-----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, RWoX8Q3LFOu7Cr3ih5v8439OBajlUtrLL+rXrRWUd6EfiYXMiKJS5PrZrP/daBE6 WGL7EzXUKRz8f0TuK8K3hA== 0001145549-04-000405.txt : 20040407 0001145549-04-000405.hdr.sgml : 20040407 20040407064754 ACCESSION NUMBER: 0001145549-04-000405 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040407 FILED AS OF DATE: 20040407 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ST ASSEMBLY TEST SERVICES LTD CENTRAL INDEX KEY: 0001101873 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-75080 FILM NUMBER: 04721359 BUSINESS ADDRESS: STREET 1: 5 YISHUN ST 23 CITY: SINGAPORE STATE: U0 ZIP: 768442 BUSINESS PHONE: 657555885 MAIL ADDRESS: STREET 1: 5 YISHUN ST 23 CITY: SINGAPORE STATE: U0 ZIP: 768442 6-K 1 u92321e6vk.txt ST ASSEMBLY TEST SERVICES LTD United States Securities and Exchange Commission Washington, D.C. 20549 Form 6-K Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of April, 2004 Commission File Number 000-29103 ST ASSEMBLY TEST SERVICES LTD (Exact name of registrant as specified in its charter) Not Applicable (Translation of registrant's name into English) Republic of Singapore (Jurisdiction of incorporation or organization) 5 Yishun Street 23 Singapore 768442 (65) 6824-7888 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F X Form 40-F ----- ----- Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No X ------ ----- If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). Not applicable. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ST ASSEMBLY TEST SERVICES LTD By: /s/ Tan Lay Koon ------------------------------------------- Name : Tan Lay Koon Title : President & Chief Executive Officer Date : April 7, 2004 ST ASSEMBLY TEST SERVICES LTD (Incorporated in the Republic of Singapore) NOTICE OF TENTH ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the Tenth Annual General Meeting (the "Annual General Meeting") of ST Assembly Test Services Ltd (the "Company" or "STATS") will be held at 10 Ang Mo Kio Street 65, #04-18/20 TechPoint, Singapore 569059, on April 27, 2004 at 10.00 a.m. to transact the following routine and special businesses: ROUTINE BUSINESS (1) To adopt the Audited Accounts of the Company for the financial year ended December 31, 2003, together with the Reports of the Directors and Auditors. (2) To re-elect the following Directors each of whom will retire pursuant to: (a) Article 94 of the Articles of Association of the Company and who, being eligible, offer themselves for re-election: (i) Mr. Steven Hugh Hamblin (ii) Mr. William J. Meder (iii) Mr. Richard John Agnich (b) Article 99 of the Articles of Association of the Company and who, being eligible, offers himself for re-election: Mr. Quek Swee Kuan (3) To re-appoint Mr. Charles Richard Wofford, a Director who will retire under Section 153(6) of the Companies Act, Chapter 50 to hold office from the date of this Annual General Meeting until the next annual general meeting of the Company. (4) To re-appoint KPMG as Auditors to hold office until the conclusion of the next annual general meeting of the Company at a remuneration to be determined by the Board of Directors upon the recommendation of the Audit Committee of the Board of Directors. (5) To approve Directors' fees totalling approximately US$440,000 for the financial year ended December 31, 2003 (approximately US$380,000 for the financial year ended December 31, 2002). SPECIAL BUSINESS (6) To consider and, if thought fit, to pass, with or without modifications, the following resolutions which will be proposed as ordinary resolutions: Page 1 ORDINARY RESOLUTIONS (a) Authority to Allot and Issue Shares pursuant to Section 161 of the Companies Act, Chapter 50. That pursuant to Section 161 of the Companies Act, Chapter 50, the Directors be and are hereby authorised to allot and issue shares in the capital of the Company to any person on such terms and conditions and with such rights or restrictions as they may think fit to impose and that such authority shall continue in force until the conclusion of the next annual general meeting of the Company or the expiration of the period within which the next annual general meeting of the Company is required by law to be held, whichever is the earlier. (b) Authority to Create and Issue Securities and to Allot and Issue Shares in connection therewith pursuant to Section 161 of the Companies Act, Chapter 50. That pursuant to Section 161 of the Companies Act, Chapter 50, approval be and is hereby given to the Directors to: (i) (aa) create and issue securities ("Securities") including, without limitation, warrants or options to subscribe for new shares of the Company ("New Shares") or to purchase from the Company other securities issued or to be issued by the Company, debt securities and securities which are convertible into, exchangeable for, or exercisable for, New Shares or other securities issued or to be issued by the Company to any person or persons and on such terms and conditions as the Directors may think fit to impose; (bb) create and issue any further Securities ("Further Securities") as may be required or permitted to be issued in accordance with the terms and conditions of the Securities; and (cc) make, enter into and/or issue offers, agreements, options, undertakings, guarantees and/or indemnities (together referred to as "Agreements") which would or might require the issue of New Shares or other securities by the Company with any person or persons and on such terms and conditions as the Directors may think fit to impose; (ii) allot and issue from time to time: (aa) such number of New Shares as may be required or permitted to be allotted or issued on the conversion, exchange or exercise of the Securities, or any of them, to the holders of such Securities on the conversion, exchange or exercise thereof, subject to and otherwise in accordance with the terms and conditions of the Securities; (bb) on the same basis as paragraph (ii)(aa) above, such further New Shares as may be required to be allotted and issued on the conversion, exchange or exercise of any of the Further Securities in accordance with the terms and conditions of the Further Securities; and (cc) such number of New Shares as may be required or permitted to be allotted or issued pursuant to and otherwise in accordance with the terms and conditions of the Agreements; and Page 2 (iii) take such steps, make such amendments to the terms and conditions of the Securities, the Further Securities and the Agreements and any of them, and exercise such discretion as the Directors may from time to time deem fit, advisable or necessary in connection with all or any of the above matters. (c) Amendment to the ST Assembly Test Services Ltd Share Option Plan 1999 (the "Share Option Plan"). That pursuant to Section 10(b) of the Share Option Plan, approval be and is hereby given for the Share Option Plan to be amended to increase the maximum number of ordinary shares authorised for issuance under the Share Option Plan from 150 million ordinary shares to 190 million ordinary shares and that such ordinary shares, when allotted, issued and paid for in accordance with the terms and conditions of the Share Option Plan, shall be validly issued and fully paid ordinary shares in the capital of the Company. (d) Authority to Offer and Grant Options and to Allot and Issue Shares pursuant to the Share Option Plan. That the Directors be and are hereby authorised to offer and grant options in accordance with the provisions of the Share Option Plan and to allot and issue from time to time such number of shares of the Company as may be required to be issued pursuant to the exercise of the options under the Share Option Plan. (7) To transact any other business as may be properly transacted at any annual general meeting. BY ORDER OF THE BOARD CHUA SU LI (Mrs) Company Secretary Date: April 7, 2004 NOTES: (1) A shareholder is a person whose name appears on the Depository Register of The Central Depository (Pte) Limited in Singapore or a person registered in the Company's Register of Shareholders (Members). (2) A shareholder entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote on his behalf. A proxy need not be a shareholder of the Company. The instrument appointing a proxy must be deposited at the registered office of the Company at 5 Yishun Street 23, Singapore 768442 not less than 48 hours before the time appointed for holding the Annual General Meeting or at any adjournment thereof. A proxy may be revoked at any time prior to the time it is voted. (3) The Company is subject to the continuing listing rules of the Nasdaq National Market and applicable U.S. federal securities laws and is not subject to the continuing listing rules of the Singapore Exchange Securities Trading Limited. Page 3 ST ASSEMBLY TEST SERVICES LTD (Incorporated in the Republic of Singapore) PROXY STATEMENT April 7, 2004 The accompanying proxies are solicited on behalf of the Board of Directors (the "Board") of ST Assembly Test Services Ltd ("STATS"), a company incorporated in the Republic of Singapore under the Companies Act, Chapter 50 of Singapore (the "Companies Act"), for use at STATS's Tenth Annual General Meeting of Shareholders (the "Annual General Meeting") to be held on April 27, 2004, at 10.00 a.m. (Singapore time), at 10 Ang Mo Kio Street 65, #04-18/20 TechPoint, Singapore 569059, or at any adjournments or postponements thereof, for the purposes set out in the accompanying Notice of Annual General Meeting. SHAREHOLDERS ENTITLED TO NOTICE OF ANNUAL GENERAL MEETING A shareholder is a person whose name appears on the Depository Register (as defined in the Companies Act) maintained by The Central Depository (Pte) Limited in Singapore or a person registered in STATS's Register of Shareholders (Members) as a holder of STATS's ordinary shares, par value S$0.25 per share. We have mailed the Notice of Annual General Meeting, this Proxy Statement and the Annual Report to shareholders who are listed at the close of business on March 25, 2004. These documents were first mailed to shareholders on or about April 7, 2004. Shareholders are advised to read this Proxy Statement carefully prior to returning