EURO TECH HOLDINGS COMPANY LIMITED
18/F Gee Chang Hong Centre
65 Wong Chuk Hang Road
Hong Kong
July 23, 2002
Dear Shareholder:
You are cordially invited to attend the annual meeting of
shareholders of Euro Tech Holdings Company Limited which will be held
on August 20, 2002 at 4:00 p.m., local time, at Luk Kwok Hotel, 72
Gloucester Road, Wanchai, Hong Kong.
Only shareholders of record at 5:00 p.m. (New York time) on July
23, 2002 can vote at this meeting or any adjournments that may take
place.
At the meeting, we will be asking you to re-elect seven persons
and elect a new person to serve on the Company's Board of Directors,
approve the Company's 2002 Officers' and Directors' Stock Option and
Incentive Plan, and ratify the retention of the Company's auditors for
the fiscal year to end December 31, 2002.
In addition, you will be asked to consider and vote upon a
proposal to adjourn the annual meeting if the Company's management
should determine in its sole discretion, at the time of the annual
meeting, that an adjournment is necessary to enable it to solicit
additional proxies to secure a quorum or the approval of any of the
matters identified in the notice of meeting included with this proxy
statement.
The Board of Directors recommends a vote "for" the re-election of
its seven directors and the election of a new director, "for" approval
of the new stock option plan, "for" the ratification of the Company's
auditors, and "for" the proposal to adjourn the annual meeting in the
circumstances described above.
Included with this letter are an attached notice of meeting and
proxy statement, as well as a proxy form and copy of the Company's
annual report on Form 20F for its fiscal year ended December 31, 2001
(the "2001 Fiscal Year"), as filed with the Securities and Exchange
Commission.
Your vote is important. Whether or not you plan to attend the
annual meeting and regardless of the size of your holdings, we
encourage you to sign, date, and mail the enclosed proxy form in the
envelope provided. Your right to vote in person at the meeting is not
affected by returning the proxy form.
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On behalf of the Board of Directors, officers and employees of
Euro Tech Holdings Company Limited, I would like to thank you for your
continued interest and support.
Sincerely,
T.C. Leung
Chairman of the Board and Chief
Executive Officer
2
EURO TECH HOLDINGS COMPANY LIMITED
18/F Gee Chang Hong Centre
65 Wong Chuk Hang Road
Hong Kong
July 23, 2002
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 20, 2002
To the Shareholders of Euro Tech Holdings Company Limited:
Notice is hereby given that the annual meeting of shareholders of Euro
Tech Holdings Company Limited (the "Company") will be held at the Luk
Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on August 20, 2002
at 4:00 p.m., local time. The purpose of the meeting is to:
1. elect eight persons to the Company's Board of Directors
until the next annual meeting of shareholders or until their
respective successors are duly elected and qualified as provided in
the Company's Memorandum and Articles of Association;
2. consider and vote upon the adoption of the 2002 Officers'
and Directors' Stock Option and Incentive Plan;
3. confirm and ratify the retention of Pricewaterhouse Coopers,
Hong Kong, as the Company's independent auditors for the fiscal year
to end December 31, 2002;
4. consider and vote upon a proposal to adjourn the annual
meeting if the Company's management should determine in its sole
discretion, at the time of the annual meeting, that an adjournment is
necessary to enable it to solicit additional proxies to secure a
quorum or the approval of any of the matters identified in this notice
of meeting; and
5. transact any other business properly before the annual
meeting.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY FORM AND RETURN
IT PROMPTLY TO THE COMPANY IN THE ENVELOPE PROVIDED. RETURNING THE
PROXY FORM WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND
THE MEETING.
By Order of the Board of Directors
Jerry Wong, Secretary
1
TABLE OF CONTENTS
-----------------
QUESTIONS AND ANSWERS ABOUT THE PROXY STATEMENT AND ANNUAL MEETING..... 4
PROPOSAL 1............................................................. 8
- ----------
ELECTION OF DIRECTORS.................................................. 8
VOTE REQUIREMENT.................................................. 8
THE DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY............... 8
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT IS
NOT REQUIRED.................................................... 9
PROPOSAL 2............................................................. 10
- ----------
APPROVAL OF 2002 OFFICERS' AND DIRECTORS' STOCK OPTION AND
INCENTIVE PLAN....................................................... 10
VOTE REQUIREMENT.................................................. 10
ADMINISTRATION.................................................... 10
SHARES SUBJECT TO THE PLAN........................................ 11
ELIGIBILITY....................................................... 11
GRANT OF OPTIONS.................................................. 11
OPTION PRICE...................................................... 12
EXERCISABILITY OF OPTIONS......................................... 12
EXPIRATION OF OPTIONS; EFFECT OF TERMINATION OF
EMPLOYMENT OR SERVICE........................................... 12
PAYMENT OF EXERCISE PRICE FOR OPTIONS............................. 13
TRANSFER OF OPTIONS............................................... 13
INDEMNIFICATION OF THE COMMITTEE.................................. 14
AMENDMENT AND DURATION............................................ 14
NEW PLAN BENEFITS................................................. 14
PROPOSAL 3............................................................. 14
- ----------
APPROVAL OF AUDITORS................................................... 14
PROPOSAL 4............................................................. 15
- ----------
ADJOURNMENT OF ANNUAL MEETING.......................................... 15
SHAREHOLDER PROPOSALS AND NOMINATIONS.................................. 16
FINANCIAL STATEMENTS................................................... 16
OTHER MATTERS.......................................................... 16
APPENDIX
--------
Appendix A.......................... 2002 Officers' and Directors' Stock
Option and Incentive Plan
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EUROTECH HOLDINGS COMPANY LIMITED
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 20, 2002
July 23, 2002
The Board of Directors is soliciting proxies for this annual meeting
of shareholders. This proxy statement contains important information
for you to consider when deciding how to vote on the matters brought
before the meeting. PLEASE READ IT CAREFULLY.
The Board has set July 23, 2002 as the record date for the meeting.
Shareholders who owned the Company's Ordinary Shares on that date are
entitled to attend and vote at the meeting, with each share entitled
to one vote. There were 3,064,151 Ordinary Shares of Company's issued
and outstanding on June 30, 2002.
Voting materials, which include the proxy statement, proxy form, and
the Company's 2001 annual report on Form 20F, are being mailed to
shareholders on or about July 23, 2002.
In this proxy statement:
- "we" and the "Company" mean Euro Tech Holdings Company Limited.
- "2002 Officers' and Directors' Plan" means the 2002 Officers'
and Directors' Stock Option and Incentive Plan.
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QUESTIONS AND ANSWERS ABOUT THE PROXY STATEMENT AND ANNUAL MEETING
Q: WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY FORM?
A: You are receiving a proxy statement and proxy form from us
because you own Ordinary Shares of Euro Tech Holdings Company
Limited. This proxy statement describes issues on which we would
like you, as a shareholder, to vote. It also gives you
information on these issues so that you can make an informed
decision.
When you sign the proxy form, you appoint T.C. Leung and Jerry
Wong as your representatives at the meeting. T.C. Leung and Jerry
Wong will vote your shares, as you have instructed them in the
proxy form, at the meeting. This way, your shares will be voted
whether or not you attend the annual meeting. Even if you plan to
attend the meeting, it is a good idea to complete, sign and
return your proxy form in advance of the meeting just in case
your plans change.
