-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LSKbzNXwEIlV7eU4KjUm344dc78GCmuq4AiTXDNt34cMj01maewpiJE/Ccz+gFRD hu4s0IDWMZLmZSjU4yz+Lg== /in/edgar/work/20000727/0001026700-00-000135/0001026700-00-000135.txt : 20000921 0001026700-00-000135.hdr.sgml : 20000921 ACCESSION NUMBER: 0001026700-00-000135 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAM SW INC CENTRAL INDEX KEY: 0001030860 STANDARD INDUSTRIAL CLASSIFICATION: [3911 ] IRS NUMBER: 621563911 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-22049 FILM NUMBER: 679815 BUSINESS ADDRESS: STREET 1: UNIT 25 32 2ND FLOOR BLOCK B FOCAL IND C STREET 2: MAN LOK STREET CITY: HUNGHOM, HONG KONG STATE: K3 ZIP: 12345 BUSINESS PHONE: 0118522766 MAIL ADDRESS: STREET 1: UNIT 25 32 2ND FLOOR BLOCK B FOCAL IND C STREET 2: MAN LOK STREET CITY: KOWLOON, HONG KONG STATE: K3 10-K/A 1 0001.txt 10-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 1 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended March 31, 2000 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to _______________. Commission File No. 0-22049 S.W. LAM, INC. ------------------------------------------------ (Name of registrant as specified in its charter) Nevada 62-1563911 - -------------------------------- --------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) Unit 25-32, Second Floor, Block B, Focal Industrial Centre, 21 Man Lok Street, Hunghom, Hong Kong ------------------------------------------------------------- (Address of principal executive offices)(Zip code) Registrant's telephone number, including area code: (852) 2766 3688 Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered ------------------- ----------------------------------------- None None Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, $.001 par value ------------------------------- (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past ninety (90) days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] As of July 1, 2000, 12,800,000 shares of common stock of the Registrant were outstanding. As of such date, the aggregate market value of the voting and non-voting common equity held by non-affiliates, based on the closing price, was approximately $3,600,000. DOCUMENTS INCORPORATED BY REFERENCE None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT Identification of Directors, Executive Officers and Certain Significant Employees The following table sets forth certain information regarding the directors and executive officers of the Company. Name Age Position ------ ----- ---------- Lam Sai Wing.............. 45 Chairman, Chief Executive Officer and President Chan Yam Fai, Jane........ 37 Vice President, Chief Financial Officer and Director Ng Yee Mei................ 38 Vice President and Director Cheng Wa On............... 37 Director Terms of Office The directors of the Company hold office until the next annual meeting of stockholders of the Company or until their successors in office are elected and duly qualified. All officers serve at the discretion of the Board of Directors except as set forth in employment agreements. Family Relationships Lam Sai Wing and Chan Yam Fai, Jane are husband and wife. Business Experience Lam Sai Wing has served as Chairman of the Board, Chief Executive Officer and President of the Company since the Exchange in December of 1996 and of the Company's predecessor and operating subsidiaries, the Hang Fung Group, since founding the Hang Fung Group in 1986. Chan Yam Fai, Jane has served as Vice President, Chief Financial Officer and a Director of the Company since the Exchange in December of 1996 and of the Hang Fung Group since 1990. Ng Yee Mei has served as Vice President and a Director of the Company since the Exchange in December of 1996 and of the Hang Fung Group since 1991. Cheng Wa On has served as a Director of the Company since the Exchange in December of 1996. Mr. Cheng has been employed by the Hang Fung Group as Export Manager since 1986. Compliance With Section 16(a) of the Exchange Act Under the securities laws of the United States, the Company's directors, its executive officers and any persons holding more than ten percent of the Company's Common Stock are required to report their initial ownership of the Company's Common Stock and any subsequent changes in that ownership to the Securities and Exchange Commission. Specific due dates for these reports have been established and the Company is required to disclose any failure to file by these dates during fiscal 2000. All of the filing requirements were satisfied on a timely basis in fiscal 2000. In making these disclosures, the Company has relied solely on written statements of its directors, executive officers and shareholders and copies of the reports that they filed with the Commission. 1 ITEM 11. EXECUTIVE COMPENSATION Executive Compensation Table The following table sets forth information as to the compensation paid or accrued to each officer and director receiving compensation of at least $100,000 per year and the Chief Executive Officer for the three years ended March 31, 2000: Annual Compensation --------------------------------------------------- Other Annual All Other Name and Principal Position Year Salary Bonus Compensation (1) Compensation --------------------------- ---- ------ ----- ---------------- ------------- Lam Sai Wing.......................... 2000 $166,880 $507,060 $56,222 $0 Chief Executive Officer,............ 1999 202,694 400,000 39,237 0 Chairman and President.............. 1998 194,000 0 0 0
