`
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed
by the Registrant [X]
Filed
by a Party other than the Registrant [
]
Check
the appropriate box:
[
] Preliminary Proxy Statement
[
] Confidential, for Use of the Commission only (as
permitted by Rule 14a-6(e)(2))
[X]
Definitive Proxy Statement
[
] Definitive Additional Materials
[
] Soliciting Material Pursuant to Rule
240.14a-12
TRIO-TECH INTERNATIONAL
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]
No fee required.
[
] Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class
of securities to which transaction applies:
_____________
(2)
Aggregate number of
securities to which transaction applies: _____________
(3)
Per unit price or
other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
_____________
(4)
Proposed maximum
aggregate value of transaction: _____________
(5)
Total fee paid:
_____________
[
] Fee paid previously with preliminary
materials:
[
] Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1)
Amount Previously
Paid: _____________
(2)
Form, Schedule or
Registration Statement No.: _____________
(3)
Filing Party:
_____________
(4)
Date Filed:
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______________________________________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On December 4, 2018
NOTICE
IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Trio-Tech International, a California corporation (the
“Company”), will be held at our principal executive
offices, located at 16139 Wyandotte Street, Van Nuys, California
91406, on Tuesday, December 4, 2018 at 10:00 A.M. local time for
the following purposes, as set forth in the attached Proxy
Statement:
1.
Election of
directors to hold office until the next Annual Meeting of
Shareholders;
2.
Transaction of such
other business as may properly come before the meeting or any
adjournment thereof.
The
Board of Directors of the Company (the “Board of
Directors” or the “Board”) has fixed the close of
business on October 8, 2018 as the record date for determining the
shareholders entitled to notice of and to vote at the Annual
Meeting and any adjournment and postponements thereof (the
“Record Date”).
The Securities and Exchange Commission permits proxy materials to
be furnished over the Internet rather than in paper form.
Accordingly, most shareholders will receive a notice in the mail
regarding the availability of this proxy statement, Annual Report
on Form 10-K for fiscal 2018 and other proxy materials
(the "Notice") via Internet. This electronic process provides fast,
convenient access to the materials, reduces the impact on the
environment and reduces our printing and mailing costs. If you
received a Notice by mail, you will not receive a printed copy of
the proxy materials in the mail. The Notice instructs you on how to
access and review all of the important information contained in the
Proxy Statement and Annual Report. The Notice also instructs you on
how you may submit your vote over the Internet. If you would like
to receive a printed copy of the proxy materials, please follow the
instructions for requesting such materials included in the
Notice.
Shareholders are cordially invited to attend the
Annual Meeting in person. Whether you plan to attend the
Annual Meeting or not, please vote by telephone or
electronically via the Internet. Alternatively, if you received a
paper copy, you may sign, and date the enclosed Proxy Card
and return it without delay in the enclosed postage-prepaid
envelope. If you do
attend the Annual Meeting, you may withdraw your Proxy and vote
personally on each matter brought before the meeting.
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By
Order of the Board of Directors
A. CHARLES
WILSON
Chairman
|
October 22, 2018
Van Nuys, California
-i-
IMPORTANT
WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO VOTE
PROMPTLY OVER THE INTERNET, BY TELEPHONE, OR IF YOU REQUESTED TO
RECEIVE PRINTED PROXY MATERIALS, BY MAILING A PROXY OR VOTING
INSTRUCTION CARD IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE TO
ENSURE YOUR REPRESENTATION AT THE MEETING.
THANK YOU FOR ACTING PROMPTLY
Important Notice Regarding the Availability of Proxy Materials for
the Shareholder Meeting to be held on December 4, 2018: The Proxy
Statement and our 2018 Annual Report to Shareholders
are available at
http://www.triotech.com/ind_rel.htm, which does not have
“cookies” that identify visitors to the
site.
TABLE OF CONTENTS
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-ii-
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
OF
TRIO-TECH INTERNATIONAL
To Be Held on December 4,
2018
This Proxy Statement is furnished in connection
with the solicitation of the enclosed Proxy on behalf of the Board
of Directors (the “Board”) of Trio-Tech International,
a California corporation (“Trio-Tech” or the
“Company”), for use at the annual meeting of
shareholders of the Company (the “Annual Meeting”) to
be held at our principal executive offices, located at 16139
Wyandotte Street, Van Nuys, California 91406, on Tuesday, December
4, 2018 at 10:00 A.M. local time, for the purposes of electing
directors and such other business as may properly come before the
Annual Meeting. For directions to our principal executive offices,
please call our executive offices at 818-787-7000. This Proxy
Statement and the enclosed proxy card are intended to be
electronically available to shareholders on or about October 25,
2018.
Record Date and Voting Securities
The Board of Directors fixed the close of business
on October 8, 2018 as the record date for shareholders entitled to
notice of and to vote at the Annual Meeting. As of that date, there
were 3,608,055 shares of the
Company’s common stock (the “Common Stock”)
outstanding and entitled to vote, the holders of which are entitled
to one vote per share.
Voting Generally
The
presence in person or by proxy of holders of a majority of the
shares entitled to vote at the Annual Meeting is necessary to
constitute a quorum at the Annual Meeting. Abstentions will be
counted for purposes of determining the presence of a
quorum.
Because
a shareholder’s broker may not vote on behalf of the
shareholder on the election of directors unless the shareholder
provides specific instructions by completing and returning the
voting instruction form, for a shareholder’s vote to be
counted, we ask that our shareholders communicate their voting
decisions to the broker or other nominee before the date of the
Annual Meeting or give a proxy to vote their shares at the
meeting.
In
the election of directors, a shareholder may cumulate his/her votes
for one or more candidates, but only if each such candidate’s
name has been placed in nomination prior to the voting and the
shareholder has given notice at the meeting, prior to the voting,
of his intention to cumulate his votes. If any shareholder has
given such notice, all shareholders may cumulate their votes for
the candidates in nomination. If the voting for directors is
conducted by cumulative voting, each share will be entitled to a
number of votes equal to the number of directors to be elected.
These votes may be cast for a single candidate or may be
distributed among two or more candidates in such proportions as the
shareholder thinks fit. The five candidates receiving the highest
number of affirmative votes will be elected. Abstentions will be
counted for purposes of determining the presence of a quorum, but
votes against a candidate or withheld from voting (whether by
abstention, broker non-votes or otherwise) will not be counted
and will have no legal effect on the vote. Discretionary authority
to cumulate votes is solicited hereby.
Deadline for Voting by Proxy
In order to be counted, votes cast by proxy
must be received prior to the Annual Meeting.
Revocability of
Proxies
Any Proxy given may be revoked by the shareholder
at any time before it is voted by delivering written notice of
revocation to the Secretary of the Company, by filing with the
Secretary of the Company a Proxy bearing a later date, or by
attending the Annual Meeting and voting in person. All Proxies
properly executed and returned will be voted in accordance with the
instructions specified thereon. If no instructions are specified,
Proxies will be voted FOR the election of the five nominees for directors
named under “Election of Directors” (Proposal
1).
