INTERMOST CORPORATION
10th Floor, B10-07 Guomao BuildingRenmin Road (South)
Shenzhen, China 518014
December 23, 2003
Dear Stockholders:
You are cordially invited to attend the annual meeting of stockholders of
Intermost Corporation (the "Company") to be held at 11:00 a.m. local time on
Wednesday, January 28, 2004, in the Conference Room located at 35/F Central
Plaza, 18 Harbour Road, Wanchai, Hong Kong, People's Republic of China.
In addition to the items set forth in the accompanying Notice of Annual Meeting
of Stockholders and Proxy Statement, we will report on current activities of the
Company and will provide you with an opportunity to discuss matters of interest
to you as a stockholder.
We sincerely hope that you will be able to attend our Annual Meeting. However,
whether or not you plan to attend, please sign, date, and promptly return the
enclosed proxy to ensure that your shares are represented.
On behalf of the Board of Directors, I would like to express our appreciation
for your continued interest in Intermost Corporation
Very truly yours,
/s/ Andy Lin
------------------------
ANDY LIN
CHIEF EXECUTIVE OFFICER
INTERMOST CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 28, 2004
TO OUR STOCKHOLDERS:
The Annual Meeting of Stockholders of Intermost Corporation will be held at
11:00 a.m. local time on Wednesday, January 28, 2004 in the Conference Room,
35/F Central Plaza, 18 Harbour Road, Wanchai, Hong Kong, People's Republic of
China, for the following purposes:
(1) To elect four directors, each to a one year term;
(2) To approve an amendment to the Articles of Incorporation increasing the
number of shares of common stock from 100,000,000 to 500,000,000;
(3) To approve the Intermost Corporation 2003 Equity Incentive Plan; and
(4) To transact any other business that may properly come before the meeting.
Only stockholders of record at the close of business on December 1, 2003 are
entitled to notice of, and to vote at, the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Andy Lin
------------------------
Andy Lin
Chief Executive Officer
December 23, 2003
IMPORTANT
Whether or not you plan to attend the meeting, please sign, date, and return
promptly the enclosed proxy in the enclosed envelope, which requires no postage
if mailed in the United States. Promptly signing, dating, and returning the
proxy will save the Company the additional expense of further solicitation.
INTERMOST CORPORATION
10th Floor, B10-07 Guomao Building, Renmin Road (South)
Shenzhen, China 518014
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Intermost Corporation ("Intermost Corporation" or
the "Company") to be voted at the 2004 Annual Meeting of Stockholders of the
Company to be held at 11:00 a.m. local time on Wednesday, January 28, 2004.
Stockholders who sign proxies may revoke them at any time before their exercise
by delivering a written revocation to the Secretary of the Company, by
submission of a proxy with a later date, or by voting in person at the meeting.
These proxy materials are being mailed to stockholders on or about January 8,
2004. All monetary information included in this Proxy Statement is stated in
U.S. dollars.
A copy of the Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 2003 is being mailed concurrently herewith to all stockholders of
record at the close of business on December 1, 2003. The Annual Report does not
constitute a part of the proxy solicitation material for the Annual Meeting.
VOTING SECURITIES
Only stockholders of record at the close of business on December 1, 2003 are
entitled to vote at the Annual Meeting. The total number of shares of the
Company's common stock (the "Common Stock") that were issued, outstanding and
entitled to be voted on the record date was 56,392,406 shares. Each share of
Common Stock is entitled to one vote on all matters to be acted upon at the
Annual Meeting. The holders of a majority of the outstanding shares (i.e.,
28,196,204 shares) shall constitute a quorum, which is necessary for the
transaction of business at the Annual Meeting. In accordance with applicable
law, the election of directors shall be by a plurality of the votes cast, while
the approval of all other proposals shall be by a majority of the votes cast.
Cumulative voting is not permitted. Shares which abstain from voting as to these
matters, and shares held in "street name" by brokers or nominees who indicate on
their proxies that they do not have discretionary authority to vote such shares
as to these matters ("broker non-votes"), will not be counted as votes in favor
of, or against, such matters. For purposes of determining whether the
affirmative vote of a majority of the shares present at the meeting and entitled
to vote on a proposal has been obtained, abstentions and broker non-votes will
be included in the number of shares present and entitled to vote.
SOLICITATION
The cost of solicitation of proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company. Copies
of solicitation materials will be furnished to brokerage houses, nominees,
fiduciaries and custodians to forward to beneficial owners of common stock held
in their names. We will reimburse brokerage firms and other persons representing
beneficial owners of stock for their reasonable expenses in forwarding
solicitation materials to the owners. In addition to original solicitation of
proxies by mail, our directors, officers and other employees may, without
additional compensation, solicit proxies by telephone, facsimile and personal
interviews.
2
DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS
The Company will only deliver one proxy statement to multiple stockholders
sharing an address unless we have received contrary instructions from one or
more of the stockholders. The Company will promptly deliver a separate copy of
this proxy statement to a stockholder at a shared address to which a single copy
of the document was delivered upon oral or written request to:
Intermost Corporation Attn: Corporate Secretary 10th Floor, B10-07 Guomao
Building, Renmin Road (South) Shenzhen, China 518014 Telephone No.: (86) 755
8221 0238
Stockholders may also address future requests for separate delivery of
information statements and/or annual reports by contacting the Company at the
address listed above.
PROPOSAL 1: ELECTION OF DIRECTORS
Four directors are to be elected to our Board of Directors at the Annual
Meeting. Each director will hold office for a term of one-year or until his
successor is elected and qualified. The Board of Directors has nominated Mr.
Andy Lin, Mr. Sai Keung (Hugo) Chan, Mr. Shim (Peter) Yang and Ms. Catalina Chan
to serve as directors. All of the nominees currently serve on the Company's
Board of Directors. The Company does not have a standing audit, nominating or
compensation committee nor does it have committees forming similar functions.
Unless a stockholder indicates otherwise, each signed proxy will be voted for
the election of these nominees.
Management expects that each of the nominees will be available for election, but
if any of them is not a candidate at the time the election occurs, it is
intended that the proxies will be voted for the election of another nominee to
be designated by the Board of Directors to fill any vacancy.
NOMINEES FOR ELECTION
ANDY LIN, AGE 57
Andy Lin has served as President, Chief Executive Officer and Chief Financial
Controller of the Company since June 2001 and as a director of the Company since
October 1998. Mr. Lin co-founded the Company's predecessor, IML, in January 1998
and served as Vice President of the Company from October 1998 until June 2001.
Prior to forming IML, Mr. Lin was the Vice President of China Business Resources
from 1994 to 1998. Mr. Lin graduated from Tsinghua University in 1970 and from
the Chinese Academy of Sciences in 1981 with a Master of Science degree in
computer science.