- --------------- (1) Mr. Lam's other annual compensation consists of a housing allowance and education allowance. Director's Compensation No compensation has been paid to any directors for service in such capacity in the past and no such compensation is presently payable to directors. At such time as the Board of Directors deems appropriate, the Company intends to adopt an appropriate policy to compensate non-employee directors in order to attract and retain the services of qualified non-employee directors. Employment Agreements The Company previously maintained employment agreements with Mr. Lam and Ms. Chan. In connection with the Group Reorganization and Hong Kong Offering, both of those employment agreements were terminated on February 27, 1999 and the Company's subsidiary, Hang Fung Gold, entered into employment agreements with Mr. Lam, Ms. Chan and Ms. Ng Yee Mei. The Employment Agreement with Mr. Lam commenced October 1, 1998 and runs for a term of three years. The agreement provides for a monthly salary of HK$100,000 with annual adjustments based on review by the board of directors, not to exceed 15%. The agreement also provides for a guaranteed annual bonus equal to one month's salary and discretionary bonuses to be fixed by the board, with the aggregate bonuses payable to executive directors not to exceed 5% of consolidated profits of Hang Fung Gold. In addition to the salary and bonus provisions, Mr. Lam is entitled to (i) participation in insurance schemes adopted by Hang Fung Gold, (ii) participation in provident funds maintained by Hang Fung Gold, (iii) use of a company automobile, including maintenance, gas and parking, (iv) payment of maintenance, gas and parking costs for one automobile owned by Mr. Lam, (v) use of a company provided residence, including payment by Hang Fung Gold of all management and utility costs associated with such residence, with the monthly rental payable by Hang Fung Gold not to exceed HK$30,000, and (vi) an education allowance of up to HK$300,000 annually to pay for tuition of dependent children under the age of 18. The Employment Agreement with Ms. Chan commenced October 1, 1998 and runs for a term of three years. The agreement provides for a monthly salary of HK$30,000 with annual adjustments based on review by the board of directors, not to exceed 15%. The agreement also provides for a guaranteed annual bonus equal to one month's salary and discretionary bonuses to be fixed by the board, with the aggregate bonuses payable to executive directors not to exceed 5% of consolidated profits of Hang Fung Gold. In addition to the salary and bonus provisions, Ms. Chan is entitled to (i) participation in insurance schemes adopted by Hang Fung Gold, (ii) participation in provident funds maintained by Hang Fung Gold, (iii) use of a company automobile, including maintenance, gas and parking, and (iv) payment of maintenance, gas and parking costs for one automobile owned by Ms. Chan. 2 The Employment Agreement with Ms. Ng Yee Mei commenced October 1, 1998 and runs for a term of three years. The agreement provides for a monthly salary of HK$50,000 with annual adjustments based on review by the board of directors, not to exceed 15%. The agreement also provides for a guaranteed annual bonus equal to one month's salary and discretionary bonuses to be fixed by the board, with the aggregate bonuses payable to executive directors not to exceed 5% of consolidated profits of Hang Fung Gold. In addition to the salary and bonus provisions, Ms. Ng Yee Mei is entitled to (i) participation in insurance schemes adopted by Hang Fung Gold, (ii) participation in provident funds maintained by Hang Fung Gold, (iii) use of a company automobile, including maintenance, gas and parking, and (iv) payment of maintenance, gas and parking costs for one automobile owned by Ms. Ng Yee Mei. The Employment Agreement with Ms. Ng terminated effective November 1, 1999 by delivery of notice of termination from Ms. Ng. Provident Plan The Company's subsidiaries in Hong Kong have adopted a voluntary defined contribution provident plan (the "Plan") for its employees in Hong Kong. The Plan generally covers all employees of the Company's operating subsidiaries (excluding contract workers in the PRC) who have completed twelve months of service with the Company. Employees electing to participate in the Plan defer, in the form of a contribution to the