If you have signed and returned the proxy form and an issue comes
up for a vote at the meeting that is not identified on the proxy
form, T.C. Leung and Jerry Wong will vote your shares, under your
proxy, in accordance with their best judgment.
Q: WHAT MATTERS WILL BE VOTED ON AT THE MEETING?
A: You are being asked to vote on the re-election of seven members
and the election of a new member to the Company's Board of
Directors, adoption of the 2002 Officers' and Directors' Plan and
ratification of the Company's appointment of its auditors and a
proposal to adjourn the annual meeting under certain
circumstances in the discretion of the Company's management. We
have described all of these matters more fully in the attached
proxy statement.
Q: HOW DO I VOTE?
A: You may vote either by mail or in person at the annual meeting.
To vote by mail, complete and sign the enclosed proxy form and
mail it in the enclosed, prepaid addressed envelope. If you mark
your proxy form to indicate how you want your shares voted on
each proposal, your shares will be voted as you instruct.
If you sign and return your proxy form but do not mark the form
to provide voting instructions, the shares represented by your
proxy form will be voted "for" the election of eight persons as
the Company's directors, "for" the 2002 Officers' and Directors'
Plan, "for" the ratification of the Company's auditors and "for"
the proposal to adjourn the annual meeting under certain
circumstances in the discretion of the Company's management.
If you want to vote in person, please come to the meeting. We
will be passing out written ballots to anyone who wants to vote
at the meeting. Please note, however, that if your shares are
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held in the name of your broker (or in what is usually referred
to as "street name"), you will need to arrange to obtain a proxy
from your broker in order to vote in person at the meeting.
Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY FORM?
A: It means that you have multiple holdings reflected in our stock
transfer records and/or in accounts with stockbrokers. Please
sign and return ALL proxy forms to ensure that all your shares
are voted.
Q: IF I HOLD SHARES IN THE NAME OF A BROKER, WHO VOTES MY SHARES?
A: We provide each brokerage firm listed in our records as an owner
of our ordinary shares with a sufficient number of copies of this
proxy statement and annual report so that the brokerage firm can
forward copies to the actual owners of the shares. If you
received this proxy statement from your broker, your broker
should have provided you with instructions for giving your broker
directions as to how to vote your shares. It will then be your
broker's responsibility to vote your shares for you in the manner
you direct.
Under the rules of various national and regional securities
exchanges, brokers may generally vote on routine matters, such as
the election of directors, a proposal to adjourn a meeting in the
discretion of the Company's management and ratification of the
appointment of auditors, but cannot vote on non-routine matters,
such as the adoption of a stock option plan unless they have
received voting instructions from the person for whom they are
holding shares. Thus, if you do not give your broker instructions
as to how to vote your shares, your broker will most likely be
able to vote on the proposals to elect directors, ratify the
appointment of our auditors and to adjourn the annual meeting in
the discretion of the Company's management but will not have
discretionary authority to cast a vote-whether "for" or "against"
or "abstain"-on the proposed adoption of 2002 Officers' and
Directors' Plan. If a broker does not receive instructions from
you on how to vote particular shares on the proposed adoption of
the 2002 Officers' and Directors' Plan and your broker does not
have discretionary authority to vote on these matters, your
broker will return the proxy form to us, indicating that he or
she does not have the authority to vote on this matter. This is
generally referred to as a "broker non-vote" and will affect the
outcome of the voting as described below, under "How Many Votes
Are Needed For Approval Of Each Proposal?"
We encourage you to provide directions to your broker as to how
you want he or she to vote your shares on each of the matters to
be brought before the annual meeting. You should do this by very
carefully following the instructions your broker gives you
concerning your broker's procedures. This ensures that your
shares will be voted at the meeting.
5
Q: WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY?
A: If you hold your shares in your own name, you may revoke your
proxy and change your vote at any time before the polls close at
the meeting. You may do this by:
-- signing another proxy with a later date and returning that
proxy to the Company,
-- sending notice to the Company that you are revoking your
proxy, or
-- voting in person at the annual meeting.
You should send any later dated proxy or notice of revocation to:
Euro Tech Holdings Company Limited, c/o Euro Tech (Far East)
Ltd., 18/F Gee Chang Hong Centre, 65 Wong Chuk Hang Road, Hong
Kong, Attention: Jerry Wong, Secretary.
If you hold your shares in the name of your broker, you will need
to contact your broker to revoke your proxy.
Q: HOW MANY VOTES DO WE NEED TO HOLD THE MEETING?
A: A majority of the shares that were outstanding and entitled to
vote as of the record date must be present in person or by proxy
at the meeting in order to hold the meeting and conduct business.
This is called a quorum.
Shares are counted as present at the meeting if the shareholder
either:
-- is present and votes in person at the meeting, or
-- has properly submitted a signed proxy form or other proxy.
Abstentions will be counted as present at the meeting. If a
brokerage firm indicates that it does not have authority to vote
any of the shares held in its name on a particular proposal, then
those shares will not be considered "entitled to vote" and will
not be counted as present for purposes of determining whether
there is a quorum for consideration of that proposal.
Q: WHAT OPTIONS DO I HAVE IN VOTING ON EACH OF THE PROPOSALS?
A: You may vote "for," "against," or "abstain" on each of the
proposals or "withhold authority" as to the election of
directors.
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Q: HOW MANY VOTES ARE NEEDED FOR APPROVAL OF EACH PROPOSAL?
A: For each director nominee to be elected to the Board of
Directors, each director nominee must receive the affirmative
vote of a simple majority of the votes of the shares entitled to
vote, were voted and did not withhold authority.
The 2002 Officers' and Directors' Plan must receive the
affirmative vote of a simple majority of the shares entitled to
vote, were voted and did not abstain.
In order for the engagement of the Company's auditors to be
approved the affirmative vote of a simple majority of the votes
of the shares entitled to vote, were voted and not abstained must
be obtained.
An abstention will have the same effect as a vote "against."
Broker non-votes will not be counted as entitled to vote and will
thus not count for purposes of determining whether or not a
quorum is present on the matter. So long as a quorum is present,
broker non-votes will have no effect on the outcome of a vote.
Q: HOW ARE VOTES COUNTED?
A: Voting results will be tabulated and certified by our transfer
agent, American Stock Transfer & Trust Company.
Q: WHERE DO I FIND THE VOTING RESULTS OF THE MEETING?
A: We will announce preliminary voting results at the meeting. We
will file a Report on Form 6-K to announce the results. We will
file that report with the Securities and Exchange Commission, and
you can get a copy by contacting the Securities and Exchange
Commission or through the SEC's EDGAR system on its home page at
www.sec.gov.
-----------
Q: WHO BEARS THE COST OF SOLICITING PROXIES?
A: The Company will bear the cost of soliciting proxies. In addition
to solicitations by mail, officers, directors, or employees of
the Company or its subsidiaries may solicit proxies in person or
by telephone. These persons will not receive any special or
additional compensation for soliciting proxies. The Company also
reimburses brokerage houses and other custodians, nominees and
fiduciaries for their reasonable out-of-pocket expenses for
forwarding proxy and solicitation materials to shareholders.
