Tech Electro Industries, Inc.
477 Madison Avenue, 24th Floor
New York, New York 10022
(212) 583-0900 Tel
(212) 583-0741 Fax
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON June 19, 2000
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 4300 Wiley Post Road, Addison, Texas 75001, 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 three directors to serve until the next
annual meeting of the Company's stockholders or until their
respective successors have been elected and qualify;
2. To ratify the selection and appointment of King, Griffin &
Adamson, P.C. as the Company's independent public accountants for
fiscal year 2000; and
3. 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 and Series A Preferred
Stock at the close of business on May 10, 2000, 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
Mee Mee Tan
Secretary
New York, New York
May 12, 2000
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Tech Electro Industries, Inc.
477 Madison Avenue, 24th Floor
New York, New York 10022
(212) 583-0900
_______________
PROXY STATEMENT
_______________
The following information is furnished 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 4300 Wiley Post Road,
Addison, Texas 75001 at 10:00 a.m. CDST, on Monday, June 19, 2000, and any
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,
depositories, 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 May 12, 2000.
Proxies duly executed and returned by stockholders and received by the
Company before the Meeting will be voted FOR the election of all three of the
nominee-directors specified herein, and FOR the ratification of the selection
and appointment of King, Griffin & Adamson, P.C. as the Company's independent
public accountants for fiscal year 2000, 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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STOCKHOLDERS' VOTING RIGHTS
Only holders of record of the Company's Common Stock, $0.01 par value
("Common Stock") and Series A Preferred Stock, $1.00 par value ("Series A
Stock"), at the close of business on May 10, 2000 (the "Record Date") will be
entitled to notice of, and to vote at, the Meeting. On such date there were
8,103,139 shares of Common Stock outstanding and 120,588 shares of Series A
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 will be elected. See
"Nomination and Election of Directors." To ratify the selection and appointment
of King, Griffin & Adamson, P.C., 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 and Series A
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 King, Griffin & Adamson,
P.C., will have the effect of a no vote for such proposal.
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 and Series A Stock:
- ------------------ ------------ -------- ---------- ---------
Common Series A
Stock Stock
------ --------
Amount Amount
and and
Nature of Nature of % of
Beneficial % of Beneficial % of Voting
Name and Address Ownership(1) Class(2) Ownership(1) Class(2) Power(3)
- ------------------ ------------ -------- ------------ --------- --------
William Tan 3,467,546 42.79% 5,000 4.18% 13.45%
Kim Wah, President Direct (through
and CEO and Indirect ownership of
No. 18 Jalan Sri (4) 5,000 units)
Semantan 1
Damansara Heights
50490
Kuala Lumpur
Malaysia
3
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- ------------------ ------------ ------- ---------- --------- ----------
Gin Securities,Ltd. 1,163,636(5) 14.36% 0 0 7.18%
11 Jalan Medang Direct
Bukit Bandaraya
59100 Kuala Lumpur
Malaysia
- ------------------ ------------ ------- ---------- --------- --------
Pricewaterhouse 1,100,000 13.57% 0 0 13.57%
Coopers, Inc. Direct
145 King Street W
Toronto Ontario
Canada
M5H 1V8
- ------------------ ------------ ------- ---------- --------- --------
Jenny Jechart 1,094,696(6) 13.51% 0 0 6.28%
10724 WilshireBlvd. Direct and
Los Angeles,CA 90024Indirect
- ------------------ ------------ ------- ---------- --------- --------
Jason Tan Highway 668,000(7) 8.24% 0 0 4.12%
Wisma Cosway#12-02, Direct
Jln.Raja Chulan
50200 Kuala Lumpur,
Maylysia
- ------------------ ------------ ------- ---------- --------- --------
Wooi Hou Tan 666,000(8) 8.21% 0 0 4.11%
First Floor Flat Direct
53 Gloucester Road
London, England SW74QN
United Kingdom
- ------------------ ------------ ------- ---------- --------- --------
Mutsuko Gomi 666,000(8) 8.21% 0 0 4.11%
1367-31 Kawana Direct
Ito-Shi,
Japan 414
- ------------------ ------------ ------- ---------- --------- --------
Craig D. La Taste 542,979(9) 6.70% 0 0 6.42%
4300 Wiley Post Rd. Direct
Dallas, TX 75244
USA
- ------------------ ------------ ------- ---------- --------- --------
Mee Mee Tan, 535,000(10) 6.61% 0 0 2.53%
Secretary Direct and
477 Madison Ave, Indirect
24th Floor
New York, NY 10022
- ------------------ ------------ ------- ---------- --------- --------
Sadasuke Gomi 487,150(11) 6.01% 0 0 2.56%
477 Madison Avenue
24th Floor
New York, N Y 10022
- ------------------ ------------ ------- ---------- --------- --------
All Directors 4,689,696 57.97% 5,000 2.70% 20.10%
and Executive
Officers as a Group
(4 persons)
4
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(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 as of 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.