Plan, an amount equal to five percent (5%) of their monthly salary and the Company makes a matching contribution on behalf of each participating employee. Participating employees are always fully vested with respect to contributions made by them to the Plan and earnings or increases thereon. Employees become vested in contributions made by the Company ratably over ten years. Share Option Scheme The Company's subsidiary, Hang Fung Gold, adopted a Share Option Scheme pursuant to which the directors of Hang Fung Gold may grant options to Hang Fung Gold employees to purchase shares of common stock of Hang Fung Gold. Pursuant to the Share Option Scheme, options may be granted to purchase shares of Hang Fung Gold at a price determined by the directors, not less than 80% of the average closing price of the share quoted on the Stock Exchange for the five trading days immediately preceding the date of the option or the nominal value of the share of Hang Fung Gold whichever is higher, for a period of not more than 10 years. The total number of shares issuable pursuant to the Share Option Scheme may not exceed ten percent of the shares of Hang Fung Gold outstanding from time to time. Compensation Report The Company does not presently maintain a Compensation Committee of its Board of Directors. The Board of Directors, acting under the guidance of the Company's Chairman and Chief Executive Officer, Mr. Lam, has historically fixed the compensation of executive officers. The salary of Mr. Lam, Ms. Chan and Ms. Ng Yee Mei was fixed pursuant to the terms of Employment Agreements between Hang Fung Gold and those officers entered in 1998. In fixing the compensation of Mr. Lam and other executive officers, the Board of Directors considered the following factors, among others: (1) from fiscal 1995 through fiscal 2000, the Company and its predecessor, the Hang Fung Group, was consistently profitable -- with revenues increasing 427% and net income increasing 162%, (2) the importance of attracting and retaining the highly skilled executive officers in the management team that has been responsible for such financial performance, (3) the efforts, skills and responsibilities of, and contributions made by, each such executive officer, and (4) the competitiveness of the Company's compensation packages. With respect to the Chairman and Chief Executive Officer, the Directors acknowledged that he has brought to the Company not only his expertise and personal relationships in the jewelry industry, but also his vision, foresight and efforts to bring about the Company's financial performance over the past several years, and to steer the Company toward the more profitable segments of the business. The Directors also took into account the need to retain such highly qualified officers by providing competitive compensation packages. 3 Performance Graph The following graph summarizes cumulative total shareholder return (assuming reinvestment of dividends) on the Common Stock of the Company compared to the returns of the S&P Smallcap 600 Index and of a peer group (the "Peer Group") consisting of DG Jewellery CDA Ltd. ("DGJ") and IWI Holding Limited ("IWI"). The Company's Common Stock was first registered under Section 12(g) of the Securities Exchange Act of 1934, as amended, on March 24, 1997. The measurement period hereto commenced on March 31, 1997 and ended on March 31, 2000, the Company's 2000 fiscal year end date. The graph assumes that $100 was invested on March 31, 1997. As there is no broad equity market index for the OTC Bulletin Board where the Company's Common Stock is traded and there is no published industry or line-of-business index for the jewelry business in which the Company is engaged, the Company has selected DGJ and IWI as peer issuers for comparison. DGJ and IWI are engaged primarily in the design, assembly, merchandising and wholesale distribution of jewelry and whose shares are traded in the over-the-counter market in the United States. The comparisons in this graph are required by the Securities and Exchange Commission and are not intended to forecast or be indicative of future stock price performance or the financial performance of the Company. Shareholders are encouraged to review the Financial Statements of the Company mentioned in Item 8 above. [OBJECT OMITTED] March 31, 1997 March 31, 1998 March 31, 1999 March 31, 2000 -------------- -------------- -------------- -------------- S.W. Lam, Inc. 100 16.67 42.86 133.33 S&P SmallCap 600 Index 100 145.87 117.96 154.18 Peer Group 100 35.31 93.22 38.58