-1-
PROPOSAL 1
ELECTION OF DIRECTORS
Information With Respect to Directors
A majority of the independent directors of our
Board has nominated the persons listed below for election to the
Board at the Annual Meeting, to hold office until the next Annual
Meeting and until their respective successors are elected and
qualified. There is one vacancy on the Board of Directors. The
Board does not intend to fill the vacancy at this time due to the
costs associated therewith. It is intended that the Proxies
received, unless otherwise specified, will be voted
FOR
the five nominees named below, all of
whom are incumbent directors of the Company and, with the exception
of Mr. Yong and Mr. Ting, are “independent” as
specified in Section 803 of the NYSE MKT rules and Rule 10A-3 under
the Securities and Exchange Act of 1934, as amended (the
“Exchange Act”). It is not contemplated that any of the
nominees will be unable or unwilling to serve as a director but, if
that should occur, the persons designated as proxies will vote in
accordance with their best judgment. In no event will Proxies be
voted for a greater number of persons than the number of nominees
named in this Proxy Statement. The following chart and accompanying
narrative set forth, as of October 8, 2018, the names of each of
the five nominees for election as a director, his principal
occupation, age, the year he became a director of the Company, and
additional biographical data.
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NAME
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AGE
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PRINCIPAL OCCUPATION
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A.
Charles Wilson
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94
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Chairman of the
Board of Trio-Tech Internationa
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Chairman of the
Board of Ernest Paper Packaging Solutions, Inc.
Attorney at Law and
Business Consultant,
Chairman of the
Board of Daico Industries, Inc.
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S. W.
Yong
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65
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Chief
Executive Officer and President of Trio-Tech
International
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Richard
M. Horowitz
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77
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President of
Management Brokers Insurance, Inc.
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Jason
T. Adelman
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49
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Chief
Executive Officer of Burnham Hill Capital Group
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Victor
H. M. Ting
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64
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Chief
Financial Officer and Corporate Vice President of Trio-Tech
International
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A. Charles Wilson
Mr. Wilson has served as a director of Trio-Tech
since 1966, and was President and Chief Executive Officer of the
Company from 1981 to 1989. In 1989, he was elected Chairman of the
Board. Mr. Wilson is also Chairman of the Board of Ernest
Packaging Solutions, Inc. and Chairman
of Daico Industries, Inc. as well as an attorney admitted to
practice law in California and a business
consultant.
In
determining that Mr. Wilson should serve on the Company’s
Board of Directors, the Board has considered, among other
qualifications, his professional background and experience, his
leadership skills as a result of his ten years serving as President
and Chief Executive Officer of the Company, his service as a
Chairman on other corporate boards and his broad range of knowledge
of the Company’s history and business through his 52 years of
service as a director of the Company.
S. W. Yong
Mr.
Yong has been a director, Chief Executive Officer and President of
Trio-Tech since 1990. He joined Trio-Tech International Pte. Ltd.
in Singapore in 1976 and was appointed as its Managing Director in
August 1980. Mr. Yong holds a Master’s Degree in Business
Administration, a Graduate Diploma in Marketing Management and a
Diploma in Industrial Management.
In
determining that Mr. Yong should serve on the Company’s Board
of Directors, the Board has considered, among other qualifications,
his 42 years history with the Company, his intimate knowledge of
the Company’s business and operations and the markets in
which the Company operates, as well as the Company’s
customers and suppliers, and his detailed in-depth knowledge of the
issues, opportunities, and challenges facing the Company and its
principal industries.
-2-
Richard M. Horowitz
Mr. Horowitz has served as a director of Trio-Tech
since 1990. He has been President of Management Brokers
Insurance, Inc. since 1974. Mr. Horowitz holds a
Master’s Degree in Business
Administration from Pepperdine University. Mr. Horowitz was the subject of an SEC
administrative proceeding arising out of the sale of certain
annuity products in 2007 by Management Brokers Insurance,
Inc. The proceeding was wholly unrelated to the
Company’s business and was settled in March 2014 without
requiring Mr. Horowitz to admit to any of the allegations.
The Board believes that the proceeding and the actions alleged
thereunder do not impair upon Mr. Horowitz’s ability or
integrity as a director of the Company.
In
determining that Mr. Horowitz should serve on the Company’s
Board of Directors, the Board has considered, among other
qualifications, his extensive experience and expertise in
administration and management based on his position as President of Management Brokers Insurance, Inc.
for more than 44 years and his broad range of knowledge of
the Company’s history and business through his 28 years of
service as a director of the Company.
Jason T. Adelman
Mr.
Adelman was elected to the Board of Trio-Tech in April 1997.
Mr. Adelman is the Founder and Chief Executive Officer of Burnham
Hill Capital Group, LLC, a privately held financial services
holding company headquartered in New York City. Mr. Adelman
serves as Managing Member of Cipher Capital Partners LLC, a private
investment fund. Prior to founding Burnham Hill Capital Group, LLC
in 2003, Mr. Adelman served as Managing Director of Investment
Banking at H.C. Wainwright and Co., Inc. Mr. Adelman graduated Cum
Laude with a B.A. in Economics from the University of Pennsylvania
and earned a JD from Cornell Law School where he served as Editor
of the Cornell International Law Journal.
In
determining that Mr. Adelman should serve on the Company’s
Board of Directors, the Board has considered, among other
qualifications, his experience and expertise in finance,
accounting, banking and management based on his positions as
Managing Member of Cipher Capital
Partners LLC for 13 years and Chief Executive Officer of
Burnham Hill Capital Group LLC
for 14 years, as well as his position as Managing Director of Investment Banking in the New
York offices of H. C. Wainwright & Co.
Victor H. M. Ting
Mr.
Ting was appointed as a director of Trio-Tech on September 16,
2010. Mr. Ting is the Corporate Vice-President and Chief Financial
Officer of the Company. Mr. Ting joined Trio-Tech as the Financial
Controller for the Company’s Singapore subsidiary in 1980. He
was promoted to the level of Business Manager during 1985 and in
December 1989 he was promoted to the level of Director of Finance
and Sales & Marketing, and later he was promoted to the level
of General Manager of the Singapore subsidiary. Mr. Ting was
elected Corporate Vice-President and Chief Financial Officer of
Trio-Tech International in November 1992. Mr. Ting holds a Bachelor
of Accountancy Degree and Master’s Degree in Business
Administration.
In
determining that Mr. Ting should serve on the Company’s Board
of Directors, the Board has considered, among other qualifications,
his expertise in finance, accounting and management based on his 26
years history as Corporate
Vice-President and Chief Financial Officer of the Company
and his intimate knowledge of the Company’s
operations.
Vote Required for Election
The
five persons receiving the highest number of affirmative votes will
be elected as directors of the Company. Votes against a nominee or
withheld from voting (whether by abstention, broker non-votes or
otherwise) will have no legal effect on the vote.
-3-
CORPORATE
GOVERNANCE
Corporate Governance Program
Our
Board of Directors has established a written Corporate Governance
Program to address significant corporate governance issues that may
arise. It sets forth the responsibilities and qualification
standards of the members of the Board of Directors and is intended
as a governance framework within which the Board of Directors,
assisted by its committees, directs our affairs.
Code of Ethics
The
Company has adopted a written code of business conduct and ethics
applicable to all directors, officers, management and employees and
a separate code of ethics applicable to its principal executive
officer, principal financial officer and principal accounting
officer or controller or persons performing similar
functions. A copy of the Company's code of business conduct
and ethics and code of ethics may be obtained, without charge, upon
written request to the Secretary of the Company at 16139 Wyandotte
Street, Van Nuys, California 91406.
