Exhibit 99.2
HIGHWAY HOLDINGS LIMITED
Suite 1801, Level 18
Landmark North
39 Lung Sum Avenue
Sheung Shui
New Territories, Hong Kong
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
September 10, 2019
Notice is hereby given
that the Annual Meeting of Shareholders of Highway Holdings Limited (the “Company”), will be held at the offices of
TroyGould PC, 1801 Century Park East, Suite 1600, Los Angeles, California U.S.A., on Tuesday, September 10, 2019, at 10:00 a.m.,
for the following purposes:
(1) To
elect three members of the Company’s Board of Directors to serve until the 2022 Annual Meeting of Shareholders;
(2) To
ratify the appointment by the Board of Directors of Deloitte Touche Tohmatsu as the independent accountants of the Company for
the fiscal year ending March 31, 2020; and
(3) To
transact such other business as may properly come before the meeting or any adjournment thereof.
Your attention is directed
to the accompanying proxy statement. Only shareholders of record at the close of business on July 25, 2019 will be entitled to
notice of and to vote at the meeting and any adjournment thereof.
Important Notice Regarding
the Availability of Proxy Materials for the Shareholders’ Meeting to Be Held on Tuesday, September 10, 2019 at 10:00 a.m.
Pacific time at the offices of TroyGould PC, 1801 Century Park East, Suite 1600, Los Angeles, California U.S.A.
The Proxy Statement
and 2019 annual report to shareholders, or Annual Report, are available at http://www.edocumentview.com/HIHO
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By Order of the Board of Directors
Alan Chan, Secretary |
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Hong Kong
July 31, 2019 |
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You are cordially invited to attend
the Annual Meeting in person. Whether or not you expect to attend the Annual Meeting, please complete, date, sign and return the
enclosed proxy, or vote over the Internet as instructed in these materials, as promptly as possible in order to ensure your representation
at the Annual Meeting. A return envelope (which is postage prepaid if mailed in the United States) has been provided for your convenience.
Even if you have voted by proxy, you may still vote in person if you attend the Annual Meeting. Please note, however, that if your
shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must
obtain a legal proxy issued in your name from the holder of record.
HIGHWAY HOLDINGS LIMITED
Suite 1801, Level 18
Landmark North
39 Lung Sum Avenue
Sheung Shui
New Territories, Hong Kong
PROXY STATEMENT
Annual Meeting of Shareholders
September 10, 2019
INTRODUCTION
Persons Making the Solicitation
This Proxy Statement
is furnished in connection with the solicitation by the Board of Directors of Highway Holdings Limited, a British Virgin Islands
corporation (the “Company”), of proxies for use at the Annual Meeting of Shareholders to be held at 10:00 a.m. at the
offices of TroyGould PC, 1801 Century Park East, Suite 1600, Los Angeles, California U.S.A., on Tuesday, September 10, 2019, and
at any adjournment thereof (the “Annual Meeting”). This proxy statement is first being mailed to shareholders on or
about July 31, 2019. You are requested to submit your proxy by internet by following the internet voting instructions on the enclosed
proxy card, or to sign, date and return the enclosed proxy card in order to ensure that your shares are represented at the Annual
Meeting.
A form of proxy is
enclosed for your use. The shares represented by each properly executed unrevoked proxy will be voted as directed by the shareholder
executing the proxy. If no direction is made, the shares represented by each properly executed unrevoked proxy will be voted (i) “FOR”
the election of management’s nominees for the Board of Directors to be elected as Class III directors to serve until the
2022 Annual Meeting of Shareholders, and (ii) “FOR” the ratification of the appointment by the Board of Directors of
Deloitte Touche Tohmatsu as the independent accountants of the Company for the fiscal year ending March 31, 2020. With respect
to any other item of business that may come before the Annual Meeting, the proxy holders will vote the proxy in accordance with
the recommendation of management of the Company.
The cost of solicitation
of proxies, including the cost of preparation and mailing of the Notice of Annual Meeting, this Proxy Statement, and the enclosed
proxy, will be borne by the Company. It is anticipated that brokerage houses, fiduciaries, nominees, and others will be reimbursed
for their out-of-pocket expenses in forwarding proxy material to beneficial owners of stock held in their names. Directors, officers,
or employees of the Company may solicit proxies by telephone or in person without additional compensation.
How to Vote
Shareholder
of Record: Shares Registered in Your Name
If on the Record Date
your shares were registered directly in your name with our transfer agent, Computershare, then you are a shareholder of record.
If you are a shareholder of record, there are three ways to vote:
By Internet
– To vote through the Internet, go to www.investorvote.com/HIHO to complete an electronic proxy card. You will be asked to
provide the control number from the enclosed proxy card. Your Internet vote must be received by 1:00 a.m. Central Time on September
10, 2019 to be counted.