their instruments appointing a proxy or proxies. QUORUM Any two or more shareholders holding or representing in aggregate not less than 33 1/3 per cent. of the outstanding ordinary shares of STATS present in person or by proxy at the Annual General Meeting will constitute a quorum for the transaction of business at the Annual General Meeting. SHAREHOLDERS ENTITLED TO VOTE Shareholders who are registered with The Central Depository (Pte) Limited or in STATS's Register of Shareholders (Members) as at forty-eight (48) hours before the time set for the Annual General Meeting shall be entitled to vote at the Annual General Meeting. At the close of business on February 15, 2004, there were 1,076,731,410 ordinary shares issued and outstanding. Page 1 PROXIES To be effective, a proxy must be deposited at STATS's registered office located at 5 Yishun Street 23, Singapore 768442, at least forty-eight (48) hours before the time set for the Annual General Meeting or at any adjournment thereof. A proxy need not be a shareholder. Shareholders may appoint any member of the Board or any other person as their proxy. Any shareholder signing a proxy in the form accompanying this Proxy Statement has the power to revoke it either prior to the Annual General Meeting at which the matter voted by proxy is acted upon or at the Annual General Meeting prior to the vote on the matter. A proxy may be revoked by the shareholder at any time not less than forty-eight (48) hours before the time set for the Annual General Meeting by the shareholder submitting a subsequently dated instrument appointing a proxy or at the Annual General Meeting prior to the vote of the resolution by such shareholder attending the Annual General Meeting and voting in person. VOTING On a show of hands, every shareholder present in person or by proxy shall have one vote and on a poll, every shareholder present in person or by proxy shall have one vote for each ordinary share held. A resolution put to the vote of shareholders at the Annual General Meeting will be decided on a show of hands unless a poll is demanded by the Chairman of the Annual General Meeting or by not less than five shareholders present in person or by proxy and entitled to vote at the Annual General Meeting or by a shareholder present in person or by proxy and representing not less than one-tenth of the total voting rights of all the shareholders having the right to vote at the Annual General Meeting provided always that no poll shall be demanded on the choice of a chairman or on a question of adjournment. Ordinary shares represented by duly executed proxies deposited with STATS will be voted at the Annual General Meeting in accordance with shareholders' instructions contained in the instrument. In the absence of specific instructions in the proxy, the proxy of a shareholder may vote or abstain as he may think fit. On a show of hands, each of the resolutions to be proposed at the Annual General Meeting will be duly passed by the affirmative vote of a simple majority of shareholders present in person or by proxy and voting at the Annual General Meeting. If a poll is demanded in accordance with this section, each of the resolutions to be proposed at the Annual General Meeting will be duly passed by the affirmative vote of a simple majority of votes cast at the Annual General Meeting for each ordinary share held or represented. GENERAL INFORMATION ON SOLICITATION OF PROXIES The expense of printing and mailing proxy materials will be borne by STATS. In addition to the solicitation of proxies by mail, solicitation may be made by certain directors, officers and other employees of STATS by personal interview, telephone or facsimile. No additional compensation will be paid for such solicitation. STATS will request brokers and nominees who hold ordinary shares in their names and Citibank, N.A., the Depositary for STATS's American Depositary Receipts ("ADR") facility to furnish proxy materials to the beneficial owners of the ordinary shares and ADRs and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding solicitation materials to such beneficial owners. Page 2 SUMMARY OF PROPOSALS Shareholders will be voting on the following proposals at this Annual General Meeting: 1. Adoption of the Audited Accounts of STATS for the financial year ended December 31, 2003, together with the Reports of the Directors and Auditors. 2. Re-election of Directors retiring by rotation and of a Director appointed as additional Director. 3. Re-appointment of a Director pursuant to Section 153(6) of the Companies Act, Chapter 50. 4. Re-appointment of KPMG as independent auditors and authorization to the Board, upon the recommendation of the Audit Committee, to fix their remuneration. 5. Approval of Directors' fees for services rendered for the financial year ended December 31, 2003. 6. Authority to the Board to allot and issue shares and securities and amendment to the Share Option Plan of STATS. PROPOSAL NO. 1 ADOPTION OF THE AUDITED ACCOUNTS OF STATS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2003, TOGETHER WITH THE REPORTS OF THE DIRECTORS AND AUDITORS STATS's Annual Report for its financial year ended December 31, 2003 accompanies this Proxy Statement. STATS's financial statements included in the Annual Report have been prepared in conformity with United States generally accepted accounting principles and are accompanied by an auditors' report from KPMG. THE BOARD RECOMMENDS A VOTE FOR THE ADOPTION OF THE AUDITED ACCOUNTS OF STATS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2003, TOGETHER WITH THE REPORTS OF THE DIRECTORS AND AUDITORS. PROPOSAL NO. 2(a) RE-ELECTION OF DIRECTORS RETIRING BY ROTATION According to Article 94 of STATS's Articles of Association, one-third of the Board (or, if the number of directors on the Board is not a multiple of three, the number nearest to but not less than one-third) will retire at each annual general meeting of STATS. The Directors retiring each year are determined by those who have been in office longest since their re-election or appointment. The retiring Directors are nonetheless eligible for re-election. Accordingly, pursuant to Article 94 of STATS's Articles of Association, on the date of this Annual General Meeting, Mr. Steven Hugh Hamblin, Mr. William J. Meder and Mr. Richard John Agnich shall retire as Directors by rotation. They have offered themselves for re-election. The Board believes that it is in the best interest of STATS to re-elect Mr. Steven Hugh Hamblin, Mr. William J. Meder and Mr. Richard John Agnich as Directors. Page 3 The biographies of these Directors and a complete listing of all our Directors are provided on pages 9, 10 and 11 of this Proxy Statement. THE BOARD RECOMMENDS A VOTE FOR THE RE-ELECTION OF MR. STEVEN HUGH HAMBLIN AND MR. WILLIAM J. MEDER AND MR. RICHARD JOHN AGNICH AS DIRECTORS OF STATS. PROPOSAL NO. 2(b) RE-ELECTION OF A DIRECTOR WHO HAS BEEN APPOINTED AS AN ADDITIONAL DIRECTOR According to Article 99 of STATS's Articles of Association, the Board shall have the power to appoint any person to be a Director to fill a casual vacancy or as an additional director. Any person so appointed shall hold office only until the next annual general meeting. He shall then be eligible for re-election. Pursuant to Article 99 of STATS's Articles of Association, the Board appointed Mr. Quek Swee Kuan on July 29, 2003 as an additional Director of the Board. Accordingly, Mr. Quek Swee Kuan's appointment as a Director on the Board will expire on the date of this Annual General Meeting. He has offered himself for re-election. The Board believes that it is in the best interest of STATS to re-elect Mr. Quek Swee Kuan as a Director. The biography of this Director and a complete listing of all our Directors are provided on pages 9, 10 and 11 of this Proxy Statement. THE BOARD RECOMMENDS A VOTE FOR THE RE-ELECTION OF MR. QUEK SWEE KUAN AS A DIRECTOR OF STATS. PROPOSAL NO. 3 RE-APPOINTMENT OF MR. CHARLES RICHARD WOFFORD PURSUANT TO SECTION 153(6) OF THE COMPANIES ACT, CHAPTER 50 Section 153(1) of the Companies Act provides that, subject to the provisions of Section 153, no person of or over the age of 70 years shall be appointed or act as a director of a public company or of a subsidiary of a public company. Section 153(6) allows for the appointment or re-appointment of such a person as a director of the company by the passing of an ordinary resolution by a simple majority of shareholders of the company as being entitled to vote in person or by proxy at a general meeting of the company. A director appointed or re-appointed pursuant to Section 153(6) of the Companies Act would hold office until the next annual general meeting of the company. Mr. Wofford is offering himself up for re-appointment to the Board under Section 153(6) of the Companies Act. The Board believes that it is in the best interest of STATS to re-appoint Mr. Charles Richard Wofford as a Director. The biography of Mr. Charles Richard Wofford and a complete listing of all our Directors are provided on pages 9, 10 and 11 of this Proxy Statement. THE BOARD RECOMMENDS A VOTE FOR THE RE-APPOINTMENT OF MR. CHARLES RICHARD WOFFORD AS A DIRECTOR TO HOLD SUCH OFFICE FROM THE DATE OF THIS ANNUAL GENERAL MEETING UNTIL THE NEXT ANNUAL GENERAL MEETING OF THE COMPANY. Page 4 PROPOSAL NO. 4 RE-APPOINTMENT OF KPMG AS INDEPENDENT AUDITORS AND AUTHORISATION TO THE BOARD, UPON THE RECOMMENDATION OF THE AUDIT COMMITTEE OF THE BOARD, TO FIX THEIR REMUNERATION The Audit Committee of the Board intends to engage KPMG as STATS's independent auditors to perform the audit of its financial statements for the financial year 2004. KPMG has audited STATS's financial statements since STATS was incorporated. The Board expects that a representative of KPMG will be present at the Annual General Meeting. Such representative will be given an opportunity to make a statement at the meeting if he desires to do so, and will be available to respond to appropriate questions. KPMG has consented to act as auditors for the financial year 2004. THE BOARD, UPON THE RECOMMENDATION OF THE AUDIT COMMITTEE OF THE BOARD, RECOMMENDS A VOTE FOR THE RE-APPOINTMENT OF KPMG