7
PROPOSAL 1
----------
ELECTION OF DIRECTORS
At the annual meeting, eight directors will be elected to serve
until the next annual meeting of Shareholders or until each of their
respective successors has been duly elected and qualified as provided in
the Memorandum and Articles of Association.
Unless otherwise indicated on the proxy, votes pursuant to the
accompanying proxy will be cast for the election of the nominees on the
proxy, provided that, if any of the nominees named below shall become
unavailable to serve as a director prior to the meeting, the shares
represented by valid proxies shall be voted for the election of such
other person as the Board may recommend in his or her place, or the
number of directors to be elected shall be decreased. The Board of
Directors has no reason to believe that any nominee will be unable to
serve.
VOTE REQUIREMENT
T.C. Leung, Jerry Wong, Nancy Wong, C.P. Kwan, Alex Sham, Y.K.
Liang, Ho Choi Chiu and Wang Xu Hong, have been nominated for election
to the Board of Directors and each has consented to serve as such, if
elected. Except for Wang Xu Hong, each of the nominees who has been
nominated for election as a director commencing at the conclusion of the
annual meeting, is currently a director. In order to be elected, each
such nominee must receive the affirmative vote of a simple majority of
the votes of the shares entitled to vote thereon and were voted and not
withholding authority.
The enclosed proxy gives shareholders the option to vote for,
against or withhold authority to vote for all director nominees as a
group.
THE DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The Current Directors and Executive Officers of the Company are as
follows:
Name Age Position
---- --- --------
T.C. Leung 58 Chairman of the Board of Directors
and Chief Executive Officer
Jerry Wong 43 Director and Chief Financial
Officer
Nancy Wong 53 Director
C.P. Kwan 43 Director
Alex Sham 38 Director
Y.K. Liang 72 Director
Ho Choi Chiu 70 Director
8
Set forth below is a brief background of Wang Xu Hong based upon
the information supplied by him:
Director Nominee. Wang Xu Hong, 35, has been the East China sales
manager of Euro Tech (Far East) Limited, a wholly-owned subsidiary of
the Company, since mid 1994. From mid 1997 until joining Euro Tech, he
was employed as a Research Associate and Lecturer at the Analysis and
Research Center of Shanghai's Tongji University. Wang Xu Hong received
Bachelor's and Master's degrees in Science from Fudan University in
1984 and 1988, respectively.
THE FOLLOWING INFORMATION MAY BE FOUND IN THE INDICATED SECTIONS
OF THE COMPANY'S 2001 ANNUAL REPORT ON FORM 20-F WHICH IS BEING MAILED
TO OUR SHAREHOLDERS ON OR ABOUT THE DATE OF THIS PROXY STATEMENT.
TYPE OF INFORMATION FORM 20-F REFERENCE
- ------------------- -------------------
Information Concerning Item 6A. Directors, Senior
the Directors and Management, and Employees and
Executive Officers of Item 6C. Board Practices
the Company
Executive Compensation Item 6B. Compensation
Compensation of Directors Item 6B. Compensation
Pension Plan Item 6B. Compensation
Certain Relationships Item 5E. Significant Related
and Related Transactions Party Transactions. Item 7B.
Related Party Transactions
Voting Securities Item 7A. Major Shareholders
Item 10A. Share Capital,
and Principal Shareholders
Item 10B. Memorandum and
Articles of Association.
Option Plans Item 6B. Compensation
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT IS NOT REQUIRED
As a consequence of the Company being a foreign issuer of
securities, directors, officers and beneficial owners of more than 10
percent of the outstanding Ordinary Shares of the Company are not
required to file with the SEC reports on Forms 3, 4 and 5 reflecting
certain changes in their beneficial ownership of the Company's
Ordinary Shares.
9
PROPOSAL 2
----------
APPROVAL OF 2002 OFFICERS' AND DIRECTORS' STOCK OPTION
AND INCENTIVE PLAN
The Board of Directors has approved the 2002 Officers' and
Directors' Stock Option Plan ("2002 Officers' and Directors' Plan").
The 2002 Officers' and Directors' Plan provides for the grant of
options to acquire the Company's Ordinary Shares to the Company's
executive officers and directors and persons holding the same
positions with the Company's subsidiaries. The purpose of the plan is
to enable the Company and its subsidiaries to attract, retain and
reward officers and directors by offering them an opportunity to have
a greater proprietary interest in and closer identity with the Company
and its financial success.
400,000 Ordinary Shares will be authorized for issuance under the
2002 Officers' and Directors' Plan.
A copy of the 2002 Officers' and Directors' Plan is attached as
Appendix A to this proxy statement. The following discussion of the
material features and provisions of the 2002 Officers' and Directors'
Plan is qualified in its entirety by reference to Appendix A.
VOTE REQUIREMENT
The affirmative vote of a simple majority of the votes cast by
the holders of the Ordinary Shares present, in person or by proxy, and
entitled to vote at the annual meeting, were voted and did not abstain
is required in order to approve the 2002 Officers' and Directors'
Plan. Abstentions will be counted in determining the total number of
votes cast on the proposal at the annual meeting. As a result, an
abstention will have the same effect as a vote "against" the approval
of the 2002 Officers' and Directors' Plan. Broker non-votes will not
be counted as entitled to vote and will thus not count for purposes of
determining whether or not a quorum is present. Provided that a quorum
is present, broker non-votes will have no effect on the outcome of the
vote on the 2002 Officers' and Directors' Plan.
ADMINISTRATION
Under the terms of the 2002 Officers' and Directors' Plan, the
Board of Directors or a committee (the "Committee") appointed by the
Board of Directors will administer the 2002 Officers' and Directors'
Plan. The Board of Directors or the Committee has the authority to
interpret the 2002 Officers' and Directors' Plan, prescribe, amend and
rescind rules and regulations relating to it, determine the terms and
provisions of options granted under the 2002 Officers' and Directors'
Plan (which need not be identical), and make other determinations as
it deems necessary and advisable for the administration of the 2002
Officers' and Directors' Plan.
10
Any decision by the Committee to grant an award under the 2002
Officers' and Directors' Plan are subject to ratification by the Board
of Directors of the Company. The Company will also require the Board
to ratify any decision that affects the terms or conditions of options
awarded to elected officers or directors of the Company or its
subsidiaries.
SHARES SUBJECT TO THE PLAN
If the 2002 Officers' and Directors' Plan is adopted, 400,000
Ordinary Shares will be authorized for issuance under the 2002
Officers' and Directors' Plan. Ordinary Shares issued upon the
exercise of options granted under the 2002 Officers' and Directors'
Plan may be either authorized but unissued shares or shares reacquired
by the Company and held in treasury. The grant of an option will
reduce the number of Ordinary Shares available for grant under the
2002 Officers' and Directors' Plan by the number of Ordinary Shares
subject to such option. If an option granted under the 2002 Officers'
and Directors' Plan expires unexercised, terminates or lapses, any
Ordinary Shares subject to such option will again be available for
grant.
In the event that the Ordinary Shares of the Company are
subdivided or consolidated as a result of a reorganization, stock
split, payment of a stock dividend, reverse stock split or other
change in the Company's capitalization, the Committee or the Board of
Directors has the authority to make appropriate adjustments in the
Ordinary Shares available for issuance under the 2002 Officers' and
Directors' Plan, the number of shares subject to options that may have
been or may be awarded to any participant in any 12-month period, the
price, number of Ordinary Shares or kind of securities subject to
outstanding options, or the terms of such options in order to prevent
dilution or enlargement of rights under the options. In addition, the
Board may also change the kind of securities available for grant under
the 2002 Officers' and Directors' Plan to reflect any such corporate
changes.