By Mail –
You may do this by marking, dating and signing your proxy card or, for shares held in street name, the voting instruction card
provided to you by your broker or nominee, and mailing it in the enclosed, pre-addressed envelope.
In Person –
You may vote in person at the Annual Meeting and we will give you a ballot when you arrive.
Beneficial Owner:
Shares Registered in the Name of Broker, Bank or Other Nominee
If you are a beneficial
owner of shares registered in the name of your broker, bank, or other nominee, you should have received a voting instruction form
with these proxy materials from that organization rather than from us. Simply complete and mail the voting instruction form to
ensure that your vote is counted. Alternatively, you may vote over the Internet as instructed by your broker, bank or other nominee.
To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other nominee. Follow the instructions
from your broker, bank or other nominee included with these proxy materials, or contact your broker, bank or other nominee to request
a proxy form.
Revocability of Proxy
Any proxy given by
a shareholder of the Company may be revoked at any time before it is voted at the Annual Meeting by a written notice to the Secretary
of the Company, or upon request if the shareholder is present at the meeting. Each valid proxy submitted by internet, or returned
via mail, that is not revoked, unless indicated otherwise on the proxy card, will be voted in the election of directors for the
nominee as described herein.
Voting Securities
Holders of record of
the Company’s Common Shares, $0.01 par value (the “Common Shares”), at the close of business on July 25, 2019
(the “Record Date”) are entitled to notice of and to vote at the meeting or any adjournment thereof. As of the Record
Date, there were 3,801,874 Common Shares issued and outstanding. Holders of Common Shares are entitled to cast one vote per share
on each matter presented for consideration and action by the shareholders. The presence, in person or by proxy, of shareholders
entitled to cast at least a majority of the outstanding Common Shares will constitute a quorum for the transaction of business
at the Annual Meeting.
Abstentions may be
specified as to all proposals to be brought before the Annual Meeting other than the election of directors. Votes cast by proxy
or in person at the Annual Meeting will be tabulated by the inspectors of election appointed for the meeting, and will determine
whether or not a quorum is present. The inspectors of election will treat abstentions as shares that are present and entitled to
vote for purposes of determining the presence of a quorum, but as unvoted for purposes of determining the approval of any matter
submitted to the shareholders for a vote. Ratification of the appointment of the independent accountants will require the affirmative
vote of at least a majority in voting interest of the shareholders present in person or by proxy at the Annual Meeting and entitled
to vote thereon.
The directors to be
elected at the Annual Meeting will be elected by a plurality of the votes cast. Nominees receiving the highest number of affirmative
votes cast, up to the number of directors to be elected, will be elected as directors. Only votes cast for a nominee will be counted,
except that each properly executed unrevoked proxy will be voted for management’s nominee for the Board of Directors in the
absence of instructions to the contrary. Abstentions, broker non-votes and instructions on a proxy to withhold authority to vote
for management’s nominees will result in the respective nominees receiving fewer votes.
Annual Report
This Proxy Statement
is accompanied by the Annual Report of the Company for the fiscal year ended March 31, 2019. Shareholders are encouraged to read
the Annual Report in connection with the information contained herein. This proxy statement, the proxy card and the Annual Report
are available at http://www.investorvote.com/HIHO.
What is the quorum
requirement?
A quorum of shareholders
is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of our then outstanding
shares of the common stock entitled to vote are present at the Annual Meeting in person or represented by proxy. On the Record
Date, there were 3,801,874 shares issued and outstanding and entitled to vote.
Your shares will be
counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee)
or if you vote in person at the Annual Meeting. If there is no quorum, the holders of a majority of shares present at the Annual
Meeting in person or represented by proxy may adjourn the Annual Meeting to another date.
What if I return a
proxy card or otherwise vote but do not make specific choices?
If you return a signed
and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable:
“For” the election of three (3) Class III directors to serve on our Board for three-year terms.
“For” the ratification of the selection of Deloitte Touche Tohmatsu as our independent registered public accounting firm for the fiscal year ending March 31, 2020.
If any other matter
is properly presented at the Annual Meeting, your proxyholder (named on your proxy card) will vote your shares using their best
judgment
PROPOSAL I - ELECTION OF DIRECTORS
The directors and executive
officers of the Company as of July 31, 2019 are listed below.