AS INDEPENDENT AUDITORS OF STATS TO HOLD OFFICE UNTIL THE CONCLUSION OF THE NEXT ANNUAL GENERAL MEETING AND AUTHORISATION TO THE BOARD, UPON THE RECOMMENDATION OF THE AUDIT COMMITTEE OF THE BOARD, TO FIX THEIR REMUNERATION. PROPOSAL NO. 5 APPROVAL OF DIRECTORS' FEES FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2003 In accordance with Article 81 of STATS's Articles of Association, shareholders are requested to approve the payment of Directors' fees of up to approximately US$440,000 for services rendered during the financial year ended December 31, 2003. As at December 31, 2003, we had eleven directors on the Board. In Singapore, it is customary that directors are paid a fee for their contributions to the company. For the financial year ended December 31, 2002, STATS paid Directors' fees totaling approximately US$380,000. Directors' fees for the financial year ended December 31, 2003 represented an increase of 16% over Directors' fees for the financial year ended December 31, 2002. The proposed Directors' fees for 2003 are higher due principally to attendance fees paid to Mr. Charles Richard Wofford and Mr. Steven Hugh Hamblin for attendance at Executive Committee meetings. THE BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF DIRECTORS' FEES TOTALING US$440,000 FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2003. PROPOSALS NO. 6(a) AND (b) AUTHORITY TO THE BOARD TO CREATE, ALLOT AND ISSUE SHARES AND SECURITIES Under the Companies Act, the Directors may exercise any power of the company to issue shares only with the prior approval of the shareholders of the company at a general meeting. Such approval, if granted, is effective from the date of the meeting at which it was given to the earlier of the conclusion of the next annual general meeting of shareholders of the company or the expiration of the period within which the next annual general meeting is required by law to be held. Shareholders' approval is sought to authorise the Board to issue shares during the period from this Annual General Meeting to the date of the next annual general meeting. This Page 5 approval, if granted, will lapse at the conclusion of the annual general meeting of STATS to be held in year 2005. The requirement for shareholders' approval under the Companies Act extends to the issue of shares arising from the conversion, exchange or exercise of other securities, including warrants or options to subscribe for shares of STATS or to purchase from STATS other securities issued or to be issued by STATS, debt securities and securities which are convertible into, exchangeable for, or exercisable for shares, shares pursuant to any offers, agreements, options, undertakings, guarantees and/or indemnities to be made, entered into or issued by STATS, as well as shares to be issued pursuant to the exercise of options under the ST Assembly Test Services Ltd Share Option Plan 1999 (the "Share Option Plan"). Shareholders' approval is also sought for the creation and issuance of new securities, including but not limited to warrants, options or other securities convertible into, exchangeable for, or exercisable for, shares, the making, entry into and/or issue of offers, agreements, options, undertakings, guarantees and/or indemnities by STATS which would or might require the issue of shares, and the issuance of shares required or permitted to be allotted and issued on the conversion, exchange or exercise of such securities, pursuant to such offers, agreements, options, undertakings, guarantees and/or indemnities, or upon the exercise of any options under the Share Option Plan. In summary, the shareholders are requested to authorise the Board to: (i) under Proposal 6(a), allot and issue shares in the capital of STATS pursuant to Section 161 of the Companies Act; and (ii) under Proposal 6(b), create and issue securities and to allot and issue shares in the capital of STATS in connection therewith pursuant to Section 161 of the Companies Act; THE BOARD RECOMMENDS A VOTE FOR EACH OF THE RESOLUTIONS SET OUT UNDER PROPOSAL NO. (6)(a) AND (b) AS DESCRIBED ABOVE AND IN THE NOTICE OF THE ANNUAL GENERAL MEETING. PROPOSALS NO. 6(c) AND (d) AMENDMENT TO THE SHARE OPTION PLAN AND AUTHORITY TO THE BOARD TO GRANT OPTIONS AND ALLOT AND ISSUE SHARES PURSUANT TO THE SHARE OPTION PLAN The maximum number of ordinary shares that may be issued under the Share Option Plan is 150 million. The Board would like to increase the number of ordinary shares that may be issued under the Share Option Plan to 190 million ordinary shares in view of the increase in number of employees employed and to be employed by the Company. AS EXPLAINED ABOVE, THE REQUIREMENT FOR SHAREHOLDERS APPROVAL UNDER THE COMPANIES ACT EXTENDS TO THE ISSUE OF SHARES PURSUANT TO THE EXERCISE OF OPTIONS UNDER THE SHARE OPTION PLAN. THE APPROVAL OF SHAREHOLDERS IS THEREFORE SOUGHT FOR THE OFFER AND GRANT OF OPTIONS, AND THE ALLOTMENT AND ISSUE OF SHARES IN THE CAPITAL OF STATS PURSUANT TO THE EXERCISE OF OPTIONS UNDER THE SHARE OPTION PLAN. THE BOARD RECOMMENDS A VOTE FOR EACH OF THE RESOLUTIONS SET OUT UNDER PROPOSALS NO 6(c) AND (d) AS DESCRIBED ABOVE AND IN THE NOTICE OF THE ANNUAL GENERAL MEETING. Page 6 OTHER BUSINESS The Board does not presently intend to bring any other business before the Annual General Meeting, and so far as is known to the Board, no matters will be brought before the Annual General Meeting except as is specified in this Proxy Statement. As to any business that may properly come before the Annual General Meeting, however, it is intended that proxies, in the form enclosed, will be voted in respect thereof in accordance with the judgment of those persons voting such proxies. Page 7 DIRECTORS AND SENIOR MANAGEMENT DIRECTORS The following table sets forth the name, age (as at February 15, 2004) and position of each director and member of senior management:
NAME AGE POSITION - -------------------------------------------------------------------------------------------------- BOARD OF DIRECTORS Charles Richard Wofford (1) (2) (3) 70 Chairman of the Board of Directors Lim Ming Seong (2)(3)(4) 56 Deputy Chairman of the Board of Directors Tan Lay Koon 45 Director, President & Chief Executive Officer Peter Seah Lim Huat (5)(6) 57 Director Tay Siew Choon (7)(8) 56 Director Quek Swee Kuan (9) 39 Director Koh Beng Seng (10) 53 Director Steven Hugh Hamblin (8)(10) 55 Director Teng Cheong Kwee (11) 50 Director William J. Meder (7) 63 Director Richard John Agnich (10) 60 Director Eleana Tan Ai Ching (12) 41 Alternate Director to Tay Siew Choon SENIOR MANAGEMENT Suh Tae Suk 56 Chief Operating Officer Wang Pearlyne 49 Acting Chief Financial Officer Han Byung Joon 44 Chief Technology Officer Jeff Osmun 40 Vice President, Worldwide Sales Ng Tiong Gee 41 Chief Information Officer
(1) Chairman of the Executive Committee. (2) Member of the Executive Resource & Compensation Committee. (3) Member of the Nominating Committee. (4) Chairman of the Budget Committee. (5) Chairman of the Executive Resource & Compensation Committee. (6) Chairman of the Nominating Committee. (7) Member of the Budget Committee. (8) Member of the Executive Committee. (9) Appointed on July 29, 2003 to replace Tan Choon Shian, who resigned on the same date. (10) Member of the Audit Committee. (11) Chairman of the Audit Committee. (12) Eleana Tan Ai Ching was appointed as alternate director to Tay Siew Choon on January 2, 2004, to replace Gan Chee Yen, who resigned on December 31, 2003. Lai Yeow Hin, alternate director to Tan Choon Shian, resigned on July 29, 2003. Under Singapore companies law, a director appointed by a company may, if permitted by the Articles of Association of such company, appoint an alternate director to act in place of such director should the director be unable to perform his or her duties as director of such company for a period of time. The Board of Directors held three meetings in person and one meeting by videoconference/teleconference in 2003. The average attendance by directors at Board meetings they were scheduled to attend was 95%. Page 8 There are no family relationships among any of our directors, senior management or substantial shareholders, and there are no arrangements or understandings with any person pursuant to which any of our directors or members of senior management were selected. The following directors hold or held positions in 2003 in Singapore Technologies Pte Ltd: Lim Ming Seong was Corporate Advisor until January 31, 2004, Peter Seah Lim Huat is President & Chief Executive Officer, Tay Siew Choon is Managing Director/Chief Operating Officer and Eleana Tan Ai Ching is Director, Finance. The following directors hold or held positions in 2003 in Singapore Technologies Semiconductors Pte Ltd: Peter Seah Lim Huat is Chairman, Lim Ming Seong is a director and Tay Siew Choon is a director. BOARD OF DIRECTORS CHARLES RICHARD WOFFORD Charles Richard Wofford has been a member of our Board of Directors since February 1998. He was appointed Chairman of the Board of Directors in August 2002 and re-elected to the Board of Directors in 2003. He is presently a director of FSI International. Mr. Wofford was with Texas Instruments, Inc. for 33 years before leaving as Senior Vice-President to join Farr Company in 1991. He was the Chairman, CEO and President of Farr Company from 1992 to 1995. He received his Bachelor of Arts degree from Texas Western College. LIM MING SEONG Lim Ming Seong became our Deputy Chairman in June 1998 and was re-elected to our Board of Directors in 2001. Mr. Lim was the Corporate Advisor of Singapore Technologies Pte Ltd until January 31, 2004. He is the Deputy Chairman of the Board of Directors of Chartered Semiconductor Manufacturing Ltd and Chairman of CSE Global Ltd, formerly known as CSE Systems & Engineering Ltd. Since joining Singapore Technologies Pte Ltd in December 1986, he has held various senior positions in the Singapore Technologies Group. Mr. Lim is presently a director of Singapore Technologies Semiconductors Pte Ltd and STATS Inc. Prior to joining Singapore Technologies Pte Ltd, he was with the Ministry of Defence of Singapore. Mr. Lim received his Bachelor of Applied