UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934
Filed
by
the Registrant
x
Filed
by
a Party other than the Registrant
o
Check
the
appropriate box:
o
Preliminary
Proxy Statement
o
Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
x
Definitive
Proxy Statement
o
Definitive
Additional
Materials
o
Soliciting
Material Pursuant
to §240.14a-12
Diguang
International Development Co., Ltd.
(Name
of
Registrant as Specified In Its Charter)
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
x
No
fee required.
o
Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1)
Title
of each class of securities to which transaction applies:
2)
Aggregate number of securities to which transaction applies:
3)
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4)
Proposed maximum aggregate value of transaction:
5)
Total
fee paid:
o
Fee paid previously
with preliminary materials.
o
Check box if any part
of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify
the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule
and
the date of its filing.
1)
Amount
Previously Paid:
2)
Form,
Schedule or Registration Statement No.:
3)
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Party:
4)
Date
Filed:
DIGUANG INTERNATIONAL DEVELOPMENT CO., LTD.
Notice
Of Annual Meeting Of Stockholders
To
Be Held On November 28, 2007
The
Annual Meeting of Stockholders of Diguang International Development Co.,
Ltd.,
the “Company”, will be held on November 28, 2007, Wednesday, at 10 a.m. local
time at 23/F, Building A, Galaxy Century, No. 3069 Caitian Road, Futian
District, Shenzhen, P.R. China/Post Code: 518026 for the following purposes,
as
more fully described in the accompanying proxy statement:
1.
To elect five directors to hold office until the 2008 Annual Meeting of
Stockholders and until their successors are elected and qualified.
2.
To ratify the appointment of BDO Reanda as the Company’s independent auditors
for the fiscal year ending December 31, 2007.
3.
To transact such other business as may properly come before the meeting or
any
adjournments or postponements thereof.
Only
stockholders of record at the close of business on October 26, 2007 will
be
entitled to notice of, and to vote at, such meeting or any adjournments or
postponements thereof.
BY
ORDER OF THE BOARD OF DIRECTORS
Yi
Song
Chairman
Shenzhen,
People's Republic of China
October
27, 2007
YOUR
VOTE IS IMPORTANT!
WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND MAIL
PROMPTLY THE ACCOMPANYING PROXY CARD IN THE ENCLOSED RETURN ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THIS WILL ENSURE THE
PRESENCE OF A QUORUM AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE
IN
PERSON IF YOU WISH TO DO SO EVEN IF YOU HAVE PREVIOUSLY SENT IN YOUR PROXY
CARD.
DIGUANG INTERNATIONAL DEVELOPMENT CO., LTD.
23/F,
Building A, Galaxy Century, No. 3069 Caitian Road,
Futian
District, Shenzhen, P.R. China
011-86-755-2655-3152
PROXY
STATEMENT
2007
ANNUAL MEETING OF STOCKHOLDERS
Diguang
International Development Co., Ltd., the “Company”, is furnishing this proxy
statement and the enclosed proxy in connection with the solicitation of proxies
by the Board of Directors of the Company for use at the Annual Meeting of
Stockholders to be held on November 28, 2007, Wednesday, at 10 a.m. local
time,
at 23/F, Building A, Galaxy Century, No. 3069 Caitian Road, Futian
District, Shenzhen, P.R. China/Post Code: 518026, and at any adjournments
thereof, the “Annual Meeting”. These materials will be mailed to stockholders on
or about October 27, 2007.
Only
holders of the Company’s common stock as of the close of business on October 26,
2007, the “Record Date”, are entitled to vote at the Annual Meeting.
Stockholders who hold shares of the Company in “street name” may vote at the
Annual Meeting only if they hold a valid proxy from their broker. As of the
Record Date, there were approximately 22,370,000 shares of common stock outstanding.
A
majority of the outstanding shares of common stock entitled to vote at the
Annual Meeting must be present in person or by proxy in order for there to
be a
quorum at the meeting. Stockholders of record who are present at the meeting
in
person or by proxy and who abstain from voting, including brokers holding
customers’ shares of record who cause abstentions to be recorded at the meeting,
will be included in the number of stockholders present at the meeting for
purposes of determining whether a quorum is present.
Each
stockholder of record is entitled to one vote at the Annual Meeting for each
share of common stock held by such stockholder on the Record Date. Stockholders
do not have cumulative voting rights. Stockholders may vote their shares
by
using the proxy card enclosed with this proxy statement. All proxy cards
received by the Company, which are properly signed and have not been revoked
will be voted in accordance with the instructions contained in the proxy
cards.
If a signed proxy card is received which does not specify a vote or an
abstention, the shares represented by that proxy card will be voted for the
nominees to the Board of Directors listed on the proxy card and in this proxy
statement, and for the ratification of the appointment of BDO Reanda as the
Company’s independent auditors for the fiscal year ending December 31, 2007. The
Company is not aware, as of the date hereof, of any matters to be voted upon
at
the Annual Meeting other than those stated in this proxy statement and the
accompanying Notice of Annual Meeting of Stockholders. If any other matters
are
properly brought before the Annual Meeting, the enclosed proxy card gives
discretionary authority to the persons named as proxies to vote the shares
represented by the proxy card in their discretion.
Under
Nevada law and the Company’s Certificate of Incorporation and Bylaws, if a
quorum exists at the meeting, the affirmative vote of a plurality of the
votes
cast at the meeting is required for the election of directors. A properly
executed proxy marked “Withhold authority” with respect to the election of one
or more directors will not be voted with respect to the director or directors
indicated, although it will be counted for purposes of determining whether
there
is a quorum. For each other item, the affirmative vote of the holders of
a
majority of the shares represented in person or by proxy and entitled to
vote on
the item will be required for approval. A properly executed proxy marked
“Abstain” with respect to any such matter will not be voted, although it will be
counted for purposes of determining whether there is a quorum. Accordingly,
an
abstention will have the effect of a negative vote.
For
shares held in “street name” through a broker or other nominee, the broker or
nominee may not be permitted to exercise voting discretion with respect to
some
of the matters to be acted upon. Thus, if stockholders do not give their
broker
or nominee specific instructions, their shares may not be voted on those
matters
and will not be counted in determining the number of shares necessary for
approval. Shares represented by such “broker non-votes” will, however, be
counted in determining whether there is a quorum.