SAI KEUNG CHAN, AGE 47
Sai Keung (Hugo) Chan joined the Company's predecessor, IML, as Secretary and a
director in January 1998 and assumed the same positions with the Company
following its merger with IML in October 1998. Mr. Chan received a law degree
from the University of Southampton, U.K. and since 1986 has been a partner in
the law firm of Liau, Ho & Chan in Hong Kong.
SHIM YANG, AGE 45
Shim (Peter) Yang joined the Company's predecessor, IML, as a director in
January 1998 and was appointed a director of the Company following IML's merger
with the Company in October 1998. Since December 1997, Mr. Yang has been a
Managing Director of Corporate Finance International Ltd., a privately-held
investment consulting and business brokerage company in Hong Kong specializing
in corporate finance and business restructuring consulting, where he is
responsible for corporate development and strategic management. From January
1997 to December 1997, Mr. Yang served as Managing Director of CEC (HK) Ltd., a
privately-held company in Hong Kong specializing in securing financing for
start-up Internet companies in Hong Kong and China. From 1993 to 1996, Mr. Yang
served as Managing Director of Eagle Gain Ltd., a privately-held company in Hong
Kong specializing in securing financing for real estate development in China.
Mr. Yang received a Bachelors degree in Economics from the University of Foreign
Trade in China in 1982.
CATALINA CHAN, AGE 52
Catalina Chan has served as a director of the Company since April 2002. Ms.
Chan first established Multi M Company Limited in 1984 and it was one of the
first companies to introduce Casio Products into China and is responsible for
the trading and logistic management of these products in China. She has over 18
years of experience in China trade for digital products including cameras,
watches, personal computers and printers, software and accessories.
The Board of Directors recommends a vote FOR each of the nominees as a director.
3
PROPOSAL 2: APPROVAL OF AMENDMENT TO ARTICLES OF INCORPORATION INCREASING THE
NUMBER OF SHARES OF COMMON STOCK
On December 1, 2003 the Company's Board of Directors adopted an Amendment to the
Company's Articles of Incorporation that would increase the authorized number of
shares of common stock available for issuance from 100,000,000 to 500,000,000.
Currently, the Company has 100,000,000 shares of common stock authorized, of
which 56,392,406 shares are issued and outstanding as of the record date,
leaving 43,607,594 shares available for issuance. Management wants an adequate
number of shares of common stock available for issuance from time-to-time for
various purposes, including the issuance of shares in connection with financing
or acquisition transactions and the issuance or reservation of common stock for
equity awards to employees, officers, directors, consultants and agents. Once
the Company files the Amendment to its Articles of Incorporationt, it will have
443,607,594 shares of authorized but unissued common stock available for
issuance, based upon the number of shares outstanding as of December 1, 2003. By
increasing the number of authorized shares of common stock, the Company's Board
of Directors would be able to authorize the issuance of shares for transactions
such as those described herein, as they are needed, without the necessity and
related costs and delays of calling a special stockholders' meeting or waiting
for the regularly scheduled annual meeting of stockholders in order to increase
the authorized capital. The Over-the-Counter Bulletin Board does not require a
vote of stockholders for the issuance of additional shares. The Amendment is not
intended to have any anti-takeover effect and is not part of any series of
anti-takeover measures contained in the Company's Articles of Incorporation or
its Bylaws in effect on the date of this Proxy Statement. As of the date of this
Proxy Statement, management has no knowledge of any specific effort to
accumulate the Company's securities or to obtain control of the Company by means
of a merger, tender offer, solicitation in opposition to management or
otherwise.
OVER-ALL EFFECT OF THE INCREASE IN THE AUTHORIZED NUMBER OF SHARES OF COMMON
STOCK
The availability of additional authorized and unissued shares of common stock
could make any attempt to gain control of the Company or its Board of Directors
more difficult or time consuming. Furthermore, the availability of additional
authorized and unissued shares might make it more difficult to remove
management, irrespective of whether or not these actions or others like them
would be beneficial to the Company's stockholders. Although the Board currently
has no intention of doing so, shares of common stock could be issued by the
Board to dilute the percentage of common stock owned by a significant
stockholder and increase the cost of, or the number of, voting shares necessary
to acquire control of the Board or to meet the voting requirements imposed by
Wyoming law with respect to a merger or other business combination involving the
Company. The Company is not aware of any proposed attempt to take it over or of
any attempt to acquire a large block of its common stock. The Company has no
present intention to use the increased authorized common stock for anti-takeover
purposes.
SECTION 17-16-1004 OF THE WYOMING BUSINESS CORPORATION ACT
Section 17-16-1004 of the Wyoming Business Corporation Act permits the amendment
of the Articles of Incorporation to allow for an increase or decrease of the
aggregate number of authorized shares of a class so long as the holders of at
least a majority of the issued and outstanding shares of the effected class
approve the action.
Based on the foregoing discussion, the Board of Directors requests that
stockholders approve the following resolutions in connection with the proposed
Amendment to the Articles of Incorporation:
RESOLVED, that Article IV of the Articles of Incorporation is deleted in its
entirety and the following shall appear in its place:
The Corporation shall have the authority to issue five hundred million
(500,000,000) shares of common stock, par value $.001 per share ("Common Stock")
and five million (5,000,000) shares of preferred stock, par value $.001 per
share. Shares of any class of stock may be issued, without shareholder action,
from time to time in one or more series as may from time to time be determined
by the board of directors. The board of directors of this Corporation is
expressly granted authority, without shareholder approval, and within the limits
of the Wyoming Statutes, to:
(a) designate in whole or in part, the preferences, limitations and relative
rights, of any class of shares before the issuance of any shares of that class:
(b) create one or more series within a class of shares, fix the number of shares
of each such series, and designate, in whole or in part, the preferences,
limitations, and relative rights of the series, all before the issuance of any
shares of that series;
(c) alter or revoke the preferences, limitations, and relative rights granted to
or imposed upon any wholly unissued class of shares or any wholly unissued
series of any class of shares; or
(d) increase or decrease the number of shares constituting any series, the
number of shares of which was originally fixed by the board of directors, either
before or after the issuance of shares of the series; provided that the number
may not be decreased below the
4
number of shares of the series then outstanding, or increased above the total
number of authorized shares of the applicable class of shares available for
designation as a part of the series.
The allocation between the classes, or among the series of each class, of
unlimited voting rights and the right to receive the net assets of the
Corporation upon dissolution, shall be as designated by the board of directors.
