides an exemption from the restrictions of Section 16(b) for
the grant of derivative securities, such as stock options, under qualifying
plans. Because the Plan satisfies the requirements for exemption under Rule
16b-3, the grant of options will not be considered a purchase and the exercise
of the options to acquire the underlying shares of Common Stock willnot be
considered a purchase or a sale. Thus, there will be no substantial risk of
forfeiture and ordinary income will be recognized and the Spread will be
measured on the date of exercise. The taxable income resulting from the exercise
of a Nonqualified Option will constitute wages subject to withholding and the
Company will be required to make whatever arrangements are necessary to ensure
that funds equaling the amount of tax required to be withheld are available for
payment, including the deduction of required withholding amounts from the
optionee's other compensation and requiring payment of withholding amounts as
part of the exercise price. The tax basis for the Common Stock acquired is the
option price plus the taxable income recognized.
The requirements for exemption under Section 16(b)
are complex and are subject to certain transitional rules that may affect the
availability of exemption under certaincircumstances. Optionees who are
insiders are advised to contact their ownsecurities advisors to determine the
consequences of a grant or exercise of anoption under the Plan.
b. Tax Consequences to Optionee on Subsequent
Disposition of the Shares. The optionee's tax basis in shares acquired by
exercising a Nonqualified Option willbe equal to the option exercise price he or
she paid for those shares, plus the amount of gross income recognized on
exercising the option. When the optioneelater disposes of the shares, any
further gain or loss realized by the optionee will be treated as long-term or
short-term capital gain or loss, depending on how long the shares have been
held.
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<PAGE>
Reasons for Adoption of the 1997 Plan. The 1997 Plan was adopted by the Board
and is recommended for approval by the Company's stockholders because the Board
believes that 1997 option grants to employees will promote the interests of the
Company by providing a method whereby employees of the Company may participate
in the ownership of the Company by acquiring an interest in the Company's growth
and productivity. In addition, the Board believes that adoption of the 1997 Plan
will enhance the Company's ability to promote the interests of the Company by
providing key employees with an equity ownership in the Company and with an
incentive for continuous employment with the Company.
Vote Required for Approval of the 1997 Plan. Assuming a quorum is present,
approval of the 1997 Plan requires the affirmative vote of the holders of a
majority of the shares of Common Stock of the Company present, or represented,
and entitled to vote at the Meeting. If adoption of the 1997 Plan is not
approved by the stockholders, the 1997 Plan will not take effect.
The Board of Directors recommends a vote "FOR" approval of adoption of
the 1997 Plan.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Action is to be taken by the stockholders at the Meeting with respect
to the ratification of Deloitte & Touche, LLP independent public accountants, as
independent accountants for the Company for the fiscal year ending December 31,
1997. Deloitte & Touche, LLP does not have and has not had at any time any
direct or indirect financial interest in the Company or any of its subsidiaries
and does not have and has not had at any time any connection with the Company or
any of its subsidiaries in the capacity of promoter, underwriter, voting
trustee, director, officer, or employee. Neither the Company nor any officer or
director of the Company has or has had any interest in Deloitte & Touche, LLP.
The Board of Directors of the Company have approved Deloitte & Touche,
LLP as its independent accountants. Prior thereto, they have questioned partners
of that firm about its methods of operation and have received assurances that
any litigation or other matters involving it do not affect its ability to
perform as the Company's independent accountants.
Representatives of Deloitte & Touche, LLP will be present at the
Meeting, will have an opportunity to make statements if they so desire, and will
be available to respond to appropriate questions.
Notwithstanding the ratification by shareholders of the appointment of
Deloitte & Touche, LLP, the Board of Directors may, if the circumstances
dictate, appoint other independent accountants.