A
stockholder of record may revoke a proxy at any time before it is voted at
the
Annual Meeting by (a) delivering a proxy revocation or another duly
executed proxy bearing a later date to Mr. Wang Hua, the Secretary of the
Company, at 23/F, Building A, Galaxy Century, No. 3069 Caitian Road, Futian
District, Shenzhen, P.R. China, or (b) attending the Annual Meeting and
voting in person. Attendance at the Annual Meeting will not revoke a proxy
unless the stockholder actually votes in person at the
meeting.
The
proxy
card accompanying this proxy statement is solicited by the Board of Directors
of
the Company. The Company will pay all of the costs of soliciting proxies.
In
addition to solicitation by mail, officers, directors and employees of the
Company may solicit proxies personally, or by telephone, without receiving
additional compensation. The Company, if requested, will also pay brokers,
banks
and other fiduciaries who hold shares of Common Stock for beneficial owners
for
their reasonable out-of-pocket expenses of forwarding these materials to
stockholders.
BOARD
OF DIRECTORS
The
name,
age and year in which the term expires of each member of the Board of Directors
of the Company is set forth below:
Name
|
|
Age
|
Position
|
|
Term
Expires
on
the
Annual
Meeting
held
in the Year
|
Yi
Song
|
|
49
|
Chief
Executive Officer, President and Chairman of the Board of the Directors
|
|
2008
|
Hong
Song
|
|
44
|
Director
|
|
2008
|
Tuen-Ping
Yang
|
|
61
|
Director
|
|
2008
|
Dexter
Fong
|
|
48
|
Director
|
|
2008
|
Hoi
S. Kwok
|
|
56
|
Director
|
|
2008
|
At
the
Annual Meeting, the stockholders will vote on the election of Yi Song, Hong
Song, Tuen-Ping Yang, Dexter Fong and Hoi S. Kwok as directors to serve for
a
one-year term until the annual meeting of stockholders in 2008 and until
their
successors are elected and qualified. All directors will hold office until
the
annual meeting of stockholders at which their terms expire and the election
and
qualification of their successors.
NOMINEES
AND CONTINUING DIRECTORS
The
following individuals have been nominated for election to the Board of Directors
or will continue to serve on the Board of Directors after the Annual Meeting:
Yi
Song,
Board Chairman, President and Chief Executive Officer, established Diguang
Electronics in 1996 and has been its chairman since inception. Mr. Song started
his career in 1976 when he joined Hubei Wei Te Engine Factory as a technician.
He was subsequently promoted to the position of engineer and thereafter,
director of technology. From 1978 to 1979, he conducted research in the
detecting fuse tube system of mathematical control together with a team of
researchers from Wuhan Wireless Research Institute. From 1990 to 1996, he
worked
in the field of the marketing and sales operation in Shenzhen Nanji
Electromechanical Company Ltd. under Aidi (Group) Corporation of China. Mr.
Song
is one of the members of SID (Society for Information Display), the Deputy
Director (Commissioner) of Working Committee of Shenzhen Electronics
Communication Experts, one of the members of China Flat Plate Display
Association, and Deputy Director of Shenzhen Optoelectronic Industry
Association. In 2003, he was awarded Excellent Entrepreneur by Shenzhen
Government and in 2006 he was again awarded the same title. Mr. Song cooperated
with Wuhan University to research and develop the computer detecting project
of
Motor Automation Control Engineering. Mr. Song has completed a CEO course
from
Tsinghua University that focused on International Enterprise Management and
is
now working towards receiving his MBA for the University of Southern Queensland.
Mr. Song is Hong Song's older brother and Tuen-Ping Yang's nephew.
Hong
Song, Chief Operating Officer, joined Diguang Electronics in January 2001
and
became Chief Operating Officer in 2006. Prior to joining Diguang Electronics,
Mr. Song was an engineer involved in the design of mining engineering equipment
at Beijing Engineering Design & Research Institute for Nonferrous Metals
Industry (ENFI) from 1983 to 1990, where he was later promoted to project
chief
designer. Mr. Song has also held management positions at China National
Non-Ferrous Metals Industry Corporation (CNNC) from 1990 to 1998. He obtained
a
degree in Mechanical Engineering from Xi’an Construction Technology University
in 1983 and participated in post-graduate studies in Project Economic Analysis
at Paris Mineral Industries University in Paris, France from 1998 to 1999.
Mr.
Song received his MBA from Peking University in 2001. Mr. Song is Yi Song’s
younger brother and Tuen-Ping Yang’s nephew.
Tuen-Ping
Yang, Independent Director, a Director of the Company since March, 2006 and
has
been the President of Cinema Systems, Inc. located in California since 1992.
Previously, from 1984 to 1986, Mr. Yang served as the President of World
Television Network and a Director of the Los Angeles National Bank. He has
also
been an Assistant Professor at Chinese Culture University, and a Manager
of CMPC
Taipei, Taiwan. He received his first Golden House Award (Taiwan’s Oscar Award)
as the Best Film Director in 1972, and has received that award an additional
three times since that date. He received his bachelor's degree from the National
Taiwan University of Arts in 1967 and his master’s degree of Fine Arts from the
University of California, Los Angeles, U.S. in 1976. Mr. Yang is Yi Song’s and
Hong Song’s uncle.
Dexter
Fong, Independent Director, is a Certified Public Accountant, has been a
director of the Company since August 2007 and since December 2006 has served
as
the Executive Vice President for Corporate Development of Fuqi International,
Inc. From January 2004 to November 2006, Mr. Fong served as the managing
partner
of Iceberg Financial Consultants, a financial advisory firm based in China
that
advises Chinese clients on raising capital in the United States. From March
2002
to March 2004, Mr. Fong served as Chief Financial Officer of Pacific Systems
Control Technology, Inc. (NASDAQ: PFSY), a Chinese company listed on NASDAQ
and
later on OTCBB. From December 2001 to December 2003, Mr. Fong was the Chief
Executive Officer of Holley Communications, a Chinese company that engaged
in
CDMA chip and cell phone design. Mr. Fong currently serves as an independent
director and audit committee member of Universal Technology Holdings Limited
(HK
Stock Code 8091), a Hong Kong public company, and as an independent director
and
chairman of the audit committee of Stone Mountain Resources, Inc., a U.S.
public
company (OTCBB: SMOU). Mr. Fong graduated from the Baptist University with
a
diploma in history in 1982. He has a MBA from the University of Nevada at
Reno
and a Masters in Accounting from the University of Illinois at Urbana-Champagne.
Dr.