Board Leadership Structure
The
Board of Directors believes it is important to select its Chairman
and the Company’s Chief Executive Officer in the manner it
considers in the best interests of the Company at any given point
in time. The Chairman of the Board and CEO of the Company are held
by separate persons as an aid in the Board's oversight of
management. The duties of the non-executive Chairman of the Board
include:
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presiding
over all meetings of the Board;
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preparing
the agenda for Board meetings in consultation with the CEO and
other members of the Board;
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calling
and presiding over meetings of the independent
directors;
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managing
the Board's process for annual director self-assessment and
evaluation of the Board and of the CEO; and
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presiding
over all meetings of shareholders.
The
Board believes that there may be advantages to having an
independent chairman for matters such as communications and
relations between the Board, the CEO, and other senior management;
assisting the Board in reaching consensus on particular strategies
and policies; and facilitating robust director, Board, and CEO
evaluation processes.
Risk Management
The
Chief Executive Officer and senior management are primarily
responsible for identifying and managing the risks facing the
Company, and the Board of Directors oversees these efforts. The
Chief Executive Officer and senior management report to the Board
of Directors regarding any risks identified and steps it is taking
to manage those risks. In addition, the Audit Committee identifies,
monitors and analyzes the priority of financial risks, and reports
to the Board of Directors regarding its financial risk
assessments.
Certain Relationships and Related Transactions
The Board’s Audit Committee is responsible
for review, approval, or ratification of “related-person
transactions” between the Company or its subsidiaries and
related persons. Under SEC rules, a related person is a director,
officer, nominee for director, or 5% shareholder of the Company and
their immediate family members. The Company's code of business
conduct and ethics provides guidance to the Audit Committee for
addressing actual or potential conflicts of interests that may
arise from transactions and relationships between the
Company and its executive officers or directors. Potential
conflicts relating to other personnel must be addressed by the
Chief Executive Officer or the Chief Financial
Officer. There were no related party transactions during
the fiscal year ended June 30, 2018 for which disclosure would be
required under SEC rules.
-4-
BOARD MEETINGS AND
COMMITTEES
The
Board held four regularly scheduled and special meetings during the
fiscal year ended June 30, 2018. All of the directors attended (in
person or by telephone) at least 75% of the meetings of the Board
and any committees of the Board on which they served during the
last full fiscal year. Directors are expected to use their best
efforts to be present at the Annual Meeting of Shareholders. All of
our directors attended the Annual Meeting of Shareholders held on
December 4, 2017.
The
Company does not have a standing nominating committee. The Board
consists of five directors, three of whom are
“independent” (as defined under the rules of the NYSE
MKT upon which the Company’s securities are listed), namely
Jason T. Adelman, Richard M. Horowitz and A. Charles Wilson.
Pursuant to a resolution adopted by the Board, a majority of the
independent directors, following a discussion with the entire
Board, has the sole and ultimate responsibility to determine and
nominate Board candidates for election at the Annual Meeting.
Although nominations are made by a majority of the independent
directors, the three current independent directors value the input
of the entire Board and thus discuss proposed nominees at the Board
level before the ultimate nomination determinations are made by the
independent directors. The Board does not believe that it is
necessary, at this time, given the Board composition and such Board
resolution, to have a separately constituted nominating committee.
At such time as the Board composition changes, the Board may elect
to establish a separate nominating committee.
The Board has also adopted a resolution addressing
the nomination process and related matters and it states, among
other things, that the Board believes that the continuing service
of qualified incumbents promotes stability and continuity in the
boardroom, contributing to the Board's ability to work as a
collective body, while giving the Company the benefit of the
familiarity and insight into the Company's affairs that its
directors have accumulated during their tenure. The resolution
further states that the Board will evaluate the performance of its
Board members on an annual basis in connection with the nomination
process. The Board may solicit recommendations for nominees from
persons that the Board believes are likely to be familiar with
qualified candidates, including without limitation members of the
Board and management of the Company. The Board may also determine
to engage a professional search firm to assist in identifying
qualified candidates if the need arises. In addition, the
Board has the authority to retain third-party consultants to
provide advice regarding compensation issues. The Board has not adopted specific minimum
qualifications for a position on the Company’s Board or any
specific skills or qualities that the Board believes are necessary
for one or more of its members to possess. However, the Board will
consider various factors including without limitation the
candidate’s qualifications, the extent to which the
membership of the candidate on the Board will promote diversity
among the directors, and such other factors as the Board may deem
to be relevant at the time and under the then existing facts and
circumstances. The Company does not have a formal policy
with regard to the consideration of diversity in identifying
nominees for director. The Board of Directors seeks to nominate
directors with a variety of skills and experience so that the Board
will have the necessary expertise to oversee the Company’s
business. The Company did not receive
any recommendations as to nominees for election of directors for
the Annual Meeting of Shareholders to be held on December 4,
2018.
The
Board will consider candidates proposed by shareholders of the
Company and will evaluate all such candidates upon criteria similar
to the criteria used by the Board to evaluate other candidates.
Shareholders desiring to propose a nominee for election to the
Board must do so in writing sufficiently in advance of an annual
meeting so that the Board has the opportunity to make an
appropriate evaluation of such candidate and his or her
qualifications and skills and to obtain information necessary for
preparing all of the disclosures required to be included in the
Company’s proxy statement for the related meeting should such
proposed candidate be nominated for election by shareholders.
Shareholder candidate proposals should be sent to the attention of
the Secretary of the Company at 16139 Wyandotte Street, Van Nuys,
California 91406.
The Board has a standing Compensation Committee,
which currently consists of the three independent directors, namely
Jason T. Adelman, Richard M. Horowitz and A. Charles Wilson,
Chairman. The Compensation Committee determines salary and bonus
arrangements. The Compensation Committee met four times during the
fiscal year ended June 30, 2018. The Compensation Committee has a
written charter. For the fiscal year ended June 30, 2018,
the Compensation Committee did not retain a third-party consultant
to review the Company’s current policies and procedures with
respect to executive compensation.
-5-
The
Board has a separately-designated standing Audit Committee
established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended. The members thereof
consist of Jason T. Adelman, Richard M. Horowitz and A. Charles
Wilson, Chairman. The Board of Directors has determined that the
Audit Committee has at least one financial expert, namely A.
Charles Wilson. The Board of Directors has affirmatively determined
that Mr. Wilson does not have a material relationship with the
Company that would interfere with the exercise of independent
judgment and is “independent” as independence is
defined in Section 803 of the rules of the NYSE MKT. Pursuant to
its written charter, which charter was adopted by the Board of
Directors, the Audit Committee is charged with, among other
responsibilities, selecting our independent public accountants,
reviewing our annual audit and meeting with our independent public
accountants to review planned audit procedures. The Audit Committee
also reviews with the independent public accountants and management
the results of the audit, including any recommendations of the
independent public accountants for improvements in accounting
procedures and internal controls. The Audit Committee held seven
meetings during the fiscal year ended June 30, 2018. Each of the
members of the Audit Committee satisfies the independence standards
specified in Section 803 of the rules of the NYSE MKT and Rule
10A-3 under the Securities Exchange Act of 1934, as
amended.