4 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Common Stock The following table is furnished as of March 31, 2000 to indicate beneficial ownership of shares of the Company's Common Stock by (1) each shareholder of the Company who is known by the Company to be a beneficial owner of more than 5% of the Company's Common Stock, (2) each director and named officer of the Company, individually, and (3) all officers and directors of the Company as a group. The information set out in the following table was supplied by such persons. Name and Address of Number of Shares Beneficial Owner (1) Beneficially Owned Percent - -------------------- ------------------- ------- Good Day Holdings Ltd. (2)(3)........................ 6,600,000 (2) 51.6% Lam Mo Wan (3)....................................... 2,930,000 22.9% Chan Wai Sum (3)..................................... 670,000 5.2% Lam Sai Wing (2)..................................... 6,600,000 (2) 51.6% Carhill Limited (4).................................. 800,000 6.3% Chan Yam Fai, Jane................................... 300,000 2.3% Ng Yee Mei........................................... 0 - Cheng Wa On.......................................... 0 - All officers and directors as a group (2 persons).... 6,900,000 (2) 53.9%
- --------------- (1) Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to the shares shown opposite the name of such person or group. (2) Good Day Holdings Ltd. is controlled 100% by Lam Sai Wing, an officer and director of the Company. Accordingly, Mr. Lam may be deemed to be the beneficial owner of the shares held by Good Day Holdings Ltd. (3) Address is Unit 25-32, Second Floor, Block B, Focal Industrial Centre, 21 Man Lok Street, Hunghom, Hong Kong. (4) Address is c/o Suite 4703, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong. Preferred Stock Series A Preferred Stock. The following table is furnished as of March 31, 2000 to indicate beneficial ownership of the Company's Series A Preferred Stock by each shareholder of the Company who is known by the Company to be a beneficial owner of more than 5% of the Company's Series A Preferred Stock. Name and Address of Number of Shares Beneficial Owner (1) Beneficially Owned Percent - -------------------- ------------------- -------- Good Day Holdings Ltd. (3).................. 100,000 (2) 100.0% Lam Sai Wing................................ 100,000 (2) 100.0% (1) Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to the shares shown opposite the name of such person or group. (2) Good Day Holdings Ltd. is controlled 100% by Lam Sai Wing, an officer and director of the Company. Accordingly, Mr. Lam may be deemed to be the beneficial owner of the shares held by Good Day Holdings Ltd. (3) Address is Unit 25-32, Second Floor, Block B, Focal Industrial Centre, 21 Man Lok Street, Hunghom, Hong Kong. 5 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Company's predecessor and subsidiary, Hang Fung Group, has, from time to time entered into transactions with officers and directors of the Company and companies controlled by officers and directors of the Company. During the fiscal year ended March 31, 1999 and March 31, 2000, the Hang Fung Group paid rental payments of $20,916 and $41,592, respectively, to Mr. Lam in connection with the lease of a residential premises for Mr. Lam's residence. The Company has from time to time both advanced to and borrowed funds from Mr. Lam. At March 31, 1999, the Company owed Mr. Lam $0.4 million. At March 31, 2000, the Company owed Mr. Lam $0.57 million. All of such loans are unsecured, non-interest bearing and without pre-determined repayment terms. Mr. Lam and Ms. Chan personally guaranteed the existing banking facilities of the Hang Fung Group, pledged certain real estate as collateral to secure such banking facilities. All of the above transactions are believed by management to be on terms at least as favorable to the Company as may have been obtained from unaffiliated third parties. The Company has no present policy governing related party transactions but intends to implement a policy such that all future and ongoing transactions between the Company and its directors, officers, principal stockholders or affiliates will be on terms no less favorable to the Company than may be obtained from unaffiliated third parties, and any such transactions will be approved by a majority of disinterested directors of the Company. 6 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to on Form 10-K report to be signed on its behalf by the undersigned, thereunto duly authorized. S.W. LAM, INC. By: /s/ Lam Sai Wing ---------------------------------------- Lam Sai Wing President and Chief Executive Officer Dated: July 27, 2000 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date ----------- -------- ------- /s/ Lam Sai Wing President, Chief Executive Officer July 27, 2000 - ------------------------ (Principal Executive Officer) and Lam Sai Wing Chairman of the Board /s/ Chan Yam Fai, Jane Vice President, Chief Financial July 27, 2000 - ------------------------- Officer (Principal Accounting Chan Yam Fai, Jane and Financial Officer) and Director /s/ Ng Yee Mei Vice President and Director July 27, 2000 - ------------------------- Ng Yee Mei /s/ Cheng Wa On Director July 27, 2000 - ------------------------- Cheng Wa On -----END PRIVACY-ENHANCED MESSAGE-----