(3) In order to reflect the voting rights of the Common
Stock and Series A Stock as of the Record Date 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) Includes (i) 75,000 shares directly held by Mr. Tan,
(ii) options to acquire 500,000 shares of common
stock exercisable within 60 days of the Record Date.
(iii) 288,000 shares of common stock, 100,000
options to purchase common stock and 1,050,000
warrants to purchase stock held by Placement &
Acceptance, Inc., (both exercisable within 60 days
of the Record Date), a company of which Mr Tan is a
director and officer. (iv) 727,273 shares of common
stock and 727,273 warrants to purchase shares of
common stock held by Ventures International, Ltd., a
company of which Mr. Tan is a director and officer.
(v) 5,000 Units, with each Unit convertible within
60 days of the Record Date into one share of common
stock and one share of Preferred Stock, of which one
share of Preferred Stock is convertible into two
shares of common stock.
(5) Includes (i) 581,818 shares of Common Stock and (ii)
581,818 warrants exercisable within 60 days of the
Record Date.
(6) Includes (i) 509,091 shares of Common Stock, (ii)
509,091 warrants exercisable within 60 days of the
Record Date and (iii) 76,514 warrants exercisable
within 60 days of the Record Date owned by
AlphaNetFunding, LLC of which Ms. Jechart is the
principal.
5
<PAGE>
(7) Includes options to acquire 334,000 shares of common
stock exercisable within 60 days of the Record Date.
(8) Includes options to acquire 333,000 shares of common
stock exercisable within 60 days of the Record Date.
(9) Mr. La Taste has direct ownership of 433,732 shares
of Common Stock, and as of the Record Date as a
partner of La Taste Enterprise (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 granted 35,000 options, each toacquire one
share of Common Stock; 26,250 of such options are
exercisable within 60 days of the Record Date, and
are included in the percent of shares shown herein.
Mr. La Taste's wife, Jacqueline Green La Taste, is
the owner of 24,213 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.
(10) Includes (i) 205,000 shares held by Ms. Tan and the
options to acquire 180,000 shares of common stock
exercisable within 60 days of the Record Date
attributed to her through Equator Holdings, Inc. a
company of which Ms. Tan is a director and officer
and (ii) options held directly by Ms. Tan to acquire
150,000 shares of common stock within 60 days of the
Record Date.
(11) Includes (i) 2,150 shares held directly by Mr. Gomi,
(ii) 205,000 shares and options to acquire 180,000
shares exercisable within 60 days of the Record Date
attributed to him through Fleet Security
Investments, Inc. of which Mr. Gomi is a director
and (iii) an option granted to Gomi to acquire
100,000 shares that is exercisable within 60 days of
the Record Date.
