SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by registrant [X]
Filed by a party other than the registrant[ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
Heng Fai China Industries, Inc
(Name of Registrant as Specified in Its Charter)
Heng Fai China Industries, Inc
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 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:
HENG FAI CHINA INDUSTRIES, INC.
588-650 West Georgia Street
P.O. Box 11586
Vancouver, B.C. Canada V6B 4N8
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 10, 1996
To the Stockholders of Heng Fai China Industries, Inc.:
You are cordially invited to attend the Annual Meeting of Stockholders of
Heng Fai China Industries, Inc. (the "Company"), a Delaware corporation, to be
held at the Dumont Plaza Hotel, 150 East 34th Street, New York, New York 10016,
on Thursday, October 10, 1996, at 10:30 a.m. local time, for the following
purposes:
1. To elect three members to the Board of Directors of the Company to
serve until their respective successors are elected and qualified;
2. To ratify the selection by the Company of Deloitte Touche Tohmatsu
International, independent public accountants, to audit the financial
statements of the Company for the year ending December 31, 1996; and
3. To transact such other matters as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on September 10, 1996
(the "Record Date"), are entitled to notice of and to vote at the meeting.
A proxy statement and proxy are enclosed herewith. If you are unable to
attend the meeting in person you are urged to sign, date and return the enclosed
proxy promptly in the enclosed addressed envelope which requires no postage if
mailed within the United States. If you attend the meeting in person, you may
withdraw your proxy and vote your shares. Also enclosed herewith is the
Company's Annual Report on Form 10K for the fiscal year ended December 31, 1995.
By Order of the Board
of Directors
Robert H. Trapp, Secretary
Dated: September 11, 1996
PROXY STATEMENT
HENG FAI CHINA INDUSTRIES, INC.
588-650 West Georgia Street
P.O. Box 11586
Vancouver, B.C. Canada V6B 4N8
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of
proxies for use at the annual meeting (the "Annual Meeting") of stockholders of
Heng Fai China Industries, Inc. (the "Company"), to be held on Thursday, October
10, 1996, and at any adjournments thereof. The accompanying proxy is solicited
by the Board of Directors of the Company and is revocable by the stockholder by
notifying the Company's secretary at any time before it is voted, or by voting
in person at the Annual Meeting. This proxy statement and accompanying proxy
will be distributed to stockholders beginning on or about September 13, 1996.
The principal executive offices of the Company are located at 588-650 West
Georgia Street, P.O. Box 11586, Vancouver, B.C. Canada V6B 4N8, telephone (604)
685-8318.
OUTSTANDING SHARES AND VOTING RIGHTS
Only stockholders of record at the close of business on September 10, 1996,
are entitled to receive notice of, and vote at the Annual Meeting. As of
September 10, 1996, the number and class of stock outstanding and entitled to
vote at the meeting was 10,959,542 shares of common stock, par value $.01 per
share (the "Common Stock"). Each share of Common Stock is entitled to one vote
on all matters. No other class of securities will be entitled to vote at the
meeting. There are no cumulative voting rights.
The nominees receiving the highest number of votes cast by the holders of
Common Stock will be elected as the Company's directors and constitute the
entire Board of Directors of the Company. The affirmative vote of at least a
majority of the shares represented and voting at the Annual Meeting at which a
quorum is present (which shares voting affirmatively also constitute at least a
majority of the required quorum) is necessary for approval of Proposal No. 2. A
quorum is representation in person or by proxy at the Annual Meeting of a
majority of the outstanding shares of the Company.
PROPOSALS TO SHAREHOLDERS
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Each nominee to the Board of Directors will serve until the next Annual
Meeting of stockholders, or until his earlier resignation, removal from office,
death or incapacity.
Unless otherwise specified, the enclosed proxy will be voted in favor of
the election of Fai H. Chan, Robert H. Trapp and Ronald M. Lau. Information is
furnished below with respect to all nominees.
The following information with respect to the principal occupation or
employment of the nominees, the name and principal business of the corporation
or other organization in which such occupation or employment is carried on and
other affiliations and business experience during the past five years has been
furnished to the Company by the respective nominees:
FAI H. CHAN has been the president and a director of the Company since June
1994 and has served as the Company's chief executive officer since June 1995.
Since January 1995, Mr. Chan has been an executive director and director of Hua
Jian International Finance Company Limited (a member of China Huaneng Holdings).
Since June 1993, Mr. Chan has been a director of Inter-Asia Equities, Inc., a
Canadian company. Since September 1992, Mr. Chan has also been an executive
director and director of Heng Fung Holdings Co., Ltd., a public company in Hong
Kong which is listed on the Hong Kong Stock Exchange. Since March 1988, Mr. Chan
has been the chairman of the board of directors of American Pacific Bank, a bank
in Oregon, and between April 1991 and April 1993, he was the chief executive
officer of such bank.
