SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only
[_] Definitive Additional Materials (as permitted by Rule 14a-
[_] Soliciting Material Under Rule 14a-12 6(e)(2))
--------------------------------
ASIAINFO HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
--------------------------------
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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or the form or schedule and the date of its filing.
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[LOGO OF ASIAINFO]
ASIAINFO HOLDINGS, INC.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 23, 2002
----------------
March 22, 2002
TO THE STOCKHOLDERS OF ASIAINFO HOLDINGS, INC.:
You are cordially invited to attend the Annual Meeting of stockholders (the
"Annual Meeting") of AsiaInfo Holdings, Inc., a Delaware corporation
("AsiaInfo"), to be held on Tuesday, April 23, 2002 at 2:00 p.m., local time,
at 4th Floor, Zhongdian Information Tower, 6 Zhongguancun South Street, Haidian
District, Beijing, PRC for the following purposes:
1. To elect three directors to serve for three-year terms to expire at the 2005
Annual Meeting of stockholders and until their successors are duly elected
and qualified;
2. To ratify the selection of Deloitte Touche Tohmatsu as the independent
auditors of AsiaInfo for the fiscal year ending December 31, 2002; and
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
This notice of meeting, proxy statement, proxy card and copy of the Annual
Report on AsiaInfo's operations during the year ended December 31, 2001 are
being distributed on or about March 22, 2002. The foregoing items of business
are more fully described in the proxy statement.
Stockholders of record at the close of business on March 1, 2002 are entitled
to notice of and to vote at the Annual Meeting and any adjournment thereof. A
list of these stockholders will be available for inspection during ordinary
business hours at our principal executive offices, at 4th Floor, Zhongdian
Information Tower, 6 Zhongguancun South Street, Haidian District, Beijing, PRC,
from April 14 to the date of our Annual Meeting. The list will also be
available for inspection at the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in person.
However, to assure your representation at the Annual Meeting, you are urged to
vote your shares by telephone, the Internet, or by signing and returning the
enclosed proxy card as promptly as possible in the enclosed self-addressed
envelope. Any stockholder attending the Annual Meeting may vote in person even
if he or she returned a proxy. However, if a stockholder's shares are held of
record by a broker, bank or other nominee and the stockholder wishes to vote at
the Annual Meeting, the stockholder must obtain from the record holder a proxy
issued in his or her name.
By Order of the Board of Directors
/s/ James Ding
_______________________________________
James Ding
President and Chief Executive Officer
March 22, 2002
Beijing, PRC
ASIAINFO HOLDINGS, INC.
4th Floor, Zhongdian Information Tower
6 Zhongguancun South Street
Haidian District
Beijing 100086, PRC
---------------------
PROXY STATEMENT
2002 ANNUAL MEETING OF STOCKHOLDERS
---------------------
This proxy statement and accompanying proxy are being mailed to stockholders on
or about Friday, March 22, 2002, in connection with the solicitation of proxies
by the Board of Directors (the "Board") of AsiaInfo Holdings, Inc., a Delaware
corporation ("AsiaInfo," the "Company," "we" or "our"), for use at the Annual
Meeting of stockholders (the "Annual Meeting") to be held on Tuesday, April 23,
2002 at 2:00 p.m., local time, at 4th Floor, Zhongdian Information Tower, 6
Zhongguancun South Street, Haidian District, Beijing, PRC, or at any
adjournment thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Stockholders. AsiaInfo's principal executive
offices are located at 4th Floor, Zhongdian Information Tower, 6 Zhongguancun
South Street, Haidian District, Beijing 100086, PRC. AsiaInfo's telephone
number at that location is +8610 6250 1658.
INFORMATION CONCERNING SOLICITATION AND VOTING
Record Date and Share Ownership
Stockholders of record at the close of business on March 1, 2002 (the "Record
Date") are entitled to notice of and to vote at the Annual Meeting. At the
Record Date, 42,693,394 shares of AsiaInfo's common stock ("Common Stock") were
issued and outstanding and held of record by approximately 197 registered
stockholders.
Voting, Solicitation and Revocability of Proxy
Registered stockholders can vote by mail, telephone or the Internet. Telephone
voting can be accessed by calling the toll-free number (in the United States
only) 1-866-593-3363. Internet voting can be accessed by logging on to the
following Internet address: (http://www.proxyvotenow.com/asi). Telephone and
Internet voting information is provided on the proxy card. A control number
located on the proxy card is designed to verify each stockholder's identity and
allow stockholders to vote their shares and confirm that their voting
instructions have been properly recorded. If your shares are held in the name
of a bank or broker, follow the voting instructions on the form you receive
from your bank or broker. The availability of telephone or Internet voting will
depend on your bank or broker's voting process.
If you do not choose to vote by telephone or the Internet, you may still return
your proxy card, properly signed, and the shares represented will be voted in
accordance with your directions. You can specify your choices by marking the
appropriate boxes on the proxy card. If your proxy card is signed and returned
without specifying choices, the shares will be voted in favor of proposals 1
and 2. If you vote by telephone or the Internet, it is not necessary to return
your proxy card.
You may revoke your proxy at any time before it is voted at the Annual Meeting
by casting a different vote by telephone or the Internet, by executing a later-
voted proxy by mail, by voting by ballot at the Annual Meeting, or by providing
written notice of the revocation to Adams Lin, Corporate Secretary and Legal
Counsel of AsiaInfo, at the Company's principal executive offices.