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<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the shares of
the Company's Common Stock and Series A 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:
Common Series A
Stock Stock
------------ -----------
Amount Amount
and and
Nature of Nature of % of
Beneficial % of Beneficial % of Voting
Name and Address Ownership Class(1) Ownership Class(1) Power(2)
- ------------------ ------------ ------- ------------ -------- --------
William Kim 3,467,546 42.86% 5,000 4.18% 13.48%
Wah Tan Direct (through
No. 18 Jalan Sri and Indirect ownership of
Semantan 1 (3) 5,000 units)
Damansara Heights
50490
Kuala Lumpur
Malaysia
- ------------------ ------------ ------- ------------ -------- --------
Sadasuke Gomi 487,150 6.02% 0 0 2.25%
477 Madison Ave, Direct
24th Floor and Indirect
New York, NY 10022 (4)
- ------------------ ------------ ------- ------------ -------- --------
Ian Colin Edmonds 200,000(5) 2.47% 0 0 0
477 Madison Ave,
24th Floor
New York, NY 10022
- ------------------ ------------ ------- ------------ -------- --------
Mee Mee Tan 535,000(6) 8.21% 0 0 4.37%
477 Madison Ave, Indirect
24th Floor
New York, NY 10022
- ------------------ ------------ ------- ------------ -------- --------
All Directors 4,689,696 57.97% 5,000 20.10% 20.10%
and Executive
Officers as a Group
(4 persons)
- ------------------ ------------ ------- ------------ --------- --------
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).
(1) Percent of class is based on the number of shares outstanding as of the
Record Date. In addition, shares which a person had the right to acquire within
60 days of the Record Date, are also deemed outstanding in calculating the
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<PAGE>
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 of the Record Date.
(2) In order to reflect the voting rights of the Common Stock and Series A 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 1 above.
(3) Includes (i) 75,000 shares directly held by Mr. Tan, (ii) options to acquire
500,000 shares of common stock exercisable within 60 days of the Record Date,
(iii) 288,000 shares of common stock, 100,000 options to purchase common stock
and 1,050,000 warrants to purchase stock held by Placement & Acceptance, Inc.,
(both exercisable within 60 days of the Record Date), a company of which Mr Tan
is a director and officer, (iv) 727,273 shares of common stock and 727,273
warrants to purchase shares of common stock held by Ventures International,
Ltd., a company of which Mr. Tan is a director and officer, (v) 5,000 Units,
with each Unit convertible within 60 days of the Record Date into one share of
common stock and one share of Preferred Stock, of which one share of Preferred
Stock is convertible into two shares of common stock.
(4) Includes: (i) 205,000 shares and options to acquire 180,000 shares
exercisable within 60 days of the Record Date attributed to him through Fleet
Security Investments, Inc. of which Mr. Gomi is a director, (ii) 2,150 shares
directly held by Mr. Gomi and (iii) an option to acquire 100,000 shares of
common stock exercisable within 60 days of the Record Date.
(5) Represents shares underlying options exercisable by Mr. Edmonds within 60
days of the Record Date.
(6) Includes (i) 205,000 shares held directly by Ms. Tan; (ii) 150,000 shares
underlying options exercisable by Mr. Tan within 60 days of the Record Date; and
(iii) 180,000 shares underlying options exercisable with 60 days of the Record
Date by Equator Holdings, Inc. of which Ms. Tan is a director and officer.
8
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Computer Components Corporation ("CCC") leases its office and warehouse
premises from La Taste Enterprises, a partnership comprised of Craig D. La Taste
and members of his family. The current lease is for a term ending February 28,
2005 and provides for an annual base rent of $100,800.
On October 26, 1999, the Company completed the acquisition of AlphaNet.
Aspart of this transaction, the Company arranged for a $2,525,000 credit
facility for AlphaNet to refinance its existing indebtedness. $1,525,000 of the
said indebtedness was refinanced through Appel Investments Inc. ("Appel").