ELIGIBILITY
Only executive officers and directors of the Company and its
subsidiaries will be eligible to participate in the 2002 Officers' and
Directors' Plan.
As of June 30, 2002, a total of six executive officers and
directors of the Company and its subsidiaries will be eligible to
participate in the 2002 Officers' and Directors' Plan.
GRANT OF OPTIONS
The Committee or the Board of Directors will determine the number
of shares of common stock subject to options to be granted.
11
OPTION PRICE
The purchase price per share of the Ordinary Shares to be paid
upon the exercise of an option will be at least 100% of the fair
market value of an Ordinary Share on the date on which the option was
granted.
Under the 2002 Officers' and Directors' Plan, if the Ordinary
Shares are principally traded on a national securities exchange or the
Nasdaq Stock Market's National Market or Small Cap Market at the time
of grant, the Company is required to use, as fair market value, the
average of the closing prices of the Ordinary Shares for the ten
consecutive trading days immediately before the date of grant. If the
Ordinary Shares are traded on a national securities exchange or the
Nasdaq Stock Market's National Market or Small Cap Market, but no
closing prices are reported for such ten-day period, or if the
Ordinary Shares are principally traded in the over-the-counter market,
the Company is required to use, as fair market value, the average of
the mean between the bid and asked prices reported for the Company's
Ordinary Shares at the close of trading during such ten-day period
before the date of grant. If the Ordinary Shares are traded neither
on a national securities exchange, the Nasdaq Stock Market's National
Market, Small Cap Market nor in the over-the-counter market or if bid
and asked prices are otherwise not available, the fair market value of
the Ordinary Shares on the date of grant will be determined in good
faith by the Committee or the Board of Directors, as the case may be.
EXERCISABILITY OF OPTIONS
The Board of Directors or the Committee will determine, at the
time of grant, when each option granted under the 2002 Officers' and
Directors' Plan will become exercisable. Notwithstanding the
foregoing, all options held by a non-employee director of the Company
or its subsidiaries will become immediately exercisable, whether or
not exercisable at the time, upon the death or disability of the non-
employee director. See "-Expiration of Options; Effect of Termination
of Employment or Service."
EXPIRATION OF OPTIONS; EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICE
No option will be exercisable more than ten years from the date
the option is granted.
Death or Disability. If a participant in the 2002 Officers' and
Directors' Plan ceases to be an employee or director of the Company or
its subsidiaries due to death or disability (as determined by the
Board or Committee), the participant or his or her beneficiary or
permitted transferee, as the case may be, will be permitted to
exercise any options held by the participant on the date of
termination of employment or service on the Board, whether or not
exercisable as of such date, for a period of 12 months following such
date, but in no event later than the expiration date of the options.
Termination by the Company Without Cause. If the Company or any
of its subsidiaries terminates a participant's employment with, or
service on the Board of the Company or its subsidiaries without cause,
the participant will be permitted to exercise any options that were
12
exercisable upon the date of termination of employment or service for
a period of 90 days following such date, but in no event later than
the expiration date of the options.
Termination for Cause; Voluntary Resignation. If (1) the Company
or any of its subsidiaries terminates a participant's employment with,
or service on the Board of the Company or its subsidiaries for cause,
or (2) the participant voluntarily resigns all employment with, or
service on the Board of the Company or its subsidiaries, all options
whether or not exercisable at the date of termination of employment or
service, will be null and void and will terminate. Termination for
cause includes termination for willful misconduct, willful and
substantial non-performance of duty, incompetence, breach of trust,
personal dishonesty, conviction of any felony, and similar reasons.
PAYMENT OF EXERCISE PRICE FOR OPTIONS
Under the 2002 Officers' and Directors' Plan, payment for shares
purchased upon exercise of an option may be made by any of the
following methods, subject to certain requirements: (1) in cash, paid
by either the option holder or a broker to whom the option has
tendered the option; (2) in Ordinary Shares of the Company, delivered
to the Company and valued at the fair market value of such shares on
the date of exercise, provided that such shares were held by the
option holder for not less than six months prior to the date of
exercise of the option; (3) by any other medium of payment that the
Board or Committee has authorized at the time of grant (other than the
withholding of shares issuable upon the exercise of options); or (4)
by any combination of the preceding methods.
TRANSFER OF OPTIONS
Under the 2002 Officers' and Directors' Plan, an optionee may not
be sold, assigned or otherwise transferred except to:
-- the spouse or lineal descendant of a 2002 Officers' and
Directors' Plan participant;
-- the trustee of a trust for the primary benefit of a 2002
Officers' and Directors' Plan participant's spouse or
lineal descendant;
-- a partnership of which a 2002 Officers' and Directors' Plan
participant's and lineal descendants are the only partners;
or
-- a charitable organization.
These assignments will only be permitted if the assigning
optionee does not receive any compensation in connection with the
assignment and the assignment is expressly approved by the Board or
Committee, as the case may be.
13
INDEMNIFICATION OF THE COMMITTEE
The Company will indemnify the members of any Committee and its
delegates against (1) reasonable expenses incurred in connection with
the defense of any action, suit or proceeding to which they may be a
party by reason of any action taken or failure to act in connection
with the 2002 Officers' and Directors' Plan, and (2) all amounts paid
by them in settlement of or satisfaction of a judgment entered in any
such action, suit or proceeding, except in cases where such a person
is adjudged liable for gross negligence or gross misconduct in the
performance of his or her duties.
AMENDMENT AND DURATION
The Board may terminate, suspend, or amend the 2002 Officers' and
Directors' Plan at any time without the authorization of shareholders
to the extent allowed by law or the rules of any applicable national
securities exchange or other market on which the Company's shares are
then listed or quoted.
Unless required by law, no termination, suspension, or amendment
of the 2002 Officers' and Directors' Plan may adversely affect options
outstanding under the 2002 Officers' and Directors' Plan, without the
consent of the owners of the options.
NEW PLAN BENEFITS
The Board of Directors has not proposed any option grants to be
awarded if the 2002 Officers' and Directors' Plan is approved by the
shareholders. As a result, benefits under the 2002 Officers' and
Directors' Plan in 2002 or thereafter are not determinable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
2002 OFFICERS' AND DIRECTORS' PLAN. UNLESS OTHERWISE DIRECTED IN THE
PROXY, THE PERSONS NAMED IN THE ACCOMPANYING PROXY INTEND TO VOTE THE
PROXY "FOR" PROPOSAL 2.
PROPOSAL 3
----------
APPROVAL OF AUDITORS
The Board of Directors has selected Pricewaterhouse Coopers, Hong
Kong, a certified public accounting firm, as independent auditors of
the Company's financial statements for its fiscal year 2002 to end
December 31, 2002. A representative of Pricewaterhouse Coopers, Hong
Kong is expected to be present at the annual meeting and will have an
opportunity to make a statement if he desires to do so. The
representative is expected to be available to respond to appropriate
questions.