All rights accruing to the outstanding shares of the Corporation not expressly
provided for to the contrary herein or in the Corporation's bylaws or in any
amendment hereto or thereto shall be vested in the Common Stock. Accordingly,
unless and until otherwise designated by the board of directors of the
Corporation, and subject to any superior rights as so designated, the Common
Stock shall have unlimited voting rights and be entitled to receive the net
assets of the Corporation upon dissolution.
and it is further
RESOLVED, that the officers of the Company be, and each of them hereby is,
authorized and empowered (any one of them acting alone), in the name and on
behalf of the Company, to execute and deliver the Amendment to the Secretary of
State of the State of Wyoming for filing; and it is further
RESOLVED, that the officers of the Company be, and each of them hereby is,
authorized and empowered (any one of them acting alone), in the name of and on
behalf of the Company, to procure any authorizations or approvals or to do or
cause to be done all such acts or things and to sign and deliver or cause to be
signed and delivered, all such documents, including but not limited to, stock
certificates, federal and state securities forms, filings, applications or other
documents, with such amendments, additions and other modifications thereto, as
such officer may deem appropriate, which shall be deemed conclusively evidenced
by the execution and delivery thereof, and to carry out and fully perform the
terms and provisions of such documents in order to carry into effect the
foregoing resolutions and to fully effect the transactions contemplated in such
resolutions.
The Board of Directors recommends a vote FOR the Amendment to the Articles of
Incorporation.
PROPOSAL 3: APPROVAL OF THE ADOPTION OF THE INTERMOST CORPORATION
2003 EQUITY INCENTIVE PLAN
The following discussion is qualified in its entirety by the terms and
provisions of the Intermost Corporation 2003 Equity Incentive Plan, a copy of
which is attached to this Proxy Statement as Exhibit 1.
On December 1, 2003 the Board of Directors adopted the Intermost Corporation
2003 Equity Incentive Plan (the "Plan"). A copy of the Plan is attached as
Exhibit 1 to this Proxy Statement. The Plan authorizes awards of options (both
incentive stock options and non-qualified stock options), awards of stock
("Stock Award") and the granting of bonus stock ("Stock Bonus"). Persons
eligible to receive awards under the Plan include the Company's employees,
officers and directors and its consultants, independent contractors and
advisors. As of the date of this Proxy Statement, the Company has 60 employees,
two officers and four directors who would be eligible to receive awards under
the Plan. The number of persons covered by the Plan may increase if we add
additional employees (including officers) and directors. As of the date of this
Proxy Statement, no awards have been granted from the Plan.
The Company's Board of Directors, or a committee made up of members of the
Company's Board of Directors, will administer the Plan. For purposes of this
discussion, the body administering the Plan will be referred to as the
Administrator. The Administrator has the authority to determine, at its
discretion, the number and type of awards that will be granted, the recipients
of the awards, any exercise or purchase price required to be paid, when options
may be exercised and the term of option grants. Awards under the Plan are not
defined as to any group. The term of the Plan is 10 years from the date the Plan
was adopted by the Board of Directors. If the Amendment to the Articles of
Incorporation increasing the number of shares of authorized common stock to
500,000,000 is approved by the stockholders, we intend to reserve 20,000,000
shares of our common stock for awards to be made under the Plan. If the
Amendment to the Articles of Incorporation is not approved by the stockholders,
we intend to reserve 10,000,000 shares of our common stock for awards to be made
under the Plan. As of December 1, 2003 the approximate total fair market value
of the common stock available to be awarded from the Plan would have been
approximately $8,200,000 if 20,000,000 shares were reserved, and approximately
$4,100,000 if 10,000,000 shares were reserved.
The exercise price for stock options granted to officers and directors must be
the fair market value of the common stock on the date of grant. The exercise
price for stock options granted to eligible persons other than officers and
directors may not be less than 85% of the fair market value of the common stock
on the date of grant. The term of an option may not exceed 10 years.
A Stock Award is an offer by the Company to sell to an eligible person shares of
common stock that may or may not be subject to restrictions. Stock Awards
granted to officers and directors must be granted at the fair market value of
the common stock on the date of the award. Stock Awards granted to eligible
persons who are not officers or directors may not be granted at less than 85% of
the fair market value of the common stock on the date of the award. Stock Awards
may be subject to vesting conditions, as determined by the Administrator.
5
A Stock Bonus is a grant of shares that may be awarded to an eligible person. A
Stock Bonus may be subject to vesting conditions, as determined by the
Administrator. A Stock Bonus may be awarded for any reason determined by the
Administrator, including, but not limited to, extraordinary services rendered to
the Company by an eligible person, as an award for performance achieved by the
Company or upon satisfaction of performance goals by the eligible person.
In the United States, a recipient will not recognize any taxable income at the
time an option is granted. However, upon exercise of an option, the recipient
will include in income as compensation an amount equal to the difference between
the fair market value of the shares on the date of exercise and the recipient's
exercise price. The included amount will be treated as ordinary income by the
recipient and may be subject to withholding. Upon resale of the shares by the
recipient, any subsequent appreciation or depreciation in the value of the
shares will be treated as capital gain or loss. There is no tax consequence to
the Company as a result of either the grant or the vesting of stock options.
BENEFITS ALLOCATED TO EXECUTIVE OFFICERS
As of December 1, 2003, no awards have been made to persons who comprise the
Company's executive group, the non-executive director group and the
non-executive officer employee group.
Awards may be made to the Company's officers and directors, who comprise the
executive group, in the future. As of the date of this Proxy Statement, no
awards have been specifically designated to members of the executive group.
The Board of Directors recommends a vote "FOR" the approval of the adoption of
the Intermost Corporation 2003 Equity Incentive Plan.
BOARD AND COMMITTEE MEETINGS
The Board of Directors held 17 meetings from July 1, 2002 to June 30, 2003. None
of the Directors missed a meeting.
COMPENSATION OF THE BOARD OF DIRECTORS
Neither employee nor non-employee directors received any compensation for his or
her service as a director in the 2003 fiscal year.
The Company reimburses its directors for out-of-pocket expenses incurred on
behalf of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table is furnished as of December 1, 2003 to indicate beneficial
ownership of shares of the Company's common stock by (1) each shareholder of the
Company who is known by the Company to be a beneficial owner of more than 5% of
the Company's common stock, (2) each director and named officer of the Company,
individually, and (3) all officers and directors of the Company as a group.
Name and Address of Number of Shares
Beneficial Owner (1) Beneficially Owned Percent
- -------------------- ------------------ -------
Allied Point Limited (3) ............................... 3,218,653(2) 6.53%
Andy Lin (3) ........................................... 3,218,653(2) 6.53%
Andy Lin ............................................... 3,922,801 7.96%
Shim Yang .............................................. 350,000 0.71%
Catalina Chan (4) ...................................... 1,000,000 2.03%
Grand Grade International Ltd (4) ...................... 1,000,000 2.03%
Sai Keung Chan ......................................... 700,000 1.42%
Mass United Investment Ltd. ............................ 2,500,000 5.07%
All officers and directors as a group (4 persons) .. 9,191,454 16.30%
- ----------
(1) Unless otherwise noted, each person or group identified possesses sole
voting and investment power with respect to the shares shown opposite the
name of each person or group.
