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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 2001
or
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-29332
PEAK INTERNATIONAL LIMITED
(Exact Name of Registrant as Specified in its Charter)
Bermuda Not applicable
(Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
44091
Nobel
Drive
94538
P.O. Box
1767
Fremont,
CA 94538
(Address
of
Principal
Executive
Offices) (Zip Code)
Registrant's telephone number, including area code: (510) 449-0100
Securities registered or to be registered pursuant to Section 12(b) of the
Act: None
Securities registered or to be registered pursuant to Section 12(g) of the
Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, par value US $0.01 per
share Nasdaq Stock Market National Market
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of Common Stock held by non-affiliates of the
Registrant was approximately $36,279,461.46 as of July 24, 2001, based upon
the closing price of $6.27 on the Nasdaq National Market reported on such
date.
As of July 24, 2001, the number of shares of Common Stock outstanding was
approximately 12,985,591
DOCUMENTS INCORPORATED BY REFERENCE
None.
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This Form 10-K/A Amendment No. 1 (the "Amendment") amends and supplements
the Form 10-K (the "Original Form 10-K") filed by Peak International Limited,
a company incorporated under Bermuda law (the "Company"), on June 19, 2001.
The sole purpose of this Amendment is to amend and restate Items 10, 11, 12
and 13 of Part III of the Original Form 10-K to read in their entirety as set
forth below. Capitalized terms not otherwise defined herein shall have the
respective meanings ascribed thereto in the Original Form 10-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth information with respect to the directors and
executive officers of the Company.
Name Age Position
---- --- --------
Mr. T.L. Li...................... 49 Director, Chairman of the Board
Mr. Calvin Reed.................. 58 Director, President and Chief Executive
Officer and Deputy Chairman
Mr. Jack Menache................. 58 Vice President of Administration,
Secretary and General Counsel
Mr. Jerry Mo..................... 42 Chief Financial Officer and Controller
Mr. C.Y. Ng(1)................... 43 Vice President, General Manager of PRC
Operations of Peak Plastic & Metal
Products (International)
Limited
Mr. Danny Tong................... 33 Vice President of Sales & Marketing of
Peak Plastic & Metal Products
(International)
Limited
Mr. John Pylant(2)............... 66 Vice President of Engineering of Peak
International, Inc.
Mr. Douglas Broyles.............. 59 Director
Ms. Christine Russell............ 51 Director
Mr. William Snyder............... 57 Director
--------
(1) Mr. Ng left the Company on June 28, 2001.
(2) Mr. Pylant has resigned from the Company, effective August 1, 2001. Darien
Spencer will join Peak as Vice President, Manufacturing.
Mr. T.L. Li has served as our Chairman since 1990. From 1990 to August 1998,
Mr. Li also served as our Chief Executive Officer. Mr. Li holds a Bachelor of
Science degree in chemical engineering from the University of Wisconsin-
Madison and has over 20 years of experience in the semiconductor industry. Mr.
Li is the major shareholder of, and since 1981 has served as the Chairman of
the Board of Directors of, QPL Holdings, a company whose shares are listed on
The Stock Exchange of Hong Kong Limited ("The Hong Kong Stock Exchange").
Until May of 1999, Mr. Li also owned 100% of EEMS, a memory IC assembly and
test business based in Italy. See Item 13, "Certain Relationships and Related
Transactions." Since 1988 Mr. Li has been a director of ASAT Holdings Limited,
a Nasdaq company. Mr. Li is the brother-in-law of Mr. Jerry Mo.
Mr. Calvin Reed has served as our President and Chief Executive Officer and
as a member of our Board of Directors since April 1999. Mr. Reed has over
thirty years of experience in the electronics and technology sectors. From
1993 to 1998 Mr. Reed served as the Chairman, President, and Chief Executive
Officer of Valance Technology, Inc., a Nasdaq company. Mr. Reed was retired
prior to joining Peak.
2
Mr. Jack Menache has served as our Vice President of Administration,
Secretary and General Counsel since July 1999. He served as a member of our
Board of Directors from May 1999 until July 1999. Mr. Menache holds an LLB
degree from George Washington University Law School, and a Bachelor of Arts
degree from the University of the Americas. He is admitted to the Bars of
Washington, D.C., and the States of Texas and California. From September 1989
until July 1999, he served as Vice President, General Counsel and Secretary
for Integrated Device Technology, Inc., an international manufacturer of
semiconductors.