Science (Honors) in Mechanical Engineering from the University of Toronto and his Diploma in Business Administration from the University of Singapore. He also participated in the Advanced Management Programs at INSEAD and Harvard University. TAN LAY KOON Tan Lay Koon was appointed our President and Chief Executive Officer on June 26, 2002. He was appointed to the Board of Directors on the same date. Mr. Tan joined us in May 2000 as our Chief Financial Officer. Prior to joining us, he was an investment banker with Salomon Smith Barney, the global investment banking unit of Citigroup Inc. Before that, he held various positions with the Government of Singapore, Times Publishing Limited and United Overseas Bank Limited in Singapore. Mr. Tan graduated with a Bachelor of Engineering (First Class Honors) from the University of Adelaide, Australia as a Colombo Plan Scholar. He also has a Master of Business Administration (Distinction) from the Wharton School, University of Pennsylvania where he was elected a Palmer scholar. PETER SEAH LIM HUAT Peter Seah Lim Huat was appointed to our Board of Directors in July 2002. Mr. Seah was appointed as a Director of Singapore Technologies Pte Ltd in May 1997 and is currently the President and Chief Executive Officer of Singapore Technologies Pte Ltd, a position he has held since December 1, 2001. He was with the former Overseas Union Bank Limited from 1977 to 2001. He held several senior positions during that time, becoming its President and Chief Executive Officer in 1991. He retired as Vice Chairman and Chief Executive Officer of the former Overseas Union Bank Limited on September 30, 2001. Mr. Seah received his Bachelor of Business Administration (Honors) from the former University of Singapore in Page 9 1968. Mr. Seah is a director or chairman of numerous companies including, in particular, Singapore Technologies Pte Ltd, Singapore Technologies Semiconductors Pte Ltd, Chartered, EDBI and Singapore Technologies Holdings. TAY SIEW CHOON Tay Siew Choon was appointed to our Board of Directors in July 2002. He is currently the Managing Director and Chief Operating Officer of Singapore Technologies Pte Ltd and Deputy Chairman and CEO of Green Dot Capital Pte Ltd, a wholly owned subsidiary of Singapore Technologies Pte Ltd. He is also the Chairman of Singapore Computer Systems Ltd, SNP Corporation Ltd and Co-Chairman of NexGen Financial Holdings Ltd. He is also a board member of Singapore Technologies Pte Ltd, Singapore Technologies Semiconductors Pte Ltd, SembCorp Industries Ltd, Chartered Semiconductor Manufacturing, ST Telemedia Pte Ltd and SNP-Leefung Holdings Ltd. Mr. Tay graduated from Auckland University in 1970 with a Bachelor of Engineering in Electrical Engineering under the Colombo Plan Scholarship and a Master of Science in System Engineering from the former University of Singapore in 1974. QUEK SWEE KUAN Quek Swee Kuan was appointed to our Board of Directors in July 2003. Mr. Quek is currently Director, InfoComms & Media, EDB. He is also the Chief Information Officer and Director for EDB's North American operations. Mr. Quek joined EDB as a Senior Industry Officer in the Electronics Systems Group in 1994. Prior to joining the EDB, he was a Systems Engineer at Tandem Computers. He was Head of the Electronics Systems Group in 1995 before being posted to EDB's Silicon Valley office. From 1998, Mr. Quek was Regional Director for the Western Region, based in Silicon Valley. In January 2001, he returned to Singapore to be a Deputy Director, Services Development Division before assuming his current appointment in April 2002. He holds a Bachelor's degree in Computer Science from the National University of Singapore in 1988 and a Masters in Business Administration (Higher Honours) from Oklahoma City University in 1992. KOH BENG SENG Koh Beng Seng was appointed to our Board of Directors in February 1999 and was re-elected to our Board of Directors in 2002. He is currently the Deputy President and a Director of United Overseas Bank Limited and Far Eastern Bank Limited. Mr. Koh is on the Board of Directors of Singapore Technologies Engineering Ltd. He is active in the financial services sector and was with the Monetary Authority of Singapore from 1973 to 1998, where he served as Deputy Managing Director from 1988 to 1998. He received his Bachelor of Commerce (First Class Honors) from the former Nanyang University and his Master of Business Administration from Columbia University. Mr. Koh was awarded an Overseas Postgraduate Scholarship by the Monetary Authority of Singapore in 1978. In 1987, the President of the Republic of Singapore awarded him a Meritorious Service Medal. STEVEN HUGH HAMBLIN Steven Hugh Hamblin was appointed to our Board of Directors in June 1998 and was re-elected to our Board of Directors in 2002. Mr. Hamblin was with Compaq Computer Corporation from 1984 to 1996 and held various positions including, Managing Director of Compaq Asia Manufacturing, Vice President Asia/Pacific Division, Vice President and Financial Controller for Corporate Operations and Vice President of Systems Division Operations. He was with Texas Instruments for ten years before leaving as its Division Controller, Semiconductor Group, to join General Instrument, Microelectronics Division, New York in 1983 as its Group Financial Executive. Mr. Hamblin received his Bachelor of Science in Civil Engineering from the University of Missouri, Columbia and his Master of Science in Industrial Administration from Carnegie-Mellon University. Page 10 TENG CHEONG KWEE Teng Cheong Kwee was appointed to our Board of Directors in January 2001 and was re-elected to our Board of Directors in May of that year. Prior to this appointment, he was the Head of Risk Management & Regulatory Division of the Singapore Exchange Limited. Mr. Teng has more than 20 years of experience in the finance industry. He is an Executive Director of Pheim Asset Management (Asia) Private Limited, a licensed fund management company in Singapore. Mr. Teng received his Bachelor of Engineering (Industrial), First Class Honors and Bachelor of Commerce from the University of Newcastle, Australia. WILLIAM J. MEDER William J. Meder was appointed to our Board of Directors in June 2001 and was re-elected to our Board of Directors in 2002. He has 38 years of experience in electronics manufacturing, technology and business management, 33 of which were with Motorola. He runs a consulting firm, Firebird Consulting Group L.L.C. and currently consults for Motorola Inc., on semiconductor issues and several other multinational companies in the area of business and manufacturing management. Mr. Meder is Chairman of the Board for Leshan Phoenix, a China-U.S. joint venture, and a member of the Board for PSI Technologies. He also teaches Business and Manufacturing Strategy for the Chinese Government. He received his Bachelor of Science (Metallurgical Engineering) from Oklahoma University and Master (Materials Science) from Washington University in St. Louis. RICHARD JOHN AGNICH Richard John Agnich was appointed to our Board of Directors in October 2001 and was re-elected to our Board of Directors in 2002. He has 27 years of experience in the semiconductor industry. Mr. Agnich joined Texas Instruments in 1973 and held various positions, including that of Senior Vice President, Secretary and General Counsel. He is a past president of the Association of General Counsel, and has written on corporate governance. He is also a co-founder and is currently the Chair of Entrepreneurs Foundation of North Texas, and serves on the Board of Trustees of Austin College. Mr. Agnich received his BA in Economics from Stanford University and a Juris Doctor from the University of Texas School of Law. ELEANA TAN AI CHING Eleana Tan Ai Ching was appointed Alternate Director to Tay Siew Choon in January 2004. Ms. Tan has been in the finance accounting field for more than 16 years and is currently the Director, Finance of Singapore Technologies Pte Ltd. Prior to this appointment, she was Group Financial Controller of Singapore Technologies Engineering Ltd. Ms. Tan is presently a director of Chartered Silicon Partners Pte Ltd. Ms. Tan received her Bachelor of Accountancy (Honors) from the National University of Singapore. COMMITTEES OF THE BOARD OF DIRECTORS AUDIT COMMITTEE The Audit Committee currently consists of four members, all of whom are non-executive directors. They are Teng Cheong Kwee (Chairman), Steven Hugh Hamblin, Koh Beng Seng and Richard John Agnich. Mr. Hamblin stepped down as Chairman of the Audit Committee on January 28, 2003 but remains a member. He was appointed to the Executive Committee which was established on January 28, 2003. Mr. Wofford was a member of the Audit Committee until January 28, 2003 when he was appointed Chairman of the Executive Committee. The Audit Committee reviews the scope and results of the audits provided by our internal and independent auditors, reviews and evaluates the adequacy of our administrative, operating and internal accounting controls, reviews material related party transactions, and reviews the integrity of the financial information presented to our Page 11 shareholders. Under Singapore law, only board members of a company may serve on its Audit Committee. The Audit Committee held four meetings in 2003. EXECUTIVE RESOURCE & COMPENSATION COMMITTEE The Executive Resource & Compensation Committee currently consists of Peter Seah Lim Huat (Chairman), Charles Richard Wofford and Lim Ming Seong. The Executive Resource & Compensation Committee oversees executive compensation and development in our company with the goal of building capable and committed management teams through competitive compensation, focused management and progressive policies that attract, motivate and retain talented executives to meet our current and future growth plans. Specifically, the Executive Resource & Compensation Committee establishes and approves the compensation policies and incentive programs for key management executives. The compensation of the Chief Executive Officer is further required to be approved by the Board. The Executive Resource & Compensation Committee also