The members of the Board of Directors recommend that the
shareholders vote "for" the proposal to approve Pricewaterhouse
Coopers, Hong Kong as the Company's auditors for its fiscal year
ending December 31, 2002. In order to be so approved, Pricewaterhouse
Coopers, Hong Kong must receive the affirmative vote of a simple
majority of the votes of the shares entitled to vote thereon were
14
voted and did not abstain. Broker non-votes will not be counted as
entitled to vote and thus not count for purposes of determining
whether or not a quorum is present on this matter. So long as a quorum
is present, broker non-votes will have no effect on the outcome of the
vote. All proxies will be voted "for" approval of Pricewaterhouse
Coopers, Hong Kong, as the Company's auditors for its fiscal year
ending December 31, 2002, unless a shareholder specified to the
contrary on such shareholder's proxy.
PROPOSAL 4
----------
ADJOURNMENT OF ANNUAL MEETING
In the event that the number of shares present, in a person or by
proxy, at the annual meeting is insufficient to constitute a quorum or
to approve any of the matters identified in the notice of meeting for
the annual meeting, the Board of Directors may decide to adjourn the
annual meeting to permit further solicitation of proxies. If the
annual meeting is adjourned, no further notice of the time and place
of the adjourned meeting is required to be given to the Company's
shareholders other than an announcement of such time and place at the
annual meeting; provided, however, that if the date of any adjourned
meeting is more than 30 days after the date for which the meeting was
originally noticed, or if a new record date is fixed for the adjourned
meeting, written notice of the place, date, and time of the adjourned
meeting will be given.
If the annual meeting is postponed or adjourned, at any
subsequent reconvening of the annual meeting, all proxies will be
voted in the same manner as such proxies would have been voted at the
original convening of the annual meeting (except for any proxies which
have theretofore effectively been revoked or withdrawn). In the event
that proxies are voted to adjourn the annual meeting, the persons
named in the enclosed proxy form will not vote the shares represented
by such proxies for or against any proposal introduced by management
at any adjournment of the meeting, other than the proposals identified
in the notice of meeting included with this proxy statement, without
first resoliciting proxies to vote on such proposals.
The Board of Directors recommends a vote "for" the proposal to
adjourn the meeting. The affirmative vote of a simple majority of the
vote of the shares entitled to vote, were voted and did not abstain is
required to approve this proposal. Broker non-votes will not be
counted as entitled to vote and thus not count for purposes of
determining whether or not a quorum is present on this matter. So long
as a quorum is present, broker non-votes will have no effect on the
outcome of the vote. All proxies will be voted "for" approval of this
proposal unless a shareholder specifies to the contrary on such
shareholder's proxy.
In order to allow the Company's management to vote proxies
received by the Company at the time of the annual meeting in favor of
such an adjournment under the circumstances described above, the
Company has submitted the question of adjournment as a separate matter
for the consideration and vote of the shareholders.
15
SHAREHOLDER PROPOSALS AND NOMINATIONS
Any shareholder proposals intended to be considered for
presentation at the 2003 annual meeting and for inclusion in the 2003
proxy statement must be made in writing and received by the Corporate
Secretary at the Company's principal executive offices by April 1,
2003. The Company will consider only proposals it deems lawful and
reasonable. Shareholders are urged to review all applicable laws,
rules and, if questions arise, consult their own legal counsel before
submitting a proposal to the Company.
Recommendations by shareholders for directors to be nominated at
the 2003 annual meeting must be made in writing, with sufficient
biographical and other relevant information such that an informed
judgment as to the proposed nominee's qualifications can be made and
be accompanied by a notarized written consent to be named in the Proxy
Statement, if nominated, and to serve as a director, if elected,
executed by the proposed nominee. Recommendations received in proper
order by the Corporate Secretary at the Company's principal executive
office at least four months prior to the 2003 annual meeting will be
referred to, and considered by, the Company's Board of Directors. No
shareholder recommendations were received before the 2002 annual
meeting.
FINANCIAL STATEMENTS
The consolidated financial statements of the Company and its
subsidiaries are contained in the Company's Annual Report on Form 20-F
which is being delivered to you with this Proxy Statement.
OTHER MATTERS
The Board of Directors is not currently aware of any other matter
to be transacted at the annual meeting.
16
APPENDIX A
EURO TECH HOLDINGS COMPANY LIMITED
2002 OFFICERS' AND DIRECTORS'
STOCK OPTION AND INCENTIVE PLAN
1. Purpose
Euro Tech Holdings Company Limited, a British Virgin Islands
corporation ("ETHC") hereby establishes the Euro Tech Holdings Company
Limited 2002 Officers' and Directors' Stock Option and Incentive Plan
(the "Plan"). The purpose of the 2002 Officers' and Directors' Plan is
to enable ETHC and its subsidiaries to attract, retain, and reward
Officers and Directors of ETHC and its subsidiaries (references
hereinafter to "Board" mean the Board of Directors of ETHC and any
subsidiary of ETHC, as the context dictates, unless otherwise
indicated), by offering them an opportunity to have a proprietary
interest in and closer identity with ETHC and its subsidiaries and
with their financial success. Proceeds received by ETHC from shares of
Ordinary Shares acquired pursuant to Options granted under the Plan
shall be used for general corporate purposes.
2. Administration
This Plan shall be administered by the Board or a committee
("Committee") appointed by the Board. Except as otherwise provided in
this Plan, the Board or the Committee may interpret this Plan,
prescribe, amend and rescind rules and regulations relating to it,
determine the terms and provisions of options granted under this Plan
(which need not be identical), and make such other determinations as
it deems necessary and advisable for the administration of this Plan.
A majority of the Committee members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing, and signed
by all of the members, shall be fully as effective as if it had been
made by a majority vote at a meeting duly called and held. The
Committee shall also have express authorization to hold Committee
meetings by means of conference telephone, or similar communications
equipment, by which all persons participating in the meeting can hear
each other. The decisions of the Committee under this Plan shall be
conclusive and binding. No member of the Board or the Committee, shall
be liable for any action taken or determination made hereunder in good
faith. Service on the Committee shall constitute service as a director
of ETHC so that the members of the Committee shall be entitled to
indemnification and reimbursement as directors of ETHC pursuant to its
Memorandum and Articles of Association. If this Plan is administered
by the Board, the Board shall administer this Plan as if it were the
Committee having the authority hereunder.
Appendix - Pg. 1
3. Eligibility
Officers and Directors who have been selected to receive an
Option shall participate in this Plan and shall be collectively
referred to as "Participants". The Board or the Committee, as
applicable, shall determine, within the limits of the express
provisions of this Plan, those Participants to whom, and the time or
times at which, Options shall be granted. The Board or the Committee,
as applicable, shall also determine, with respect to Options granted
to Participants, the number of Ordinary Shares to be subject to each
such Option; the duration of each Option; the exercise price under
each Option; the time or times within which (during the term of the
Option) all or portions of each Option may be exercised; whether cash,
Ordinary Shares, or other property may be accepted in full or partial
payment upon exercise of an Option; and any other terms and conditions
of such Options. In making such determinations, the Board or the
Committee, as applicable, may take into account the nature of the
services rendered by the Participant, his or her present and potential
contributions to ETHC's success and such other factors as the Board or
the Committee, as applicable, in its discretion shall deem relevant.