| Name | |
Age | |
Positions |
| Roland W. Kohl | |
70 | |
Chief Executive Officer, Director, Chairman of the Board |
| Ringo Tsang | |
53 | |
Chief Operating Officer |
| Alan Chan | |
55 | |
Chief Financial Officer, Secretary |
| Tiko Aharonov (1) (2) | |
72 | |
Director |
| Uri Bernhard Oppenheimer (1) (2) | |
83 | |
Director |
| Kevin Yang Kuang Yu | |
62 | |
Director |
| Irene Wong Ping Yim (1) | |
53 | |
Director |
| Brian Geary (2) | |
62 | |
Director |
| George Leung Wing Chan (1) | |
66 | |
Director |
| (1) | Current member of Audit Committee. |
| (2) | Member of Compensation Committee |
The Directors hold
office until their term has expired and they are re-elected at an annual meeting of shareholders. The Company’s Amended and
Restated Memorandum and Articles of Association provide that the Board of Directors is divided into three classes of directors
with staggered terms of office. At each annual meeting of shareholders, the members of one class of directors will be elected for
a term of office to expire at the third succeeding annual meeting of shareholders after their election, and until their successors
have been duly elected and qualified. At the Annual Meeting, the terms of one class of directors (consisting of Shlomo Tamir, Kevin
Yang Kuang Yu and George Leung Wing Chan) will expire, and nominees for that class will be nominated elected to hold office for
a three-year term expiring at the 2022 annual meeting. All directors hold office until their respective terms expire and until
his or her successor is elected, or until his or her death, resignation, or removal.
The three candidates
receiving the highest number of affirmative votes cast at the Annual Meeting shall be elected as directors of the Company. Each
nominee listed below has agreed to serve if elected. If for any reason any nominee named below is not a candidate when the election
occurs, the Company intends to vote proxies for the election of the other nominees named below and may vote for any substitute
nominee or, in lieu thereof, our Board of Directors may reduce the number of directors in accordance with our Amended and Restated
Memorandum and Articles of Association. Unless otherwise instructed, the Proxy holders will vote the Proxies received by them in
a manner that will result in the election of the three nominees named below.
We have three incumbent
directors in Class II whose term expires at the Annual Meeting. The Board of Directors has nominated the incumbent Class III directors,
Roland W. Kohl, Tiko Aharonov and Irene Wong Ping Yim for reelection as Class III directors to serve until the 2022 Annual Meeting
of Shareholders and until their successors are duly elected and qualified. We believe that Roland W. Kohl, Tiko Aharonov and Irene
Wong Ping Yim will be available and able to serve as directors. In the event that any one of them is unable or unwilling to serve,
the proxy holders will vote the proxies for such other nominee as they may determine.
Roland W. Kohl.
Mr. Kohl was the founder of the Company and has been its Chief Executive Officer since its inception in 1990. He has been
a Director of the Company since March 1, 1995. He has overall responsibility for the day-to-day operations of the Company and its
subsidiaries. Prior to forming the Company, Mr. Kohl was the Managing Director of Dialbright Company Limited, a camera manufacturer
located in China. Mr. Kohl received a degree in mechanical engineering and has over twenty years’ experience in managing
factories and manufacturing operations in China. Mr. Kohl is a German national and resides in Hong Kong.
The Board of Directors
has concluded that Mr. Kohl should be re-elected because he is a founder of the Company and has been its Chief Executive Officer
since its inception. As a result, he has invaluable experience with the Company and the industry in which the Company operates.
Tiko Aharonov.
Mr. Aharonov has been a Director of the Company since its inception in 1990 and was a General Manager of the Company’s camera
operations from 1998 to 2004. Until the closing of the Company’s Bulgarian facility in 2004, Mr. Aharonov acted as the General
Manager of the Bulgarian operations. He was a bank manager for a leading Israeli commercial and retail bank from 1969 to 1989 and
has operated his own real estate and investment company for high net worth individuals desiring to invest in real estate in Israel.
Mr. Aharonov also represents investors in real estate in Bulgaria.
The Board of Directors
has concluded that Mr. Aharonov should be re-elected because of his extensive experience with the Company.
Irene Wong Ping
Yim. Ms. Wong was elected to the Board of Directors in July 2005. For over ten years, Ms. Wong was the Chief Accountant of
CNIM Hong Kong Ltd. From 1994 to 2001, she was the Accounting Manager of Highway Holdings. Ms. Wong graduated from Deakin University
with a master degree in Business Administration. She is currently a fellow member of the Association of Chartered Certified Accountant
and a member of Hong Kong Institute of Certified Public Accountants.
The Board of Directors
believes that Ms. Wong should be re-elected because her extensive accounting background and expertise are a valuable resource to
the Board of Directors. Ms. Wong also has extensive knowledge and understanding about the Company’s financial position and
background, having been the Company’s Accounting Manager for seven years. In addition, since she has a degree in accounting,
she is able to serve as the “audit committee financial expert” of the Audit Committee.
Continuing Directors
The following is a
description of the incumbent Class I and Class II directors whose terms of office will continue after the Annual Meeting:
Class I — Nominees to Serve as Directors
Until the 2020 Annual Meeting
Uri Bernhard Oppenheimer.
Mr. Oppenheimer has served on the Board of Directors since July 2005. Mr. Oppenheimer is founder, managing director and the majority
owner of U.B. Oppenheimer GmbH in Germany and MIG Germany GmbH in Germany.
The Board of Directors
believes that Mr. Oppenheimer is a valuable member of the Board of Directors because his extensive business experience, particularly
with German companies (German companies are currently among the Company’s largest clients), is an important contribution
to the functions of the Board.