(2) Allied Point Limited is a corporation organized under the laws of the
British Virgin Islands and is owned 50% by Jun Liang and 50% by Andy Lin.
Therefore, Mr. Lin IS deemed to be the beneficial owner of these shares.
(3) Address is 10th Floor, B10-07 Guomao Building, Renmin Rd.(South),
Shenzhen, China 518014.
(4) Catalina Chan is director and shareholder of Grand Grade International
Ltd. and may be deemed to be the beneficial owner of the share held by
Grand Grade International Ltd
6
To our knowledge, none of our directors, officers or affiliates, or any holder
of 5% or more of the Company's common stock, or any associate of our directors,
officers or affiliates, is a party that is adverse to us in any material legal
proceeding.
Section 16(a) Beneficial Ownership Reporting Compliance
Federal securities laws require the Company's directors and executive officers
and persons who own more than 10% of the Company's common stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of any securities of the Company.
Based solely on its review of the copies of such reports received by the
Company, and on written representations by the Company's officers and directors
regarding their compliance with the applicable reporting requirements, the
Company believes that, with respect to its fiscal year ended December 31, 2002,
all of the Company's directors and officers and all of the persons known to the
Company to own more than ten percent (10%) of the Company's common stock, either
failed to file on a timely basis, or have yet to file, the required beneficial
ownership reports with the Securities and Exchange Commission. The Company is in
the process of obtaining the information to file all required reports.
The Company was provided no forms or written representations with respect to
Section 16 compliance.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
For the 2003 fiscal year, all executive officers received their salaries from
the Company and no bonus was paid to any executive officer. Executive officers
include our current Chief Executive Officer and President, Andy Lin, our former
Chief Executive Officer and President, Jun Liang, and Kam Fai Sun, our former
Finance Manager.
The following table sets forth information concerning cash and non-cash
compensation paid or accrued to our executive officers during the past three
fiscal years:
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------- ------------------------ -------------------------
Other Restricted
Annual Stock Securities LTIP All Other
Name and Principal Salary Bonus Compensation Awards Underlying Payout Compensation
Position Year ($) ($) ($) ($) Options/SARs ($) ($)
- ------------------ ---- ------- ----- ------------ ---------- ------------ ------ ------------
Andy Lin, 2003 128,205(4) 0 0 0 0 0 0
CEO and 2002 76,923 0 0 0 0 0 0
President(1) 2001 76,923 0 5,640 0 0 0 0
Jun Liang 2003 0 0 0 0 0 0 0
CEO, Chairman 2002 5,769 0 0 0 0 0 0
and President(2) 2001 92,307 0 5,640 0 0 0 0
Kam Fai Sun 2003 102,564(5) 0 0 0 0 0 0
Finance Manager(3) 2002 19,231 0 0 0 0 0 0
2001 0 0 0 0 0 0 0
- ----------
(1) Mr. Lin was appointed as Chief Executive Officer and President of the
Company in June 2001. Previously, Mr. Lin served as Vice President of the
Company.
(2) Mr. Liang served as Chief Executive Officer of the Company from October
1998 until June 2001.
(3) Mr. Sun's employment with the Company began on March 25, 2002 and
terminated on February 28, 2003. Mr. Sun continues to perform consulting
services for the Company.
(4) Of this amount, $76,923 was paid in cash and the balance, totaling
$51,282, was paid by issuing to Mr. Lin 1,709,400 shares of the Company's
common stock having a value of $0.03 a share.
(5) Of this amount, $51,282 was paid in cash and the balance, totaling
$51,282, was paid by issuing to Mr. Sun 1,709,400 shares of the Company's
common stock having a value of $0.03 a share.
OTHER COMPENSATION AND EMPLOYMENT ARRANGEMENTS
No executive officer, at June 30, 2003, had an employment agreement.
During the 2003 fiscal year, the Company did not grant options to any of its
directors or executive officers. However, on December 1, 2003 the Board of
Directors adopted the Intermost Corporation 2003 Equity Incentive Plan. No
awards have been made under this plan. For a discussion of the plan, please see
page 5 of this Proxy Statement.
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EQUITY COMPENSATION PLAN INFORMATION
- ----------------------------------------------------------------------------------------------------------------------
Number of securities
remaining available for
Number of securities to be Weighted average exercise future issuance under
issued upon exercise of price of outstanding equity compensation plans
outstanding options, options, warrants and (excluding securities
Plan Category warrants and rights rights reflected in column 2)
- ----------------------------------------------------------------------------------------------------------------------
Equity Compensation Plan
Approved by Security Holders 0 $0 0
- ----------------------------------------------------------------------------------------------------------------------
Equity Compensation Plans Not
Approved by Security Holders N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the years ended June 30, 2001 and 2002, Jun Liang and Andy Lin, officers,
directors and principal shareholders of the Company, advanced funds to, and were
advanced funds by, the Company on an unsecured, non-interest bearing basis
without pre-determined repayment terms. At June 30, 2002, the net balances owed
to Mr. Liang and Mr. Lin were $80,891 and $143,496, respectively. At June 30,
2003, the net balances owed to Mr. Liang and Mr. Lin were $80,487 and $51,071,
respectively.
INDEPENDENT PUBLIC ACCOUNTANTS
Our independent public accountant for the 2003 fiscal year was Moores Rowland. A
representative of Moores Rowland is not expected to to be present at the Annual
Meeting.
In September 2001, the Company's Board of Directors dismissed
PricewaterhouseCoopers as the independent auditors for the Company and selected
Blackman Kallick Bartelstein LLP to serve as its new independent auditors.
In January 2002, the Company's Board of Directors dismissed Blackman Kallick
Bartelstein LLP as the independent auditors for the Company and selected Moores
Rowland to serve as its new independent auditors.
PricewaterhouseCoopers did not render any audit reports on the financial
statements of the Company. During the Company's two quarterly interim period
preceding the dismissal of PricewaterhouseCoopers, there were no disagreements
with PricewaterhouseCoopers on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of PricewaterhouseCoopers,
would have caused PricewaterhouseCoopers to make reference to the subject matter
of the disagreements in connection with its report. During the Company's two
quarterly interim period preceding the dismissal of PricewaterhouseCoopers,
there have been no reportable events of the type required to be disclosed by
Item 304(a)(1)(v) of Regulation S-K.