4. Ordinary Shares
The total number of shares of Ordinary Shares that may be subject
to Options under this Plan shall be 400,000. Such total number of
shares shall be adjusted in accordance with the provisions of Section
9 hereof. Such shares may be either authorized but unissued shares or
reacquired shares. In the event that any Option granted under this
Plan expires unexercised or is terminated, surrendered, forfeited,
canceled or reacquired without being exercised, in whole or in part,
for any reason, then the number of Ordinary Shares theretofore subject
to such Option, or the unexercised, terminated, surrendered,
forfeited, canceled or reacquired portion thereof, shall be added to
the remaining number of shares of Ordinary Shares that may be made
subject to Options granted under this Plan. Such Options include
Options to former holders of such Options, upon such terms and
conditions as the Board or the Committee, as applicable, shall
determine, which terms may be more or less favorable than those
applicable to such former holders of Options.
5. Grants
Options may be granted at any time and from time to time as shall
be determined by the Board or the Committee. Subject to the limitation
on the total number of shares subject to issuance in subsections 6(a)
and (d), the Board or the Committee, as applicable, shall have
complete discretion in determining the number of Ordinary Shares
subject to Options granted. The Board or the Committee, as applicable,
may grant any type of Option to purchase Ordinary Shares that is
permitted by law at the time of the grant.
6. Required Terms and Conditions of Options
Each Option granted shall be in such form and subject to such
restrictions and conditions and other terms as the Board or the
Committee, as applicable, may determine at the time of grant, subject
to the general provisions of this Plan, the applicable Option
Agreement and the following specific rules:
Appendix - Pg. 2
(a) Exercise Price. Except as otherwise provided, the per share
exercise price of each Option shall be at least 100% of the Fair
Market Value of the Ordinary Shares at the time such Option is
granted.
(b) Maximum Term. Subject to earlier termination as provided in
Section 7, each Option shall expire on the date determined in the
applicable Option Agreement at the time the Option is granted,
provided that no Option shall be exercisable after the expiration of
10 years from the date it is granted, except as otherwise provided in
subsection (a) next above.
(c) Time of Exercise. The Board or the Committee, as
applicable, shall specify in the Option Agreement, at the time each
Option is granted, the duration of each Option and the time or times
within which (during the term of the Option) all or portions of each
Option may be exercised, except to the extent that other terms of
exercise are specifically provided by other provisions of the Plan.
7. Expiration of Options; Termination of Employment, Disability,
Death, and Expiration of Restrictions Upon Occurrence of
Specified Events
(a) General Rule. Except with respect to Options expiring
pursuant to subsections 7(b), (c) or (d) below, each Option granted to
a Participant shall expire on the expiration date or dates set forth
in the applicable Option Agreement. Each Option expiring pursuant to
subsections 7(b), (c) or (d) below shall expire on the date set forth
in subsections 7(b), (c) or (d) notwithstanding any restrictions and
conditions that may be contained in a Participant's Option Agreement.
(b) Expiration Upon Termination of Employment or Service on the
Board. If a Participant ceases to be an employee of ETHC or any of its
subsidiaries, or ceases to serve on the Board, due to the voluntary
resignation of the Participant, or a termination by ETHC or any of its
subsidiaries for Cause, then all of such Participant's Options shall
be null and void and shall terminate. If a Participant ceases to be an
employee of ETHC or any of its subsidiaries or ceases to serve on the
Board of ETHC or any of its subsidiaries due to termination without
Cause by ETHC or any of its subsidiaries, then all of such
Participant's Options shall expire on the first to occur of (i) the
applicable date or dates determined pursuant to subsection 7(a), or
(ii) the date ninety (90) days after the date that the employment of
the Participant with ETHC or its subsidiaries, or service of the
Participant on the Board, terminates.
(c) Expiration Upon Disability or Death. If the employment of a
Participant with ETHC or one of its subsidiaries, or service on the
Board, terminates by reason of disability (as determined by the Board
or the Committee, as applicable), all of the Participant's unexercised
Options may be exercised by the Participant, whether or not otherwise
exercisable at the date of disability, within twelve (12) months after
the date of disability, but in no event later than the expiration date
of such Options. If a Participant dies while in the employ of ETHC or
one of its subsidiaries, or during such Participant's service on the
Board, all of the Participant's unexercised Options, whether or not
Appendix - Pg. 3
otherwise exercisable at the date of death, may be exercised within
twelve (12) months after the date of death by the person specified in
Section 8, but in no event later than the expiration date of such
Options.
(d) Expiration of Restrictions Upon Occurrence of Specified
Events. Upon the occurrence of any event described in subsection 9(b),
each Participant's outstanding Options shall become immediately vested
and exercisable. In such event, the Participant may elect to exercise
in whole or in part any or all of his or her Options, in accordance
with the terms of Section 8, notwithstanding any restrictions and
conditions that may be contained in his or her Option Agreement.
(e) "Cause" shall mean: a) the willful failure of Participant
to substantially perform his or her duties with ETHC or any of its
subsidiaries (other than any such failure resulting from Participant's
incapacity due to physical or mental illness) after a written demand
for substantial performance is delivered to Participant specifically
identifying the manner in which Participant has not substantially
performed his or her duties; b) any willful act of misconduct by
Participant which is materially injurious to ETHC or it subsidiaries
(monetarily or otherwise); c) criminal indictment or conviction of
Participant for any felony or act involving dishonesty, breach of
trust, or a violation of the laws of the United States or any state of
the United States; d) a breach of fiduciary duty involving personal
profit; e) a willful violation of any law, rule, regulation or final
cease and desist order; f) incompetence, personal dishonesty or
material violation of any employment policy of ETHC or any of its
subsidiaries relating to Participant which would have a material
adverse effect on ETHC or any of its subsidiaries; or g) suspension,
removal and/or prohibition (whether temporary or permanent) by any
banking, securities or similar regulatory authority from participation
in the affairs of ETHC or any of its subsidiaries.
8. Method of Exercise of Options
Any Option may be exercised by the Participant, by a legatee or
legatees of such Option under the Participant's last will, by his or
her executors, personal representatives or distributees by his or her
assignee or assignees as provided in Section 11 below, by delivering
to the Secretary of ETHC written notice of the number of shares of
Ordinary Shares with respect to which the Option is being exercised,
accompanied by full payment to ETHC of the exercise price of the
shares being purchased under the Option, and by satisfying all other
conditions provided for in this Plan. Except as otherwise provided in
this Plan or in any Option Agreement, the exercise price of Ordinary
Shares upon exercise of any Option by a Participant shall be paid in
full (i) in cash, (ii) in Ordinary Shares which have been held by the
Participant for not less than six months prior to the exercise of the
Option, valued at its Fair Market Value on the date of exercise, (iii)
in cash by a broker-dealer to whom the holder of the Option has
submitted an exercise notice consisting of a fully endorsed Option, or
(iv) by such other medium of payment as the Board or the Committee, as
applicable, in its sole discretion, shall authorize, or by any
combination of (i), (ii), or (iii), at the sole discretion of the
Board or the Committee, as applicable, or in any manner provided in
the Option Agreement, except by directing ETHC to withhold Ordinary
Shares otherwise issuable upon the exercise of the Option in payment
of the exercise price. In the case of payment pursuant to (ii) or
(iii), above, the Participant's election must be made on or prior to
the date of exercise of the Option and must be irrevocable. In lieu of
Appendix - Pg. 4
a separate election governing each exercise of an Option, a
Participant may file a blanket election which shall govern all future
exercises of Options until revoked by the Participant. ETHC shall
issue, in the name of the Participant (or, if applicable, the
legatee(s), executor(s), personal representative(s), or distributee(s)
of a deceased Participant, or the assignee(s) as provided in Section
11), stock certificates representing the total number of Ordinary
Shares issuable pursuant to the exercise of any Option as soon as
reasonably practicable after such exercise.