approves share incentives, including share options and share ownership for executives, approves key appointments and reviews succession plans for key positions, and oversees the development of key executives and younger talented executives. We are a "controlled company" as defined in Rule 4350(c)(5) of the Nasdaq Marketplace Rules (i.e. more than 50% of the voting power of our company is held by an individual, group or another company) and hence, we are exempt from compliance with Rule 4350(c) of the Nasdaq Marketplace Rules relating to independence of directors serving on compensation and nomination committees. The Executive Resource & Compensation Committee held three meetings in 2003. BUDGET COMMITTEE The Budget Committee currently consists of Lim Ming Seong (Chairman), Tay Siew Choon and William J. Meder. The Budget Committee meets with our senior management to review our annual budget and to review our quarterly financial performance in relation to our budget. The Budget Committee held five meetings in 2003. EXECUTIVE COMMITTEE The Executive Committee, which was formed on January 28, 2003, currently consists of Charles Richard Wofford (Chairman), Tay Siew Choon and Steven Hugh Hamblin. The main objective of the Executive Committee is to enable the Board to delegate some of its powers and functions regarding the governing of the affairs of our company and our subsidiaries to the Executive Committee in order to facilitate timely decision-making processes within the limits of authority as determined by the Board. The Executive Committee held six meetings in 2003. Page 12 NOMINATING COMMITTEE The Nominating Committee which was established on January 28, 2004, comprises the same members as the Executive Resource & Compensation Committee. The Committee identifies suitable candidates for appointment to our Board of Directors, with a view to ensuring that the individuals comprising our Board can contribute in the relevant strategic areas of our business and are able to discharge their responsibilities as directors having regard to the law and high standards of governance. We are a "controlled company" as defined in Rule 4350(c)(5) of the Nasdaq Marketplace Rules (i.e. more than 50% of the voting power of our company is held by an individual, group or another company) and hence, we are exempt from compliance with Rule 4350(c) of the Nasdaq Marketplace Rules relating to independence of directors serving on compensation and nomination committees. SENIOR MANAGEMENT SUH TAE SUK Suh Tae Suk joined us in September 2002 as our Chief Operating Officer. Mr. Suh has 29 years of experience in the semiconductor industry. Prior to joining us, he served as Managing Director of Philips Semiconductor Thailand from 1996 to September 2002 and as General Manager of Philips Semiconductor Philippines from 1995 to 1996. From 1973 to 1992, Mr. Suh was with Philips Korea where he last served as Staffing Director of Assembly Operations. He received his Bachelor of Business Administration from Kyung Hee University in 1974. PEARLYNE WANG Pearlyne Wang joined us in April 2000. Ms. Wang is acting Chief Financial Officer, a position she has held since June 2002, except during the tenure of our former Chief Financial Officer, Dov Oshri from August 2003 to January 2004 when she was Vice President, Finance. Before assuming the post of Acting Chief Financial Officer in June 2002, she had held the position of Vice President, Finance and, prior to that, was our Financial Controller. From 1980 to 2000, she was with McDermott South East Asia Pte. Ltd and served as its Regional Head of Finance (Far East Operations) from 1996 to early 2000. From 1973 to 1980, Ms. Wang held various accounting positions at Esso Singapore Pte. Ltd. She received her CPA from the Association of Certified Chartered Accountants, UK and is a member of the Institute of Certified Public Accountants Singapore (ICPAS). HAN BYUNG JOON Han Byung Joon joined us as our Chief Technology Officer in December 1999. Prior to joining our company, Dr. Han was Director of Product Development at Anam Semiconductor, Inc. and, before that, held various engineering positions with IBM and AT&T Bell Labs in Murray Hill, New Jersey. He is credited with the invention of several wafer and chip scale semiconductor packaging technologies patented today. Dr. Han received his Doctorate in Chemical Engineering from Columbia University, New York, in 1988. JEFFREY R. OSMUN Jeffrey R. Osmun was appointed Vice President, Worldwide Sales & Marketing and President, U.S. Operations in September 2002. Mr. Osmun joined us in September 1999 as Director of Sales, U.S. Central Region and was later appointed Vice President, North American Sales. Prior to that, he served as National Sales Manager of Kyocera America Inc. and, before that, held the post of Director of Development -- College of Engineering and Applied Sciences for Lehigh University. Mr. Osmun received his Bachelor of Science in Mechanical Engineering from Lehigh University in 1985. Page 13 NG TIONG GEE Ng Tiong Gee was appointed Chief Information Officer in May 2001. Mr. Ng was previously the Chief Information Officer of Gateway Singapore, heading the technology multinational's IT activities in Asia Pacific. Prior to that, he spent over six years with Siemens Components (now known as Infineon Technologies Asia Pacific) where he last served as Director of Information Systems and Services. Between 1988 and 1992, he held various key engineering positions at Digital Equipment Singapore, now part of Compaq. Mr. Ng graduated with a Bachelor of Mechanical Engineering with honors from the National University of Singapore in 1987. He also holds a Master's Degree in Science (computer integrated manufacturing) and Business Administration from the Nanyang Technological University in Singapore. COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT In 2003, the aggregate amount of compensation and bonuses paid and accrued for all our directors and senior management was approximately $2.2 million broken down as follows:
NON EXECUTIVE EXECUTIVE DIRECTOR DIRECTORS(1) TOTAL(2) - --------------------------------------------------------------------------------------------------- Charles Richard Wofford $102,420 $ 102,420 Lim Ming Seong 50,000 50,000 Tan Lay Koon $397,602(5) 397,602 Peter Seah Lim Huat 30,000 30,000 Tay Siew Choon 30,000 30,000 Quek Swee Kuan(3) 2,393 2,393 Tan Choon Shian(4) 3,346 3,346 Koh Beng Seng 29,000 29,000 Steven Hugh Hamblin 67,410 67,410 Teng Cheong Kwee 33,590 33,590 William J. Meder 49,000 49,000 Richard John Agnich 41,000 41,000 Senior Management (excluding executive director) as a group 1,338,443 -------- -------- ---------- $397,602 $438,159 $2,174,204 ======== ======== ==========
(1) We will seek approval at our annual general meeting in 2004 for the payment of directors' fees for the financial year ended December 31, 2003. (2) No compensation was given in the form of stock options. (3) Appointed on July 29, 2003. (4) Resigned on July 29, 2003. (5) Includes bonus payment of $22,958 for the financial year ended December 31, 2003. As of February 15, 2004, we had twelve directors (including one alternate director) on the Board. Our executive director does not receive any directors' fees. Our non-executive directors are paid directors' fees, except that for the directors employed by Singapore Technologies Pte Ltd and EDBI, their directors' fees are paid to Singapore Technologies Pte Ltd and EDBI, respectively. Our non-executive directors are also reimbursed for reasonable expenses they incur in attending meetings of the Board and its committees. They may receive compensation for performing additional or special duties at the request of the Board. Alternate Directors do not receive any directors' fees including for serving or attending meetings of the Board. Page 14 For the financial year ended December 31, 2002, we paid our non-executive directors fees totaling $380,000. We will seek approval at our annual general meeting in 2004 for the payment of directors' fees of approximately $440,000. The increase is due principally to attendance fees paid to Mr. Charles Richard Wofford and Mr. Steven Hugh Hamblin for attendance at Executive Committee meetings. We have provided to our directors and officers customary directors' and officers' insurance, as appropriate. We have an established incentive plan to reward our senior executives for their performance and contributions. The incentive pool is derived from the annual wage increments of the participants and a sharing of the positive Economic Value Added, or EVA, and the change in EVA over the preceding year (which can result in a negative incentive pool if the change in EVA is significantly negative). The amount allocated to the individuals from this pool would be based on the collective achievement of the corporate goals, achievement of individual performance targets as well as his or her scoring on corporate values. Each senior executive will have his or her own notional EVA bank account. The bonus earned each year will be added to his or her notional EVA bank account, and only one third of the aggregate EVA bank amount will be paid for the year. Payment is made only when there is a positive EVA bank balance in the notional EVA bank account. In the case of Tan Lay Koon, his incentive plan comprises a Performance Target Bonus component as well as an EVA-based incentive plan. The Performance Target Bonus is paid in relation to the extent to which he achieves his yearly individual targets which are set to focus on what needs to be achieved for the year in support of long term strategic business goals subject to a maximum payout of 2.5 months' base salary. His EVA-based incentive plan is also based on a sharing of the positive EVA and the change in EVA over the preceding year. Each year, the EVA bonus earned will be added to (or subtracted from, in the case of negative EVA change) his notional EVA bank account, and only one third of the aggregate EVA bank amount will be the payout for the year. The balance is accrued to the following year as a provision for future years' payout and the payout is subject to the future performance