Blackman Kallick Bartelstein LLP's audit report on the financial statements of
the Company as of June 30, 2001 contained no adverse opinion or disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope, or
accounting principles. During the subsequent interim period preceding the
resignation of Blackman Kallick Bartelstein LLP, there were no disagreements
with Blackman Kallick Bartelstein LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of Blackman Kallick
Bartelstein LLP, would have caused Blackman Kallick Bartelstein LLP to make
reference to the subject matter of the disagreements in connection with its
report.
The following table sets forth fees billed to us by our auditors during the
fiscal years ended June 30, 2002 and June 30, 2003 for: (i) services rendered
for the audit of our annual financial statements and the review of our quarterly
financial statements, (ii) services by our auditor that are reasonably related
to the performance of the audit or review of our financial statements and that
are not reported as Audit Fees, (iii) services rendered in connection with tax
compliance, tax advice and tax planning, and (iv) all other fees for services
rendered.
8
June 30, 2003 June 30, 2002
------------- -------------
(i) Audit Fees $74,750 $82,500
(ii) Audit Related Fees $ -- $ --
(iii) Tax Fees $ -- $ --
(iv) All Other Fees $ -- $ --
STOCKHOLDER PROPOSALS
Under Rule 14a-8 of the Securities and Exchange Commission, stockholder
proposals intended for inclusion in next year's Proxy Statement must be directed
to the Corporate Secretary at Intermost Corporation, 10th Floor, B10-07 Guomao
Building, Renmin Road (South), Shenzhen, China 518014, and must have been
received by August 18, 2004. Any stockholder proposal for next year's annual
meeting submitted after November 1, 2004 will not be considered filed on a
timely basis with the Company. For proposals that are not timely filed, the
Company retains discretion to vote proxies it receives. For proposals that are
timely filed, the Company retains discretion to vote proxies it receives,
provided that (i) the Company includes in its Proxy Statement advice on the
nature of the proposal and how it intends to exercise its voting discretion and
(ii) the proponent does not issue a Proxy Statement.
OTHER MATTERS
The Company is not aware of any other business to be acted on at the meeting. If
other business requiring a vote of the stockholders comes before the meeting,
the holders of the proxies will vote in accordance with their best judgment.
9
EXHIBIT 1
10
INTERMOST CORPORATION
2003 EQUITY INCENTIVE PLAN
AS ADOPTED DECEMBER 1, 2003
1. PURPOSE.
The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are
important to the success of the Company, and its Parent and Subsidiaries (if
any), by offering them an opportunity to participate in the Company's future
performance through awards of Options, the right to purchase Common Stock and
Stock Bonuses. Capitalized terms not defined in the text are defined in Section
2.
2. DEFINITIONS.
As used in this Plan, the following terms will have the following meanings:
"AWARD" means any award under this Plan, including any Option, Stock Award or
Stock Bonus.
"AWARD AGREEMENT" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means any cause, as defined by applicable law, for the termination of a
Participant's employment with the Company or a Parent or Subsidiary of the
Company.
"COMMITTEE" means the Board of Directors or any committee made up of members of
the Board of Directors.
"COMPANY" means Intermost Corporation or any successor corporation.
"DISABILITY" means a disability, whether temporary or permanent, partial or
total, as determined by the Committee.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" means the price at which a holder of an Option may purchase the
Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share of the Company's
Common Stock determined as follows:
(a) if such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the date of determination on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading;
(b) if such Common Stock is quoted on the NASDAQ National Market or the NASDAQ
SmallCap Market, its closing price on the NASDAQ National Market or the NASDAQ
SmallCap Market on the date of determination;
(c) if such Common Stock is publicly traded but is not listed or admitted to
trading on a national securities exchange, the average of the closing bid and
asked prices on the date of determination; or
(d) if none of the foregoing is applicable, by the Committee in good faith.
"INSIDER" means an officer or director of the Company or any other person whose
transactions in the Company's Common Stock are subject to Section 16 of the
Exchange Act.
"OPTION" means an award of an option to purchase Shares pursuant to Section 6.
"PARENT" means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
"PARTICIPANT" means a person who receives an Award under this Plan.
11
"PERFORMANCE FACTORS" means the factors selected by the Committee, in its sole
and absolute discretion, from among the following measures to determine whether
the performance goals applicable to Awards have been satisfied:
(a) Net revenue and/or net revenue growth;
(b) Earnings before income taxes and amortization and/or earnings before income
taxes and amortization growth;
(c) Operating income and/or operating income growth;
(d) Net income and/or net income growth;
(e) Earnings per share and/or earnings per share growth;
(f) Total stockholder return and/or total stockholder return growth;
(g) Return on equity;
(h) Operating cash flow return on income;
(i) Adjusted operating cash flow return on income;
(j) Economic value added; and
(k) Individual business objectives.
"PERFORMANCE PERIOD" means the period of service determined by the Committee,
not to exceed five years, during which years of service or performance is to be
measured for Stock Awards or Stock Bonuses, if such Awards are restricted.
"PLAN" means this Intermost Corporation 2003 Equity Incentive Plan, as amended
from time to time.
"PURCHASE PRICE" means the price at which the recipient of a Stock Award may
purchase the Shares.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means shares of the Company's Common Stock reserved for issuance under
this Plan, as adjusted pursuant to Sections 3 and 18, and any successor
security.
"STOCK AWARD" means an award of Shares pursuant to Section 7.
"STOCK BONUS" means an award of Shares, or cash in lieu of Shares, pursuant to
Section 8.
"SUBSIDIARY" means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
"TERMINATION" or "TERMINATED" means, for purposes of this Plan with respect to a
Participant, that the Participant has for any reason ceased to provide services
as an employee, officer or director to the Company or a Parent or Subsidiary of
the Company. An employee will not be deemed to have ceased to provide services
in the case of (i) sick leave, (ii) military leave, or (iii) any other leave of
absence approved by the Company, provided that such leave is for a period of not
more than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to a
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing. In the case of any employee on an approved
leave of absence, the Committee may make such provisions respecting suspension
of vesting of the Award while on leave from the employ of the Company or a
Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Option agreement.
The Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "Termination Date").
3. SHARES SUBJECT TO THE PLAN.
3.1 Number of Shares Available. Subject to Sections 3.2 and 18, the total
aggregate number of Shares reserved and available for grant and issuance
pursuant to this Plan shall be _________________________________ Shares and will
include Shares that are subject to:
12
(a) issuance upon exercise of an Option but cease to be subject to such Option
for any reason other than exercise of such Option; (b) an Award granted
hereunder but forfeited or repurchased by the Company at the original issue
price; and (c) an Award that otherwise terminates without Shares being issued.
At all times the Company shall reserve and keep available a sufficient number of
Shares as shall be required to satisfy the requirements of all outstanding
Options granted under this Plan and all other outstanding but unvested Awards
granted under this Plan.