Hoi
S. Kwok
,
Independent Director,
has
been
a director of the Company since August 2007 and
has
been
the Dr. William Mong Endowed Chair Professor of Nanotechnology at the Hong
Kong
University of Science and
Technology
since
1994. He
has served as a consultant to numerous companies, and currently for Bona
Fide
Instruments, Ltd (Hong Kong), Integrated Microdisplays Limited (Hong Kong),
and
Himax Displays (Taiwan). He has founded four companies, and most recently
eLite
Displays (Hong Kong) in 2004. He received his B.S. in Electrical Engineering
from Northwestern University in 1973, and received his B.S. and Ph.D. in
Applied
Physics from Harvard University in 1974 and 1978, respectively.
DIRECTOR
NOMINATION
Criteria
for Board Membership. In recommending
candidates
for appointment or re-election to the Board, the nominating committee (the
“nominating committee”) considers the appropriate balance of experience, skills
and characteristics required of the Board of Directors. It seeks to ensure
that
at least three directors are independent under the rules of the Nasdaq Stock
Market, that members of the Company’s audit committee meet the financial
literacy and sophistication requirements under the rules of the Nasdaq Stock
Market, and at least one member of the Board qualifies as an “audit committee
financial expert” under the rules of the Securities and Exchange Commission.
Nominees for director are recommended on the basis of their depth and breadth
of
experience, integrity, ability to make independent analytical inquiries,
understanding of the Company’s business environment, and willingness to devote
adequate time to Board duties.
Stockholder
Nominees. The nominating committee will consider written proposals from
stockholders for nominees for director. Any such nominations should be submitted
to the nominating committee c/o Mr. Wang Hua, the Secretary of the Company,
and
should include the following information: (a) all information relating to
such nominee that is required to be disclosed pursuant to Regulation 14A
under the Securities Exchange Act of 1934 (including such person’s written
consent to being named in the proxy statement as a nominee and to serving
as a
director if elected); (b) the names and addresses of the stockholders
making the nomination and the number of shares of the Company’s common stock
which are owned beneficially and of record by such stockholders; and
(c) appropriate biographical information and a statement as to the
qualification of the nominee, and should be submitted in the time frame
described in the Bylaws of the Company and under the caption, “Stockholder
Proposals for 2008 Annual Meeting” below. Stockholder Nominees.
Process
for Identifying and Evaluating Nominees. The nominating committee believes
the
company is well-served by its current directors. In the ordinary course,
absent
special circumstances or a material change in the criteria for Board membership,
the nominating committee will renominate incumbent directors who continue
to be
qualified for Board service and are willing to continue as directors. If
an
incumbent director is not standing for re-election, or if a vacancy on the
Board
occurs between annual stockholder meetings, the nominating committee will
seek
out potential candidates for Board appointment who meet the criteria for
selection as a nominee and have the specific qualities or skills being sought.
Director candidates will be selected based on input from members of the Board,
senior management of the company and, if the nominating committee deems
appropriate, a third-party search firm. The nominating committee will evaluate
each candidate's qualifications and check relevant references; in addition,
such
candidates will be interviewed by at least one member of the nominating
committee. Candidates meriting serious consideration will meet with all members
of the Board. Based on this input, the nominating committee will evaluate
which
of the prospective candidates is qualified to serve as a director and whether
the committee should recommend to the Board that this candidate be appointed
to
fill a current vacancy on the Board, or presented for the approval of the
stockholders, as appropriate.
The
Company has never received a proposal from a stockholder to nominate a director.
Although the nominating committee has not adopted a formal policy with respect
to stockholder nominees, the committee expects that the evaluation process
for a
stockholder nominee would be similar to the process outlined above.
Board
Nominees for the 2007 Annual Meeting.
Mr.
Yi
Song, Mr. Hong Song, Mr. Tuen-Ping Yang, Dexter Fong and Hoi S. Kwok are
current
directors standing for re-election. Dexter Fong and Hoi S. Kwok were appointed
to the Board in August, 2007. They were recommended for nomination
by
Yi
Song, the Company’s CEO, and approved by the Board of Directors then in office.
DIRECTOR
COMPENSATION
Effective
from March, 2006, independent Directors receive a director fee from the Company
for their services as members of the Board of Directors and any committee
of the
Board of Directors in the amount of $3,000 per month for the Chairman of
the Audit Committee, $2,000 per month for the Chairman of the Compensation
Committee and $2,000 per month for the Chairman of the Nominating Committee..
They are reimbursed for certain expenses in connection with attending Board
and
committee meetings.
Diguang’s
outstanding 2006 stock incentive plan, “Diguang 2006 Option Plan”, covers
options totaling the equivalent of 1,500,000 shares of the Company’s common
stock. As of December 31, 2006, approximately 540,000 shares of the Company’s
common stock were issued under the Diguang 2006 Option Plan. None of these
options has been exercised and 34,000 shares subject to the option were
forfeited due to staff resignation. The exercise price for each of these
options
is $5.00 per share. The commencement date for these options is March 1, 2006,
with monthly vesting at the end of each month after March 1, 2006, for the
three
independent directors as well as for the chief financial officer and yearly
vesting for the other employees of Diguang; The options that have been issued
expire ten years from their grant date (which date is February 25, 2006 or
the
date the optionee commences his or her service relationship with us, whichever
is the later date).
On
February 25, 2007, the Company issued additional options to purchase 20,000
shares of common stock to each of its three independent directors. Such
stock options were vested immediately upon grant and are exercisable at $5
per
share over a period of three years. The exercise price represented the
fair market value based on the grant date of the stock options.
BOARD
MEETINGS AND COMMITTEES
The
Company’s Board of Directors met in person or by conference call nine (9) times
during fiscal 2006. The Audit Committee met by conference call two (2) times,
the Compensation Committee met by conference call one (1) time and the
Nominating Committee met by conference call one (1) time during fiscal 2006.
Each member of the Board attended 95% or more of the Board meetings, and
each
member of the Board who served on either the Audit, Compensation or Nominating
Committee attended 100% of the committee meetings.
The
Board
has determined that the following directors are “independent” under current
Nasdaq rules: Tuen-Ping Yang, Dexter Fong and Hoi S. Kwok.
The
Board
of Directors has standing Audit, Compensation and Nominating Committees.
Audit
Committee.
The
audit committee currently consists of Dexter Fong (chairman), Hoi S. Kwok
and
Tuen-Ping Yang. The Board has determined that all members of the Audit Committee
are independent directors under the rules of the Nasdaq Stock Market. The
Board
has determined that Dexter Fong qualifies as an “audit committee financial
expert” as defined by the rules of the Securities and Exchange Commission. The
purpose of the Audit Committee is to oversee the accounting and financial
reporting processes of the Company and audits of its financial statements.