DIRECTORS’ COMPENSATION
Our
directors play a critical role in guiding our strategic direction
and overseeing our management. In order to compensate them for
their substantial time commitment, we provide a mix of cash and
equity-based compensation. We do not provide pension or retirement
plans for non-employee directors. Our employee directors, S.W. Yong
and Victor Ting, do not receive separate compensation for Board
service.
During the fiscal year ended June 30, 2018,
Richard M. Horowitz and Jason T. Adelman, as non-employee
directors, received quarterly fees in an amount equal to $7,812 for
each quarter and for service on the various committees of which
they are a member. A. Charles Wilson, as a non-employee director,
Chairman of the Board, Chairman of the Audit Committee and
Chairman of the Compensation Committee, received $16,375 in
quarterly fees for each quarter and for service on the various
committees of which he is a member. The directors were also
reimbursed for out-of-pocket expenses incurred in attending
meetings.
Each of our directors is entitled to participate
in our 2017 Directors Equity Incentive Plan (“2017 Directors
Plan”). Messrs. Yong and Ting, as employees of the Company,
are also entitled to participate in our 2017 Employee Stock
Option Plan (“2017 Employee Plan”). On March 23, 2018, pursuant to the 2017 Directors
Plan, Mr. Wilson was granted an option to purchase 40,000 shares,
and Messrs. Horowitz and Adelman each were granted an option to
purchase 20,000 shares of Common Stock at an exercise price of
$5.98 per share. Each such option vested immediately upon grant and
will terminate five years from the date of grant unless terminated
sooner upon termination of the optionee’s status as a
director or otherwise pursuant to the 2017 Directors
Plan. The exercise price under the options was
set at 100% of fair market value (as defined in the 2017 Directors
Plan) of the Company’s Common Stock on the date of grant of
each such option.
As
of June 30, 2018, there were 220,000 shares available for grant
under the 2017 Directors Plan and 240,000 shares under the 2017
Employee Plan.
The
Compensation Committee reviewed the average directors’ fees
for comparable public companies. The Compensation Committee
believes that the director fees paid to its directors were and are
substantially less than the fees paid to directors of comparable
public companies. Directors’ compensation may be increased
based on the profitability of the Company.
The following table contains information on
compensation for our non-employee members of our Board of Directors
for the fiscal year ended June 30, 2018.
DIRECTOR
COMPENSATION
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Name
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Fees
Earned or Paid in Cash ($)
|
Option
Awards ($)(1)
|
Total
($)
|
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A. Charles Wilson
(2)
|
65,500
|
80,000
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145,500
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Richard M. Horowitz
(3)
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31,250
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40,000
|
71,250
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Jason T. Adelman
(4)
|
31,250
|
40,000
|
71,250
|
(1)
The option awards
are based on the fair value of stock options on the grant date
computed in accordance with FASB ASC Topic 718.
(2)
The
total shares underlying option awards outstanding as of June 30,
2018 were 205,000.
(3)
The
total shares underlying option awards outstanding as of June 30,
2018 were 102,500.
(4)
The
total shares underlying option awards outstanding as of June 30,
2018 were 92,500.
-6-
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The
following table sets forth, as of September 30, 2018, certain
information regarding the beneficial ownership of the Common Stock
by (i) all persons known by the Company to be the beneficial owners
of more than 5% of its Common Stock, (ii) each of the directors of
the Company, (iii) each of the Named Executive Officers (as defined
under the heading “EXECUTIVE COMPENSATION” below), and
(iv) all executive officers and directors of the Company as a
group. To the knowledge of the Company, unless otherwise indicated,
each of the shareholders has sole voting and investment power with
respect to shares beneficially owned, subject to applicable
community property and similar statutes.
|
Name
|
Amount
of Shares Owned Beneficially (1)
|
|
Percent
of Class (1)
|
|
|
|
|
|
|
S. W. Yong
(2)
|
550,318
|
|
14.9%
|
|
A. Charles Wilson
(3)
|
460,500
|
(4)
|
12.1%
|
|
Richard M. Horowitz
(5)
|
436,864
|
|
11.8%
|
|
Jason T. Adelman
(6)
|
92,500
|
|
2.5%
|
|
Victor H. M. Ting
(7)
|
169,391
|
|
4.6%
|
|
Hwee Poh
Lim
|
80,733
|
|
2.2%
|
|
All Directors and
Executive
|
|
|
|
|
Officers
as a group (6 persons)
|
1,790,306
|
(8)
|
43.3%
|
|
FMR
LLC
|
289,996
|
(9)
|
8.0%
|
|
Renaissance
Technologies LLC
|
329,900
|
(10)
|
9.1%
|
(1)
The
percent of class is based upon 3,608,055 shares outstanding. The
number of shares indicated and the percentage shown for each
individual assumes the exercise of options that are presently
exercisable or may become exercisable within 60 days from September
30, 2018 which are held by that individual or by all executive
officers and directors as a group, as the case may be. The address
for each of the directors and executive officers above is in care
of the Company at 16139 Wyandotte Street, Van Nuys, California
91406.
(2)
Includes
vested options to purchase an aggregate of 86,250 shares from the
Company at exercise prices from $3.10 to $5.98 per
share.
(3)
Includes
vested options to purchase an aggregate of 185,000 shares from the
Company at exercise prices from $2.69 to $5.98 per
share.
(4)
The
shares are held in a revocable family trust.
(5)
Includes
vested options to purchase an aggregate of 102,500 shares from the
Company at exercise prices from $2.69 to $5.98 per
share.
(6)
Includes
vested options to purchase an aggregate of 92,500 shares from the
Company at exercise prices from $2.69 to $5.98 per
share.
(7)
Includes
vested options to purchase an aggregate of 62,500 shares from the
Company at exercise prices from $3.10 to $5.98.
(8)
Includes
vested options to purchase an aggregate of 528,750 shares from the
Company at exercise prices from $2.69 to $5.98 per
share.
(9)
Based
on Form 13G filed by FMR LLC on February 13, 2018. The address of
FMR LLC is 245 Summer Street, Boston, MA 02210.
(10)
Based on Form 13G filed by Renaissance
Technologies LLC on February 14, 2018.
The address of Renaissance Technologies LLC is 800 Third Ave, New York, NY
10022.
The
Company does not know of any arrangements that may at a subsequent
date result in a change of control of the Company.
-7-
EXECUTIVE OFFICERS
The
following persons were our only executive officers, as of October
8, 2018:
S. W. Yong - Mr. Yong, age 65,
is our President and Chief Executive Officer. He is also a
member of our Board of Directors.
Biographical information regarding Mr. Yong is set forth under the
section entitled “Election of
Directors.”
Victor H. M. Ting - Mr. Ting,
age 64, is our Corporate Vice-President and Chief Financial
Officer. He is also a member of our Board of
Directors. Biographical information
regarding Mr. Ting is set forth under the section entitled
“Election of Directors.”
Hwee Poh Lim - Mr. Lim, age 59,
is our Corporate Vice-President-Testing. Mr. Lim joined Trio-Tech
in 1982 and became the Quality Assurance Manager in 1985. He was
promoted to the position of Operations Manager in 1988. In 1990 he
was promoted to Business Manager and was responsible for the
Malaysian operations in Penang and Kuala Lumpur. Mr. Lim became the
General Manager of the Company’s Malaysia subsidiary in 1991.