Your vote is important. Accordingly, regardless of whether you plan to attend
the Annual Meeting, you are urged to vote by telephone, by the Internet, or by
signing and returning the accompanying proxy card. If you do attend, you may
vote by ballot at the Annual Meeting, thereby canceling any proxy previously
given.
In the event that any matter not described in this Proxy Statement properly
comes before the Annual Meeting, the proxy holders named in the accompanying
proxy will vote the shares represented by the proxy in accordance with their
best judgment. As of the date of this Proxy Statement, AsiaInfo is not aware of
any other matter that might be presented at the Annual Meeting.
Each share of Common Stock outstanding on the Record Date is entitled to one
vote. The required quorum for the transaction of business at the Annual Meeting
is a majority of the votes eligible to be cast by holders of shares of Common
Stock issued and outstanding on the Record Date, present in person or
represented by proxy. Stockholders may withhold authority to vote for one or
more of the nominees for director and may abstain on one or more of the other
matters that may come before the Annual Meeting. The inspector of election
appointed for the Annual Meeting will determine the existence of a quorum and
will tabulate the votes cast at the Annual Meeting. Broker non-votes will not
be counted in determining the number of votes cast with respect to a proposal.
For purposes of determining the presence of a quorum, abstentions and broker
non-votes will be counted by AsiaInfo as present at the Annual Meeting.
Abstentions will also be counted by AsiaInfo in determining the total number of
votes cast with respect to a proposal (other than the election of directors).
If, however, such quorum shall not be present or represented, the stockholders
present in person or represented by proxy shall have the power to adjourn the
Annual Meeting from time to time, without notice other than announcement at the
Annual Meeting until a quorum shall be present or represented. If a broker
indicates on a proxy that such broker does not have discretionary authority to
vote on a particular matter, under applicable Delaware law those shares will be
counted as present for purposes of determining the presence of a quorum, but
will not be counted as votes cast on the matter and will have no effect on the
outcome of the vote on such matter.
The cost of soliciting proxies will be borne by AsiaInfo. Proxies may be
solicited by certain of AsiaInfo's directors, officers and employees, without
additional compensation, in person or by telephone, email or facsimile. In
addition, AsiaInfo has retained Morrow & Co., Inc. to assist in such
solicitation. The fee to be paid to such firm is not expected to exceed $4,000
plus reasonable out-of-pocket costs and expenses. In addition, AsiaInfo may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation materials to such
beneficial owners.
2
TABLE OF CONTENTS
Matters to be Considered at the Annual Meeting............................. 4
Proposal No. 1: Election of Directors...................................... 4
General................................................................... 4
Nominees for Class III Directors.......................................... 4
Board Meetings and Committees............................................. 5
Director Compensation..................................................... 5
Vote Required............................................................. 5
Recommendation of the Board............................................... 5
Proposal No. 2: Ratification of Appointment of Independent Auditors........ 6
General................................................................... 6
Audit Fees................................................................ 6
Financial Information Systems Design and Implementation Fees.............. 6
All Other Fees............................................................ 6
Recommendation of the Board............................................... 6
Management................................................................. 7
Executive Officers........................................................ 7
Executive Compensation..................................................... 9
Summary Compensation Table................................................ 9
Option Grants in Last Fiscal Year......................................... 9
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values................................................................... 10
Employment Agreements..................................................... 11
Pension Plans............................................................. 11
Compensation Committee Report.............................................. 11
Compensation Philosophy and Review........................................ 12
Policy Regarding Section 162(m) of the Internal Revenue Code.............. 12
Base Salaries............................................................. 12
Long-Term Equity Incentives............................................... 12
Other Compensation........................................................ 13
Chief Executive Officer Compensation...................................... 13
Audit Committee Report..................................................... 13
Compensation Committee Interlocks and Insider Participation................ 14
Certain Relationships and Related Transactions............................. 15
Transactions with China Netcom............................................ 15
Other..................................................................... 16
Stock Price Performance.................................................... 16
Security Ownership of Certain Beneficial Owners and Management............. 17
Section 16(a) Beneficial Ownership Reporting Compliance.................... 19
Deadline for Receipt of Stockholder Proposals.............................. 19
Other Matters.............................................................. 19
3
MATTERS TO BE CONSIDERED AT
THE ANNUAL MEETING
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
General
The By-Laws of AsiaInfo provide that the authorized number of directors shall
consist of no less than three nor more than nine directors. There are presently
eight directors divided into three classes: Class I , Class II and Class III.
Each class has a three year term. Messrs. James Ding, Alan Bickell and Steve
Chang are Class I directors, whose term will expire at the 2003 annual meeting;
Messrs. Patrick Keen and Louis Lau are Class II directors, whose term will
expire at the 2004 annual meeting; and Messrs. Edward Tian, Chang Sun and
Michael Zhao are Class III directors whose term will expire at the Annual
Meeting. Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the nominees named below, all of whom are presently
AsiaInfo directors. If any nominee is unable or declines to serve as a director
at the time of the Annual Meeting, the proxies will be voted for any nominee
designated by the present Board to fill the vacancy. If stockholders properly
nominate persons other than AsiaInfo's nominees for election as directors, the
proxy holders will vote all proxies received by them to assure the election of
as many of AsiaInfo's nominees as possible, with the proxy holder making any
required selection of specific nominees to be voted for. The term of office of
each person elected as a director will continue until the third annual meeting
following his or her election or until his or her earlier resignation or
removal. The directors elected this year should continue in office until the
2005 annual meeting. There is no family relationship between any director and
any other director or executive officer of AsiaInfo.