of the company. We do not have any pension, retirement or other similar post-retirement benefits, other than the plans required or permitted by local regulations and described below. Under Singapore law, we make monthly contributions based on the statutory funding requirement into a Central Provident Fund for substantially all of our Singapore employees who are Singapore citizens and Singapore permanent residents. Our total expenses under this plan were $2.7 million for 2001, $3.0 million for 2002 and $4.0 million for 2003. Winstek operates a defined benefit retirement plan for a substantial portion of its employees in Taiwan in accordance with the Labor Standards Law in Taiwan. Pension benefits are generally based on years of service and average salary for the six months prior to the approved retirement date. Winstek contributes its pension obligations to Central Trust of China, as required by the Labor Standards Law. The funding of the pension plan is determined in accordance with statutory funding requirements. Winstek is obligated to make up any shortfall in the plan's assets in meeting the benefits accrued to the participating staff. Our total pension plan expenses for the period from August 21, 2001 (the date we acquired Winstek) to December 31, 2001 were approximately $39,000, for the year ended December 31, 2002 were approximately $24,000 and for the year ended December 31, 2003 were approximately $46,000. STATS Inc and STATS FastRamp have a 401(k) savings plan covering substantially all of our U.S. employees. We contribute up to 6% of eligible employee compensation at the rate Page 15 of 50% of employee contributions deferred to the 401(k) plan. Our company's matching contributions under the 401(k) plan were $131,000 in 2001, $186,000 in 2002 and $258,000 in 2003. SHARE OWNERSHIP FOR DIRECTORS AND SENIOR MANAGEMENT Based on an aggregate of 1,076,731,410 ordinary shares outstanding as of February 15, 2004, each of our directors and senior management officers has a beneficial ownership of less than 1% of our outstanding ordinary shares, including ordinary shares held directly or in the form of ADSs and share options granted as of such date. Beneficial ownership is determined in accordance with rules of the U.S. Securities and Exchange Commission and includes shares over which the indicated beneficial owner exercises voting and/or investment power or receives the economic benefit of ownership of such securities. Ordinary shares subject to options currently exercisable or exercisable within 60 days are deemed outstanding for computing the percentage ownership of the person holding the options but are not deemed outstanding for computing the percentage ownership of any other person. All our ordinary shares have identical rights in all respects and rank equally with one another. SHARE OPTIONS FOR DIRECTORS The following table contains information pertaining to share options held by directors as of February 15, 2004:
NUMBER OF ORDINARY PER SHARE SHARES ISSUABLE ON EXERCISE PRICE EXERCISE OF OPTION S$ EXERCISABLE PERIOD - --------------------------------------------------------------------------------------------------- Charles Richard Wofford 25,000 0.42 02/09/2000 to 12/09/2004 20,000 0.25 02/09/2000 to 06/11/2004 20,000 3.554 02/09/2000 to 11/21/2004 40,000 6.93 04/20/2001 to 04/19/2005 50,000 1.592 04/24/2002 to 04/23/2006 70,000 2.885 04/29/2003 to 04/28/2007 100,000 1.99 08/06/2004 to 08/05/2008 Lim Ming Seong 200,000 1.592 04/24/2002 to 04/23/2011 70,000 2.885 04/29/2003 to 04/28/2007 70,000 1.99 08/06/2004 to 08/05/2008 Tan Lay Koon 500,000 6.93 04/20/2001 to 04/19/2010 700,000 2.826 10/19/2001 to 10/18/2010 449,000 1.592 04/24/2002 to 04/23/2011 325,000 2.885 04/29/2003 to 04/28/2012 2,000,000 2.2 06/26/2003 to 06/25/2012 700,000 1.99 08/06/2004 to 08/05/2013
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NUMBER OF ORDINARY PER SHARE SHARES ISSUABLE ON EXERCISE PRICE EXERCISE OF OPTION S$ EXERCISABLE PERIOD Koh Beng Seng 10,000 0.25 02/09/2000 to 12/09/2004 50,000 3.554 02/09/2000 to 11/21/2004 40,000 6.93 04/20/2001 to 04/19/2005 50,000 1.592 04/24/2002 to 04/23/2006 50,000 2.885 04/29/2003 to 04/28/2007 50,000 1.99 08/06/2004 to 08/05/2008 Peter Seah Lim Huat 70,000 1.99 08/06/2004 to 08/05/2013 Tay Siew Choon 70,000 1.99 08/06/2004 to 08/05/2013 Steven Hugh Hamblin 10,000 0.25 02/09/2000 to 12/09/2004 20,000 0.25 02/09/2000 to 06/11/2004 30,000 3.554 02/09/2000 to 11/21/2004 40,000 6.93 04/20/2001 to 04/19/2005 50,000 1.592 04/24/2002 to 04/23/2006 70,000 2.885 04/29/2003 to 04/28/2007 70,000 1.99 08/06/2004 to 08/05/2008 Teng Cheong Kwee 50,000 1.592 04/24/2002 to 04/23/2006 50,000 2.885 04/29/2003 to 04/28/2007 70,000 1.99 08/06/2004 to 08/05/2008 William J Meder 20,000 1.624 07/23/2002 to 07/22/2006 50,000 2.885 04/29/2003 to 04/28/2007 50,000 1.99 08/06/2004 to 08/05/2008 Richard John Agnich 20,000 1.298 10/23/2002 to 10/22/2006 50,000 2.885 04/29/2003 to 04/28/2007 50,000 1.99 08/06/2004 to 08/05/2008 Quek Swee Kuan 0 - - Eleana Tan Ai Ching 0 - -
EMPLOYEES' SHARE OWNERSHIP SCHEME We had an Employees' Share Ownership Scheme for employees and directors of our company, our subsidiary and the related companies within the Singapore Technologies Group which was terminated prior to the initial public offering of our shares on the Nasdaq National Market and Singapore Exchange in February 2000. Page 17 SHARE OPTION PLAN Effective as of May 28, 1999, we adopted the ST Assembly Test Services Ltd Share Option Plan 1999, or the Share Option Plan. The purpose of the plan is to offer selected individuals an opportunity to acquire or increase their proprietary interest in our company through the grant of options to purchase ordinary shares of our company. Options granted under the Share Option Plan may be non-statutory options or incentive stock options intended to qualify under Section 422 of the United States Internal Revenue Code. The aggregate number of shares that may be issued under the Share Option Plan and under all of our other share incentive and options schemes or agreements may not exceed 150 million shares (subject to anti-dilution adjustment pursuant to the Share Option Plan). If an outstanding option expires for any reason or is cancelled or otherwise terminated, the shares allocable to the unexercised portion of such option will again be available for future grants of options under the Share Option Plan and all other share incentive and option schemes approved by our Board of Directors. The Share Option Plan is administered by the Executive Resource & Compensation Committee. Employees, outside directors and consultants of our company and any of our affiliates (including our parent and any of our subsidiaries) are eligible to be granted options except that: (i) employees of our affiliates, and any participant who is an outside director or consultant is not eligible to be granted incentive stock options; and (ii) employees, outside directors and consultants of our affiliates other than our parent or any of our subsidiaries who are residents of the United States are not eligible to participate in our Share Option Plan. An individual who owns more than 10% of the total combined voting power of all classes of our outstanding shares or of the shares of our parent or subsidiary is not eligible to be granted incentive stock options unless the exercise price of the option is at least 110% of the fair market value of the underlying shares on the date of grant and the option by its terms is not exercisable after five years from the date of grant. The exercise price of an incentive stock option may not be less than 100% of the fair market value of the underlying shares on the date of grant. In no event may the exercise price of an option be less than the par value of the underlying shares. Options granted to persons other than officers, outside directors and consultants become exercisable at least as rapidly as 20% per year over the five-year period commencing on the date of grant. No option that has an exercise price equal to or greater than the fair market value of the underlying shares on the date of grant may be exercisable prior to the first anniversary of the date of grant. No option that has an exercise price that is less than the fair market value of the underlying shares on the date of grant may be exercisable prior to the second anniversary of the date of grant. The exercisability of options outstanding under the Share Option Plan may be fully or partially accelerated under certain circumstances such as a change in control of our company, as defined in the Share Option Plan. Each option granted under the Share Option Plan is evidenced by a share option agreement and the term of options may not exceed ten years from the date of grant. If the optionee's service with us is terminated, the optionee may exercise all or part of the optionee's options at any time before expiration of such options but only to the extent that such options had become exercisable before the termination of service (or become exercisable as a result of the termination), unless otherwise determined by the Executive Resource & Compensation Page 18 Committee in its sole discretion. The balance of such options shall lapse when the optionee's service terminates. The Executive Resource & Compensation Committee may modify, extend or assume outstanding options or may accept the cancellation of outstanding options in return for the grant of new options for the same or a different number of shares and at the same or a different exercise price. No modification of an outstanding option shall, without the consent of the optionee, impair the optionee's rights or increase the optionee's obligations under such option. Options are generally not transferable under the Share Option Plan. In the event of certain changes in our capitalization, the Executive Resource & Compensation Committee is required to make appropriate adjustments in one or more of the number of the following: (i) shares available for future grants under the Share Option Plan, (ii) the number of shares covered by each outstanding option and (iii) the exercise price of each outstanding