In February 1993, all test facilities in Southeast Asia came under
Mr. Lim’s responsibility. He holds diplomas in Electronics
& Communications and Industrial Management and a Master’s
Degree in Business Administration. He was elected Corporate
Vice-President-Testing in July 1998.
S. K. Soon – Ms. Soon, age 60, joined Trio-Tech
Singapore in 1981 and became the Personnel and Administration
Manager in 1985. In 1991, she was promoted to Group Logistics
Manager and was responsible for the overall logistics and human
resources functions for our operations in Asia. Effective July 1,
2015, she was appointed as Corporate Vice-President and currently
oversees the Company's Logistics and Human Resources
functions in
Asia.
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a)
of the Securities Exchange Act of 1934, as amended, requires that
directors, certain officers of the Company and beneficial owners of
more than 10% of our Common Stock file reports of ownership and
changes in ownership with the SEC as to the Company’s
securities beneficially owned by them. Such persons are also
required by SEC rules to furnish the Company with copies of all
Section 16(a) forms they file.
Based
solely on its review of copies of such forms received by the
Company, or on written representations from certain reporting
persons, the Company believes that all Section 16(a) filing
requirements applicable to its officers, directors and greater than
ten percent beneficial owners were complied with during the fiscal
year ended June 30, 2018, except for one Form 4 filed by Jason
Adelman, which filing reported four transactions, two of which
transactions were not reported on a timely basis.
-8-
EQUITY COMPENSATION PLAN
INFORMATION
The
Company previously had two equity plans, one entitled the 2007
Employee Stock Option Plan (the “2007 Employee Plan”,
and one entitled the 2007 Directors Equity Incentive Plan (the
“2007 Directors Plan), each of which was previously approved
by the Company’s shareholders. The purpose of these two plans
was to enable the Company to attract and retain top-quality
employees, officers, directors and consultants and to provide them
with an incentive to enhance shareholder return. On September 24,
2017, each of the 2007 Employee Plan and 2007 Director Plan
terminated in accordance with its terms and no further options may
be granted pursuant to the 2007
Employee Plan or the 2007 Directors Plan. However, there
remains outstanding options to purchase shares that were granted
pursuant to those plans.
The
Company’s 2017 Employee Plan and 2017 Directors Plan were
approved by the Board on September 14, 2017 and by the shareholders
on December 4, 2017. The purpose of these two plans is also to
enable the Company to attract and retain top-quality employees,
officers, directors and consultants and to provide them with an
incentive to enhance shareholder return as well as contributing to
the Company’s long-term growth and profitability
objectives.
The
following table provides information as of June 30, 2018 with
respect to the following compensation plans of the Company under
which equity securities of the Company are authorized for
issuance:
|
EQUITY
COMPENSATION PLAN INFORMATION
|
|||
|
Plan
Category
|
Number of securities
to be issued upon exercise of outstanding options
|
Weighted average
exercise price of outstanding options
|
Number of securities
remaining available for future issuance under equity compensation
plans (excluding securities reflected in
|
|
|
(a)
|
(b)
|
column
(a)
|
|
Equity compensation
plans approved by shareholders:
|
|
|
|
|
2007 Employee
Plan
|
127,500
|
$3.52
|
-
|
|
2017 Employee
Plan
|
60,000
|
$5.98
|
|
|
(240,000 shares
available under this plan)
|
|
|
|
|
2007 Directors
Plan
|
390,000
|
$3.41
|
-
|
|
2017 Directors
Plan
|
80,000
|
$5.98
|
|
|
(220,000 shares
available under this plan)
|
|
|
|
|
Equity compensation
plans not approved by shareholders
|
-
|
-
|
-
|
|
Total
|
657,500
|
$3.98
|
-
|
-9-
COMPENSATION
DISCUSSION AND ANALYSIS
The Compensation Committee
The
Compensation Committee reviews and approves corporate goals and
objectives relating to the compensation of the Chief Executive
Officer; reviews goals and objectives of other executive officers;
establishes the performance criteria (including both long-term and
short-term goals) to be considered in light of those goals and
objectives; evaluates the performance of the executives; determines
and approves the compensation level for the Chief Executive
Officer; and reviews and approves compensation levels of other key
executive officers.
Compensation Objectives
The
Company operates in a highly competitive and rapidly changing
industry. The key objectives of the Company’s executive
compensation programs are to:
●
attract, motivate
and retain executives who drive Trio-Tech’s success and
industry leadership;
●
provide each
executive, from Vice-President to Chief Executive Officer, with a
base salary based on the market value of that role, and the
individual’s demonstrated ability to perform that
role;
●
motivate executives
to create sustained shareholder value by ensuring all executives
have an “at risk” component of total compensation that
reflects their ability to influence business outcomes and financial
performance.
What Our Compensation Program is Designed to Reward
Our compensation program is designed to reward
each individual executive officer’s contribution to
the advancement of the Company’s overall performance and
execution of our goals, ideas and objectives. It is designed to
reward and encourage exceptional performance at the individual
level in the areas of organization, creativity and responsibility
while supporting the Company’s core values and ambitions.
This in turn aligns the interest of our executive officers with the
interests of our shareholders, and thus with the interests of the
Company.
Determining Executive Compensation
The
Compensation Committee reviews and approves the compensation
program for executive officers annually after the closing of each
fiscal year. Reviewing the compensation program at such time allows
the Compensation Committee to consider the overall performance of
the past fiscal year and the financial and operating plans for the
upcoming fiscal year in determining the compensation program for
the upcoming fiscal year.
The
Compensation Committee also annually reviews market compensation
levels with comparable jobs in the industry to determine whether
the total compensation for our officers remains in the targeted
median pay range. This assessment includes evaluation of base
salary, annual incentive opportunities, and long-term incentives
for the key executive officers of the Company. The Company did not
hire any compensation consultants in connection with setting
executive compensation for the fiscal year ended June 30,
2018.
The
Compensation Committee’s compensation decisions are based on
the Company’s operation performance, the performance and
contribution of each individual officer, and the compensation
budget and objectives of the Company. The Compensation Committee
also considers other factors, such as the experience and potential
of the officer and the market compensation level for a similar
position.
-10-
Role of Executive Officers in Determining Executive
Compensation
The
Compensation Committee determines compensation for the Chief
Executive Officer, which is based on different factors, such as
level of responsibility and contributions to the performance of the
Company. The Chief Executive Officer recommends the compensation
for the Company's executive officers (other than the compensation
of the Chief Executive Officer) to the Compensation Committee. The
Compensation Committee reviews the recommendations made by the
Chief Executive Officer and determines the compensation of the
Chief Executive Officer and the other executive officers. The Chief
Executive Officer is not present during voting on, or deliberations
concerning, his compensation.
Components of Executive Compensation
The
Company’s compensation program has three major components:
(1) base annual salary; (2) potential annual cash incentive
awards that are based primarily on financial performance of the
Company or its relevant business operating units; and
(3) long-term incentive compensation in the form of stock
options.
Base Salary
Base
salaries are provided as compensation for day-to-day
responsibilities and services to the Company and to meet the
objective of attracting and retaining the talent needed to run the
business.
Base
salary for our executive officers was determined utilizing various
factors.