Nominees for Class III Directors
Certain information regarding the nominees is set forth below:
Name of Nominee Age Principal Occupation Director Since
--------------- --- -------------------- --------------
President and CEO, China
Edward S. Tian.......... 38 Netcom 1993
Managing Director of Warburg
Chang Sun............... 45 Pincus 1997
Michael Zhao............ 36 Senior Vice President and 1999
General Manager for Network
Infrastructure Solutions
Edward S. Tian has served as a member of the board of directors of AsiaInfo
since our inception. Dr. Tian is the President and CEO of China Netcom
Corporation ("China Netcom"), a position he has held since June 1999. China
Netcom is a facilities-based broadband telecommunications operator in China,
providing Internet broadband access and integrated telecom services to
residential and corporate customers. Prior to joining China Netcom, he and
James Ding co-founded AsiaInfo in Dallas, Texas in 1993 and Dr. Tian served as
AsiaInfo's President through May 1999. Dr. Tian has a Master of Science degree
from the Graduate School of the Chinese Academy of Science in Beijing and a
Ph.D. in Environmental Management from Texas Tech University.
Chang Sun has served as a member of the board of directors of AsiaInfo since
December 1997. Mr. Sun has been a Managing Director of Warburg Pincus, a major
shareholder and affiliate of AsiaInfo, since 1995. Warburg Pincus is in the
business of managing private equity and venture capital funds. Prior to that
position, he was an Executive Director of Goldman Sachs (Asia) LLC. Mr. Sun
holds a B.A. from the Beijing Foreign Language University, a Master of Arts
degree from the Joseph Lauder Institute of International Management at the
University of Pennsylvania and an M.B.A. from the Wharton School of the
University of Pennsylvania.
Michael Zhao has served as a member of the board of directors of AsiaInfo since
1999 and has been our Senior Vice President and General Manager for Network
Infrastructure Solutions since January 2001. He
4
served as Senior Vice President and Chief Strategy Officer between January 1997
and January 2001. He was our General Manager from October 1996 to December 1997
and our Deputy Chief Engineer from February 1996 to January 1997. Mr. Zhao
holds a Ph.D. in engineering from the State University of New York at Buffalo,
which he received in 1994 and an M.B.A. from Rutgers, the State University of
New Jersey, which he received in 2000.
For information on our Class I and Class II directors, please see the
Management Section beginning on page 7 of this proxy statement.
Board Meetings and Committees
The Board held four regular meetings during the fiscal year ended December 31,
2001, and acted eight times by unanimous written consent. The Board has an
audit committee, a compensation committee and a finance committee. The Board
does not have a nominating committee.
Audit Committee Compensation Committee Finance Committee
--------------- ---------------------- -----------------
Patrick L. Keen Alan D. Bickell Chang Sun
Alan D. Bickell Patrick L. Keen Alan Bickell
Louis Lau Chang Sun
The Audit Committee. The audit committee currently consists of Messrs. Keen
(Chair), Bickell and Lau, all independent directors. The audit committee held
four meetings during the last fiscal year. The audit committee makes
recommendations to the Board regarding the selection of independent
accountants, reviews the results and scope of audit and other services provided
by our independent accountants and reviews and evaluates our audit and control
functions.
The Compensation Committee. The compensation committee currently consists of
Messrs. Bickell (Chair), Keen and Sun. The compensation committee held three
meetings during the last fiscal year. The compensation committee administers
AsiaInfo's stock option plans and makes decisions concerning salaries and
incentive compensation for AsiaInfo's employees.
The Finance Committee. The finance committee consists of Messrs. Sun (Chair)
and Bickell. The finance committee held two meetings during the last fiscal
year. The finance committee makes recommendations to the Board with respect to
AsiaInfo's capital position and financing requirements.
During the year 2001, each director attended 75% or more of the meetings of the
Board and of the committees of the Board on which the director served during
the period for which he was a director or committee member, respectively.
Director Compensation
In 2001, each non-executive director was entitled to receive an annual retainer
of $10,000 and a fee of $1,000 for each Board meeting attended. However, the
non-executive directors waived their rights to receive the $10,000 annual
retainers and the $1,000 per meeting fee for 2001.
AsiaInfo also grants stock options to its non-executive directors, beginning
with initial grants of 20,000 options to each non-executive director, vesting
over four years on an annual schedule of 25%, 25%, 25% and 25%. During the last
two years of the vesting schedule, the options vest quarterly. Each year, we
grant new options to our non-executive directors as their options vest, so that
the unvested portion of each non-executive director's options is maintained at
20,000.
Vote Required
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote.
Recommendation of the Board
The Board recommends that the stockholders vote "FOR" the election of each of
the nominees listed above.
5
PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
General
The Board has selected the firm of Deloitte Touche Tohmatsu as AsiaInfo's
independent auditors to audit the financial statements of AsiaInfo for the
fiscal year ending December 31, 2002, and recommends that stockholders vote for
ratification of this appointment. Deloitte Touche Tohmatsu has audited
AsiaInfo's financial statements since the Company's inception in 1993.
Representatives of Deloitte Touche Tohmatsu are expected to be present at the
Annual Meeting and will have the opportunity to make a statement if they desire
to do so, and are expected to be available to respond to appropriate questions.