option. If we are a party to a merger or consolidation, outstanding options will be subject to the agreement of merger or consolidation. Unless terminated earlier by the Executive Resource & Compensation Committee, the Share Option Plan will terminate automatically in accordance with its terms on May 28, 2009. The Executive Resource & Compensation Committee may amend, suspend or terminate the Share Option Plan at any time and for any reason, provided that any amendment which increases the number of shares available for issuance under the Share Option Plan, or which materially changes the class of persons who are eligible for the grant of incentive stock options, will be subject to the approval of our shareholders. As of February 15, 2004, options to purchase an aggregate of 60,711,595 ordinary shares were accepted and outstanding, out of which 13,902,000 were held by all directors and senior management as a group. The exercise prices of these options range from S$0.25 to S$6.93. The expiration dates of the options range from June 2004 to August 2013. In 2004, we expect to grant to our directors, officers and employees additional options under the Share Option Plan. The exercise price of such options will be equal to the fair market value of the underlying ordinary shares on the date of the grant. SHAREHOLDINGS AND SHARE TRADING The following table sets forth certain information regarding the ownership of our ordinary shares as of February 15, 2004 by each person who is known by us to own beneficially more than 5% of our outstanding ordinary shares. Beneficial ownership is determined in accordance with rules of the U.S. Securities and Exchange Commission and includes shares over which the indicated beneficial owner exercises voting and/or investment power or receives the economic benefit of ownership of such securities. Ordinary shares subject to options currently exercisable or exercisable within 60 days are deemed outstanding for computing the percentage ownership of the person holding the options but are not deemed outstanding for computing the percentage ownership of any other person. Page 19
NUMBER OF SHARES PERCENTAGE(2) NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED - -------------------------------------------------------------------------------------------------- Singapore Technologies Semiconductors Pte Ltd(1) 712,228,050 66.15%
(1) Includes 5.27% of shares lent to Deutsche Bank AG and Morgan Stanley & Co. International Limited pursuant to a Global Master Securities Lending Agreement in connection with the issue of convertible notes due 2008 by ST Assembly Test Services Ltd dated October 29, 2003 executed by each of Deutsche Bank AG and Morgan Stanley & Co. International Limited. Temasek Holdings, the principal holding company through which the corporate investments of the Government of Singapore are held, owns 81.3% of the ordinary shares of Singapore Technologies Pte Ltd, and owns 100% of Singapore Technologies Holdings Pte Ltd, which owns the remaining 18.7% of the ordinary shares of Singapore Technologies Pte Ltd and all of the 50,000 issued preference shares of Singapore Technologies Pte Ltd which, in turn, owns 100% of Singapore Technologies Semiconductors Pte Ltd. Temasek Holdings may therefore be deemed to beneficially own the shares directly owned by Singapore Technologies Semiconductors Pte Ltd. (2) Based on an aggregate 1,076,731,410 ordinary shares outstanding as of February 15, 2004. All our ordinary shares have identical rights in all respects and rank equally with one another. Our ordinary shares have been traded on the Singapore Exchange Securities Trading Limited or SGX-ST since January 31, 2000 and our ADSs have been traded on the Nasdaq National Market or Nasdaq since January 28, 2000. As of February 15, 2004, 201,240 of our ordinary shares, representing 0.02% of our outstanding shares, were held by a total of 35 holders of record with addresses in the United States. As of February 15, 2004, 812,318 of our ADSs (representing 8,123,180 ordinary shares), representing 0.75% of our outstanding shares, were held by a total of 5 registered holders of record with addresses in the United States. Because many of our ordinary shares and ADSs were held by brokers and other institutions on behalf of shareholders in street names, we believe that the number of beneficial holders of our ordinary shares and ADSs could be higher. On February 15, 2004, the closing price of our ordinary shares on the SGX-ST was S$1.94 per ordinary share and the closing price of our ADSs on Nasdaq was $11.58 per ADS. CERTAIN TRANSACTIONS STATS is part of the Singapore Technologies group. The Singapore Technologies group is a leading technology-based multi-national conglomerate based in Singapore. The Singapore Technologies group provides a full array of multi-disciplinary capabilities, ranging from research and development, design and engineering, precision and high value-added manufacturing, major infrastructure development to management services in the following five core business groups: Engineering, Technology, Infrastructure & Logistics, Property and Financial Services. Other companies in the Singapore Technologies group include Chartered Semiconductor Manufacturing Ltd or, Chartered, one of our major customers. As of February 15, 2004, Temasek Holdings (Private) Limited directly owns 81.3% of the ordinary Page 20 shares of Singapore Technologies Pte Ltd. The remaining 18.7% of the ordinary shares of Singapore Technologies Pte Ltd is owned by Singapore Technologies Holdings Pte Ltd, which is in turn 100% owned by Temasek Holdings. Singapore Technologies Holdings Pte Ltd also owns all of the 50,000 issued preference shares in Singapore Technologies Pte Ltd. We engage in transactions with companies in the Singapore Technologies Group in the ordinary course of business. Such transactions are generally entered into on normal commercial terms. We entered into a turnkey contract with Chartered for its wafer, sort assembly and test services in March 2000. The term of this agreement, which was due to expire in March 2003, was extended to March 2005 by an amendment agreement dated October 30, 2002. This agreement governs the conduct of business between the parties, relating, among other things, to the sort, assembly and test services which were previously governed solely by purchase orders executed by Chartered. The agreement does not contain any firm commitment from Chartered to purchase or from us to supply services covered thereunder. In October 2001, we gave a guarantee on behalf of our subsidiary, STATS Inc., for the lease by STATS Inc. of its office in California in the United States. The guarantee covers the full performance of each term, covenant and condition of the lease, including payment of all rent and other sums that may be required to be paid under the lease. The largest amount that we guaranteed in 2002 under this agreement was $4.6 million. As of December 31, 2003, the amount outstanding under this guarantee was approximately $3.2 million. We entered into a long-term loan agreement with EDB on June 5, 1998 for a sum of $52.9 million (S$90.0 million). The loan was denominated in Singapore dollars and bore interest at 1% over the prevailing annual interest rate declared by the Central Provident Fund Board, a statutory board of the Government of Singapore. The principal amount was repayable over seven equal semi-annual installments commencing from September 2000 and ending on September 1, 2003. The loan was guaranteed by Singapore Technologies Pte Ltd. The loan agreement restricted us, without prior consent from EDB, from paying dividends, from incurring further indebtedness and from undertaking any form of reconstruction, including amalgamation with another company, which would result in a change in the control of our company, in each case without prior lender consent. We fully repaid this loan on September 1, 2003. We lease the land on which our Singapore facility is situated pursuant to a long-term operating lease from the Housing and Development Board, a statutory board of the Government of Singapore. The lease is for a 30-year period commencing March 1, 1996, and is renewable for a further 30 years subject to the fulfillment of certain conditions. The rent is $63,647 (S$110,745) per month subject to revision to market rate in March of each year, with the increase capped at 4% per annum. In the years ended December 31, 2001, 2002 and 2003, we paid management fees of $1.0 million, $1.1 million and $1.1 million, respectively, to Singapore Technologies Pte Ltd for various management and corporate services provided pursuant to the Singapore Technologies Management and Support Services Agreement entered into on December 1999. Prior to this agreement, these services were subject to a management fee computed based on certain percentages of capital employed, revenue, manpower and payroll. We believe that our arrangement with Singapore Technologies Pte Ltd approximates the cost of providing these services. Mr. Tan Bock Seng served as our Chief Executive Officer from May 18, 1998 to January 7, 2002. Effective January 8, 2002, we appointed Mr. Tan Bock Seng as advisor to our Board of Directors. In August 2002, Mr. Tan Bock Seng terminated the advisory agreement between him and us. In recognition of his past services, Singapore Technologies Pte Ltd Page 21 made a payment of $1.0 million to Mr. Tan Bock Seng. We accounted for the payment as compensation expenses in the income statement and as additional paid-in capital within shareholders' equity as the payment did not involve any cash outlay by us. In November 2002, we executed a letter of charge and set-off in favor of United Overseas Bank Ltd Taipei Branch, or "UOB Taipei," in connection with a working capital loan facility of $19.0 million granted by UOB Taipei to our subsidiary, Winstek, of which $3.5 million had been drawn down as of February 15, 2004. The loan facility provides for interest at the rate of 7.93% per annum payable every quarter. Under the terms of the letter of charge and set-off, we are required to make deposits as cash collateral for the loan to Winstek