Mr. Jerry Mo has served as our Chief Financial Officer and Controller since
1996. He holds a Bachelor of Science degree in accounting and data processing
from Leeds University in the United Kingdom. He is a fellow member of the
Institute of Chartered Accountants in England and Wales and an associated
member of the Institute of Chartered Accountants in Australia and the Hong
Kong Society of Accountants. Prior to joining us, Mr. Mo worked as the
Financial Controller for the Group Administration Division of Pacific Dunlop
Ltd., a major industrial conglomerate in Australia, from 1992 to 1996. Mr. Mo
is the brother-in-law of Mr. T.L. Li.
Mr. C. Y. Ng has served as Vice President, General Manager of PRC Operations
of our subsidiary, Peak Plastic & Metal Products (International) Limited,
since May of 1999. Mr. Ng holds a Bachelor of Science Degree in Electronics
Engineering from the Chinese University of Hong Kong. Mr. Ng is also a senior
member of the Society of Manufacturing Engineers. Prior to joining us, Mr. Ng
was the PRC plant manager for Honey Technology Ltd. from May 1994 to May 1999.
Mr. Danny Y.T. Tong has served as Vice President of Sales and Marketing of
our subsidiary, Peak Plastic & Metal Products (International) Limited, and has
been responsible for the Company's sales and operations in Asia and Europe
since May 1999 and in North America since May 2000. Before taking this
position, he was the Vice President responsible for the Northern Asia sales of
the Company from 1995. He holds a Bachelor of Applied Science degree in
mechanical engineering from the University of Toronto. Mr. Tong joined the
Company in 1991.
Mr. John Pylant has served as Vice President of Engineering of our
subsidiary, Peak International, Inc. since November 1999. Mr. Pylant has over
thirty years experience in manufacturing of plastic and machinery parts.
Before joining us, he served as the President and Chief Executive Officer of
CHS Group Inc., a manufacturer of disk drive hardware in Los Angeles and
Taiwan, from 1991 to November 1999.
Mr. Douglas Broyles has served as a member of our Board of Directors since
May 1999. He holds patents for image scanning, printing and microprocessor
control techniques. He currently serves as President and Chief Executive
Officer of Avalon Data, which positions he has held since 1996. Prior to that,
he was a partner for ten years with Glenwood Management, a venture capital
firm based in Menlo Park, California.
Ms. Christine Russell has served as a member of our Board of Directors since
March 2000. She is a graduate of the University of Santa Clara and has an MBA
in Finance. Ms. Russell is the Vice President and Chief Financial Officer of
San Mateo, California-based Persistence Software, a company addressing the
Internet infrastructure and enterprise application development markets, where
she has served since 1997. From 1995 to 1997, Mrs. Russell served as Vice
President of Cygnus Solutions of Sunnyvale, CA, an emerging software company.
Mr. William Snyder has served as a member of our Board of Directors since
July 1999. Mr. Snyder served as Chief Financial Officer of Etec Systems, Inc.,
a multinational capital equipment manufacturer, from August 1997 until March
2000 when Etec was acquired by Applied Materials, Inc. Prior to that, Mr.
Snyder served as Chief Financial Officer of Integrated Device Technology, Inc.
from 1990 to July of 1997. Mr. Snyder has an M.B.A. from the University of
Arizona.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, officers and persons who own more than 10 percent of a registered
class of a U.S. issuer's equity securities to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of such securities,
3
and to furnish the company with copies of all such reports they file. Based on
a review of Forms 3, 4 and 5 under the Securities Exchange Act furnished to
us, we believe that during fiscal year 2001, our officers, directors and
holders of more than 10 percent of our common stock filed all Section 16(a)
reports on a timely basis.
ITEM 11. EXECUTIVE COMPENSATION
Officer Compensation
The following Summary Compensation Table sets forth for fiscal 1999, 2000
and 2001 certain information with respect to the compensation of the Company's
President and Chief Executive Officer and the five other most highly
compensated executive officers who served in such capacities for the financial
year ended March 31, 2001.