Stockholder ratification of the selection of Deloitte Touche Tohmatsu as
AsiaInfo's independent auditors is not required by AsiaInfo's By-Laws or
otherwise. However, the Board is submitting the selection of Deloitte Touche
Tohmatsu to the stockholders for ratification as a matter of good corporate
practice. If the stockholders fail to ratify the selection, the audit committee
and the Board will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Board in its discretion may direct the appointment
of different independent auditors at any time during the year if it determines
that such change would be in the best interests of AsiaInfo and its
stockholders.
Audit Fees
The aggregate fees billed by Deloitte Touche Tohmatsu for professional services
rendered for the audit of the Company's financial statements for the fiscal
year ended December 31, 2001, and for the reviews of the financial statements
included in the Company's Quarterly Reports on Form 10-Q for that fiscal year
were approximately $269,000.
Financial Information Systems Design and Implementation Fees
Deloitte Touche Tohmatsu billed no fees for services rendered to the Company
for information technology services relating to financial information systems
design and implementation for the fiscal year ended December 31, 2001.
All Other Fees
The aggregate fees for all other services rendered by Deloitte Touche Tohmatsu
during the fiscal year ended December 31, 2001, were approximately $926,000.
This amount includes $851,000 for tax planning and compliance services, $40,000
for due diligence services performed in connection with the Company's
acquisition of Bonson Information Technology Holdings Limited and $35,000 for
certain consultative services.
Recommendation of the Board
The Board recommends that the stockholders vote "FOR" the ratification of the
appointment of Deloitte Touche Tohmatsu as AsiaInfo's independent auditors for
the fiscal year ending December 31, 2002.
6
MANAGEMENT
Executive Officers
The following table sets forth certain information with respect to our current
directors and executive officers:
Board of Directors Age Position
------------------ --- --------
Louis Lau............... 66 Chairman of the Board and Board Member
James Ding.............. 36 President, Chief Executive Officer and Board Member
Michael Zhao............ 36 Senior Vice President, General Manager for Network Infrastructure
Solutions and Board Member
Alan D. Bickell......... 65 Board Member
Steve Chang............. 47 Board Member
Patrick L. Keen......... 52 Board Member
Chang Sun............... 45 Board Member
Edward S. Tian.......... 38 Board Member
Executive Officers Age Position
------------------ --- --------
James Ding.............. 36 President and Chief Executive Officer
Ying Han................ 47 Executive Vice President and Chief Financial Officer
Michael Zhao............ 36 Senior Vice President and General Manager for Network Infrastructure
Solutions
Steve Zhang............. 38 Senior Vice President and General Manager for Operation Support
System Solutions
Fan Bao................. 31 Chief Strategy Officer and Senior Vice President for Business
Development
Yuanqin Gu.............. 41 Vice President and General Manager for Service Application Solutions
For a biographical summary of Edward S. Tian, Chang Sun and Michael Zhao, see
the section headed "Election of Directors" on pages 4-5 of this proxy
statement.
Louis Lau has served as our Chairman of the Board since our inception. Mr. Lau
has been President of Louis Lau Investments, a commercial real estate firm,
since 1987. He has held a variety of positions in the commercial real estate
and management business in Texas since 1973. Mr. Lau served as a special U.S.
Department of Commerce invitee and advisor to the 1998 U.S. Computer Industry
Trade Mission to China and as a special U.S. Department of Commerce advisor at
China Computerworld Expo 1998 in Beijing. He is presently a member of the Trade
Services Committee of the Greater Dallas Chamber of Commerce. Mr. Lau received
a Master of Science degree in biology from Texas Southern University in 1968
and a Bachelor of Science degree in chemistry from Mississippi College in 1965.
James Ding has served as our Chief Executive Officer since May 1999 and has
served as a member of the board of directors of AsiaInfo since our inception.
He was also our Senior Vice President for Business Development and Chief
Technology Officer from 1997 to 1999. Prior to that, Mr. Ding was our Senior
Vice President and Chief Technology Officer from 1993 to 1997. Mr. Ding
received a Master of Science degree in information science from the University
of California at Los Angeles in 1990.
Alan D. Bickell has served as a member of the board of directors of AsiaInfo
since March 1999. Mr. Bickell retired in November 1999 as corporate senior vice
president of Hewlett-Packard Company and managing director of Geographic
Operations, a position he had held since 1992. Mr. Bickell originally joined
Hewlett-Packard in 1964. He is a member of the board of directors of Power
Integrations, Inc. and Junior Achievement International. Mr. Bickell is a
member of the board of directors of the Peking University Foundation (USA) and,
in 1998, became an advisory Professor at Beijing University. He holds a degree
in marketing and finance from Menlo College and an M.B.A. from Santa Clara
University.
7
Steve Chang has served as a member of the board of directors of AsiaInfo since
October 2001. Mr. Chang is the President and CEO of Trend Micro, Inc., a
network antivirus and Internet content security software and services company.
He holds a B.S. in Applied Mathematics from Fu-Zen Catholic University in
Taiwan and an M.S. in Computer Science from Lehigh University.
Patrick L. Keen has served as a member of the board of directors of AsiaInfo
since January 1999. Mr. Keen is a partner of the ChinaVest Group, a major
shareholder and affiliate of AsiaInfo, and has been with the firm since 1981.