Brian Geary.
Mr. Geary was appointed to the Board of Directors in December 2005. Since 2009, Mr. Geary has been the President and owner of Stretch
Forming Corporation, a metal forming technologies company. From 2002 until 2009, Mr. Geary was a director of LMI Aerospace, a public
company that manufactures components, assemblies, and kits for the aerospace, defense, and technology industries. From 1978 until
2002, Mr. Geary was the President and owner Versaform Corp. and Versaform Canada, two companies that were sold to LMI Aerospace
in 2002.
The Board of Directors
has concluded that Mr. Geary is a valuable member of the Board of Directors due to his extensive background in manufacturing management
and because he provides valuable insight into business relations with the U.S.
Class II Directors
Continuing in Office Until the 2021 Annual Meeting
Kevin Yang Kuang
Yu. Mr. Yang was elected to the Board of Directors in July 2005. From 2004 until his retirement in 2013, Mr. Yang was the
China-USA Director of Holt Asia LLC (now owned by Chesta Co., Inc.) in the U.S. Prior thereto, from 2000 to May 2003, Mr. Yang
set up and managed a factory in Shanghai for CHT Co., Limited ( now owned by Chesta Co., Inc.) and controlled and managed other
manufacturing facilities in China. Mr. Yang has also been involved with the trading companies that were engaged in exporting products
to the US.
The Board of Directors
has determined that Mr. Yang is a valuable member of the Board of Directors because of his background in manufacturing management,
especially in China, and his experience in dealing with U.S./China business relations.
George Leung Wing
Chan. Mr. Leung was appointed to the Board of Directors in December 2005. Since 2004, Mr. Leung has been a management consultant.
Prior thereto, from 1995 to 2004, he was the Managing Director/Vice President of Lucky Metal & Plastic Mfg. Co., Ltd.
The Board of Directors
has concluded that Mr. Leung is a valuable member of the Board of Directors because he has extensive background in manufacturing
management, particularly in metal and plastics.
Executive Officers
In addition to the
directors listed above, the following are the other principal members of the Company’s management team.
Alan Chan. Mr.
Chan was appointed as the Company’s Chief Financial Officer and Secretary in September 2010. From June 2009 until he joined
the Company, Mr. Chan served as chief financial officer for a joint venture in China with Laureate Education Group. He previously
served as vice president and chief financial officer for DeCoro, an Italian sofa manufacturer with two facilities in Shenzhen,
and as financial controller for San Miguel Shunde Brewery Co. Ltd., a foreign joint venture engaged in the manufacturing and sale
of beer products for China and overseas markets. He also served as financial controller for Hua Yang Printing Holdings Co. Ltd.,
a manufacturer of children’s paper products. Mr. Chan began his professional career as an accountant with Nelson Wheeler,
an Australian CPA firm, and subsequently with PricewaterhouseCoopers — formerly Coopers and Lybrand. Mr. Chan earned a Master
of Arts degree in accounting from Curtin University in Australia and a Bachelor of Arts degree from the University of Lancaster
in the United Kingdom.
Ringo Tsang.
Mr. Tsang was appointed as the Chief Operating Officer in November 2017. Mr. Tsang joined the Company in March 2009 as a Production
Engineer and was promoted to Chief Technology Officer in 2010. Since becoming Chief Technology Officer, Mr. Tsang has been in charge
of the Company’s engineering department, its tool shop, its Computer Numerical Control (CNC) tooling system, and its automation
and information technologies. Mr. Tsang has a Bachelor of Science degree in mechanical engineering, and a Masters degree in each
of Business Administration, Information Systems, and Professional Accounting.
Officers are elected
by and serve at the discretion of the Board of Directors. There is no family relationship between any of the above-named officers,
directors or employees. To the Company’s knowledge, no arrangement or understanding exists between any such director and
executive officer and any major shareholder, customer, supplier or other party pursuant to which any director or executive officer
was elected as a director or executive officer of the Company.
Board and Committee Meetings
The Board of Directors
held four meetings during the fiscal year ended March 31, 2019. Each director attended at least 75% of the aggregate of the total
meetings of the Board of Directors and the total number of meetings of all Board committees on which he or she served that were
held during the portion of the 2019 fiscal year in which he or she served as a director or served on such committees, as applicable.
The Board of Directors
has two standing committees: (i) an Audit Committee, and (ii) a Compensation Committee.