One
factor that was taken into account in determining base salary for
our executive officers was the compensation policies of other
companies comparable in size to and within substantially the same
industry as Trio-Tech. Keeping our executive officers’
salaries in line with the market ensures the Company’s
competitiveness in the marketplace in which the Company competes
for talent.
Another
factor taken into account in determining base salary for our
executive officers was salaries paid by us to our executive
officers during the immediately preceding year and increases in the
cost of living.
The
Compensation Committee will review the Company’s financial
condition, macroeconomic conditions and adjust base salaries at
least quarterly in order to ascertain the appropriate time to
restore base salaries to pre-reduction levels.
The
salary for each of our Named Executive Officers for the fiscal year
ended June 30, 2018 and the percentage increase in their salary
from the prior fiscal year’s salary were as
follows:
|
Executives
|
Base
Salary
|
Percent
Increased
(1)
|
|
S.
W. Yong, President and Chief Executive Officer
|
$250,868
|
3.25%
|
|
Victor H. M. Ting, Corporate Vice President
and Chief Financial Officer
|
$147,485
|
2.47%
|
|
Hwee Poh Lim,
Corporate Vice President-Testing
|
$97,191
|
4.01%
|
(1)
Percent
increase is based on the increase in base salary in the currency of
Singapore. The appreciation of Singapore dollars against U.S.
dollars is excluded in the calculation. The base cash compensation
for the above named officers of the Company, each of whom resides
in Singapore, in fiscal year ended June 30, 2018, was denominated
in the currency of Singapore. The exchange rate therefore was
established as of June 30, 2018 and was computed to be 1.3421
Singapore dollars to each U.S. dollar.
Singapore executive
officers’ base salaries are credited with a compulsory
contribution ranging from 2.8% to 10.6% of base salary as required
under Singapore’s provident pension fund.
Bonuses
In
November 2016, The Compensation Committee approved the bonus
formulae for Company's executive officers, as intended to satisfy
the requirements of Section 162(m) of the Code.
-11-
The
bonus for each of our Named Executive Officers for the fiscal year
ended June 30, 2018 was as follows:
|
Executives
|
Bonus
|
|
S.
W. Yong, President and Chief Executive Officer
|
$93,351
|
|
Victor H. M. Ting, Corporate Vice President
and Chief Financial Officer
|
$49,513
|
|
Hwee Poh Lim,
Corporate Vice President-Testing
|
$30,574
|
Option Grants
Stock
options are intended to align the interests of key executives and
shareholders by placing a portion of the key executives’
compensation at risk, tied to long-term shareholder value creation.
Stock options are granted at 100% of the “fair market
value” (as defined under the applicable plan) of the
Company’s Common Stock on the date of grant. The Compensation Committee believes that stock
options are flexible and relatively inexpensive to implement when
compared with cash bonuses. It also has no negative impact on the
Company’s cash flow. The Compensation Committee believes that
long-term incentives in the form of stock options can better
encourage the executive officers to improve operations and increase
profits for the Company through participation in the growth in
value of the Company’s Common Stock.
The
Compensation Committee views any option grant portion of our
executive officer compensation packages as a special form of
long-term incentive compensation to be awarded on a limited and
non-regular basis. The objective of these awards is to ensure that
the interests of our executives are closely aligned with those of
our shareholders. These awards provide rewards to our executive
officers based upon the creation of incremental shareholder value
and the attainment of long-term financial goals. Stock options
produce value to our executive officers only if the price of our
stock appreciates, thereby directly linking the interests of our
executive officers with those of our shareholders.
Awards
of stock options are determined based on the Compensation
Committee’s subjective determination of the amount of awards
necessary, as a supplement to an executive officer’s base
salary, to retain and motivate the executive officer.
In fiscal year 2018, we granted the following
stock options covering the following officers pursuant to
the 2007 Directors Plan,
2017 Directors Plan, 2007
Employee Plan and 2017 Employee Plan as indicated
below.
|
Executives
|
2007
Directors Plan
|
2007
Employee Plan
|
Total
|
|
S. W. Yong,
President and Chief Executive Officer
|
-
|
-
|
-
|
|
Victor H. M. Ting,
Corporate Vice President and Chief Financial Officer
|
-
|
-
|
-
|
|
Executives
|
2017
Directors Plan
|
2017
Employee Plan
|
Total
|
|
S. W. Yong,
President and Chief Executive Officer
|
-
|
40,000
|
40,000
|
|
Victor H. M. Ting,
Corporate Vice President and Chief Financial Officer
|
-
|
20,000
|
20,000
|
At the
2013 Annual Meeting of Shareholders, the Company’s
shareholders voted to conduct future advisory votes on executive
compensation on an “every one year” basis. The Board of
Directors had recommended in the proxy statement for the 2013
Annual Meeting a vote for the “every three years”
option. The Board of Directors had made such recommendation based
on its conclusion that an advisory vote at such frequency would
provide the Company’s shareholders with sufficient time to
evaluate the effectiveness of its overall compensation philosophy,
policies and practices in the context of the Company’s
long-term business results, while avoiding more emphasis on short
term variations in compensation and business
results. Therefore, the Board decided to conduct future
advisory votes on executive compensation on an “every three
years” basis until at least the next vote by the
Company’s shareholders on the frequency of such votes, which
will be no later than the Annual Meeting to be held in
2019.
-12-
REPORT OF THE AUDIT
COMMITTEE
During
the fiscal year ended June 30, 2018, the Audit Committee
fulfilled its duties and responsibilities as outlined in its
charter. The Audit Committee reviewed and discussed the
Company’s audited consolidated financial statements and
related footnotes for the fiscal year ended June 30, 2018, and
the independent auditor’s report on those financial
statements, with the Company’s management and Mazars LLP
(“Mazars”), the Company’s independent auditor.
Management presented to the Audit Committee that the
Company’s financial statements were prepared in accordance
with accounting principles generally accepted in the United States
of America. The Audit Committee has discussed with Mazars the
matters required to be discussed with the Audit Committee by the
statement on Auditing Standards No. 61, as amended (AICPA,
Professional Standards,
Vol. 1 AU Section 380) as adopted by the Public Company Accounting
Oversight Board in Rule 3200T. The Audit Committee’s review
included a discussion with management and the independent auditor
of the quality (not merely the acceptability) of the
Company’s accounting principles, the reasonableness of
significant estimates and judgments, and the disclosures in the
Company’s financial statements, including the disclosures
relating to critical accounting policies.
The
Audit Committee recognizes the importance of maintaining the
independence of the Company’s independent auditor, both in
fact and appearance. The Audit Committee has evaluated
Mazars’s qualifications, performance, and independence,
including that of the lead audit partner. As part of its auditor
engagement process, the Audit Committee considers whether to rotate
the independent audit firm. The Audit Committee has established a
policy pursuant to which all services, audit and non-audit,
provided by the independent auditor must be pre-approved by the
Audit Committee or its delegate. The Company’s pre-approval
policy is more fully described in this Proxy Statement under the
caption “Policy for pre-approval of audit and non-audit
services.” The Audit Committee has concluded that provision
of the non-audit services described in that section is compatible
with maintaining the independence of Mazars. In addition, the Audit
Committee has received the written disclosure and the letter from
Mazars required by the applicable requirements of the Public
Company Accounting Oversight Board regarding Mazars’
communications with the Audit Committee concerning independence and
has discussed with Mazars its independence.