On June 24 1997, the Company retained Deloitte & Touche, LLP as its
independent public accountants, replacing King, Griffin & Adamson, P.C.,
formerly King, Burns & Company, P.C. The change in independent public
accountants was approved by the Board of Directors. For the Company's fiscal
years ended December 31, 1996 and 1995, the financial statements did not contain
an adverse opinion or a disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope, or accounting principles by King,
Griffin & Adamson, P.C., or its predecessor King, Burns & Company, P.C. During
the two fiscal years ended December 31, 1996 and 1995, and through the date of
the replacement, there were not any disagreements with King, Griffin & Adamson,
P.C., or its predecessor King, Burns & Company, P.C. on any matter of accounting
principles or practice, financial statement disclosure, auditing scopes or
procedure which disagreements if not resolved to the satisfaction of King,
Griffin & Adamson, P.C., or its predecessor King, Burns & Company, P.C. would
have caused them to make a reference to the subject matter of the disagreements
in connection with their last report, nor were there any "reportable events" as
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<PAGE>
defined by the Securities and Exchange Commission. During the two fiscal years
ended December 31, 1996 and 1995, and until the date of their retention, the
Company had not consulted with Deloitte & Touche, LLP on the application of
accounting principles to a specified transaction, or the type of audit opinion
that might be rendered on the Company's financial statements or any
disagreements or reportable events.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who own more than 10%
of a registered class of the Company's equity securities to file various reports
with the Securities and Exchange Commission concerning their holdings of, and
transactions in, securities of the Company. Copies of these filings must be
furnished to the Company. To the Company's knowl edge, based solely on review of
the copies of such reports furnished to the Company and written representations
that no other reports were required, during the Company's most recent fiscal
year all Section 16(a) filing requirements applicable to its executive officers,
directors and greater than 10% beneficial owners have been met on a timely
basis.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Stockholders who wish to present proposals for action at the 1997
Annual Meeting of Stockholders should submit their proposals in writing to the
Secretary of the Company at the address of the Company set forth on the first
page of this Proxy Statement. Proposals must be received by the Secretary no
later than February 24, 1998, for inclusion in next year's proxy statement and
proxy card.
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report to Stockholders of the Company for the fiscal year
ended December 31, 1996, including audited consolidated financial statements,
has been mailed to the stockholders concurrently herewith, but such report is
not incorporated in this Proxy Statement and is not deemed to be a part of the
proxy solicitation material. Any stockholder who does not receive a copy of such
Annual Report to Stockholders may obtain one by writing to the Company.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any other matters which are to be presented for action at the Meeting.
Should any other matters come before the Meeting or any adjournment thereof, the
persons named in the enclosed proxy will have the discretionary authority to
vote all proxies received with respect to such matters in accordance with their
best judgment and discretion.
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<PAGE>
ANNUAL REPORT ON FORM 10-KSB
A copy of the Company's Annual Report on Form 10-KSB, including the
financial statements thereto, but excluding exhibits, as filed with the
Securities and Exchange Commission, will be furnished without charge to any
person from whom the accompanying proxy is solicited upon written request to
Investor Relations, Tech Electro Industries, Inc., 4300 Wiley Post Road, Dallas,
Texas 75244. If Exhibit copies are requested, a copying charge of $.20 per page
will be made.
BY ORDER OF THE BOARD OF DIRECTORS
Sadasuke Gomi
Secretary
Los Angeles, California
June 24, 1997
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<PAGE>
STOCKHOLDERS ARE URGED TO SPECIFY THEIR CHOICES AND TO DATE, SIGN, AND RETURN
THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND
YOUR COOPERATION WILL BE APPRECIATED.
PROXY
Tech Electro Industries, Inc.
4300 Wiley Post Road
Dallas, Texas 75244
(972) 239-7151
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON JULY 18, 1997
The undersigned hereby appoints William Kim Wah Tan and Sadasuke Gomi
as Proxies, each with the power to appoint his substitute, and hereby authorizes
them or either of them to represent and to vote as designated below, all the
shares of common stock of Tech Electro Industries, Inc. held of record by the
undersigned on June 18, 1997, at the Annual Meeting of Stockholders of Tech
Electro Industries, Inc. to be held on July 18, 1997, or any adjournment
thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees below (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee mark the
box next to the
nominee's name below):
[ ] William Kim Wah Tan [ ] Sadasuke Gomi
[ ] Kim Yeow Tan [ ] Craig D. La Taste
[ ] David L. Arnold
2. APPROVAL OF 1997 INCENTIVE STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. TO RATIFY THE SELECTION OF DELOITTE & TOUCHE, LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued on reverse side)
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<PAGE>
(continued from reverse side)
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the annual meeting or any
adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
Dated: ____________, 1997
- ------------------------------------------
Signature of Stockholder
Signature if held jointly
Please sign exactly as name appears herein. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE READ, COMPLETE, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
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<PAGE>