9. Adjustments
(a) Appropriate adjustment in the maximum number of Ordinary
Shares issuable pursuant to this Plan, the maximum number of Ordinary
Shares with respect to which Options may be granted within any 12-
month period to any Participant during the duration of this Plan, the
number of shares subject to Options granted under this Plan, and the
exercise price with respect to Options, shall be made to give effect
to any increase or decrease in the number of issued Ordinary Shares
resulting from a subdivision or consolidation of shares whether
through reorganization, recapitalization, stock split, reverse stock
split, spin-off, split-off, spin-out, or other distribution of assets
to shareholders, stock distributions or combination of shares,
assumption and conversion of outstanding Options due to an acquisition
by ETHC of the stock or assets of any other corporation, payment of
stock dividends, other increase or decrease in the number of such
shares outstanding effected, without receipt of consideration by ETHC,
or any other occurrence for which the Committee determines an
adjustment is appropriate. If the number of Ordinary Shares subject to
an Option has been adjusted pursuant to this paragraph, the decision
of the Board or the Committee, as applicable, as to the amount and
timing of any such adjustments shall be conclusive.
(b) The Committee shall make all determinations relating to
the applicability and interpretation of this Section 9, and all such
determinations shall be conclusive and binding.
10. Terms and Conditions of Options
(a) In order for an Option to be effective, each Participant
shall agree to such restrictions and conditions and other terms in
connection with the exercise of an Option, including restrictions and
conditions on the disposition of the Ordinary Shares acquired upon the
exercise, grant or sale thereof, as the Committee may deem
appropriate. The certificates delivered to a Participant evidencing
the Ordinary Shares acquired upon exercise of an Option may bear a
legend referring to the restrictions and conditions and other terms
contained in the respective Option Agreement and this Plan, and ETHC
may place a stop transfer order with its transfer agent against the
transfer of such shares. If requested to do so by the Board or the
Committee, as applicable, at the time of exercise of an Option, each
Participant shall execute a written instrument stating that he or she
is purchasing the Ordinary Shares for investment and not with any
present intention to sell the same.
(b) The obligation of ETHC to sell and deliver Ordinary Shares
under the plan shall be subject to all applicable laws, regulations,
rules and approvals. A Participant shall have no rights as a
shareholder with respect to any shares covered by an Option granted
Appendix - Pg. 5
to, or exercised by, him or her until the date of delivery of a stock
certificate to him or her for such shares. No adjustment other than
pursuant to Section 9 (a) hereof shall be made for dividends or other
rights for which the record date is prior to the date such stock
certificate is delivered.
11. Nontransferability
(a) Except as provided in subsection (b) next below, Options
governed hereby and any rights and privileges pertaining thereto, may
not be transferred, assigned, pledged or hypothecated in any manner,
by operation of law or otherwise, other than by will or by the laws of
descent and distribution, and shall not be subject to execution,
attachment or similar process. The granting of an Option shall impose
no obligation upon the applicable Participant to exercise such Option.
(b) Notwithstanding the provisions of subsection (a) above, a
Participant, at any time prior to his or her death, may assign all or
any portion of an Option granted to him or her to (i) his or her
spouse or lineal descendant, (ii) the trustee of a trust for the
primary benefit of his or her spouse or lineal descendant, (iii) a
partnership of which his or her spouse and lineal descendants are the
only partners, or (iv) a tax exempt organization. In such event, the
spouse, lineal descendant, trustee, partnership or tax exempt
organization will be entitled to all of the rights of the Participant
with respect to the assigned portion of such Option, and such portion
of the Option will continue to be subject to all of the terms,
conditions and restrictions applicable to the Option, as set forth
herein and in the related Option Agreement immediately prior to the
effective date of the assignment. Any such assignment will be
permitted only if (i) the Participant does not receive any
consideration therefore, and (ii) the assignment is expressly
permitted by the applicable Option Agreement and approved by the
Committee. Any such assignment shall be evidenced by an appropriate
written document executed by the Participant, and a copy thereof shall
be delivered to ETHC on or prior to the effective date of the
assignment.
(c) The offer and sale of Ordinary Shares underlying the
Options have not been registered under the Securities Act of 1933, as
amended (the "Act"). A Participant shall not sell or otherwise dispose
of the Ordinary Shares acquired pursuant to the exercise of such
Options, in violation of the Act.
12. Indemnification of the Committee
In addition to such other rights of indemnification as they may
have as members of the Board, or as members of the Committee, or as
its delegatees, the members of the Committee and its delegatees shall
be indemnified by ETHC against (a) the reasonable expenses (as such
expenses are incurred), including attorneys' fees actually and
necessarily incurred in connection with the defense of any action,
suit or proceeding (or in connection with any appeal therein), to
which they or any of them may be a party by reason of any action taken
or failure to act under or in connection with the Plan, or any Option
granted hereunder; and (b) all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal
counsel selected by ETHC) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to
Appendix - Pg. 6
matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee member or delegatee, as applicable, is
liable for gross negligence or gross misconduct in the performance of
his or her duties; provided that within 60 days after institution of
any such action, suit or proceeding a Committee member or delegatee
shall in writing offer ETHC the opportunity, at its own expense, to
handle and defend the same.
13. No Contract of Employment or Service on the Board
Neither the adoption of this Plan nor the grant of any Option
shall be deemed to obligate ETHC or any subsidiary to continue the
employment or service on the Board of any Participant for any
particular period, nor shall the granting of an Option constitute a
request or consent to postpone the retirement date of any Participant.
14. Termination and Amendment of this Plan
Unless required by law, no termination, suspension, amendment or
modification of this Plan shall adversely affect any right acquired by
any Participant under an Option granted before the date of such
termination, suspension, amendment or modification, unless such
Participant shall consent; but it shall be conclusively presumed that
any adjustment for changes in capitalization as provided for herein
does not adversely affect any such right.
15. Effective Date of this Plan
This Plan shall become effective upon adoption by the Board;
provided, however, that it shall be submitted for approval by the
holders of a majority of the outstanding Ordinary Shares of ETHC
present, or represented, and entitled to vote at a shareholders'
meeting held within 12 months thereafter, and Options granted prior to
such shareholder approval shall become null and void if such
shareholder approval is not obtained.