William Tan Kim Wah's brother, Kim Yeow Tan is an officer of Appel. In
conjunction with Appel's $1,525,000 loan to refinance AlphaNet indebtedness,
AlphaNet paid a loan origination fee of $150,737. The remaining balance of the
indebtedness is an interest only loan at 20.5% per annum. The principal of the
indebtedness is due in full on October 26, 2001. As additional consideration for
the refinancing, Appel Investments Inc. received 116,703 Warrants to purchase
the Common Stock of the Company exercisable at $0.75 per share. The Warrants
expire on October 20, 2004.
The Company engaged Placement & Acceptance, Inc. ("PAI"), a British Virgin
Islands corporation, to effect a private placement of securities, which was
consummated in December 1997. Mr. Tan is a director and shareholder of PAI. PAI
received fees of $112,000, inclusive of expenses, for acting as sales agent in
the placement. The Company also engaged PAI in October, 1999 to effect a private
placement of securities to raise $1,400,000 for the Company's acquisition of
AlphaNet. PAI received a placement fee of warrants to purchase 500,000 shares in
consideration for services rendered. In addition, the Company retained PAI to
refinance the outstanding AlphaNet indebtedness required to complete the
acquisition. PAI received a placement fee of warrants to purchase 550,000 shares
of common stock in consideration for services rendered. All of these warrants
are exercisable at $0.75 per share and expire on October 20, 2004.
On February 25, 2000, the Company renegotiated and settled in full its $2.1
Million promissory note with PricewaterhouseCoopers, Inc. (Trustee of the Estate
of AlphaNet Telecom Inc.) that composed part of the purchase price of the
acquisition of AlphaNet. The promissory note was paid in full by the payment of
$500,000 cash and the issuance of 1,100,000 shares of Common Stock. The $500,000
cash was raised by a loan from Caspic International, Inc. Mr. Tan is also a
director and shareholder of Caspic International, Inc. The loan is due on May
25, 2000, bears an interest rate of 12% per annum payable monthly and is secured
by a pledge of the shares of capital stock of AlphaNet. As additional
consideration for the loan, the Company also issued warrants to purchase 250,000
shares of Common Stock at $0.73 per share (which was the market price on the day
the transaction was negotiated), exercisable immediately, with an expiration
date of February 25, 2005.
9
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NOMINATION AND ELECTION OF DIRECTORS
The Company's directors are to be elected at each annual meeting of
stockholders. At this Meeting, three 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 three 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.
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 Julie A.
Sansom-Reese who is currently the Interim Chief Financial Officer of the Company
and Mee Mee Tan who is currently Secretary of the Company and who are noted
below as significant employees:
Nominee Principal Occupation
------- --------------------
William Kim Wah Tan Investor, President, Chief Executive Officer, 57
and Chairman of the Board
of the Company
Ian Colin Edmonds Vice President and Director of the Company 28
Sadasuke Gomi Investor and Director of the Company 29
WILLIAM KIM WAH TAN was elected President, Chief Executive Officer,
Director, and Chairman of the Board of Directors of the Company in February
1997. Mr. Tan has been active as an entrepreneur in the fields of finance,
general insurance, property development and management for the past twenty
years. He has held senior management positions in a number of financing,
insurance, textile, property development and related businesses. Mr. Tan is the
father of Mee Mee Tan.
IAN COLIN EDMONDS, Vice President and director of the Company. Mr. Edmonds
is a graduate of the University of Denver, where he received a bachelors degree
in Marketing and minor in Statistics in June 1996. Following graduation and
through December 1997, he was Assistant Product Manager at Information Handling
Services, a private information-technology firm, in Denver, Colorado. Mr.
Edmonds has served as a director of the Company since July 1997. Mr. Edmonds was
elected Vice President in February 1999.
SADASUKE GOMI was elected Director 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.
10
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No family relationship exists among any of the executive officers or
directors of Company or persons nominated or chosen to become directors or
executive officers, except that William Kim Wah Tan is the father of Mee Mee
Tan, Secretary of the Company.
Significant Employees
The following table sets forth-certain information concerning significant
employees of the Company and its wholly owned subsidiaries.