3.2 Adjustment of Shares. In the event that the number of outstanding shares is
changed by a stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in the capital
structure of the Company without consideration, then (a) the number of Shares
reserved for issuance under this Plan, (b) the Exercise Prices of and number of
Shares subject to outstanding Options, and (c) the number of Shares subject to
other outstanding Awards will be proportionately adjusted, subject to any
required action by the Board or the stockholders of the Company and compliance
with applicable securities laws; provided, however, that fractions of a Share
will not be issued but will either be replaced by a cash payment equal to the
Fair Market Value of such fraction of a Share or will be rounded up to the
nearest whole Share, as determined by the Committee.
4. ELIGIBILITY.
Awards may be granted to employees, officers, directors, consultants,
independent contractors and advisors of the Company or any Parent or Subsidiary
of the Company. A person may be granted more than one Award under this Plan.
5. ADMINISTRATION.
5.1 Committee Authority. This Plan will be administered by the Committee or by
the Board acting as the Committee. Subject to the general purposes, terms and
conditions of this Plan, and to the direction of the Board, the Committee will
have full power to implement and carry out this Plan. Without limitation, the
Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this Plan or
any Award;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to Awards;
(f) determine whether Awards will be granted singly, in combination with, in
tandem with, in replacement of, or as alternatives to, other Awards under this
Plan or any other incentive or compensation plan of the Company or any Parent or
Subsidiary of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission or reconcile any inconsistency in
this Plan, any Award or any Award Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for the administration
of this Plan.
5.2 Committee Discretion. Any determination made by the Committee with respect
to any Award will be made at the time of grant of the Award or, unless in
contravention of any express term of this Plan or Award, at any later time, and
such determination will be final and binding on the Company and on all persons
having an interest in any Award under this Plan. The Committee may delegate to
one or more officers of the Company the authority to grant an Award under this
Plan to Participants who are not Insiders of the Company.
6. OPTIONS.
The Committee may grant Options to eligible persons, the number of Shares
subject to the Option, the Exercise Price of the Option, the period during which
the Option may be exercised, and all other terms and conditions of the Option,
subject to the following:
6.1 Form of Option Grant. Each Option granted under this Plan will be evidenced
by an Award Agreement (hereinafter referred to as the "Stock Option Agreement"),
and will be in such form and contain such provisions (which need not be the same
for each Participant) as the Committee may from time to time approve, and which
will comply with and be subject to the terms and conditions of this Plan.
13
6.2 Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, unless otherwise
specified by the Committee. The Stock Option Agreement and a copy of this Plan
will be delivered to the Participant within a reasonable time after the granting
of the Option.
6.3 Exercise Period. Options may be exercisable within the times or upon the
events determined by the Committee as set forth in the Stock Option Agreement
governing such Option; provided, however, that no Option will be exercisable
after the expiration of ten (10) years from the date the Option is granted. The
Committee also may provide for Options to become exercisable at one time or from
time to time, periodically or otherwise, in such number of Shares or percentage
of Shares as the Committee determines.
6.4 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and may be not less than 85% of the Fair
Market Value of the Shares on the date of grant; provided, however, in the case
of a grant to an officer or director, the Exercise Price must be the Fair Market
Value of the Shares on the date of grant. Payment for the Shares purchased may
be made in accordance with Section 9 of this Plan.
6.5 Method of Exercise. Options may be exercised only by delivery to the Company
of a written stock option exercise agreement (the "Exercise Agreement") in a
form approved by the Committee, (which need not be the same for each
Participant), stating the number of Shares being purchased, the restrictions
imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding the Participant's investment intent and
access to information and other matters, if any, as may be required or desirable
by the Company to comply with applicable securities laws, together with payment
in full of the Exercise Price for the number of Shares being purchased.
6.6 Termination. Notwithstanding the exercise periods set forth in the Stock
Option Agreement, exercise of an Option will always be subject to the following:
(a) If the Participant's service is Terminated for any reason except death or
Disability, then the Participant may exercise such Participant's Options only to
the extent that such Options would have been exercisable upon the Termination
Date no later than three months after the Termination Date (or such longer time
period not exceeding five years as may be determined by the Committee).
(b) If the Participant's service is Terminated because of the Participant's
death or Disability (or the Participant dies within three months after a
Termination other than for Cause or because of Participant's Disability), then
the Participant's Options may be exercised only to the extent that such Options
would have been exercisable by the Participant on the Termination Date and must
be exercised by the Participant (or the Participant's legal representative) no
later than 12 months after the Termination Date (or such longer time period not
exceeding five years as may be determined by the Committee).
(c) Notwithstanding the provisions in paragraph 6.6(a) above, if the
Participant's service is Terminated for Cause, neither the Participant, the
Participant's estate nor such other person who may then hold the Option shall be
entitled to exercise any Option with respect to any Shares whatsoever, after
Termination, whether or not after Termination the Participant may receive
payment from the Company or a Subsidiary for vacation pay, for services rendered
prior to Termination, for services rendered for the day on which Termination
occurs, for salary in lieu of notice, or for any other benefits. For the purpose
of this paragraph, Termination shall be deemed to occur on the date when the
Company dispatches notice or advice to the Participant that his service is
Terminated.
6.7 Limitations on Exercise. The Committee may specify a reasonable minimum
number of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent the Participant from exercising the
Option for the full number of Shares for which it is then exercisable.
6.8 Modification, Extension or Renewal. The Committee may modify, extend or
renew outstanding Options and authorize the grant of new Options in substitution
therefore, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant's rights under any Option
previously granted. The Committee may reduce the Exercise Price of outstanding
Options without the consent of Participants affected by a written notice to
them; provided, however, that the Exercise Price may not be reduced below the
minimum Exercise Price that would be permitted under Section 6.4 of this Plan
for Options granted on the date the action is taken to reduce the Exercise
Price.
7. STOCK AWARD.
A Stock Award is an offer by the Company to sell to an eligible person Shares
that may or may not be subject to restrictions. The Committee will determine to
whom an offer will be made, the number of Shares the person may purchase, the
price to be paid (the "Purchase Price"), the restrictions to which the Shares
will be subject, if any, and all other terms and conditions of the Stock Award,
subject to the following:
7.1 Form of Stock Award. All purchases under a Stock Award made pursuant to this
Plan will be evidenced by an Award Agreement
14
(the "Stock Purchase Agreement") that will be in such form (which need not be
the same for each Participant) as the Committee will from time to time approve,
and will comply with and be subject to the terms and conditions of this Plan.
The offer of a Stock Award will be accepted by the Participant's execution and
delivery of the Stock Purchase Agreement and payment for the Shares to the
Company in accordance with the Stock Purchase Agreement.