The ChinaVest Group provides long term investment capital and management
experience to growing companies doing business in or with China, Hong Kong and
Taiwan. Mr. Keen received both a bachelor's and master's degree in Business
Administration from the University of Texas at Austin.
Ying Han has been our Executive Vice President and Chief Financial Officer
since June 1998. Ms. Han was Chief Controller and Business Development Director
from 1996 to June 1998 of Hewlett-Packard (China), their Finance Manager from
1993 to 1996 and their Service Business Administration Manager from 1990 to
1993. Ms. Han received a college degree in Western Accounting from Xiamen
University in 1985.
Steve Zhang is our Senior Vice President and General Manager for Operation
Support System Solutions. He served as our Vice President for Software from
December 1999 to January 2001, responsible for overseeing AsiaInfo's software
development efforts and management of AsiaInfo's software division. From 1989
to 1999, Mr. Zhang has held senior project management and technical positions
in several successful Silicon Valley companies including Blue Martini Software,
Inc., Hyperion Solutions, Inc., Arbor Software, Versant Object Technology, Inc.
and Sun Microsystems. From September 1997 to June 1999, he was a development
manager and senior development manager at Hyperion Solutions, Inc. and from
March 1994 to October 1995, he served as Development Manager at Versant Object
Technology, Inc. Mr. Zhang earned his Master of Science degree in computer
science from Rice University and a doctorate in information science from the
University of Pisa, Italy.
Fan Bao is our Chief Strategy Officer and Senior Vice President for Business
Development, responsible for origination, structuring and execution of
acquisitions, joint ventures, strategic alliances and partnerships. Mr. Bao has
been with AsiaInfo since April 2000. Prior to that time, Mr. Bao was an
investment banker for seven years with Morgan Stanley and Credit Suisse First
Boston focusing on mergers and acquisitions and corporate finance transactions
in the technology and telecom sectors. Mr. Bao studied at Fudan University and
holds a Master of Science degree from the Norwegian School of Management.
Yuanqin Gu is our Vice President and General Manager for Service Application
Solutions. He served as our Vice President for Software from January 2001 to
December 2001. From November 1997 to December 2000, Mr. Gu was the Chief of our
South China operations. He has also held senior positions at Guangdong Xinda
High Technology Corporation from 1992 to 1997. Mr. Gu holds a B.S. in Physics
from the South Normal University of China and a computer science specialty
junior college degree from the Science and Technology Cadre Institute of
Guangdong.
8
EXECUTIVE COMPENSATION
The following table sets forth the compensation earned for services rendered to
AsiaInfo in all capacities for the fiscal years ended December 31, 2000 and
2001, by AsiaInfo's Chief Executive Officer and its four next most highly
compensated executive officers for the fiscal year ended December 31, 2001
(collectively, the "Named Executive Officers"):
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
------------------------------------------ ------------
Securities
Name and Principal Other Annual Underlying All Other
Position Year Salary ($) Bonus ($) Compensation ($) Options (#) Compensation ($)(/1/)
------------------ ---- ---------- --------- ---------------- ------------ ---------------------
James Ding, President
and Chief Executive 2001 145,000 40,185 24,399 -- 13,473
Officer................ 2000 145,000 31,598 24,000 -- 14,412
Ying Han, Executive Vice
President and Chief 2001 148,795 40,769 20,129 100,000 7,857
Financial Officer...... 2000 148,795 40,531 12,853 55,000 4,525
Michael Zhao, Senior
Vice President and
General Manager for
Network Infrastructure 2001 145,000 49,661 31,304 230,000 14,702
Solutions.............. 2000 145,000 31,598 24,000 -- 14,352
Steve Zhang, Senior Vice
President and General
Manager for Operation
Support System 2001 141,250 23,175 31,105 80,000 13,027
Solutions.............. 2000 130,000 36,000 24,000 180,000 11,232
Fan Bao, Chief Strategy
Officer and Senior Vice
President for Business 2001 150,000 27,399 44,047 80,000 6 ,429
Development............ 2000 150,000 30,000 35,000 250,000 1,470
--------
(1) This compensation consists of contributions by the Company for pension,
life insurance and health insurance benefits.
Option Grants in Last Fiscal Year
The following table sets forth certain information with respect to stock
options granted to each of the Named Executive Officers during the fiscal year
ended December 31, 2001. In accordance with the rules of the Securities and
Exchange Commission (the "SEC"), also shown below is the potential realizable
value over the term of the option (the period from the grant date to the
expiration date) based on assumed rates of stock appreciation of 5% and 10%,
compounded annually. These amounts are based on certain assumed rates of
appreciation and do not represent AsiaInfo's estimate of its future stock
price. Actual gains, if any, on stock option exercises will be dependent on the
future performance of our Common Stock.