ROBERT H. TRAPP has been has been the secretary, treasurer and director of
the Company since June 1994. Since May 1995, Mr. Trapp has been a director of
Heng Fung Holding Co., Ltd., a public company in Hong Kong which is listed on
the Hong Kong Stock Exchange. Mr. Trapp has since April 1994, been the corporate
secretary and since February 1995 has been a director of Inter-Asia Equities,
Inc., a Canadian company. Since July 1991, he has also been the Canadian
operational manager for Pacific Concord Holding (Canada) Ltd., responsible for
management, marketing and financial reporting operations of such company to
Pacific Concord Holding Ltd. of Hong Kong. Between March and June 1991, Mr.
Trapp was a securities trainee at Pacific International Securities in Vancouver,
B.C., Canada. Between September 1985 and June 1989, Mr. Trapp served as an
executive officer and a director of Inter-Asia Equities, Inc.
RONALD M. LAU has been a director of the Company since July 1995. Since
June 1995, Mr. Lau has been the financial controller of Heng Fung Holdings Co.,
Ltd., a public company in Hong Kong which is listed on the Hong Kong Stock
Exchange. Prior thereto, from August 1991 until October 1994, Mr. Lau worked as
an auditor at Deloitte Touche Tohmatsu in Hong Kong.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 1 TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" ALL THREE OF THE
ABOVE-NAMED NOMINEE DIRECTORS OF THE COMPANY.
2
INFORMATION CONCERNING BOARD MEETINGS
The Company's Board of Directors met twice during the fiscal year ended
December 31, 1995. All of the incumbent directors attended all of the meetings.
INFORMATION CONCERNING COMMITTEES OF THE BOARD
The Board of Directors has not established any committees.
3
MANAGEMENT
The current executive officers and directors of the Company are set forth
below:
Name Age Position
---- --- --------
Fai H. Chan 51 President, Chief Executive Officer, Director
Robert H. Trapp 41 Secretary, Treasurer and Director
Ronald M. Lau 27 Director
FAI H. CHAN has been the president and a director of the Company since June
1994 and has served as the Company's chief executive officer since June 1995.
Since January 1995, Mr. Chan has been an executive director and director of Hua
Jian International Finance Company Limited (a member of China Huaneng Holdings).
Since June 1993, Mr. Chan has been a director of Inter-Asia Equities, Inc., a
Canadian company. Since September 1992, Mr. Chan has also been an executive
director and director of Heng Fung Holdings Co., Ltd., a public company in Hong
Kong which is listed on the Hong Kong Stock Exchange. Since March 1988, Mr. Chan
has been the chairman of the board of directors of American Pacific Bank, a bank
in Oregon, and between April 1991 and April 1993, he was the chief executive
officer of such bank.
ROBERT H. TRAPP has been has been the secretary, treasurer and director of
the Company since June 1994. Since May 1995, Mr. Trapp has been a director of
Heng Fung Holding Co., Ltd., a public company in Hong Kong which is listed on
the Hong Kong Stock Exchange. Mr. Trapp has since April 1994, been the corporate
secretary and since February 1995 has been a director of Inter-Asia Equities,
Inc., a Canadian company. Since July 1991, he has also been the Canadian
operational manager for Pacific Concord Holding (Canada) Ltd., responsible for
management, marketing and financial reporting operations of such company to
Pacific Concord Holding Ltd. of Hong Kong. Between March and June 1991, Mr.
Trapp was a securities trainee at Pacific International Securities in Vancouver,
B.C., Canada. Between September 1985 and June 1989, Mr. Trapp served as an
executive officer and a director of Inter-Asia Equities, Inc.
RONALD M. LAU has been a director of the Company since July 1995. Since
June 1995, Mr. Lau has been the financial controller of Heng Fung Holdings Co.,
Ltd., a public company in Hong Kong which is listed on the Hong Kong Stock
Exchange. Prior thereto, from August 1991 until October 1994, Mr. Lau worked as
an auditor at Deloitte Touche Tohmatsu in Hong Kong.
4
EXECUTIVE COMPENSATION
Summary Compensation Table
The Company did not compensate the Company's chief executive officer for
services rendered to the Company during the fiscal years ended December 31,
1993, 1994 and 1995 and none of the Company's executive officers earned in
excess of $100,000 during the fiscal years ended December 31, 1993, 1994 and
1995.
Option/SAR Grants in Last Fiscal Year
There were no options granted during the fiscal year ended December 31,
1995.