Long-Term Compensation
-----------------------------
Awards Payouts
--------------------- -------
Annual Compensation Securities
---------------------------------- Restricted Underlying LTIP
Name and Principal Other Annual Stock Options/ Payouts All Other
Position Year Salary($) Bonus($) Compensation($) Awards ($) SARs (#) ($) Compensation($)
------------------ ---- --------- -------- --------------- ---------- ---------- ------- ---------------
Calvin Reed............. 2001 442,974 120,000 0 0 0 0 0
President, CEO 2000 373,308 0 0 0 0 0 0
1999 0 0 0 0 0 0 0
Jerry Mo................ 2001 290,708 50,000 0 0 0 0 13,801*
CFO, Controller 2000 305,797 0 0 0 0 0 13,098*
1999 305,694 0 0 0 0 0 12,128*
Jack Menache............ 2001 292,585 50,000 0 0 0 0 0
VP of Administration 2000 172,571 0 0 0 0 0 0
Secretary, General 1999 0 0 0 0 0 0 0
Counsel
John Pylant............. 2001 225,000 55,000 90,878 0 0 0 0
VP of Engineering 2000 100,965 0 0 0 0 0 0
1999 0 0 0 0 0 0 0
CY Ng .................. 2001 169,827 10,000 0 0 0 0 7,142*
VP. GM of PRC 2000 131,091 0 0 0 0 0 3,989*
Operations 1999 0 0 0 0 0 0 0
Melvern Slates.......... 2001 225,000 55,000 72,000 0 0 0 0
VP of Manufacturing 2000 0 0 0 0 0 0 0
1999 0 0 0 0 0 0 0
--------
* These represent the Company's contribution to the relevant employees benefit
plans of officers who are based in Hong Kong.
4
Stock Options
Stock options were granted in the financial year ended March 31, 2001 to the
following executive officers named on the Summary Compensation Table:
Options/SAR Grants in Last Fiscal Year
Percent of Total Potential Realizable Value
Number of Options/SARs at Assumed Annual Rates of
Securities Granted to Share Price Appreciation for
Underlying Employees in Exercise Option Term
Options/SARs Year Ended March Price Expiration ------------------------------
Name Granted (#) 31, 2001 ($/Share) Date 0% ($) 5% ($) 10% ($)
---- ------------ ---------------- --------- ---------- ------ ---------- ----------
Calvin Reed............. 98,000 10.38% 8.0625 09/01/2004 0 170,277 366,697
President, CEO
Jerry Mo................ 86,000 9.11% 8.0625 09/01/2004 0 149,427 321,795
CFO, Controller
Jack Menache............ 36,000 3.81% 8.0625 09/01/2004 0 62,551 134,705
VP of Administration 70,000 7.42% 6.6250 08/22/2004 0 99,941 215,226
Secretary,
General Counsel
John Pylant............. 10,000 1.06% 8.0625 09/01/2004 0 17,375 37,418
VP of Engineering
Melvern Slates.......... 10,000 1.06% 8.0625 09/01/2004 0 17,375 37,418
VP of Manufacturing
Cy Ng................... 88,000 9.32% 8.06f25 09/01/2004 0 152,902 329,279
VP. GM of PRC
Operations
Aggregated Option/SAR Exercises in Last Financial Year
And Financial Year-End Option/SAR Values
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Options/SARs at Financial In-the-Money Options/SARs
on Value Year-End (#) at Financial Year-End ($)
Exercise Realized ------------------------- -------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
Calvin Reed............. 0 0 42,208 498,292 0 0
President, CEO
Jerry Mo................ 0 0 253,552 74,417 443,750 0
CFO, Controller
Jack Menache............ 0 0 146,083 86,917 20,000 0
VP of Administration
Secretary,
General Counsel
John Pylant............. 0 0 9,583 117,417 0 0
VP of Engineering
Melvern Slates.......... 0 0 2,500 107,500 0 0
VP of Manufacturing
CY Ng................... 0 0 0 103,300 0 0
VP. GM of PRC
Operations
Compensation of Directors
Each director of the Company who is not an employee of the Company or its
affiliates receives an annual fee of $15,000 plus a fee of $1,000 for each
Board meeting attended and $500 for each committee meeting attended. In
addition, each such director is awarded an annual vested option to purchase
10,000 Shares at a purchase price determined on the date of grant in
accordance with the applicable stock option plan. The chairpersons of the
Compensation and Stock Option Committee and Audit Committee are granted an
additional 2,000 Share options. Chairman T.L. Li and directors who are also
employees of the Company or its affiliates receive no remuneration for serving
as directors. Directors travelling overseas for the purpose of fulfilling
their oversight responsibilities are paid $800 per day plus actual expenses.