The
responsibilities of the Audit Committee include appointing and providing
the
compensation of the independent accountants to conduct the annual audit of
our
accounts, reviewing the scope and results of the independent audits, reviewing
and evaluating internal accounting policies, and approving all professional
services to be provided to the Company by its independent accountants. The
Audit
Committee operates under a written charter filed at
www.diguangintl.com.
Compensation
Committee.
The
Compensation Committee currently consists of Hoi S. Kwok
(chairman), Tuen-Ping Yang and Dexter Fong. The Board has determined that
all members of the Compensation Committee are independent directors under
the
rules of the Nasdaq Stock Market. The Compensation Committee administers
the
Company’s benefit plans, reviews and administers all compensation arrangements
for executive officers, and establishes and reviews general policies relating
to
the compensation and benefits of our officers and employees. The Compensation
Committee operates under a written charter filed at
www.diguangintl.com.
Nominating
Committee.
The
Nominating Committee currently consists of Tuen-Ping Yang (chairman), Dexter
Fong and Hoi S. Kwok, each of whom the Board has determined is an independent
director under the rules of the Nasdaq Stock Market. The Nominating Committee’s
responsibilities include recommending to the Board of Directors nominees
for
possible election to the Board of Directors and providing oversight with
respect
to corporate governance. The Nominating Committee operates under a written
charter filed at www.diguangintl.com.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
For
the
twelve months ended December 31, 2007, none of our executive officers had
a
relationship that would constitute an interlocking relationship with executive
officers or directors of another entity or insider participation in compensation
decisions.
COMMUNICATIONS
WITH DIRECTORS
Stockholders
interested in communicating directly with our Directors may send an e-mail
to
the Company’s independent director Dexter Fong at dexterfong@gmail.com. Mr. Fong
will review all such correspondence and will regularly forward to the Board
of
Directors copies of all such correspondence that deals with the functions
of the
Board or committees thereof or that he otherwise determines requires their
attention. Directors may at any time review all of the correspondence received
that is addressed to members of the Board of Directors and request copies
of
such correspondence. Concerns relating to accounting, internal controls or
auditing matters will immediately be brought to the attention of the Audit
Committee and handled in accordance with procedures established by the Audit
Committee with respect to such matters.
The
Company has a policy of encouraging all directors to attend the annual
stockholder meetings. This will be the second Annual Meeting since the Company's
current management took over the Company in March, 2006. Last year three
(3)
directors attended the Annual Meeting.
CODE
OF CONDUCT AND ETHICS
The
Company has adopted a code of conduct and ethics that applies to all directors,
officers and employees, including its principal executive officer, principal
financial officer and controller. This code of conduct and ethics was filed
as
Exhibit 14.1 to the Company’s Annual Report on Form 10K for the fiscal
year ended December 31, 2006 filed with the Securities and Exchange
Commission.
SECURITY
OWNERSHIP OF DIRECTORS AND
OFFICERS
AND CERTAIN BENEFICIAL OWNERS
The
following table sets forth certain information known to the Company with
respect
to the beneficial ownership of the Company's Common Stock as of September
30,
2007 by (i) each person who is known by the Company to own beneficially more
than 5% of the Company's Common Stock, (ii) each of the Company's directors
and
executive officers, and (iii) all executive officers and directors as a group.
Except as otherwise listed below, the address of each person is c/o Diguang
International Development Co., Ltd.,
23/F,
Building A, Galaxy Century, No. 3069 Caitian Road, Futian District, Shenzhen,
P.R. China/Post Code: 518026
.
Percentage ownership is based upon 22,393,000 shares outstanding as of September
30, 2007.
Name,
Title, Address
|
Number
of Shares
|
|
|
Beneficially
Owned (1)
|
|
Sino
Olympics Industrial Limited (2)
|
15,590.000
|
69.0%
|
|
|
|
Yi
Song, Chief Executive Officer, Chairman of the Board and President
(2)
|
15,590,000
|
69.0%
|
|
|
|
Hong
Song, Chief Operating Officer, and Director (2)
|
3,118,000
|
13.8%
|
|
|
|
Other
executive officers
|
0
|
0
|
|
|
|
Dexter
Fong, Director
|
0
|
0
|
|
|
|
Hoi
S. Kwok, Director
|
0
|
0
|
|
|
|
Tuen-Ping
Yang, Director
|
10,555
(3)
|
0.0467%
|
|
|
|
All
current Executive Officers as a Group
|
15,590,000
|
69%
|
|
|
|
All
current Directors who are not Executive Officers as a
Group
|
10,555
|
0.0467%
|
(1)
The
number of shares beneficially owned by a person includes Common Stock subject
to
options held by that person that were currently exercisable at, or exercisable
within 60 days of the date of this proxy statement. The Common Stock issuable
under those options are treated as if they were outstanding for purposes
of
computing the percentage ownership of the person holding these options but
are
not treated as if they were outstanding for the purposes of computing the
percentage ownership of any other person.
(2)
The
shares are held of record by Sino Olympics Industrial Limited, a corporation
in
which Ying Song owns 80% of the shares and Hong Song owns 20%. Ying Song
and
Hong Song disclaim beneficial ownership of the shares held by Sino Olympics
Industrial Limited except to the extent of their pecuniary interests
therein.
(3)
Represents shares that may be acquired within 60 days through the exercise
of
stock options.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
According
to the lease agreement between Shenzhen Diguang Electronics (“Diguang
Electronics”), a subsidiary of the Company, and Dongguan Diguang Electronic
Science & Technology Co., Ltd. (“Dongguan Diguang”), a company 92%
beneficially owned by the Song brothers, dated March 30, 2005, Diguang
Electronics agreed to pay the rental of RMB380,000 (approximately $49,000)
per
month including all maintenance fees based on the prevailing market price
for a
similar facility to be leased in Dongguan area and that the lease terms start
from February 1, 2005 to January 31, 2010, and both parties agreed that the
rental for three months from February to April 2005 would be waived as Diguang
Electronics had to finish its interior remodeling during this period. Based
on
the above agreement, the Company recorded the monthly rental of RMB361,000
(approximately $46,000) on a straight-line basis and recorded amount of $467,571
due to Dongguan Diguang.