Audit Committee
During fiscal 2019,
the members of the Audit Committee of the Board of Directors were Irene Wong Ping Yim, Uri Bernhard Oppenheimer, George Leung Wing
Chan, and Tiko Aharonov (Shlomo Tamir also served on the Audit Committee until his resignation on September 14, 2018). The Audit
Committee reviews, acts on and reports to the Board of Directors on various auditing and accounting matters, including the selection
of the Company’s auditors, the scope of the annual audits, fees to be paid to the auditors, the performance of the independent
auditors, any additional services to be provided by the auditors, and the Company’s accounting practices. Each of these individuals
is a non-employee director and is independent as defined under the Nasdaq Stock Market’s listing standards, and each has
significant knowledge of financial matters (one of the members has an advanced degree in business administration). Ms. Wong has
been designated by the Board of Directors as the “audit committee financial expert” as defined under Item 401(h)(2)
of Regulation S-K of the Securities Exchange Act of 1934, as amended. The Audit Committee met three times during the fiscal year
ended March 31, 2019. The Audit Committee operates under a formal charter that governs its duties and conduct. This formal charter
is available from the Company upon request.
The principal functions
of the Audit Committee are (i) to recommend the independent auditors to be employed by the Company; (ii) to consult with the independent
auditors with regard to the plan of audit; (iii) to review, in consultation with the independent auditors, their audit report;
(iv) to consult with the independent auditors with regard to the adequacy of the Company’s internal accounting controls;
and (v) to approve any additional services to be provided by the auditors to the Company.
Audit Committee Report
The following
is the report of our Audit Committee with respect to our audited financial statements for the fiscal year ended March 31, 2019.
This report shall not be deemed soliciting material or to be filed with the Securities and Exchange Commission or subject to Regulation 14A
or 14C under the Securities Exchange Act or to the liabilities of Section 18 of the Securities Exchange Act, nor shall any
information in this report be incorporated by reference into any past or future filing under the Securities Act or the Securities
Exchange Act, except to the extent we specifically request that it be treated as soliciting material or specifically incorporate
it by reference into a filing under the Securities Act or the Securities Exchange Act.
In performing its oversight
responsibilities as defined in its charter, the Audit Committee has reviewed and discussed the audited financial statements and
reporting process, including the system of internal controls, with management and with Deloitte Touche Tohmatsu, the Company’s
independent registered public accounting firm for the year ended March 31, 2019. The Audit Committee has also discussed with Deloitte
Touche Tohmatsu the matters required to be discussed by the statement on Auditing Standards No. 16, as adopted by the Public Company
Accounting Oversight Board.
In addition, the Audit
Committee has received from Deloitte Touche Tohmatsu the written disclosures and the letter required by applicable requirements
of the Public Company Accounting Oversight Board regarding Deloitte Touche Tohmatsu’s communications with the Audit Committee
concerning independence and has discussed with Deloitte Touche Tohmatsu their independence.
Based on these reviews
and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in
the Annual Report on Form 20-F for the year ended March 31, 2019 for filing with the SEC.
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Audit Committee
Uri Bernhard Oppenheimer
Irene Wong Ping Yim
George Leung Wing Chan
Tiko Aharonov |
Compensation Committee
During fiscal 2019,
the Compensation Committee of the Board of Directors consisted of Uri Bernhard Oppenheimer, Brian Geary and Tiko Aharonov (Shlomo
Tamir served on the Compensation Committee until his resignation on September 14, 2018). The Compensation Committee administers
the Company’s 2010 Stock Option And Restricted Stock Plan and establishes the salaries and incentive compensation of the
executive officers of the Company. The Compensation Committee held one meeting during the fiscal year ended March 31, 2019.
Nominations
All seven of the Company’s
current directors (six of whom are independent directors) participated in the selection of 2019 director nominees. Accordingly,
the Board of Directors has not yet found it necessary to have a separate Nominating Committee or a formal charter for the Nominating
Committee. Assuming that the nominees are elected at the Annual Meeting, six of the seven members of the Board will be independent
directors.
The Board of Directors
has not established any specific minimum qualifications for director candidates or any specific qualities or skills that a candidate
must possess in order to be considered qualified to be nominated as a director. Qualifications for consideration as a director
nominee may vary according to the particular areas of expertise being sought as a complement to the existing board composition.
In making its nominations, the Board of Directors generally will consider, among other things, an individual’s business experience,
industry experience, financial background, breadth of knowledge about issues affecting our Company, time available for meetings
and consultation regarding Company matters and other particular skills and experience possessed by the individual. The Board of
Directors has not adopted a formal policy with regard to the consideration of diversity when evaluating candidates for election
to the Board of Directors. However, the Board of Directors believes that membership should reflect diversity in its broadest sense,
but should not be chosen nor excluded based on race, color, gender, national origin or sexual orientation. In this context, the
Board of Directors does consider a candidate’s experience, education, industry knowledge, history with the Company, and differences
of viewpoint when evaluating his or her qualifications for election the Board. In evaluating such candidates, the Board of Directors
seeks to achieve a balance of knowledge, experience and capability in its composition.
Usually, nominees for
election to the Board are proposed by our existing directors, and all of our current nominees were recommended by our existing
directors. The Company does not have any policy with regard to the consideration of any director candidates recommended by securityholders.