in an amount equal to the amount drawn down with UOB Taipei and its branches. We may not withdraw or otherwise transfer or encumber these deposits without the consent of UOB Taipei as long as the loan is outstanding. As at December 31, 2002, the amount deposited was US$3.5 million under this agreement. This loan was fully repaid in November 2003. We participate in a ST cash management program managed by a bank. Under this program, cash balances are pooled with other companies in the Singapore Technologies Group. The daily cash surpluses or shortfalls of the companies within the pool earn or bear interest at prevailing interest rates. From time to time, we deposit excess funds with ST Treasury Services Ltd, a wholly owned subsidiary of Singapore Technologies. Our insurance coverage is held under various insurance policies which are negotiated and maintained by Singapore Technologies but billed directly to us. This enables us to benefit from the group rates negotiated by Singapore Technologies. In accordance with the requirements of the Nasdaq Marketplace Rules, all new related party transactions (as defined in Item 404 of Regulation S-K under the Securities Act) require approval by the Audit Committee of our Board of Directors. In addition, more significant related party transactions must be separately approved by a majority of the Board of Directors. PROPOSED MERGER WITH CHIPPAC, INC. On February 10, 2004, STATS and ChipPAC, Inc. ("ChipPAC") entered into a merger agreement pursuant to which a subsidiary of STATS will merge with and into ChipPAC and ChipPAC will become a wholly owned subsidiary of STATS. As a result of the Merger, ChipPAC stockholders will be entitled to receive 0.87 American Depositary Shares of STATS ("STATS ADSs") in exchange for each share of ChipPAC Class A common stock. Completion of the Merger is subject to certain conditions, including the approval of the respective companies' shareholders, receipt of a private letter ruling from the U.S. Internal Revenue Service relating to the U.S. federal income tax treatment of the merger for ChipPAC stockholders and the consent of various regulatory authorities. STATS will be convening an extraordinary general meeting ("STATS EGM") to seek the approval of its shareholders to vote in favour of the issue of ordinary shares in the capital of STATS and other matters related to the Merger. A circular ("Circular") containing, inter alia, the details of the proposals to be tabled at the STATS EGM, will be despatched to STATS shareholders in due course. STATS shareholders are urged to review the Circular carefully. Page 22 ST ASSEMBLY TEST SERVICES LTD ----------------------------------------------------------- (Incorporated in the Republic of Singapore) IMPORTANT 1. For Investors who have used their CPF moneys to buy shares of ST Assembly Test Services Ltd, the Annual Report 2003 is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR PROXY FORM INFORMATION ONLY. - -- TENTH ANNUAL GENERAL MEETING 2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them. 3. CPF Investors who wish to vote should contact their CPF Approved Nominees. ----------------------------------------------------------- I/We,_________________________________________________ (Name) of ___________________________________________________ _____________________________________________________________________________________________________________________ __________________(Address) being a shareholder(s) of ST ASSEMBLY TEST SERVICES LTD (the "Company") hereby appoint :- - ------------------------------------------------------------------------------------------------------------------------------------ Name Address NRIC/Passport No. Proportion of Shareholding (%) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ *and/or - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ as my/our proxy, to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Tenth Annual General Meeting ("Tenth AGM") of the Company to be held at 10 Ang Mo Kio Street 65, #04-18/20 TechPoint, Singapore 569059, on April 27, 2004 at 10.00 a.m., and at any adjournment thereof. (Please indicate with an "X" in the spaces provided whether you wish your vote(s) to be cast for or against the Resolutions as set out in the Notice of the Tenth AGM and summarised below. In the absence of any specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Tenth AGM). - ------------------------------------------------------------------------------------------------------------------------------------ NO. ROUTINE BUSINESS - ORDINARY RESOLUTIONS FOR AGAINST - ------------------------------------------------------------------------------------------------------------------------------------ To adopt the Audited Accounts of the Company for the year ended December 31, 1 2003, together with the Reports of the Directors and Auditors. - ------------------------------------------------------------------------------------------------------------------------------------ (i) To re-elect Mr. Steven Hugh Hamblin as a Director of the Company pursuant to 2(a) Article 94 of the Company's Articles of Association. --------------------------------------------------------------------------------------------------------------------------- (ii) To re-elect Mr. William J. Meder as a Director of the Company pursuant to Article 94 of the Company's Articles of Association. - ------------------------------------------------------------------------------------------------------------------------------------ (iii) To re-elect Mr. Richard John Agnich as a Director of the Company pursuant to Article 94 of the Company's Articles of Association. - ------------------------------------------------------------------------------------------------------------------------------------ To re-elect Mr. Quek Swee Kuan as a Director of the Company pursuant to Article 2(b) 99 of the Company's Articles of Association. - ------------------------------------------------------------------------------------------------------------------------------------ To re-appoint Mr. Charles Richard Wofford as a Director of the Company pursuant 3 to Section 153(6) of the Companies Act, Chapter 50. - ------------------------------------------------------------------------------------------------------------------------------------ To re-appoint KPMG as Auditors and to authorise the Directors to fix their 4 remuneration. - ------------------------------------------------------------------------------------------------------------------------------------ To approve Directors' fees totalling approximately US$440,000 for the year ended 5 December 31, 2003. - ------------------------------------------------------------------------------------------------------------------------------------ SPECIAL BUSINESS -- ORDINARY RESOLUTIONS FOR AGAINST - ------------------------------------------------------------------------------------------------------------------------------------ To authorise the Directors to issue shares in the capital of the Company pursuant 6(a) to Section 161 of the Companies Act, Chapter 50. - ------------------------------------------------------------------------------------------------------------------------------------ To authorise the Directors to create and issue securities and to issue shares in 6(b) the capital of the Company in connection therewith pursuant to Section 161 of the Companies Act, Chapter 50. - ------------------------------------------------------------------------------------------------------------------------------------ To authorise the Directors to amend the ST Assembly Test Services Ltd Share 6(c) Option Plan 1999 (the "Share Option Plan") to increase the maximum number of ordinary shares that may be issued under the Share Option Plan from 150 million ordinary shares to 190 million ordinary shares. - ------------------------------------------------------------------------------------------------------------------------------------ To authorise the Directors to offer and grant options and to issue shares in the 6(d) capital of the Company pursuant to the exercise of options under the Share Option Plan. - ------------------------------------------------------------------------------------------------------------------------------------ ---------------------------------------------- Dated this ______ day of _______________ 2004. Total Number of Shares Held ---------------------------------------------- - -------------------------------------- ---------------------------------------------- Signature(s) of Shareholder(s)/Common Seal IMPORTANT *Please delete accordingly. Please read notes on the reverse
NOTES:- 1. Please insert the total number of ordinary shares ("Shares") held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Shareholders (i.e. Members), you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Shareholders (i.e. Members), you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Shareholders (i.e. Members). If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you. 2. A shareholder is a person whose name appears on the Depository Register of The Central Depository (Pte) Limited in Singapore or a person registered in the Company's Register of Shareholders (Members). A shareholder of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead of him. A proxy need not be a shareholder of the Company. 3. Where a shareholder appoints two proxies, the appointments shall be invalid unless he specifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy. 4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 5 Yishun Street 23, Singapore 768442 not less than 48 hours before the time appointed for the Tenth Annual General Meeting. 5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised. 6. A corporation which is a shareholder may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Tenth Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore. GENERAL: The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the shareholder, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Tenth Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company. -----END PRIVACY-ENHANCED MESSAGE-----