On
September 26, 2006, the board of Diguang Electronics decided to make a loan
of
$2 million to Dongguan Diguang through a bank at the current market rate
for
this type of loan, which would be used for the construction of the new
production facility and dormitory in Dongguan. Therefore, on September 30,
2006,
Diguang Electronics signed a mandate loan contract with Dongguan Diguang,
which
limit the borrowing up to RMB16 million and requires interest payment at
a rate
consistent with the market interest rate. On September 30, 2006, Diguang
Electronics advanced RMB3,040,000 ($389,538) being the principal with a 5.5%
interest rate to Dongguan Diguang through China Merchants Bank, Shenzhen
Nanyou
Branch. On October 10, 2006, Diguang Electronics advanced RMB12,960,000
($1,660,666) being the principal with a 5.5% interest rate to Dongguan Diguang
through China Merchants Bank, Shenzhen Nanyou Branch. The loan will mature
on
November 30, 2007.
For
all
related transactions, the Company’s Audit Committee will review the proposals
submitted by the interested directors who will abstain from the discussion
and
voting relating to these related transactions.
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”)
and SEC rules, the Company’s directors, executive officers and beneficial owners
of more than 10% of any class of equity security are required to file periodic
reports of their ownership, and changes in that ownership, with the SEC.
Based
solely on its review of copies of these reports and representations of such
reporting persons, the Company believes that during fiscal year 2007, such
SEC filing requirements were satisfied.
EXECUTIVE
COMPENSATION
Compensation
Discussion And Analysis
Compensation
Philosophy
The
Company’s Compensation Committee is empowered to review and approve the annual
compensation and compensation procedures for the executive officers of the
Company. The primary goals of the Compensation Committee with respect to
executive compensation are to attract, retain and motivate the most talented
and
dedicated executives possible, encourage high performance, and to align
executives’ and employees’ incentives with stockholder value creation.
Currently,
executive compensation comprises of base salaries competitive with comparable
manufacturers in China. The Compensation Committee may award bonuses to
encourage executives to focus on the achievement of specific short-term
corporate goals and set compensation at levels the committee believes are
comparable with executives in other companies of similar size and stage of
development operating in similar industry while taking into account the
Company’s relative performance and its own strategic goals and reward them for
their achievement. The Compensation Committee may award stock options and
reward
management for performance, which benefits our shareholders. The Compensation
Committee may use traditional measures of corporate performance, such as
earnings per share or sales growth, in reviewing performance of executives.
We
have
not retained a compensation consultant to review our policies and procedures
with respect to executive compensation. We conduct an annual review of the
aggregate level of our executive compensation, as well as the mix of elements
used to compensate our executive officers. We compare compensation levels
with
amounts currently being paid to executives in our industry and most importantly
with local practices in China. We are satisfied that our compensation levels
are
competitive with local conditions.
Base
Salary
Base
salary ranges are reviewed annually and adjustments are made at the beginning
of
the fiscal year to reflect changes in position responsibilities or market
conditions. When establishing or reviewing compensation levels for each
executive officer, the Compensation Committee considers numerous factors,
including the qualifications of the executive, his or her level of relevant
experience, specific operating roles and duties and strategic goals for which
the executive has responsibility.
Base
salaries for our executives are established based on the scope of their
responsibilities, taking into account competitive market compensation.
Generally, we believe that executive base salaries should be targeted near
the
median of the range of salaries for executives in similar positions with
similar
responsibilities at comparable companies, in line with our compensation
philosophy. In setting annual base salaries, the Compensation Committee also
reviews and evaluates the performance of the department or activity for which
the executive has responsibility, the impact of that department or activity
on
the Company and the skills and experience required for the job, coupled with
a
comparison of these elements with similar elements for peer executives both
inside and outside the Company. Adjustments to each individual’s base salary are
made in connection with annual performance reviews.
Discretionary
Bonuses
The
Compensation Committee has the authority to award discretionary annual bonuses
to our executive officers under the Compensation Committee Charter and
determines the specific amounts of such bonuses. Cash bonuses are awarded
on a
discretionary basis, usually following the Company’s fiscal year-end, and are
based on the achievement of corporate and individual goals set by the Board
and
the Company’s Chief Executive Officer at the beginning of the year, as well as
the financial condition of the Company. So far, no discretionary bonus has
been
awarded. Generally, the Compensation Committee may recommend to the Board
the
amount of the bonus, with advice from the Company’s management. The Compensation
Committee makes its recommendations based upon an assessment of the individual’s
contributions and accomplishments achieved during the past year.
Long-Term
Incentive Program
We
believe that long-term performance is achieved through an ownership culture
that
encourages such performance by our key employees through the use of stock
options. Our stock compensation plan has been established to provide certain
of
our employees with incentives to help align those employees’ interests with the
interests of stockholders. The Compensation Committee believes that the use
of
stock options offers the best approach to achieving our compensation goals.
We
have not adopted stock ownership guidelines. We believe that the annual
aggregate value of these awards should be set near competitive median levels
for
comparable companies.
Stock
Options
Diguang’s
outstanding 2006 stock incentive plan (“Diguang 2006 Option Plan”) covers
options totaling the equivalent of 1,500,000 shares of the Company’s common
stock. As of December 31, 2006, approximately 540,000 shares of the Company’s
common stock were issued under the Diguang 2006 Option Plan. None of these
options has been exercised and 34,000 shares subject to the option were
forfeited due to staff resignation. The exercise price for each of these
options
is $5.00 per share. The commencement date for these options is March 1, 2006,
with monthly vesting at the end of each month after March 1, 2006, for the
three
independent directors as well as for the chief financial officer and yearly
vesting for the other employees of Diguang; The options that have been issued
expire ten years from their grant date (which date is February 25, 2006 or
the
date the optionee commences his or her service relationship with us, whichever
is the later date).
The
Company has adopted Statement of Financial Accounting Standards (“SFAS”) No.
123R, “Accounting for Stock-Based Compensation”, which establishes a fair value
method of accounting for stock-based compensation plans. In accordance with
SFAS
No. 123R, the cost of stock options and warrants issued to employees is measured
at the grant date based on the fair value. The fair value is determined using
the Black-Scholes option pricing model. The resulting amount is charged to
expense on the straight-line basis over the period in which the Company expects
to receive benefit, which is generally the vesting period.
Stock
Appreciation Rights
We
currently do not have any Stock Appreciation Rights Plan that authorizes
us to
grant stock appreciation rights.
Other
Compensation.
Other
than the annual salary for our executive officers and the bonus that may
be
awarded to them at the discretion of the Compensation Committee, we do not
have
any other benefits and perquisites for our executive officers; however, the
Compensation Committee in its discretion may provide benefits and perquisites
to
these executive officers if it deems it advisable.