9
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Terms
--------------------------------------- -----------------------
Number of
Securities Percent of Total
Underlying Options Granted Exercise
Options to Employees in Price Expiration
Name Granted (#) Fiscal Year (%) ($/share) Date 5%($) 10%($)
---- ------------ ---------------- --------- ---------- ---------- ------------
James Ding.............. -- -- -- -- -- --
Ying Han................ 40,000(/1/) 1.6 9.25 1/16/2011 232,691 589,685
60,000(/2/) 2.4 9.625 4/4/2011 363,187 920,386
Michael Zhao............ 150,000(/3/) 6.1 8.00 1/4/2011 693,590 1,815,226
40,000(/1/) 1.6 9.25 1/16/2011 232,691 589,685
40,000(/4/) 1.6 9.625 4/4/2011 242,124 613,591
Steve Zhang............. 40,000(/1/) 1.6 9.25 1/16/2011 232,691 589,685
40,000(/4/) 1.6 9.625 4/4/2011 242,124 613,591
Fan Bao................. 40,000(/1/) 1.6 9.25 1/16/2011 232,691 589, 685
40,000(/4/) 1.6 9.625 4/4/2011 242,124 613,591
--------
(1) 25% of the stock options vest on each of the first and second anniversaries
of the grant date, January 16, 2001. Beginning on April 17, 2003, the
remaining 20,000 stock options vest on a schedule of 2,500 stock options
per quarter. The potential realizable value of the stock options is
calculated using the closing market price of AsiaInfo's Common Stock on the
grant date, $9.25 per share.
(2) 25% of the stock options vest on each of the first and second anniversaries
of the grant date, April 4, 2001. Beginning on July 5, 2003, the remaining
30,000 stock options vest on a schedule of 3,750 stock options per quarter.
The potential realizable value of the stock options is calculated using the
closing market price of AsiaInfo's Common Stock on the grant date, $9.625
per share.
(3) 25% of the stock options vest on each of the first and second anniversaries
of the grant date, January 4, 2001. Beginning on April 5, 2003, the
remaining 75,000 stock options vest on a schedule of 9,375 stock options
per quarter. The potential realizable value of the stock options is
calculated using the closing market price of AsiaInfo's Common Stock on the
grant date, $7.75 per share.
(4) 25% of the stock options vest on each of the first and second anniversaries
of the grant date, April 4, 2001. Beginning on July 5, 2003, the remaining
20,000 stock options vest on a schedule of 2,500 stock options per quarter.
The potential realizable value of the stock options is calculated using the
closing market price of AsiaInfo's Common Stock on the grant date, $9.625
per share.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth information concerning option exercises and
option holdings for each of the Named Executive Officers during the fiscal year
ended December 31, 2001. The numbers in the columns titled "Value Realized" and
"Value of Unexercised In-the-Money Options at December 31, 2001" are based on
the fair market value of our Common Stock on December 31, 2001, $17.42, less
the option exercise price payable for such shares.
Fiscal Year End Options Values
--------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at December 31, 2001
Shares December 31, 2001 (#) ($)(/2/)
Acquired on Value ------------------------- -------------------------
Name Exercise (#) Realized $(/1/) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ --------------- ----------- ------------- ----------- -------------
James Ding.............. -- -- 1,095,000 -- 15,623,400 --
Ying Han................ 80,000 1,143,820 57,000 309,000 472,300 2,810,050
Michael Zhao............ 70,000 1,044,400 330,000 230,000 4,413,600 2,051,600
Steve Zhang............. 24,000 235,680 66,000 290,000 385,080 1,793,840
Fan Bao................. -- -- 87,500 242,500 194,075 999,025
--------
(1) This value is based on the closing market price of AsiaInfo's Common Stock
on the date of exercise of shares covered by the options exercised, less
the option exercise price.
(2) Options are in-the-money if the market value of the shares covered thereby
is greater than the option exercise price.
10
Employment Agreements
We have entered into two-year employment agreements with James Ding, our
President and Chief Executive Officer, Ying Han, our Executive Vice President
and Chief Financial Officer, Michael Zhao, our Senior Vice President and
General Manager for Network Infrastructure Solutions, Steve Zhang, our Senior
Vice President and General Manager for Operation Support System Solutions, and
Fan Bao, our Chief Strategy Officer and Senior Vice President for Business
Development, which provide for annual base salaries of $145,000, $148,795,
$145,000, $145,000 and $150,000, respectively. The agreements terminate on
January 1, 2004, January 1, 2004, January 4, 2003, January 1, 2004 and March 9,
2004, respectively.
On October 17, 2000, the compensation committee of the Board adopted a
resolution on severance policy for departing members of AsiaInfo's senior
management. In the event that AsiaInfo terminates an employee at the level of
senior vice president or above without cause, the employee will receive
severance pay equal to one month's base salary for each year he or she has been
employed by AsiaInfo, or six month's base salary, whichever is greater. In
addition, the employee will have 120 days to exercise his or her vested
options. Unvested options are forfeited. Notwithstanding the foregoing,
pursuant to a resolution of the Board in 1998, in the event that the employment
of James Ding or Michael Zhao is terminated, they will be entitled to severance
pay equal to at least 12 month's base salary and immediate vesting of all
options granted prior to the date of the resolution.
Each of the Named Executive Officers has entered into a non-compete agreement
with AsiaInfo, pursuant to which they are prevented from engaging in any
commercial activity in competition with AsiaInfo for two years after the
termination of their employment. In addition, they are required to disclose all
their patent and copyright applications to AsiaInfo during their employment and
within one year after the termination of their employment.
Pension Plans
For the benefit of employees who are citizens or lawful permanent residents of
the United States, AsiaInfo has adopted a Simplified Employee Pension Plan (the
"Plan"). The Plan covers employees who have worked at AsiaInfo for at least six
months. The Company makes monthly contributions under the Plan in amounts equal
to 5% of each covered employee's monthly salary. The contributions are
deductible by the Company and are not taxable to the employees. Withdrawals are
taxable as ordinary income, and withdrawals before age 59 1/2 may be subject to
tax penalties.