Name Age Position
---- --- --------
Julie A. Sansom-Reese 37 Interim Chief Financial Officer of
the Company and CFO of CCC
Randy Hardin 40 CEO of CCC
Ian Kindred 52 Vice President of AlphaNet
Hospitality Systems, Inc.
Mee Mee Tan 26 Secretary of the Company
JULIE A. SANSOM-REESE was named Interim Chief Financial Officer of the
Company in November 1999. Since August 1986, she has served as CFO of CCC. She
served as CFO of the Company from 1992 through June 1996. She earned a BA from
Texas Tech University in August 1986.
RANDY T. HARDIN is Chief Executive Officer of CCC. He has been an officer
of CCC 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.
IAN KINDRED is Vice President of AlphaNet. He joined AlphaNet in 1992 to
create and manage its InnFax operations, engineering and customer service in
North America.
MEE MEE TAN is the Secretary of the Company. She holds a BS degree in
Marketing and a minor in Statistics from the University of Denver, Colorado.
Prior to joining the Company, Ms. Tan was an intern at Prudential Securities in
Denver, Colorado. She is the daughter of William Kim Wah Tan.
INFORMATION CONCERNING THE BOARD OF
DIRECTORS AND CERTAIN COMMITTEES
The business of the Company's Board of Directors is conducted through full
meetings of the Board and consents of members. 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 four meetings of the Board of Directors of the Company during
the last fiscal year of the Company. Messrs. Tan and Edmonds attended all four
of these meetings. Ms. Gomi attended none. Other Board action was taken by
unanimous consents.
11
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Compensation of Board of Directors
Directors' Fees. Effective May 9, 1997, for service on the Board of
Directors, directors who are not employees of the Company 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 meetings.
Options. As of the Record Date, Messrs Tan, Edmonds and Gomi held options
to purchase 500,000 200,000 and 100,000 shares of common stock, respectively,
that were granted to them as compensation for services to the Company. The
options are exercisable at any time at $0.75 per share and expire November 15,
2004 except options for 100,000 shares granted to Mr. Tan that expire October
31, 2001. . EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Compensation
Summary Compensation Table
The following table sets forth information for the fiscal year ended
December 31, 1999, 1998, and 1997 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 $100,000, for services in all
capacities to the Company and its subsidiaries or divisions in the fiscal year
ended December 31, 1999:
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SUMMARY COMPENSATION TABLE
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Annual Compensation Long-Term Compensation
------------------- -----------------------
Awards Payouts
- ---------- ------- ------ ----- ----------- ---------- ------------ --------
Name and Fiscal Salary Bonus Other Restricted Securities LTIP
Principal Year ($) ($) Annual stock Underlying Payouts
Position Ended Compensation award(s) Options/ ($)
December ($) ($) SARs (#)
31
- ---------- ------- ------ ----- ----------- ---------- ------------ --------
William 1999 0 0 0 400,000 0
Tan Kim
Wah,
Chairman 1998 0 0 0 $244,620 100,000 0
of the (1a) (1b)
Board,
President 1997 N/A N/A N/A $393,750 N/A N/A
and CEO (1b)
- ---------- ------ ------- ----- ---------- ---------- ------------ --------
</TABLE>
(1a) On November 18, 1998, the Company agreed on an annual compensation
of $360,000 including expenses, effective February 1998, for Mr. Tan's services.
On December 15, 1998, the Company issued to Mr. Tan 400,000 shares of Common
Stock, in lieu of payment of Mr. Tan's 1998 accrued salary in consideration for
services provided by Mr. Tan. On December 22, 1999, the Company and Mr. Tan
rescinded the issuance of these shares to him. Mr. Tan returned the shares to
the Company and has waived all compensation due him for his services to the
Company.