16. Withholding Taxes
Whenever ETHC proposes or is required to issue or transfer
Ordinary Shares to a Participant under this Plan, the Board or the
Committee, as applicable, shall have the right to require the
Participant to remit to ETHC an amount sufficient to satisfy any
withholding tax requirements prior to the delivery of any certificate
or certificates for such shares. If such certificates have been
delivered prior to the time a withholding obligation arises, ETHC
shall have the right to require the Participant to remit to ETHC an
amount sufficient to satisfy all withholding tax requirements at the
time such obligation arises and to withhold from other amounts payable
to the Participant, as compensation or otherwise, as necessary. A
Participant may elect to satisfy any such tax withholding obligation
incurred with respect to the Taxable Date of an Option by (a)
directing ETHC to withhold a portion of the shares of Ordinary Shares
otherwise distributable to the Participant, or (b) transferring to
ETHC a certain number of Ordinary Shares either subject to an Option
being exercised or previously owned, such shares being valued at the
Fair Market Value thereof on the Taxable Date. Notwithstanding any
provision of this Plan to the contrary, a Participant's election
pursuant to the preceding sentence (a) must be made on or prior to the
Appendix - Pg. 7
Taxable Date with respect to such Option, and (b) must be irrevocable.
In lieu of a separate election on each Taxable Date of an Option, a
Participant may make a blanket election with the Board or the
Committee that shall govern all future Taxable Dates until revoked by
the Participant. If the holder of shares of Ordinary Shares purchased
in connection with the exercise of an Option disposes of such shares
within two years of the date such Option was granted or within one
year of such exercise, he or she shall notify ETHC of such disposition
and remit an amount necessary to satisfy any applicable withholding
requirements. If such holder does not remit such amount, ETHC may
withhold all or a portion of any amounts then or in the future owed to
such holder as necessary to satisfy such requirements. Taxable Date
means the date a Participant recognizes income with respect to an
Option under any applicable tax law.
17. Ratification of Awards
The determination by a Committee to grant any Award under this
Plan, must be ratified in full by the Board of Directors of ETHC. Any
such Award which is not ratified in full by the Board of Directors of
ETHC within 60 days after the date of grant thereof shall be null and
void.
18. Leaves of Absence
A period of leave of absence shall not be deemed a termination of
employment or service for purposes of Options granted under this Plan,
if such leave of absence is expressly approved in writing by the Board
or the Committee, as applicable, as a leave of absence for purposes of
this Plan.
19. Governing Law
This Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of Hong Kong.
20. Fair Market Value
"Fair Market Value" as of a given date for all purposes of this
Plan and any Option Agreement means (a) if the Ordinary Shares are
listed on a national securities exchange or the Nasdaq Stock Market's
National Market, the average of the closing prices of the Ordinary
Shares for the 10 consecutive trading days immediately preceding such
given date; (b) if the Ordinary Shares are principally traded on a
national securities exchange or Nasdaq but there are no reported
closing sales prices on such exchange or Nasdaq during the 10
consecutive trading days immediately preceding such given date or if
the Ordinary Shares are principally traded on the over-the-counter
market, the average of the mean between the bid and the asked price
for the Ordinary Shares at the close of trading for the 10 consecutive
trading days immediately preceding such given date; or (c) if the
Ordinary Shares are neither listed on a national securities exchange
or Nasdaq nor traded on the over-the-counter market, or if no such bid
and asked prices are otherwise available, such value as the Board, in
good faith, shall determine. The Board or any Committee shall have
broad discretion in selecting a valuation method consistent with this
Section 20 for purposes of determining "Fair Market Value."
Appendix - Pg. 8
21. Successors
In the event of a liquidation, dissolution, sale or transfer of
substantially all of the assets of ETHC, or a merger or consolidation
involving ETHC, all obligations of ETHC under this Plan with respect
to Options governed by this Plan shall be binding on the successor to
the transaction. Employment of a Participant with such a successor or
service on the board of directors of a successor shall be considered
employment of the Participant with ETHC, or service on the Board, for
purposes of this Plan.
22. Notices
Notices given pursuant to this Plan shall be in writing and shall
be deemed received when personally delivered or five days after mailed
by registered or certified mail, return receipt requested, addressee
only, postage prepaid. Notice to ETHC shall be directed to:
Mr. T.C. Leung, Chairman
Euro Tech (Far East) Ltd.
18/F Gee Chang Hong Centre
65 Wong Chuk Hang Road
Hong Kong
Notices to or with respect to a Participant shall be directed to
the Participant, or the executors, personal representatives or
distributees of a deceased Participant or to a Participant's assignee,
at the Participant's or assignee's home address on the records of
ETHC.
IN WITNESS WHEREOF, ETHC has caused this Plan to be executed on
its behalf by its duly authorized officer on ____________, 2002.
EURO TECH HOLDINGS COMPANY LIMITED
By:___________________________________
T.C. Leung, Chief Executive Officer
Appendix - Pg. 9
[PROXY FRONT]
EURO TECH HOLDINGS COMPANY LIMITED
PROXY SOLICITED BY BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints T.C. Leung and
Jerry Wong and each of them, with full power of substitution, as
proxies to represent the undersigned and vote all the Ordinary Shares
of Euro Tech Holdings Company Limited, which the undersigned is
entitled to vote at the Annual Meeting of Shareholders to be held on
August 20, 2002, at 4:00 p.m. local time at the Luk Kwok Hotel, 72
Gloucester Road, Wanchai, Hong Kong and at any adjournments thereof.
Said proxies are directed to vote as instructed on the matters set
forth in the proxy and otherwise at their discretion. Receipt of a
copy of the notice of said meeting and proxy statement is hereby
acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTIONS
ARE GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
(PLEASE SIGN AND DATE THE REVERSE SIDE AND MAIL IN THE RETURN
ENVELOPE TO: AMERICAN STOCK TRANSFER & TRUST COMPANY, 59 MAIDEN LANE,
NEW YORK, NEW YORK 10038.)
(Continued, and to be dated and signed on reverse side)
[PROXY BACK]
MANAGEMENT RECOMMENDS THAT YOU VOTE FOR PROPOSALS 1, 2, 3 AND 4.
A. [X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. Election of Directors:
FOR AGAINST WITHOUT AUTHORITY TO
All Nominees All Nominees VOTE FOR
Listed at Right Listed at Right All Nominees Listed at Right NOMINEES
[ ] [ ] [ ] T. C. Leung
Jerry Wong
Nancy Wong
C. P. Kwan
Alex Sham
Y. K. Liang
Ho Choi Chiu
Wang Xu Hong
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2. Proposal to adopt the 2002 Officers and FOR AGAINST ABSTAIN
Directors Stock Option and Incentive Plan. [ ] [ ] [ ]
3. Proposal to ratify the appointment of FOR AGAINST ABSTAIN
Pricewaterhouse Coopers, Hong Kong, [ ] [ ] [ ]
as auditors for the 2002 Fiscal Year
4. Proposal to adjourn the special meeting FOR AGAINST ABSTAIN
in the discretion of the Company's [ ] [ ] [ ]
management if adjournment is necessary
to enable it to solicit additional proxies
to secure a quorum or the approval of
any of the matters listed above.
__________________________________
Signature
__________________________________
Signature if jointly held
Dated: ______________, 2002 Please date and sign exactly as
your name appears hereon. If
shares are jointly held, all
joint owners should sign.
Executors, administrators,
trustees, guardians and others
signing in a representative
capacity should give their full
titles. If the signatory is a
corporation or partnership, sign
the full corporate or
partnership name by a duly
authorized officer or partner.
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[Instruction Sheet]
Please detach and mail in the envelope provided.
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
EURO TECH HOLDINGS COMPANY LIMITED
August 20, 2002
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