5
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements
Calvin R. Reed. Effective April 22, 1999, the Company entered into an
employment agreement with Mr. Reed, providing that beginning on that date, he
would serve as President and Chief Executive Officer of the Company for an
initial term of three years, to be automatically extended by one year on an
annual basis unless one party notifies the other of termination. The agreement
contains standard provisions relating to benefits, intellectual property,
confidentiality, and restrictions on competitive activities and solicitation
of Company employees and customers. Pursuant to this agreement, Mr. Reed is
entitled to an annual base salary of $360,000 per year, which may be increased
as determined by the Board of Directors, with a yearly bonus in the amount of
$45,000. Mr. Reed has been granted three options to purchase shares of common
stock of the Company. The first option is for the purchase of 150,000 shares
of common stock at a per share exercise price of $3-21/32, the second option
is for the purchase of 150,000 shares of common stock at a per share exercise
price of $7.00, and the third option is for the purchase of 100,000 shares of
common stock at a per share exercise price of $10.00. The options vest over
ten years from the date of grant in twelve equal, quarterly installments,
provided that no options will vest within the first two years of the
agreement. After the second anniversary of the agreement, in all cases of
termination except those occurring within two years of a change in control,
Mr. Reed's options shall remain exercisable for a period of one year. Should
Mr. Reed be terminated without cause or resign (as a result a reduction in pay
or title, the Company's material breach of the employment contract, a
relocation of Mr. Reed's offices outside of Southern California), within two
years of a change of control or liquidation of the Company, all of Mr. Reed's
options shall vest immediately and remain exercisable for a period of one year
and he shall receive a severance payment equal to two times his current base
salary if termination occurs in the first year of the contract, and three
times his current base salary if termination happens thereafter. Mr. Reed is
also entitled to a severance payment of three times his current base salary if
he is terminated by the Company without cause.
Jack Menache, Jerry Mo, C.Y. Ng, Danny Tong and John Pylant. Effective
October 1, 2000, the Company entered into identical three year employment
agreements with Mr. Menache, Mr. Mo, Mr. Ng, Mr. Tong, and Mr. Pylant. These
agreements contain standard provisions relating to confidentiality and
restrictions on competitive activities and solicitation of Company employees
and customers. Each agreement also calls for a lump-sum severance payment in
an amount equal to 12 months base salary and unused vacation pay, and the
vesting of all stock options which would have vested within 18 months of the
date of termination with such options remaining exercisable for one year
should the employee be terminated without cause or resign because of a
reduction in base salary or material adverse change in employment duties. If
termination without cause or resignation (resulting from a reduction in base
salary or a materially adverse change in employment duties) occurs in
anticipation of or within two years following a change in control or
liquidation of the Company, then all stock options shall immediately vest in
full and remain exercisable for a period of one year.
6
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the shares as of July 24, 2001, for (i) each person
known by the Company to beneficially own more than 5% of the shares, (ii) each
of the Company's directors, (iii) the Company's Chief Executive Officer, (iv)
each of the Company's five other most highly compensated executive officers
for the financial year ended March 31, 2001, and (v) all current directors and
executive officers as a group. Amounts appearing in the table below include
all shares outstanding as of July 24, 2001 and all shares issuable upon the
exercise of options or warrants within 60 days of July 24, 2001. Unless
otherwise noted, the address of each of the Shareholders named below is the
Company's principal executive office.
Number of Percentage
Name and Address of Beneficial Owner Shares of Class
------------------------------------ --------- ----------
Luckygold 18A Ltd.(/1/)(/2/).......................... 2,588,038 19.93%
Units 4, 5 and 7, 37th Floor
Cable TV Tower
9 Hoi Shing Road
Tsuen Wan, New Territories, Hong Kong
Fidelity Management & Research Company................ 1,642,200 12.65%
82 Devonshire Street
Boston, MA 02109
Wellington Management Company, LLP.................... 1,078,200 8.30%
75 State Street
Boston, MA 02109
L-R Managers, LLC(/3/)................................ 1,070,122 8.25%
30 Rockefeller Plaza
New York, NY 10112
Royce & Associates, Inc............................... 755,000 5.81%
1414 Avenue of the Americas
New York, NY 10019
Mr. T.L. Li(/1/)(/2/)................................. 2,588,038 19.93%
Mr. Douglas Broyles(/4/).............................. 34,000 *
Ms. Christine Russell(/5/)............................ 20,000 *
Mr. William Snyder(/6/)............................... 34,000 *
Mr. Calvin Reed(/7/).................................. 381,625 2.86%
Mr. Jerry Mo(/8/)..................................... 283,891 2.14%
Mr. Jack Menache(/9/)................................. 200,832 1.53%
John Pylant(/10/)..................................... 72,417 *
CY Ng(/11/)........................................... 88,633 *
Melvern Slates(/12/).................................. 4,167 *
All directors and executive officers as a group (10 3,848,773 27.14%
persons)(/13/).......................................