Executive
Officer Compensation and Chief Executive Officer’s Compensation
In
setting compensation payable for fiscal year 2007 and planning the compensation
payable for fiscal year 2007 to the Company’s Chief Executive Officer, Mr. Yi
Song, and to the other executive officers, the Compensation Committee reviewed
the importance of each executive officer’s individual achievements in meeting
the Company’s goals and objectives set for the prior fiscal year as well as the
overall achievement of the goals by the entire company.
The
determination by the Compensation Committee of the Chief Executive Officer’s
remuneration is based upon methods consistent with those used for other
executive officers. The Compensation Committee considers certain quantitative
factors, including the Company’s financial, strategic, and operating performance
for the year as well as certain qualitative criteria including leadership
qualities and management skills, as exhibited by innovations, time and effort
devoted to the Company and other general considerations in determining
appropriate compensation of the Chief Executive Officer.
In
2007,
the Compensation Committee continued Mr. Yi Song’s annualized salary
approximately at $210,000. The Compensation Committee did not grant any stock
option to Mr. Song. In determining Mr. Song’s 2006 compensation, including
whether to grant stock options to him, the Compensation Committee considered
Mr.
Song’s overall compensation package as compared with other chief executive
officers in our industry, as well as the effectiveness of Mr. Song’s leadership
of the Company.
The
Compensation Committee believes that the continued commitment and leadership
of
our executive officers through fiscal year 2007 were and continue to be
important factors in the achievements of the Company.
Compliance
with Internal Revenue Code Section 162(m)
Section 162(m)
of the U.S. Internal Revenue Code limits the tax deductibility by a corporation
of compensation in excess of $1 million paid to any of its five most highly
compensated executive officers. However, compensation which qualifies as
“performance-based” is excluded from the $1 million limit if, among other
requirements, the compensation is payable only upon attainment of
pre-established, objective performance goals under a plan approved by
stockholders. The Compensation Committee does not presently expect total
cash
compensation payable for salaries to exceed the $1 million limit for any
individual executive. It is the current policy of the Compensation Committee
to
maximize, to the extent reasonably possible, our ability to obtain a corporate
tax deduction for compensation paid to our executive officers to the extent
consistent with the best interests of our company and our stockholders.
Summary
Compensation Table
The
following Summary Compensation Table sets forth the compensation earned by
the
Company's Chief Executive Officer, its Chief Operating Officer, and its Chief
Financial Officer during the fiscal years ended December 31, 2006, 2005 and
2004. No other executive officer received compensation for the fiscal year
2006
in excess of $100,000.
Summary
Compensation Table:
Summary
Compensation Table
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensa-tion
(4)
|
Change
in Pension Value and Nonquali-fied Deferred Compen-sation
Earnings
($)
|
All
Other Compen-sation ($)
|
Total
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Yi
Song
PEO
|
2006
2005
2004
|
197,151
16,890
9,230
|
3,008
|
|
|
|
|
|
200,159
16,890
9,230
|
Hong
Song
POO
|
2006
2005
2004
|
156,943
13,122
8,260
|
|
|
|
|
|
|
159,943
13,122
8,260
|
Jackie
You Kazmerzak,
former
CFO
|
2006
|
95,000
|
|
|
|
|
|
|
95,000
|
In
the
last fiscal year through the date of this proxy statement, the Company has
not
granted stock options to its Chief Executive Officer, nor to its three highest
paid executive officers, other than its Chief Financial Officer.
G
RANTS
OF
P
LAN-
B
ASED
A
WARDS
|
|
|
|
Estimated
future payouts under non-equity incentive plan awards
|
|
Estimated
future payouts under equity incentive plan awards
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant
date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
All
other stock awards number of shares of stock or units(#)
|
|
All
other option awards; number of securities underlying
options(#)
|
|
Exercise
or base price of option awards ($/Sh)
|
|
Grant
date fair value of stock and option awards
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
(k)
|
|
(l)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Song
Yi
Chief
Executive Officer and Chairman of the Board
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jackie
You Kazmerzak
Chief
Financial Officer
|
|
|
February
25, 2006
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
80,000
|
|
|
-
|
|
$
|
5
|
|
$
|
11.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Song
Hong
Chief
Operating Officer
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
O
UTSTANDING
E
QUITY
A
WARDS
AT
F
ISCAL
Y
EAR-
E
ND
|
|
Option
awards
|
|
Stock
awards
|
|
Name
|
|
Number
of securities underlying unexercised options exercisable (#)
|
|
Number
of securities underlying unexercised options unexercisable (#)
|
|
Equity
incentive plan awards: number of securities underlying unexercised
unearned options (#)
|
|
Option
exercise price ($)
|
|
Option
expiration date
|
|
Number
of shares or units of stock that have not vested (#)
|
|
Market
value of shares or units of stock that have not vested ($)
|
|
Equity
incentive plan awards: number of unearned shares units or other
rights
that have not vested (#)
|
|
Equity
incentive plan awards: market or payout value of unearned shares,
units or
other rights that have not vested ($)
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Song
Yi
Chief
Executive Officer and Chairman of the Board
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jackie
You Kazmerzak
Chief
Financial Officer
|
|
|
20,376
|
|
|
59,624
|
|
|
-
|
|
|
5
|
|
|
February
25, 2016
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Song
Hong
Chief
Operating Officer
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Pursuant
to the terms of the Amended and Restated Share Exchange Agreement, we assumed
Diguang’s outstanding 2006 stock incentive plan covering options totaling the
equivalent of 1,500,000 shares of our common stock. Options equivalent to
approximately 540,000 shares of our common stock were issued under the Diguang
2006 Option Plan before the Share Exchange closed as follows: the equivalent
of
80,000 shares were granted to Diguang’s chief financial officer. The exercise
price for the options is $5.00 per share. The commencement date for these
options is March 1, 2006, with monthly vesting at the end of each month after
March 1, 2006, for the chief financial officer. The options issued to the
chief
financial officer vest at a rate of 1/48th per month,. The options that have
been issued expire ten years from their grant date which date is February
25,
2006. Under the Stock Option Agreement, as of March 7, 2007, the date the
chief
financial officer resigned, 20,376 of her options have been vested and are
exercisable but none of them has been exercised as of March 7, 2007. Under
the
Stock Option Agreement, the remaining of the 59,624 shares subject to the
option
that were unvested and hence unexercisable shall terminate and expire effective
immediately on March 7, 2007, the date of her resignation. Neither the Chief
Executive Officer nor the Chief Operating Officer was or is granted any options.