All potential director candidates, regardless of source, are reviewed under the same process. The Board of Directors believes this
approach is appropriate in light of the infrequent occurrence of recommendations made by our shareholders. Notwithstanding the
foregoing, under the Company’s Amended and Restated Memorandum and of Articles of Association, no person shall be eligible
for election as a director of the Company if the election of such person as a director would cause the Company to be ineligible
to remain a “foreign private issuer.”
A shareholder may nominate
one or more persons for election to the Board of Directors. In order for such nomination to be considered, the shareholder must
(i) provide timely notice thereof in writing and in proper form to the secretary of the Company and (ii) provide the information
required by Regulation 7.6 of the Company’s Amended and Restated Articles of Association. To be timely, a shareholder’s
notice must be delivered to, or mailed and received at, the principal executive offices of the Company not less than ninety (90)
days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s meeting at which
members of the Board of Directors were elected
We do not have a formal
policy regarding attendance by Board members at the Annual Meeting of Shareholders. Our Chairman and Chief Executive Officer attended
our 2018 Annual Meeting and will attend our 2019 Annual Meeting. However, because most of the directors are located outside of
the U.S., none of the other directors is expected to attend the Annual Meeting.
Board Leadership Structure and Role in Risk Oversight
The Board of Directors
believes it is important to select the Company’s Chairman and Chief Executive Officer in the manner it considers in the best
interests of the Company at any given time. Accordingly, the Chairman and Chief Executive Officer positions may be filled by one
individual or by two different individuals, as determined by the Board of Directors based on circumstances then in existence.
Currently, Roland Kohl
serves as both Chairman and Chief Executive Officer. The Board of Directors considers this leadership structure to be suitable
for the Company because it allows one person to lead and represent the Company and the Board of Directors, while also providing
for effective oversight by an independent Board. The Board of Directors believes that having Mr. Kohl serve in the roles of Chairman
and Chief Executive Officer is appropriate for the Company and its shareholders at this time, in view of Mr. Kohl’s continuous
long-standing roles in such positions, and Mr. Kohl’s in-depth knowledge of the Company’s business and industry. The
Board of Directors also believes that the number of its independent directors mitigates the risk of any potential conflicts that
might result from combining the roles of Chief Executive Officer and Chairman.
Tiko Aharonov has been
designated as the “lead independent director” of the Board of Directors. Mr. Aharonov is responsible for coordinating
the activities of the independent directors, working with the Chief Executive Officer to set the agenda for Board meetings, chairing
executive sessions of the independent directors, and leading the Board’s review of the Chief Executive Officer. The Board
of Directors is currently comprised of a majority of individuals who are independent from the management of the Company and, assuming
that the three nominees are elected at the Annual Meeting, six of the future seven members of the Board will continue to be independent
directors. The Board of Directors and its committees meet regularly throughout the year to assure that the independent directors
are well briefed and informed with regard to the Company’s affairs. Each of the independent directors has unfettered access
to any employee within the Company and each director is encouraged to call upon whatever employee he deems fit to secure the information
each director feels is important to his understanding of our Company. In this fashion, we seek to maintain well informed, independent
directors who are prepared to make informed decisions regarding our business affairs.
Management is responsible
for the day-to-day management of risks the Company faces, while the Board of Directors as a whole plays an important role in overseeing
the identification, assessment and mitigation of such risks. The Board of Directors reviews information regarding the Company’s
finances and operations, as well as the risks associated with each. For example, the oversight of financial risk management lies
primarily with the Board’s Audit Committee, which is empowered to appoint and oversee our independent auditors, monitor the
integrity of our financial reporting processes and systems of internal controls and provide an avenue of communication among our
independent auditors, management and the Board of Directors. The Company’s Compensation Committee is responsible for overseeing
the management of risks relating to the Company’s compensation plans and arrangements, as well as risks associated with the
independence of the Board of Directors and potential conflicts of interest. In fulfilling its risk oversight responsibility, the
Board of Directors, as a whole and acting through any established committees, regularly consults with management to evaluate and,
when appropriate, modify our risk management strategies.
PROPOSAL II - RATIFICATION OF INDEPENDENT
PUBLIC ACCOUNTANTS
The Board of Directors
is considering retaining the firm of Deloitte Touche Tohmatsu, independent certified public accountants, to act as the Company’s
independent auditors for the year ending March 31, 2020. Deloitte Touche Tohmatsu has acted as the Company’s independent
auditors for all fiscal years since 1995, other than the fiscal year ended March 31, 2010.
Shareholder ratification
of the selection of Deloitte Touche Tohmatsu as the Company’s independent public accountants is not required by the Company’s
Amended and Restated Memorandum and Articles of Association or otherwise. However, the Board of Directors is submitting the anticipated
selection of Deloitte Touche Tohmatsu to the shareholders for ratification as a matter of good corporate practice. The Board of
Directors will consider the shareholders’ vote in its determination of whether or not to retain that firm. However, even
if the selection is ratified, the Board of Directors in its discretion may direct the appointment of a different independent accounting
firm, or change such appointment at any time during the year if it determines that such a change would be in the best interests
of the Company and its shareholders.