--------
* Represents less than one percent of our outstanding stock
(1) Mr. T.L. Li is the sole Shareholder of Luckygold.
(2) Includes shares held by Mr. T.L. Li through Luckygold.
(3) Represents shares held by L-R Managers, LLC and Rockefeller & Co., Inc.
(4) Includes 34,000 shares subject to options exercisable within 60 days of
July 24, 2001.
(5) Includes 20,000 shares subject to options exercisable within 60 days of
July 24, 2001.
(6) Includes 34,000 shares subject to options exercisable within 60 days of
July 24, 2001.
(7) Includes 365,625 shares subject to options exercisable within 60 days of
July 24, 2001.
(8) Includes 270,719 shares subject to options exercisable within 60 days of
July 24, 2001.
(9) Includes 171,584 shares subject to options exercisable within 60 days of
July 24, 2001.
(10) Includes 72,417 shares subject to options exercisable within 60 days of
July 24, 2001.
7
(11) Includes 88,633 shares subject to options exercisable within 60 days of
July 24, 2001.
(12) Includes 4,167 shares subject to options exercisable within 60 days of
July 24, 2001.
(13) Includes 1,195,838 shares subject to options exercisable within 60 days
of July 24, 2001.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. T.L. Li, our Chairman of the Board of Directors, through his beneficial
ownership of all of the outstanding shares of Luckygold, is the single largest
shareholder of the Company. Mr. Li owns approximately 40% of the outstanding
shares of QPL Holdings, a company incorporated under Bermuda law and listed on
The Hong Kong Stock Exchange. QPL Holdings is a holding company of a group of
semiconductor companies which includes QPL, QPL (U.S.) Inc. (f.k.a. Worltek
International Limited) and Talent Focus Industries Limited and formerly
included ASAT and Newport Wafer-Fab Limited. This group provides a wide range
of outsourcing services, including leadframe manufacturing, IC assembly and
testing and silicon wafer fabrication. In the leadframe manufacturing area,
QPL Holdings manufactures both etched leadframes through QPL as well as
stamped leadframes through Talent Focus Industries Limited, both based in Hong
Kong. In the IC assembly and test area, QPL Holdings acquired ASAT in Hong
Kong in 1989 and ASAT S.A. in France in 1993, and founded ASAT (U.K.) Ltd. in
the United Kingdom in 1993. In July 1999, the QPL group sold ASAT (U.K.) Ltd.
to its management team and in October 1999, the QPL group sold 50% of ASAT.
QPL (U.S.) Inc., a United States subsidiary of QPL Holdings, acts as sales
agent for both QPL and ASAT, and provides IC testing services. In the wafer
foundry area, QPL Holdings acquired Newport Wafer-Fab Limited in the United
Kingdom through a two-step acquisition in 1992 and 1995. The QPL group sold
Newport Wafer-Fab Limited to its management team in August 1999. Up until May
30, 1999, Mr. Li also owned 100% of the outstanding shares of EEMS Italia
S.p.A. ("EEMS"), which acted as our sales agent in Europe until December 1998.
Mr. Li has since sold his entire interest in EEMS.
A significant portion of our product sales has been made to companies
controlled by Mr. T.L. Li, which include QPL and other subsidiaries of QPL
Holdings and formerly included ASAT. Our product sales to the subsidiaries of
QPL Holdings totaled approximately $2.7 million in the year ended March 31,
2001, which represented approximately 3.1% of our net sales. QPL and ASAT are
our customers and may, from time to time, engage in transactions with us that
are material to our results of operations.
In the United States, during the year ended March 31, 1999, we purchased
used trays and reels collected by The SemiCycle Foundation, a Texas non-profit
corporation which is a publicly supported organization exempt from federal
income tax, as part of its recycling program. At the same time, we leased
office space and provided certain administrative and accounting services to
The SemiCycle Foundation and, in the past advanced loans to such foundation to
help meet its cash requirements. In August 1999, we terminated our
relationship with the SemiCycle Foundation.
Mr. Steve R. Deszo, our former Vice President responsible for United States
operations, serves as a director of The SemiCycle Foundation.
We review related party transactions on an ongoing basis and utilize the
Audit Committee to review potential conflicts of interest where appropriate.
Our policy is to conduct transactions with our affiliates, including the
companies in QPL Holdings, on an arms-length basis.
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on July 30, 2001.
Peak International Limited
/s/ Calvin Reed
By __________________________________
Calvin Reed
Chief Executive Officer
9