Aggregate Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Options/SAR Values
No options were exercised during the fiscal year ended December 31, 1995
and there are no unexercised options as of the fiscal year ended December 31,
1995.
Employment Agreements
The Company is not a party to any employment agreements.
Compensation of Directors
Directors do not receive compensation for attendance at meetings of the
Board of Directors. All directors are entitled to reimbursement of reasonable
travel and lodging expenses related to attending meetings of the Board of
Directors.
Stock Option Plans
The Company currently has no stock option plans.
5
PERFORMANCE GRAPH
Total Shareholder Returns - Dividends Reinvested
Fiscal Year: December
Years Ending
Company\Index Name Dec 91 Dec 92 Dec 93 Dec 94 Dec 95
================================================================================
HENG FAI CHINA INDS INC 0.00 293.75 49.21 -20.21 225.00
S&P MIDCAP 400 INDEX 50.10 11.91 13.95 -3.58 30.94
CONSTRUCTION(CEMNT&AGG)-MID 13.31 -10.47 31.89 -28.43 333.09
Indexed Returns
Base
Period Return Return Return Return Return
Company/Index Name Dec 90 Dec 91 Dec 92 Dec 93 Dec 94 Dec 95
===========================================================================================
HENG FAI CHINA INDS INC 100 100.00 393.75 587.50 468.75 1523.44
S&P MIDCAP 400 INDEX 100 150.10 167.98 191.41 184.55 241.66
CONSTRUCTION(CEMNT&AGG)-MID 100 113.31 101.45 133.80 95.77 414.76
6
[The following data was represented by a graph in the printed material]
Indexed Returns
Base
Period Return Return Return Return Return
Company/Index Name Dec 90 Dec 91 Dec 92 Dec 93 Dec 94 Dec 95
===========================================================================================
HENG FAI CHINA INDS INC 100 100.00 393.75 587.50 468.75 1523.44
S&P MIDCAP 400 INDEX 100 150.10 167.98 191.41 184.55 241.66
CONSTRUCTION(CEMNT&AGG)-MID 100 113.31 101.45 133.80 95.77 414.76
7
Security Ownership of Certain Beneficial
Owners and Management
The following table sets forth, as of September 9, 1996, the record and
beneficial ownership of Common Stock of the Company by each officer and
director, all officers and directors as a group, and each person known to the
Company to own beneficially or of record five percent or more of the outstanding
shares of the Company:
Shares
Officers, Directors and Beneficially Percent of Shares
Principal Stockholders Owned(1) Beneficially Owned
Fai H. Chan 2,296,443(2) 21%
Robert H. Trapp -- *
Ronald M. Lau -- *
Keow Y. Chan 1,980,000(3) 18%
Lippo Leighton Tower
103-109 Leighton Road
Unit B, 13th Fl.
Causeway Bay
Hong Kong
Ebly Profit Limited 2,000,000 18.2%
24 Raffles Place
18-01/03 Clifford Center
Singapore
All directors, 2,296,443 21%
executive officers
as a group (3 persons)
- ----------
*Less than 1%
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares of Common Stock which such person has
the right to acquire such shares within 60 days of September 9, 1996. For
purposes of computing the percentage of outstanding shares of Common Stock
held by each person or group of persons named above, any security which
such person or persons has or have the right to acquire within such date is
deemed to be outstanding but is not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person. Except
as indicated in the footnotes to this table and pursuant to applicable
community property laws, the Company believes based on information supplied
by such persons, that the persons named in this table have sole voting and
investment power with respect to all shares of Common Stock which they
beneficially own.
(2) Includes 37,500 shares of Common Stock and 37,500 shares of Common Stock
underlying Warrants owned of record by Inter-Asia Equities, Inc.
("Inter-Asia") and 258,943 shares of Common Stock and 258,943 shares of
Common Stock underlying Warrants owned by the Excess Pension Fund, Inc.
(the "Fund"). Mr. Chan is an officer, director and stockholder of
Inter-Asia and a beneficial owner of the Fund. Mr. Chan's wife is the
president of Inter-Asia and a beneficial owner of the Fund. Excludes
1,980,000 shares of owned of record by Mr. Chan's wife, of which he
disclaims beneficial ownership. See footnote (3) below.
8
(3) Excludes 2,000,000 shares of Common Stock owned of record by Ms. Chan's
husband, 258,943 shares of Common Stock and 258,943 shares of Common Stock
underlying Warrants owned by the Fund and 37,500 shares of Common Stock and
37,500 shares of Common Stock underlying Warrants owned by Inter-Asia. Ms.
Chan is the wife of Fai H. Chan. See footnote (2) above.