In 2001, the Company contributed approximately $62,067 to all the employees
covered by the Plan. With respect to the Named Executive Officers, AsiaInfo
contributed approximately $6,021, $7,250 and $6,146 on behalf of each of James
Ding, Michael Zhao and Steve Zhang, respectively.
COMPENSATION COMMITTEE REPORT
The compensation committee currently consists of Messrs. Bickell (Chair), Keen
and Sun, all of whom are independent directors of AsiaInfo. The compensation
committee reviews and recommends to the Board the compensation and benefits of
all officers of AsiaInfo and establishes and reviews general policies relating
to compensation and benefits of employees of AsiaInfo. The following is the
report of the compensation committee describing compensation policies and
rationale applicable to AsiaInfo's executive officers with respect to the
compensation paid to such executive officers for the fiscal year ended December
31, 2001. The information contained in this report, shall not be deemed to be
"soliciting material" or to be "filed" with the SEC, nor shall such information
be incorporated by reference into any future filing under the Securities Act of
1933, as amended, (the "Securities Act") or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), except to the extent that AsiaInfo
specifically incorporates such information by reference in such filing.
11
Compensation Philosophy and Review
Our executive compensation program is generally designed to align the interests
of our executives with the interests of our stockholders and to reward our
executives for achieving corporate and individual objectives. The executive
compensation program is also designed to attract and retain the services of
qualified executives in the highly competitive telecommunications software and
services marketplaces. Executive compensation currently consists of a base
salary, long-term equity incentives, and other compensation and benefit
programs generally available to other employees.
Policy Regarding Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
generally disallows a tax deduction to public companies for compensation in
excess of $1 million paid to the company's Chief Executive Officer or any of
the four most highly compensated executive officers. Certain performance-based
compensation, however, is exempt from the deduction limit.
It is the compensation committee's intention that, so long as it is consistent
with its overall compensation objectives and philosophy, executive compensation
will be deductible for federal income tax purposes. AsiaInfo's stock option
plans have been structured so that any taxable compensation derived pursuant to
the exercise of options granted under such plans should not be subject to these
deductibility limitations.
The compensation committee has considered the potential impact of Section
162(m) of the Code on the compensation paid to AsiaInfo's executive officers.
Base Salaries
Base salary levels for the President and Chief Executive Officer and other
executive officers are intended to compensate executives competitively within
the high-technology marketplace. Base salaries are determined on an individual
basis by evaluating each executive's scope of responsibility, past performance,
prior experience and data on prevailing compensation levels in relevant markets
for executive talent. The compensation committee also takes into account
AsiaInfo's financial performance during the previous fiscal year, including
revenue growth, net income growth, operational cash flow and Common Stock
performance. Base salaries for executives are reviewed annually by the
compensation committee.
Long-Term Equity Incentives
AsiaInfo provides long-term equity incentives to its executive officers and to
all other employees through the grant of stock options under its stock option
plans. The purpose of granting stock options is to create a direct link between
compensation and the long-term performance of AsiaInfo. Stock options are
generally granted at an exercise price equal to 100% of the fair market of
AsiaInfo's Common Stock on the date of grant, have a ten year term and
generally vest over a four year period. Because the receipt of value by an
executive officer under a stock option is dependent upon an increase in the
price of AsiaInfo's Common Stock, this portion of the executives' compensation
is aligned with an increase in stockholder value. The primary stock options
granted to executive officers are generally in conjunction with the executive
officer's acceptance of employment with AsiaInfo. When determining the number
of stock options to be awarded to an executive officer, the compensation
committee considers the executive's current contribution to AsiaInfo's
performance, the executive officer's anticipated contribution in meeting
AsiaInfo's long-term strategic performance goals, and comparisons to formal and
informal surveys of executive stock option grants made by other information
technology companies. The compensation committee also reviews stock option
levels for executive officers at the beginning of each fiscal year in light of
long term strategic and performance objectives and each executive's current and
anticipated contributions to AsiaInfo's future performance. In 2001, the
compensation committee recommended (and the full Board granted) stock option
grants for the Named Executive Officers
12
representing the right to acquire an aggregate of 490,000 shares of Common
Stock. These options vest according to the schedules described in the table
detailing the stock options granted to the Named Executive Officers on page 10
of this proxy statement.
Other Compensation
AsiaInfo's executive officers are also eligible to participate in benefit
programs generally available to other employees. In addition, from time to
time, executive officers have received sign-on bonuses or other bonuses based
on extraordinary effort.
Chief Executive Officer Compensation
James Ding is President and Chief Executive Officer. The compensation committee
reviews Mr. Ding's compensation annually using the same criteria and policies
as are employed for other executive officers.
Submitted by the Compensation Committee of the Board of Directors
Alan D. Bickell
Patrick L. Keen
Chang Sun
AUDIT COMMITTEE REPORT
The audit committee reviews the Company's financial reporting process on behalf
of the Board. Management has the primary responsibility for the financial
statements and the reporting process. The Company's independent auditors are
responsible for expressing an opinion on the conformity of our audited
financial statements to generally accepted accounting principles. The audit
committee currently consists of Messrs. Keen (Chair), Bickell and Lau, all
independent directors.