(1b) On February 1998, the Company agreed to pay Mr. Tan $10,000 per month
for services rendered in 1997 as the Company's Chairman of the Board, President
and Chief Executive Officer. On February 20, 1998, the Company issued to Mr. Tan
100,000 shares of Common Stock, valued at $2.25 per share, in lieu of payment of
Mr. Tan's 1997 accrued salary, and an additional 75,000 shares of Common Stock
in repayment of expenses and advances incurred by Mr. Tan on behalf of the
Company. On December 22, 1999, the Company and Mr. Tan rescinded the issuance of
the said 100,000 shares to him. Mr. Tan returned the shares to the Company and
has waived all compensation due him for his services to the Company.
Concurrently with the issuance of the foregoing shares, the Company granted to
Mr. Tan options to acquire 100,000 shares of Common Stock, which options were
exercisable over a period of two years from the date of issuance, at an exercise
price of $5.00 per share. In 1999, the exercise period for these options was
extended to October 31, 2001 and the exercise price reduced to $0.75 per share.
AGGREGATE OPTION GRANTS IN LAST FISCAL YEAR (Individual Grants)
(a) (b) (c) Exercise Price Expiration Date
Shares Percent of Total
Name Underlying Options Granted to
Options Employees in Fiscal
Granted Year
William
Kim Wah Tan 400,000 32% $0.75 November 15, 2004
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RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Action is to be taken by the stockholders at the Meeting with respect to
the ratification of King, Griffin & Adamson, P.C. independent public
accountants, as independent accountants for the Company for the fiscal year
ending December 31, 2000. King, Griffin & Adamson, P.C. 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 King, Griffin & Adamson, P.C.
The Board of Directors of the Company have approved King, Griffin &
Adamson, P.C. 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 King, Griffin & Adamson, P.C. 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
King, Griffin & Adamson, P.C., the Board of Directors may, if the circumstances
dictate, appoint other independent accountants.
On June 24 1997, the Company retained King, Griffin & Adamson, P.C. 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, 1998 and 1997, 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, 1998 and 1997, 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
defined by the Securities and Exchange Commission. During the two fiscal years
ended December 31, 1998 and 1997, the Company had not consulted with King,
Griffin & Adamson, P.C. 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
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transactions in, securities of the Company. Copies of these filings must be
furnished to the Company. To the Company's knowledge, 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, except William Kim Wah Tan filed four reports in 1999 and one report in
February 2000, Ian Edmonds filed one report in May 2000 and Sadasuke Gomi filed
one report in May 2000, each of the foregoing untimely reporting one
transaction.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Stockholders who wish to present proposals for action at the 2001 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 a
reasonable time before the Company begins to print and mail its proxy material
for that meeting. The Company will notify shareholders of such deadline in its
Form 10-QSB for the quarterly period ended June 30, 2000.
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report to Stockholders of the Company for the fiscal year ended
December 31, 1999, 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.
ANNUAL REPORT ON FORM 10-KSB
A copy of the Company's Annual Report on Form 10KSB, 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., 477 Madison Avenue, 24th
Floor, New York, New York 10022. If Exhibit copies are requested, a copying
charge of $.20 per page will be made.
BY ORDER OF THE BOARD OF DIRECTORS
Mee Mee Tan
Secretary
New York, New York
May 12, 2000
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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.
477 Madison Avenue, 24th Floor
New York, New York 10022
(212) 583-0900
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON June 19, 2000
The undersigned hereby appoints William Kim Wah Tan and Ian Colin Edmonds
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 May 10, 2000, at the Annual Meeting of Stockholders of Tech
Electro Industries, Inc. to be held on June 19, 2000, 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
Ian Colin Edmonds
2. TO RATIFY THE SELECTION OF KING, GRIFFIN & ADAMSON, P.C. AS
INDEPENDENT PUBLIC ACCOUNTANTS
FOR AGAINST ABSTAIN
3. 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 AND 2.
Dated: ____________, 2000
__________________________________________
Signature of Stockholder
(continued on reverse side)
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(continued from reverse side)
__________________________________________
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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