D
IRECTOR
C
OMPENSATION
Name
|
|
Fees
earned or paid in cash ($)
|
|
Stock
awards ($)
|
|
Option
awards ($)(1)
|
|
Non-equity
incentive plan compensation
($)
|
|
Change
in pension value and nonqualified deferred compensation
earnings
|
|
All
other compensation ($)
|
|
Total
($)
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remo
Richli (2)
|
|
|
28,500
|
|
|
-
|
|
|
61,651
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
90,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerald
Beemiller (3)
|
|
|
19,000
|
|
|
-
|
|
|
61,651
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
80,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tuen-Ping
Yang
|
|
|
19,000
|
|
|
-
|
|
|
61,651
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
80,551
|
|
(1)
20,000 shares subject to the options have been each granted to the independent
directors, but as if December 31, 2006 only 5,556 shares were vested, with
fair
value of $61,651 listed on the above table. No stock options were granted
to Yi
Song or Hong Song. The dollar amount recognized for financial statement
reporting purposes with respect to the fiscal year in accordance with FAS123R
is
calculated in accordance with Black Scholes Model by reference to the average
staff turnover rate.
(2)
Mr.
Richli resigned from the Board in June 2007.
(3)
Mr.
Beemiller resigned from the Board in June 2007.
REPORT
OF THE COMPENSATION COMMITTEE
Under
the
guidance of a written charter adopted by the Board, the purpose of the
Compensation Committee is to develop and review compensation policies and
practices applicable to executive officers, review and recommend goals for
the
Company’s Chief Executive Officer and evaluate his performance in light of these
goals, review and evaluate goals and objectives for other officers, oversee
and
evaluate the Company’s equity incentive plans and review and approve the
creation or amendment of such plans. We believe that the composition of the
Company’s Compensation Committee meets the requirements for independence under,
and the functioning of the Company’s Compensation Committee complies with, any
applicable requirements of the Sarbanes-Oxley Act of 2002, the Nasdaq National
Market and the rules and regulations of the Securities and Exchange Commission.
The
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis required by Item 402(b) of Regulation S-K with management. Based
on
these reviews and discussions, the Compensation Committee recommended to
the
Board of Directors that the Compensation Discussion and Analysis be included
in
the Company’s Annual Report on Form 10-K or the annual meeting proxy statement
on Schedule 14A.
This
report is submitted by the Compensation Committee and addresses the compensation
policies for 2007 as such policies affected Mr. Yi Song, in his capacity
as
Chief Executive Officer of the Company, and the other executive officers
of the
Company.
THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Tuen-Ping
Yang, Dexter Fong and Hoi S. Kwok*
*Mr.
Richli and Mr. Beemiller resigned from the Board in June 2007.
The
Compensation Committee report shall not be deemed incorporated by reference
by
any general statement incorporating by reference this proxy statement into
any
filing under the Securities Act of 1933, as amended, or the Securities Exchange
Act 0f 1934, and shall not otherwise be deemed filed under these acts.
REPORT
OF THE AUDIT COMMITTEE
Under
the guidance of a written charter adopted by the Board of Directors, the
purpose
of the Audit Committee is to oversee the accounting and financial reporting
processes of the Company and audits of its financial statements. The
responsibilities of the Audit Committee include appointing and providing
for the
compensation of the independent accountants. Each of the members of the Audit
Committee meets the independence requirements of Nasdaq.
Management
has primary responsibility for the system of internal controls and the financial
reporting process. The independent accountants have the responsibility to
express an opinion on the financial statements based on an audit conducted
in
accordance with generally accepted auditing standards.
In
this
context and in connection with the audited financial statements contained
in the
Company’s Annual Report on Form 10-K for 2006, the Audit Committee:
·
|
reviewed
and discussed the audited financial statements as of and for the
fiscal
year ended December 31, 2006 with the Company’s management and the
independent accountants;
|
·
|
discussed
with BDO Reanda, the Company’s independent auditors, the matters required
to be discussed by Statement of Auditing Standards No. 61,
Communication with Audit Committees, as amended by Statement of Auditing
Standards No. 90, Audit Committee Communications;
|
·
|
reviewed
the written disclosures and the letter from BDO Reanda required by
the
Independence Standards Board Standard No. 1, Independence Discussions
with Audit Committees, discussed with the auditors their independence,
and
concluded that the non-audit services performed by BDO Reanda are
compatible with maintaining their independence;
|
·
|
based
on the foregoing reviews and discussions, recommended to the Board
of
Directors that the audited financial statements be included in the
Company’s 2006 Annual Report on Form 10-K for the fiscal year ended
December 31, 2006 filed with the Securities and Exchange Commission;
and
|
·
|
instructed
the independent auditors that the Audit Committee expects to be advised
if
there are any subjects that require special attention.
|
THE
AUDIT
COMMITTEE OF THE BOARD OF DIRECTORS
Tuen-Ping
Yang, Dexter Fong and Hoi S. Kwok*
*Mr.
Richli and Mr. Beemiller resigned from the Board in June 2007.
Audit
Committee’s Pre-Approval Policy
During
fiscal years ended December 31, 2006, the Audit Committee of the Board of
Directors adopted policies and procedures for the pre-approval of all audit
and
non-audit services to be provided by the Company’s independent auditor and for
the prohibition of certain services from being provided by the independent
auditor. The Company may not engage the Company’s independent auditor to render
any audit or non-audit service unless the service is approved in advance
by the
Audit Committee or the engagement to render the service is entered into pursuant
to the Audit Committee’s pre-approval policies and procedures. On an annual
basis, the Audit Committee may pre-approve services that are expected to
be
provided to the Company by the independent auditor during the fiscal year.
At
the time such pre-approval is granted, the Audit Committee specifies the
pre-approved services and establishes a monetary limit with respect to each
particular pre-approved service, which limit may not be exceeded without
obtaining further pre-approval under the policy. For any pre-approval, the
Audit
Committee considers whether such services are consistent with the rules of
the
Securities and Exchange Commission on auditor independence.
Principal
Accountant Fees and Services
The
Audit
Committee has appointed BDO Reanda as the Company’s independent auditors for the
fiscal year ending December 31, 2006.