7.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Stock Award
will be determined by the Committee on the date the Stock Award is granted and
may not be less than 85% of the Fair Market Value of the Shares on the grant
date, except in the case of a sale to an officer or director, in which case the
Purchase Price will be 100% of the Fair Market Value. Payment of the Purchase
Price must be made in accordance with Section 9 of this Plan.
7.3 Terms of Stock Awards. Stock Awards may be subject to such restrictions as
the Committee may impose. These restrictions may be based upon completion of a
specified number of years of service with the Company or upon completion of
performance goals set out in advance in the Participant's individual Stock
Purchase Agreement. Stock Awards may vary from Participant to Participant and
between groups of Participants. Prior to the grant of a Stock Award subject to
restrictions, the Committee shall: (a) determine the nature, length and starting
date of any Performance Period for the Stock Award; (b) select from among the
Performance Factors to be used to measure performance goals, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to
the transfer of any Stock Award, the Committee shall determine the extent to
which such Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Awards that
are subject to different Performance Periods and have different performance
goals and other criteria.
7.4 Termination During Performance Period. If a Participant is Terminated during
a Performance Period for any reason, then the Company shall be entitled to pay
such Participant in Shares or cash with respect to the Stock Award, but only to
the extent earned as of the date of Termination in accordance with the Stock
Purchase Agreement, unless the Committee determines otherwise.
8. STOCK BONUSES.
8.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares for
extraordinary services rendered to the Company or any Parent or Subsidiary of
the Company. A Stock Bonus will be awarded pursuant to an Award Agreement (the
"Stock Bonus Agreement") that will be in such form (which need not be the same
for each Participant) as the Committee will from time to time approve, and will
comply with and be subject to the terms and conditions of this Plan. Stock
Bonuses may vary from Participant to Participant and between groups of
Participants, and may be awarded in connection with an achievement of the
Company, Parent or Subsidiary, in recognition of exceptional services rendered
to the Company, Parent or Subsidiary by the Participant and/or based on
individual performance factors or upon such other criteria as the Committee may
determine.
8.2 Terms of Stock Bonuses. The Committee will determine the number of Shares to
be awarded to the Participant. If the Stock Bonus is being earned upon the
satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Committee will: (a) determine the nature, length and
starting date of any Performance Period for each Stock Bonus; (b) select from
among the Performance Factors to be used to measure the performance, if any; and
(c) determine the number of Shares that may be awarded to the Participant. Prior
to the payment of any Stock Bonus, the Committee shall determine the extent to
which such Stock Bonuses have been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Bonuses that
are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with
such performance goals and criteria as may be determined by the Committee. The
Committee may adjust the performance goals applicable to the Stock Bonuses to
take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.
8.3 Form of Payment. The earned portion of a Stock Bonus may be paid to the
Participant by the Company either currently or on a deferred basis, with such
interest or dividend equivalent, if any, as the Committee may determine. Payment
of an interest or dividend equivalent (if any) may be made in the form of cash
or whole Shares or a combination thereof, either in a lump sum payment or in
installments, all as the Committee will determine.
9. PAYMENT FOR SHARE PURCHASES.
Payment for Shares purchased pursuant to this Plan may be made in cash (by
check) or, where expressly approved for the Participant by the Committee and
where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares that either: (1) have been owned by the Participant
for more than six (6) months and have been paid for within the meaning of SEC
Rule 144; or (2) were obtained by the Participant in the public market;
(c) by waiver of compensation due or accrued to the Participant for services
rendered;
15
(d) with respect only to purchases upon exercise of an Option, and provided that
a public market for the Company's stock exists:
(1) through a "same day sale" commitment from the Participant and a
broker-dealer that is a member of the National Association of Securities Dealers
(an "NASD Dealer") whereby the Participant irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased to pay for the Exercise
Price, and whereby the NASD Dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to the Company; or
(2) through a "margin" commitment from the Participant and a NASD Dealer whereby
the Participant irrevocably elects to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
(f) by any combination of the foregoing.
10. WITHHOLDING TAXES.
10.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan, the Company may require the Participant to remit
to the Company an amount sufficient to satisfy local tax requirements prior to
the delivery of any certificate or certificates for such Shares. Whenever, under
this Plan, payments in satisfaction of Awards are to be made in cash, such
payment will be net of an amount sufficient to satisfy local tax requirements.
10.2 Stock Withholding. When, under applicable tax laws, a participant incurs
tax liability in connection with the exercise or vesting of any Award that is
subject to tax withholding and the Participant is obligated to pay the Company
the amount required to be withheld, the Committee may allow the Participant to
satisfy the minimum withholding tax obligation by electing to have the Company
withhold from the Shares to be issued that number of Shares having a Fair Market
Value equal to the minimum amount required to be withheld, determined on the
date that the amount of tax to be withheld is to be determined. All elections by
a Participant to have Shares withheld for this purpose will be made in
accordance with the requirements established by the Committee and will be in
writing in a form acceptable to the Committee.
11. PRIVILEGES OF STOCK OWNERSHIP.
11.1 Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and will have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are issued pursuant to a Stock Award with restrictions, then any new,
additional or different securities the Participant may become entitled to
receive with respect to such Shares by virtue of a stock dividend, stock split
or any other change in the corporate or capital structure of the Company will be
subject to the same restrictions as the Stock Award.
11.2 Financial Statements. The Company will provide financial statements to each
Participant prior to such Participant's purchase of Shares under this Plan, and
to each Participant annually during the period such Participant has Awards
outstanding; provided, however, the Company will not be required to provide such
financial statements to Participants whose services in connection with the
Company assure them access to equivalent information.
12. NON-TRANSFERABILITY.
Awards of Shares granted under this Plan, and any interest therein, will not be
transferable or assignable by the Participant, and may not be made subject to
execution, attachment or similar process, other than by will or by the laws of
descent and distribution. Awards of Options granted under this Plan, and any
interest therein, will not be transferable or assignable by the Participant, and
may not be made subject to execution, attachment or similar process, other than
by will or by the laws of descent and distribution, by instrument to an inter
vivos or testamentary trust in which the options are to be passed to
beneficiaries upon the death of the trustor, or by gift to "immediate family" as
that term is defined in 17 C.F.R. 240.16a-1(e). During the lifetime of the
Participant an Award will be exercisable only by the Participant. During the
lifetime of the Participant, any elections with respect to an Award may be made
only by the Participant unless otherwise determined by the Committee and set
forth in the Award Agreement with respect to Awards that are not ISOs.
13. CERTIFICATES.
All certificates for Shares or other securities delivered under this Plan will
be subject to such stop transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.