The Board of Directors
does not anticipate a representative of Deloitte Touche Tohmatsu will attend the Annual Meeting.
The following table
presents the aggregate fees for professional services and other services rendered by Deloitte Touche Tohmatsu to the Company in
the fiscal year ended March 31, 2019 and 2018.
| | |
2019 | | |
2018 | |
| Audit Fees (1) | |
$ | 251,000 | | |
$ | 257,000 | |
| Tax Fees (2) | |
| - | | |
| - | |
| Total | |
$ | 251,000 | | |
$ | 257,000 | |
| (1) | Audit fees represent fees for professional services provided in connection with the audit of the Company’s consolidated
financial statements, and audit services provided in connection with other statutory or regulatory filings. |
| (2) | Tax Fees include fees for the preparation of tax returns. |
As part of its policies
and procedures, all audit related services, tax services and other services rendered by Deloitte Touche Tohmatsu were pre-approved
by the Audit Committee.
Equity Compensation Plan Information
The following table
provides information, as of March 31, 2019, with respect to all of our compensation plans under which equity securities are authorized
for issuance:
| | |
Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | | |
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | | |
Number of Shares Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Shares Reflected In Column (a)) | |
| | |
(a) | | |
(b) | | |
(c) | |
| Equity compensation plans approved by our shareholders: | |
| -0- | | |
| — | | |
| 600,000 | |
| Equity compensation plans not approved by our shareholders | |
| -0- | | |
| — | | |
| — | |
In 2010 the Company
adopted the “2010 Stock Option And Restricted Stock Plan” (the “2010 Option Plan”) to replace the prior
1996 option plan that had expired. No options remained outstanding under the 1996 option plan as of March 31, 2019. Under the new
2010 Option Plan, the Company is authorized to grant options, and to issue restricted shares, for a total of 600,000 shares. The
2010 Option Plan is administered by the Compensation Committee appointed by the Board, which determines the terms of the options
granted, including the exercise price, the number of Common Shares subject to the option and the option’s exercisability.
The exercise price of options granted to participants who are not subject to taxation in the United States may be less than the
fair market value of the Common Shares on the date of grant. Unless otherwise specified by the Compensation Committee, the maximum
term of options granted under the 2010 Option Plan is five years.
As of July 31, 2019,
no options or shares of restricted stock have been granted under the 2010 Option Plan. However, at its regular meeting in June
2019, the Board decided to grant stock options and shares of restricted stock to members of the Board of Directors, to senior
executive officers, and to key managers and employees at the Company’s Hong Kong, Shenzhen and Yangon manufacturing facilities.
The Board informed management that these options and shares of restricted stock will contain various vesting and other restrictions
in order to incentivize and retain the grantees. Management has been instructed to make recommendations to the Compensation Committee
regarding the allocation of these awards to key managers and to present the Compensation Committee with the forms of the option
and restricted stock agreements that contain the restrictive provisions. Based on the Board’s recommendation, the Company
currently anticipates that a total of 590,000 options and shares of restricted stock will be awarded under the 2010 Plan in August
2019.
Security Ownership of Certain Beneficial Owners and Management
The following table
sets forth, as of July 31, 2019, certain information with respect to the beneficial ownership of the Company’s Common Shares
by (i) each person known by the Company to own beneficially more than 5% of the outstanding Common Shares outstanding as of such
date, (ii) each of the director nominees, (iii) executive officers, and (iv) the officers and directors of the Company as a group.
Name of Beneficial Owner or Identify of Group | |
Number of Common Shares Beneficially Owned | | |
Percent Beneficial Owned(**) | |
| Officers, Directors and Nominees(1) | |
| | | |
| | |
| Roland W. Kohl | |
| 614,067 | | |
| 16.2 | % |
| Tiko Aharonov | |
| 235,000 | | |
| 6.2 | % |
| Ringo Tsang | |
| — | | |
| — | |
| George Leung Wing Chan | |
| 3,000 | | |
| * | |
| Brian Geary | |
| 11,172 | | |
| * | |
| Irene Wong Ping Yim | |
| 3,000 | | |
| * | |
| Kevin Yang Kuang Yu | |
| 11,224 | | |
| * | |
| Uri Bernhard Oppenheimer | |
| 18,000 | | |
| * | |
| Alan Chan | |
| — | | |
| — | |
| All officers, directors and nominees as a group (10 persons) | |
| 895,463 | | |
| 23.6 | % |
| | |
| | | |
| | |
| Greater than 5% stockholders | |
| | | |
| | |
Zeff Capital, LP(2)
885 Avenue of the Americas
New York, NY 10001 | |
| 389,568 | | |
| 10.2 | % |
Renaissance Technologies LLC
800 Third Avenue
New York, New York 10022(3) | |
| 208,750 | | |
| 5.5 | % |
| ** | Under the rules of the Securities and Exchange Commission, shares of Common Shares that an individual or group has a right
to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purpose of computing
the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage
ownership of any other person shown in the table. |
| (1) | The address of each of the named holders is c/o Highway Holdings Limited, Suite 1801, Level 18, Landmark North, 39 Lung Sum
Avenue, Sheung Shui, New Territories, Hong Kong. |
| (2) | Based on a Schedule 13G/A jointly filed with the SEC by Zeff Capital, LP, Zeff Holding Company, LLC and Daniel Zeff on January
3, 2019. |
| (3) | Based on a Schedule 13G jointly filed with the SEC by Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation
on February 12, 2019. |
There are no arrangements
known to the Company the operation of which may at a subsequent date result in a change in control of the Company. All holders
of the Common Shares have the same voting rights.