The
following table shows the fees paid or accrued by the Company for the audit
and
other services provided by BDO Reanda for fiscal 2006 and 2005
.
|
|
2006
|
|
2005
|
|
|
|
|
|
|
|
Audit
Fees
|
|
$
|
307,000
|
|
$
|
80,000
|
|
Audit-Related
Fees
(1)
|
|
$
|
76,000
|
|
$
|
50,000
|
|
Tax
Fees
(2)
|
|
$
|
68,000
|
|
|
--
|
|
All
other Fees
|
|
|
--
|
|
|
--
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
451,000
|
|
$
|
130,000
|
|
(1) Includes accounting and reporting consultations related to
acquisitions and internal control procedures.
|
|
(2)
Includes fees for service related to tax compliance services, preparation
and filing of tax returns and tax consulting services.
|
PROPOSAL
1 — ELECTION OF DIRECTORS
At
the
Annual Meeting, the stockholders will vote on the election of five directors
to
serve for a one-year term until the 2008 annual meeting of stockholders and
until their successors are elected and qualified. The Board of Directors
has
unanimously approved the nomination of Yi Song, Hong Song,Tuen-Ping Yang,
Dexter
Fong and Hoi S. Kwok for election to the Board of Directors. The nominees
have
indicated that they are willing and able to serve as directors. If any of
these
individuals becomes unable or unwilling to serve, the accompanying proxy
may be
voted for the election of such other person as shall be designated by the
Board
of Directors. The Directors will be elected by a plurality of the votes cast,
in
person or by proxy, at the Annual Meeting, assuming a quorum is present.
Stockholders do not have cumulative voting rights in the election of directors.
The
Board of Directors recommends a vote “for” the election of Yi Song, Hong
Song,Tuen-Ping Yang, Dexter Fong and Hoi S. Kwok as directors.
Unless
otherwise instructed, it is the intention of the persons named in the
accompanying proxy card to vote shares represented by properly executed proxy
cards for the election of Yi Song, Hong Song,Tuen-Ping Yang, Dexter Fong
and Hoi
S. Kwok.
PROPOSAL
2 — RATIFICATION OF INDEPENDENT AUDITORS
At
the
Annual Meeting, the stockholders will be asked to ratify the appointment
of BDO
Reanda as the Company’s independent auditors for the fiscal year ending December
31, 2007. BDO Reanda have been the Company’s independent auditors since October
2005. Representatives of BDO Reanda are expected to be present at the Annual
Meeting and will have the opportunity to make statements if they desire to do
so. Such representatives are also expected to be available to respond to
appropriate questions.
The
Board of Directors recommends a vote “for” the ratification of the appointment
of BDO Reanda as the Company’s independent auditors for the fiscal year ending
December 31, 2007.
OTHER
MATTERS
As
of the
time of preparation of this proxy statement, neither the Board of Directors
nor
management intends to bring before the meeting any business other than the
matters referred to in the Notice of Annual Meeting and this proxy statement.
If
any other business should properly come before the meeting, or any adjournment
thereof, the persons named in the proxy will vote on such matters according
to
their best judgment.
STOCKHOLDER
PROPOSALS FOR 2008 ANNUAL MEETING
Under
the
rules of the Securities and Exchange Commission, stockholders who wish to
submit
proposals for inclusion in the proxy statement of the Board of Directors
for the
2008 Annual Meeting of Stockholders must submit such proposals so as to be
received by the Company at 23/F, Building A, Galaxy Century, No. 3069
Caitian Road, Futian District, Shenzhen, P.R. China on or before June 30,
2008.
In addition, if the Company is not notified by the secretary of the Company
of a
proposal to be brought before the 2008 Annual Meeting by a stockholder by
the
deadline set forth in the Company’s bylaws (90 days before the 2008 meeting
date, or 10 days after the public announcement of the 2008 meeting date,
whichever is later), then proxies held by management may provide the discretion
to vote against such proposal even though it is not discussed in the proxy
statement for such meeting.
|
By
Order of the Board of Directors
|
|
Yi
Song
Chairman
|
Shenzhen,
People’s Republic of China
October
27, 2007
YOUR
VOTE IS IMPORTANT!
WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND MAIL
PROMPTLY THE ACCOMPANYING PROXY CARD IN THE ENCLOSED RETURN ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THIS WILL ENSURE THE
PRESENCE OF A QUORUM AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE
IN
PERSON IF YOU WISH TO DO SO EVEN IF YOU HAVE PREVIOUSLY SENT IN YOUR PROXY
CARD.
Diguang
International Development Co., Ltd.
Proxy
Solicited by the Board of Directors
for
the Annual Meeting of Stockholders
to
be Held November 28, 2007
The
undersigned hereby appoints Yi Song and Hong Song or any one of them with
full
power of substitution, proxies to vote at the Annual Meeting of Stockholders
of
Diguang International Development Co., Ltd. (the “Company”) to be held on
November 28, 2007 at 10 a.m., local time, and at any adjournment thereof,
hereby
revoking any proxies heretofore given, to vote all shares of Common Stock
of the
Company held or owned by the undersigned as directed on the reverse side
of this
proxy card, and in their discretion upon such other matters as may come before
the meeting.
1.
To
elect
Yi Song, Hong Song, Tuen-Ping Yang, Dexter Fong and Hoi S. Kwok as directors,
to
hold office until the 2008 Annual Meeting of Stockholders and until their
successors are elected and qualified, the nominees listed below:
___
|
|
FOR
All
nominees listed
(except
as indicated
below)
|
|
___
|
|
WITHHOLD
AUTHORITY
to
vote (as to all nominees)
|
To
withhold authority to vote for any individual nominee, write the nominee’s name
on the line provided below.
2.
To
ratify
the appointment of BDO Reanda (or another qualified audit firm) as the Company’s
independent auditors for the fiscal year ending December 31, 2007.
___ For
|
|
___ Against
|
|
___ Abstain
|
The
Board
recommends that you vote FOR the above proposals. This proxy, when properly
executed, will be voted in the manner directed above. WHEN NO CHOICE IS
INDICATED, THIS PROXY WILL BE VOTED FOR THE ABOVE PROPOSALS. This proxy may
be
revoked by the undersigned at any time, prior to the time it is voted by
any of
the means described in the accompanying proxy statement.
|
|
|
|
|
|
|
|
Signature(s)
of Stockholder(s)
|
|
|
Date
and sign exactly as name(s) appear(s) on this proxy. If signing
for
estates, trusts, corporations or other entities, title or capacity
should
be stated. If shares are held jointly, each holder should
sign.
|
|
|
Date:___________,
2007
|
PLEASE
COMPLETE, DATE AND SIGN THIS PROXY
AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.