16
14. ESCROW; PLEDGE OF SHARES.
To enforce any restrictions on a Participant's Shares, the Committee may require
the Participant to deposit all certificates representing Shares, together with
stock powers or other instruments of transfer approved by the Committee
appropriately endorsed in blank, with the Company or an agent designated by the
Company to hold in escrow until such restrictions have lapsed or terminated, and
the Committee may cause a legend or legends referencing such restrictions to be
placed on the certificates.
15. EXCHANGE AND BUYOUT OF AWARDS.
The Committee may, at any time or from time to time, authorize the Company, with
the consent of the respective Participants, to issue new Awards in exchange for
the surrender and cancellation of any or all outstanding Awards. The Committee
may at any time buy from a Participant an Award previously granted with payment
in cash, Shares or other consideration, based on such terms and conditions as
the Committee and the Participant may agree.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
An Award will not be effective unless such Award is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company
will have no obligation to issue or deliver certificates for Shares under this
Plan prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.
17. NO OBLIGATION TO EMPLOY.
Nothing in this Plan or any Award granted under this Plan will confer or be
deemed to confer on any Participant any right to continue in the employ of, or
to continue any other relationship with, the Company or any Parent or Subsidiary
of the Company or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant's employment or other
relationship at any time, with or without cause.
18. CORPORATE TRANSACTIONS.
18.1 Assumption or Replacement of Awards by Successor. In the event of (a) a
dissolution or liquidation of the Company, (b) a merger or consolidation in
which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 18.1, (i)
the vesting of any or all Awards granted pursuant to this Plan will accelerate
upon a transaction described in this Section 18 and (ii) any or all Options
granted pursuant to this Plan will become exercisable in full prior to the
consummation of such event at such time and on such conditions as the Committee
determines. If such Options are not exercised prior to the consummation of the
corporate transaction, they shall terminate at such time as determined by the
Committee.
18.2 Other Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 18, in the event of
the occurrence of any transaction described in Section 18.1, any outstanding
Awards will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets.
18.3 Assumption of Awards by the Company. The Company, from time to time, also
may substitute or assume outstanding awards granted
17
by another company, whether in connection with an acquisition of such other
company or otherwise, by either; (a) granting an Award under this Plan in
substitution of such other company's award; or (b) assuming such award as if it
had been granted under this Plan if the terms of such assumed award could be
applied to an Award granted under this Plan. Such substitution or assumption
will be permissible if the holder of the substituted or assumed award would have
been eligible to be granted an Award under this Plan if the other company had
applied the rules of this Plan to such grant. In the event the Company assumes
an award granted by another company, the terms and conditions of such award will
remain unchanged (except that the exercise price and the number and nature of
Shares issuable upon exercise of any such option will be adjusted
appropriately). In the event the Company elects to grant a new Option rather
than assuming an existing option, such new Option may be granted with a
similarly adjusted Exercise Price.
19. ADOPTION AND STOCKHOLDER APPROVAL.
This Plan will become effective on the date on which it is adopted by the Board
(the "Effective Date"). Upon the Effective Date, the Committee may grant Awards
pursuant to this Plan. The Company intends to seek stockholder approval of the
Plan within 12 months after the date this Plan is adopted by the Board.
20. TERM OF PLAN/GOVERNING LAW.
Unless earlier terminated as provided herein, this Plan will terminate 10 years
from the date this Plan is adopted by the Board or, if earlier, the date of
stockholder approval. This Plan and all agreements thereunder shall be governed
by and construed in accordance with the laws of the State of Wyoming.
21. AMENDMENT OR TERMINATION OF PLAN.
The Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Board will not,
without the approval of the stockholders of the Company, amend this Plan in any
manner that requires such stockholder approval.
22. NONEXCLUSIVITY OF THE PLAN.
Neither the adoption of this Plan by the Board, the submission of this Plan to
the stockholders of the Company for approval, nor any provision of this Plan
will be construed as creating any limitations on the power of the Board to adopt
such additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
23. ACTION BY COMMITTEE.
Any action permitted or required to be taken by the Committee or any decision or
determination permitted or required to be made by the Committee pursuant to this
Plan shall be taken or made in the Committee's sole and absolute discretion.
18
INTERMOST CORPORATION
10th Floor, B10-07 Guomao Building, Renmin Road (South)
Schenzhen, China 518014
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Intermost Corporation (the "Company") hereby
appoints Andy Lin as the attorney and proxy of the undersigned, with the powers
the undersigned would possess if personally present, and with full power of
substitution, to vote all shares of common stock of the Company at the Annual
Meeting of Stockholders of the Company to be held on Wednesday, January 28, 2004
at 11:00 a.m. at Conference Room, 35/F Central Plaza, 18 Harbour Road, Wanchai,
Hong Kong and at any adjournment or postponement thereof, upon all subjects that
may properly come before the meeting, including the matters described in the
Proxy Statement furnished herewith, subject to any directions indicated below.
PROPOSAL 1 - ELECTION OF DIRECTORS:
|_| FOR all four nominees listed below.
|_| WITHHOLD AUTHORITY to vote for all four nominees for director listed below.
|_| FOR all four nominees for director listed below, except WITHHOLD AUTHORITY
to vote for the nominee(s) whose name(s) is (are) lined through. Nominees: Andy
Lin; Sai Keung Chan; Shim Yang; Catalina Chan
PROPOSAL 2 - Approval of the Amendment to the Articles of Incorporation
increasing the number of shares of authorized common stock to 500,000,000.
|_| FOR |_| AGAINST |_| ABSTAIN
PROPOSAL 3 - APPROVING THE INTERMOST CORPORATION 2003 EQUITY INCENTIVE PLAN.
|_| FOR |_| AGAINST |_| ABSTAIN
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholders(s). If no direction is made, this proxy will be
voted "FOR" the nominees of the Board of Directors in the election of directors,
"FOR" the proposal to amend the Articles of Incorporation to increase the
authorized shares of common stock to 500,000,000, and "FOR" the approval of the
Intermost Corporation 2003 Equity Incentive Plan. This proxy also delegates
discretionary authority to vote with respect to any other business which may
properly come before the meeting or any adjournment or postponement thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING AND
PROXY STATEMENT FURNISHED IN CONNECTION THEREWITH AND HEREBY RATIFIES ALL THAT
THE SAID ATTORNEYS AND PROXIES MAY DO BY VIRTUE HEREOF.
Dated:__________________, 200__
________________________________________
(Stockholder's Signature)
________________________________________
(Stockholder's Signature)
Note: Please mark, date and sign this proxy card and return it in the enclosed
envelope. Please sign as your name appears hereon. If shares are registered in
more than one name, all owners should sign. If signing in a fiduciary or
representative capacity, please give full title and attach evidence of
authority. Corporations please sign with full corporate name by a duly
authorized officer and affix corporate seal.