Compensation of Directors and Officers
The aggregate amount
of compensation (including non-cash benefits) paid by the Company and its subsidiaries during the year ended on March 31, 2019
to all of the directors and officers, as a group (ten people), for services rendered to the Company and its subsidiaries in all
capacities was approximately $801,000, excluding amounts paid by the Company as dividends to directors and executive officers in
their capacity as shareholders of the Company. Mr. Kohl’s prior employment agreement expired in March 2019. Mr. Kohl has
entered into a new employment agreement on substantially the same terms as the prior agreement, except that under his new agreement,
his compensation will be reduced by one-half from his initial base salary following any fiscal quarter in which the Company has
a net quarterly loss, which salary reduction will remain in effect until the Company has net income in any subsequent quarter.
Accordingly, in the event that the Company has a quarterly loss, Mr. Kohl’s annual base salary for the following quarter
will be reduced by one-half. The forfeited salary will not be recouped if/when the Company has a profitable fiscal quarter. As
a result of the Company’s most recent quarterly loss, Mr. Kohl’s monthly salary currently is 50% of the prior rate.
The lower salary will not be further reduced in subsequent quarters if the Company continues to incur net losses. Mr. Kohl, and
the four other senior managers of the Company, are entitled to receive cash payments equal to three times their annual salary in
the event of a change of control of the Company without the approval of the Board of Directors.
During the past fiscal
year, the Company paid each non-executive director (Tiko Aharonov, Uri Bernhard Oppenheimer, Kevin Yang Kuang Yu, Irene Wong Ping
Yim, Brian Geary, and George Leung Wing Chan) an annual director’s fee of $12,000, and reimbursed them for their reasonable
expenses incurred in connection with their services as directors. In addition, the Chairman of any committee is paid an additional
fee of $2,000 per year, and the members of a committee are paid an additional fee of $2,000 per year for each committee on which
they serve.
SHAREHOLDER PROPOSALS AT THE
NEXT ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals
submitted for inclusion in the Company’s Proxy Statement and form of proxy relating to the Company’s 2020 annual meeting
of shareholders must be received by May 28, 2020. If the Company is not notified of a shareholder proposal by May 28, 2020, then
the proxies held by management of the Company may provide the discretion to vote against such shareholder proposal, even though
such proposal is not discussed in the Proxy Statement. Shareholder proposals should be submitted to the Company at Suite 1801,
Level 18, Landmark North, 39 Lung Sum Avenue, Sheung Shui, New Territories, Hong Kong.
OTHER MATTERS
The Board of Directors
does not know of any other business that may be presented for consideration at the meeting. However, if any matters not referred
to in this Proxy Statement should properly come before the meeting, the persons named in the proxies will vote the shares represented
thereby in accordance with their judgment.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Shareholders may communicate
directly with the Board of Directors by writing to them at Board of Directors, c/o Secretary, Highway Holdings Limited, Suite 1801,
Level 18, Landmark North, 39 Lung Sum Avenue, Sheung Shui, New Territories, Hong Kong. Such communications will be forwarded to
the director or directors to whom it is addressed, except for communications that are (1) advertisements or promotional communications,
(2) solely related to complaints with respect to ordinary course of business customer service and satisfaction issues, or (3) clearly
unrelated to the Company’s business, industry, management or Board or committee matters.
AVAILABILITY OF ANNUAL REPORT ON FORM
20-F
The Company will furnish
without charge a copy of the Company’s Annual Report on Form 20-F for the fiscal year ended March 31, 2019 as filed with
the Securities and Exchange Commission to any shareholder desiring a copy. Shareholders may request such Annual Reports from the
following: Gary S. Maier, Maier & Company, Inc. 815 Moraga Drive, Suite 306, Los Angeles, California 90049. Phone (310) 471-1288.
|
July 31, 2019 |
By Order of the Board of Directors
Alan Chan, Secretary |
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