Based
on the above-described review, written disclosures, letter and
discussions, the Audit Committee recommended to the Board of
Directors of the Company that the audited financial statements for
the fiscal year ended June 30, 2018 be included in the
Company’s Annual Report on Form 10-K.
Dated
October 22, 2018
THE
AUDIT COMMITTEE
A.
Charles Wilson, Chairman
Jason
T. Adelman
Richard
M. Horowitz
-13-
EXECUTIVE
COMPENSATION
The
following table shows compensation information concerning
compensation awarded to, earned by or paid for services rendered to
the Company in all capacities during the fiscal years ended June
30, 2018 and 2017 by our Chief Executive Officer and our two most
highly compensated executive officers (other than our Chief
Executive Officer) who were serving as executive officers at the
end of the fiscal year ended June 30, 2018 (the “Named
Executive Officers”).
SUMMARY
COMPENSATION TABLE
|
Name and Principal Position
|
|
Fiscal Year
|
|
Salary
($)
|
|
Bonus ($)
|
|
Option Awards
($) (1)
|
|
All Other Compensation
($)
|
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S. W.
Yong (2)
|
|
2018
|
|
250,868
|
|
93,351
|
|
91,200 (3)
|
|
24,886 (4)
|
|
460,306
|
|
President
and Chief Executive Officer
|
|
2017
|
|
234,372
|
|
63,561
|
|
35,250 (5)
|
|
22,057 (6)
|
|
355,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Victor
H. M. Ting (2)
|
|
2018
|
|
147,485
|
|
49,513
|
|
45,600
(7)
|
|
21,873
(8)
|
|
264,471
|
|
Corporate
Vice President and Chief Financial Officer
|
|
2017
|
|
138,846
|
|
36,824
|
|
17,625
(9)
|
|
19,481
(10)
|
|
212,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hwee
Poh Lim
|
|
2018
|
|
97,191
|
|
30,574
|
|
--
|
|
23,310
(11)
|
|
151,075
|
|
Corporate
Vice President - Testing
|
|
2017
|
|
90,136
|
|
26,625
|
|
--
|
|
21,497
(12)
|
|
138,258
|
(1)
The
option awards are based on the fair value of stock options on the
grant date computed in accordance with ASC Topic 718.
(2)
Neither
Mr. Yong nor Mr. Ting received any fees for services rendered as a
director of Trio-Tech International.
(3)
A
stock option covering 40,000 shares of Common Stock was granted to
Mr. Yong pursuant to the 2017 Employee Plan on March 23, 2018. The
option has a five-year term and vests over the period as follows:
25% vesting on the grant date and the remaining balance vesting in
equal installments on the next three succeeding anniversaries of
the grant date.
(4)
The
amount shown in the other compensation column includes central
provident fund contributions of $6,572, car benefits of $12,686,
and director fees of $5,628 for service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Yong was 2.6% for fiscal 2018.
(5)
A
stock option covering 25,000 shares of Common Stock was granted to
Mr. Yong pursuant to the 2007 Employee Plan on March 30, 2017. The
option has a five-year term and vests over the period as follows:
25% vesting on the grant date and the remaining balance vesting in
equal installments on the next three succeeding anniversaries of
the grant date
(6)
The
amount shown in the other compensation column includes central
provident fund contributions of $6,598, car benefits of $10,899,
and director fees of $4,560 for service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Yong was 2.8% for fiscal 2017.
(7)
A
stock option covering 20,000 shares of Common Stock was granted to
Mr. Ting pursuant to the 2017 Employee Plan on March 23, 2018. The
option has a five-year term and vests over the period as follows:
25% vesting on the grant date and the remaining balance vesting in
equal installments on the next three succeeding anniversaries of
the grant date.
-14-
(8)
The
amount shown in the other compensation column includes central
provident fund contributions of $6,840, car benefits of $10,628,
and director fees of $4,405 for the service as a director for
Trio-Tech Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned
by the Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Ting was 4.6% for fiscal 2018.
(9)
A
stock option covering 12,500 shares of Common Stock was granted to
Mr. Ting pursuant to the 2007 Employee Plan on March 30, 2017. The
option has a five-year term and vests over the period as follows:
25% vesting on the grant date and the remaining balance vesting in
equal installments on the next three succeeding anniversaries of
the grant date.
(10)
The
amount shown in the other compensation column includes central
provident fund contributions of $6,598, car benefits of $9,610, and
director fees of $3,273 for the service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Ting was 4.8% for fiscal 2017.
(11)
The
amount shown in the other compensation column includes central
provident fund contributions of $9,880, car benefits of $11,227,
and director fees of $2,202 for service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Lim was 10.2% for fiscal 2018.
(12)
The
amount shown in the other compensation column includes central
provident fund contributions of $9,531, car benefits of $10,446,
and director fees of $1,520 for service as a director for Trio-Tech
Malaysia and Trio-Tech Kuala Lumpur, which are 55% owned by the
Company. Singapore officers are credited with a compulsory
contribution to their central provident fund at a certain
percentage of their base salaries in accordance with Singapore law,
except for bonuses in this context. The compulsory contribution
with respect to Mr. Lim was 10.6% for fiscal 2017.
Narrative Disclosure to Summary Compensation Table
Base Salary. Base salaries for the fiscal year ended June
30, 2018 for Messrs. Yong, Ting and Lim were $250,868, $147,485 and
$97,191, respectively.
Bonuses. Bonuses for the fiscal year ended June 30, 2018 for
Messrs. Yong, Ting and Lim were $93,351, $49,513 and $30,574,
respectively.
Option Awards. Stock options are granted at 100% of the fair
market value of the Company’s Common Stock on the date of
grant. Awards of stock options are determined based on the
Compensation Committee’s subjective determination of amount
of awards necessary, as a supplement to an executive
officer’s base salary, to retain and motivate the executive
officer. Options covering 37,500 shares were granted on March 30,
2017 pursuant to the 2007 Employee Plan, which options vest over
the period as followings: 25% vesting
on the grant date and the remaining balance vesting in equal
installments on the next three succeeding anniversaries of the
grant date in. Options covering 60,000 shares were granted
on March 23, 2018 pursuant to the 2017 Employee Plan, which options
vest over the period as followings: 25% vesting on the grant date and the remaining
balance vesting in equal installments on the next three succeeding
anniversaries of the grant date in.
All Other Compensation. All other compensation includes
central provident fund contributions at a certain percentage of the
base salaries in accordance with Singapore law, car benefits and
director fees for service as a director for certain subsidiaries of
the Company.
The
Company does not generally provide its executive officers with
payments or other benefits at, following, or in connection with
retirement. The Company does not have a nonqualified deferred
compensation plan that provides for deferral of compensation on a
basis that is not tax-qualified for its executive
officers.
-15-
Outstanding Equity Awards at Fiscal Year-End
The
following table provides information concerning shares of our
Common Stock covered by exercisable and unexercisable options held
by the Named Executive Officers as of June 30, 2018, our last
completed fiscal year end. Mr. Lim held no equity awards at June
30, 2018.
|
OUTSTANDING
EQUITY AWARDS AT JUNE 30, 2018
|
||||
|
|
Option Awards
|
|||
|
|
Number
of
|
Number
of
|
|
|
|
|
Securities
|
Securities
|
|
|
|
|
Underlying
|
Underlying
|
|
|
|
|
Unexercised
|
Unexercised
|
Option
|
|
|
|
Options
(#) |
Options
(#) |
Exercise
Price |
Option
Expiration
|
|
Name
|
Exercisable
|
Unexercisable
|
($)
|
Date
|
|
S.