9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company maintains deposits in accounts at American Pacific Bank. Fai H.
Chan (an officer, director and stockholder of the Company) is an officer of such
bank.
The Company owns 7,492,000 shares of common stock of Heng Fung Holdings
Company Limited. Fai H. Chan and Robert H. Trapp (officers, directors and
stockholders of the Company) are directors of such company.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon review of Forms 3, 4 and 5 furnished to the Company
pursuant to Rule 16a-3 of the Securities Exchange Act of 1934 (the "Exchange
Act"), it is the Company's belief that any such forms required to be filed
pursuant to Section 16(a) of the Exchange Act were timely filed, as necessary,
by the officers, directors and stockholders required to file the same.
10
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF AUDITORS
The firm of Deloitte Touche Tohmatsu International ("DTT") audited the
consolidated balance sheets of the Company and its subsidiaries for the fiscal
years ended December 31, 1995 and 1994 and the related consolidated statements
of operations, stockholders' equity (deficit), and cash flows for each of the
three fiscal years in the period ended December 31, 1995. The Board of Directors
have appointed DTT as independent auditors of the Company for the fiscal year
ending 1996, subject to ratification by the stockholders.
During the prior three years ended December 31, 1995, the Company has had
no disagreements with the accountants on matters of accounting principles or
practices, financial statement disclosures or auditing scope or procedure which,
if not resolved to their accountant's satisfaction, would have caused them to
make reference to such matters in their reports.
It is anticipated that a member of DTT will be present at the Annual
Meeting to respond to appropriate questions and will have the opportunity, if he
desires, to make a statement.
The affirmative vote of at least a majority of the shares represented and
voting at the Annual Meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required quorum) is
necessary for approval of Proposal No. 2. Under Delaware law, there are no
rights of appraisal or dissenter's rights which arise as a result of a vote to
ratify the selection of auditor's.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
STOCKHOLDERS' PROPOSALS
It is anticipated that the Company's 1997 Annual Meeting of Stockholders
will be held in October, 1997. Stockholders who seek to present proposals at the
Company's next Annual Meeting of Stockholders must submit their proposals to the
Secretary of the Company on or before April 30, 1997.
11
GENERAL
Unless contrary instructions are indicated on the proxy, all shares of
Common Stock represented by valid proxies received pursuant to this solicitation
(and not revoked before they are voted) will be voted FOR Proposal No. 2 and for
the election of all directors nominated.
The Board of Directors knows of no business other than that set forth above
to be transacted at the meeting, but if other matters requiring a vote of the
stockholders arise, the persons designated as proxies will vote the shares of
Common Stock represented by the proxies in accordance with their judgment on
such matters. If a stockholder specifies a different choice on the proxy, his or
her shares of Common Stock will be voted in accordance with the specification so
made.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WE URGE YOU TO FILL IN, SIGN
AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE PREPAID ENVELOPE PROVIDED, NO
MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
By Order of the Board of Directors,
Robert H. Trapp, Secretary
Dated: September 11, 1996
12
Attachment A
HENG FAI CHINA INDUSTRIES, INC.
Annual Meeting of Stockholders -- Thursday, October 10, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Fai H. Chan and Robert H. Trapp and each of
them, with power of substitution, as proxies to represent the undersigned at the
Annual Meeting of Stockholders to be held at the Dumont Plaza Hotel, 150 East
34th Street, New York, New York 10016, on Thursday, October 10, 1996 at 10:30
a.m. local time and at any adjournment thereof, and to vote the shares of stock
the undersigned would be entitled to vote if personally present, as indicted on
the reverse side hereof.
The shares represented by the proxy will be voted as directed. If no
contrary instruction is given, the shares will be voted FOR Proposal No. 2 and
for the election of Fai H. Chan, Robert H. Trapp and Ronald M. Lau as Directors.
Please mark boxes in blue or black ink.
1. Proposal No. 1 - Election of Directors.
Nominees: Fai H. Chan, Robert H. Trapp and Ronald M. Lau.
AUTHORITY
FOR withheld
all as to all
nominees nominees
[ ] [ ]
For, except authority withheld as to the following nominee(s):
___________________________________________________________________
2. Proposal No. 2 for ratification of the selection of Deloitte Touche
Tohmatsu International as the independent auditors of the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Please date, sign as name appears at left, and return promptly. If the stock is
registered in the name of two or more persons, each should sign. When signing as
Corporate Officer, Partner, Executor, Administrator, Trustee, or Guardian,
please give full title. Please note any change in your address alongside the
address as it appears in the Proxy.
Dated:_____________
___________________________________
(Signature)
___________________________________
(Print Name)
SIGN, DATE AND RETURN PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.