W. Yong
|
10,000(1)
|
30,000
|
$5.98
|
03/22/2023
|
|
|
12,500(2)
|
12,500
|
$4.14
|
03/29/2022
|
|
|
25,000(3)
|
-
|
$3.26
|
03/20/2021
|
|
|
18,750(4)
|
6,250
|
$3.26
|
03/20/2021
|
|
|
20,000(5)
|
-
|
$3.10
|
12/08/2018
|
|
|
20,000(6)
|
-
|
$3.62
|
09/16/2018
|
|
|
|
|
|
|
|
Victor
H.M. Ting
|
5,000(1)
|
15,000
|
$5.98
|
03/22/2023
|
|
|
6,250(2)
|
6,250
|
$4.14
|
03/29/2022
|
|
|
25,000(3)
|
-
|
$3.26
|
03/20/2021
|
|
|
11,250(4)
|
3,750
|
$3.26
|
03/20/2021
|
|
|
15,000(5)
|
-
|
$3.10
|
12/08/2018
|
|
|
15,000(7)
|
-
|
$3.62
|
09/16/2018
|
(1)
Stock option
granted on March 23, 2018 pursuant to the 2017 Employee Plan, that
will fully vest on March 22, 2021 (one-fourth of the grant vested
or will vest every year beginning on March 23, 2017).
(2)
Stock option
granted on March 30, 2017 pursuant to the 2007 Employee Plan, that
will fully vest on March 29, 2020 (one-fourth of the grant vested
or will vest every year beginning on March 30, 2017).
(3)
Stock option
granted on March 21, 2016 pursuant to the 2007 Directors Plan,
which option was immediately exercisable in full.
(4)
Stock option
granted on March 21, 2016 pursuant to the 2007 Employee Plan, that
will fully vest on March 20, 2019 (one-fourth of the grant vested
or will vest every year beginning on March 21, 2016).
(5)
Stock option
granted on December 9, 2013 pursuant to the 2007 Employee Plan,
that will fully vest on December 8, 2016 (one-fourth of the grant
vested or will vest every year beginning on December 9,
2013).
(6)
Stock option
granted on September 17, 2013 pursuant to the 2007 Directors Plan,
which option was immediately exercisable in full.
(7)
Stock option
granted on September 17, 2013 pursuant to the 2007 Employee Plan,
which option was immediately exercisable in full.
Employment Agreements
None of
our executive officers has employment agreements with the Company
other than standard offer letters signed by all employees upon
employment.
-16-
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The
Audit Committee has selected Mazars as the independent registered
public accounting firm for the fiscal year ended June 30, 2018. A
representative of Mazars is expected to be present at the Annual
Meeting and will have an opportunity to make statements and respond
to appropriate questions.
The following table shows the fees that we paid or
accrued for audit and other services provided by Mazars in
fiscal 2018 and 2017. All of the
services described in the following fee table were approved in
conformity with the Audit Committee’s pre-approval
process.
|
|
2018
|
2017
|
|
Audit
Fees
|
$228,690
|
$214,640
|
|
IT
Audit
|
7,450
|
14,380
|
|
Tax
Fees
|
10,430
|
6,470
|
|
Total:
|
$246,570
|
$235,490
|
Audit Fees
The
amounts set forth opposite “Audit Fees” above reflect
the aggregate fees billed by Mazars or to be billed for
professional services rendered for the audit of the Company’s
fiscal 2018 and fiscal 2017 annual financial statements and for the
review of the financial statements included in the Company’s
quarterly reports during such periods.
Tax
Fees
The
amounts set forth opposite “Tax Fees” above reflect the
aggregate fees billed for fiscal 2018 and 2017 for professional
services rendered for tax compliance and return preparation. The
compliance and return preparation services consisted of the
preparation of original and amended tax returns and support during
the income tax audit or inquiries.
The
Audit Committee’s policy is to pre-approve all audit services
and all non-audit services that our independent accountants are
permitted to perform for us under applicable federal securities
regulations. The Audit Committee’s policy utilizes an annual
review and general pre-approval of certain categories of specified
services that may be provided by the independent accountant, up to
pre-determined fee levels. Any proposed services not qualifying as
a pre-approved specified service, and pre-approved services
exceeding the pre-determined fee levels, require further specific
pre-approval by the Audit Committee. The Audit Committee has
delegated to the Chairman of the Audit Committee the authority to
pre-approve audit and non-audit services proposed to be performed
by the independent accountants. Since June 30, 2004, all services
provided by our auditors require pre-approval by the Audit
Committee. The policy has not been waived in any
instance.
-17-
ADDITIONAL MEETING
INFORMATION
Shareholder Proposals
Shareholders who
wish to present proposals at the Annual Meeting to be held
following the end of the fiscal year ended June 30, 2019 should
submit their proposals in writing to the Secretary of the Company
at the address set forth on the first page of this Proxy Statement.
Proposals must be received no later than June 22, 2019 for
inclusion in next year’s Proxy Statement and Proxy Card. If a
shareholder intends to present a proposal at the next Annual
Meeting but does not seek inclusion of that proposal in the proxy
statement for that meeting, the holders of Proxies for that meeting
will be entitled to exercise their discretionary authority on that
proposal if the Company does not have notice of the proposal by
September 6, 2019.
Proxy Solicitation
The
cost of soliciting the enclosed form of Proxy will be borne by the
Company. In addition, the Company will reimburse brokerage firms
and other persons representing beneficial owners of shares for
their expenses in forwarding solicitation material to such
beneficial owners. Directors, officers and regular employees of the
Company may, for no additional compensation, also solicit proxies
personally or by telephone, electronic transmission, telegram or
special letter.
Annual Report
The
Company’s Annual Report to Shareholders for the year ended
June 30, 2018 is being made electronically available with this
Proxy Statement to shareholders entitled to notice of the meeting.
The Annual Report includes the consolidated financial statements,
unaudited selected consolidated financial data and
management’s discussion and analysis of financial condition
and results of operations.
Upon
the written request of any shareholder, the Company will provide,
without charge, a copy of the Company’s Annual Report on Form
10-K filed with the Commission for the year ended June 30,
2018. This request should be directed to the Corporate Secretary,
Trio-Tech International, 16139 Wyandotte St., Van Nuys, CA
91406.
OTHER MATTERS
The
shareholders and any other persons who would like to communicate
with the Board can access the website www.triotech.com and fill in
the contact form for any enquiries or information. The form will be
sent directly to the Secretary and the communications for specified
individual directors of the Board will be given to them personally
by the Secretary. In addition, the contact number is listed on the
website and the messages will be passed to the Board
accordingly.
At this
time, the Board knows of no other business that will come before
the Annual Meeting. However, if any other matters properly come
before the Annual Meeting, the persons named as Proxy holders will
vote on them in accordance with their best judgment.
|
|
|
By Order of the Board
of Directors
A. CHARLES
WILSON
Chairman |
-18-