The audit committee has reviewed and discussed the audited financial statements
for the fiscal year ended December 31, 2001 with our management, has discussed
with our independent auditors the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards), has received the written
disclosures required by Independent Standards Board No. 1 (Independence
Discussions with Audit Committees) and has discussed with our independent
auditors their independence. The audit committee has also considered whether
the provision of non-audit services by our auditor is compatible with
maintaining our auditors' independence. The Board adopted the written charter
of our audit committee in November 1999.
In reliance on the reviews and discussions referred to above, the audit
committee recommended to the Board that the audited financial statements for
the fiscal year ended December 31, 2001 be included in the Company's Annual
Report on Form 10-K.
Submitted by the Audit Committee of the Board of Directors
Patrick L. Keen
Alan D. Bickell
Louis Lau
13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Keen, Sun and Bickell served as members of the compensation committee
of our Board during 2001. None of these individuals was an officer or employee
of AsiaInfo during 2001. No member of the compensation committee serves as a
member of a board of directors or compensation committee of any entity that has
one or more executive officers serving as a member of our Board or compensation
committee. See the section titled "Certain Relationships and Related
Transactions--Other" on page 16 for a description of a transaction between
AsiaInfo and ChinaPalmInfo Holdings Co., Ltd. in which ChinaVest V LLC, a
limited liability company in which Mr. Keen serves as a principal, had an
indirect interest.
Mr. Ding participates in the discussions and decisions regarding salaries and
incentive compensation for all of our executive officers, except that Mr. Ding
is excluded from discussions regarding his own salary and incentive
compensation.
14
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with China Netcom
Edward Tian has served as a member of the Board of AsiaInfo since our inception
and is the beneficial owner of approximately 14.4% of our Common Stock. In June
1999, he became President and Chief Executive Officer of China Netcom. Prior to
joining China Netcom, Dr. Tian and James Ding co-founded AsiaInfo in Dallas,
Texas in 1993, and Dr. Tian served as AsiaInfo's President until May of 1999.
Along with China Telecommunications Corporation, China United
Telecommunications Corporation and China Mobile Communications Corporation,
China Netcom is one of the largest providers of telecommunications and Internet
services in China. Like most of the other major participants in that industry,
China Netcom has entered into contracts with AsiaInfo for systems integration
and software products. In 2001, those agreements included the following:
.. In April 2001, we entered into a contract to provide China Netcom with
hardware products and related services in connection with its Beijing and
Shanghai access networks. Our expected revenues from this contract, net of
hardware costs, are approximately $63,000.
.. In May 2001, we entered into a contract to provide China Netcom with
hardware products and related services in connection with the construction
of its transmission network for three main cities in Shandong province,
which will strengthen China Netcom's Internet infrastructure in the region
and expand its backbone capacity. Our expected revenues from this contract,
net of hardware costs, are approximately $711,000.
.. In August 2001, we entered into a contract to provide China Netcom with
hardware products and related services in connection with the construction
of its transmission network for the Yangtze River Delta area, which will
strengthen China Netcom's Internet infrastructure in the region and expand
its backbone capacity. Our expected revenues from this contract, net of
hardware costs, are approximately $382,000.
.. In September 2001, we entered into a contract with China Netcom to construct
the access network for its wireless LAN billing systems. We will also
provide China Netcom with our customer care and billing software for this
network. Our expected revenues from this contract, net of hardware costs,
are approximately $235,000.
.. In November 2001, we entered into a contract to provide China Netcom with
hardware products and related services in connection with the construction
of its transmission network for the Zhu River Delta area, which will
strengthen China Netcom's Internet infrastructure in the region and expand
its backbone capacity. Our expected revenues from this contract, net of
hardware costs, are approximately $639,000.
.. In December 2001, we entered into a contract with China Netcom to construct
its unified billing system. Our expected revenues from this contract, net of
hardware costs, are approximately $378,000.
.. In December 2001, we entered into a contract to provide China Netcom with
operation support system solutions for its Chongqing broadband network. Our
expected revenues from this contract, net of hardware costs, are $209,000.
.. In December 2001, we entered into a contract to provide China Netcom with a
billing and accounting system in connection with its broadband telephony
services. We will also provide China Netcom with our convergent billing
software, AsiaInfo Convergent Billing System. Our expected revenues from
this contract, net of hardware costs, are $200,000.
.. In December 2001, we entered into an agreement to provide China Netcom with
our billing software products, AsiaInfo Online Billing System and AsiaInfo
Convergent Billing System, in connection with its broadband network in the
province of Guangdong. Our expected revenues from this contract, net of
hardware costs, are approximately $100,000.
15
.. In addition to the above agreements, we entered into two supplementary
equipment agreements with China Netcom during 2001. Our expected revenues
from these contracts, net of hardware costs, are approximately $99,000 in
the aggregate.
Each of the foregoing transactions was an arm's-length, negotiated transaction
on terms that we believe are no less favorable than terms we would have
received from an unrelated party. We will continue to recognize revenues from
the foregoing contracts in the current fiscal year, and anticipate that we will
enter into additional contracts with China Netcom in the current fiscal year
and future fiscal years.
Other
On January 17, 2001, AsiaInfo purchased a convertible promissory note in the
principal amount of $750,000 from ChinaPalmInfo Holdings Co., Ltd.
("ChinaPalmInfo"), an early-stage information technology company based in
Beijing, China. At the time of AsiaInfo's purchase of the convertible note,
ChinaVest V LP held a convertible promissory note issued by ChinaPalmInfo in a
principal amount of $500,000. Patrick L. Keen, a member of our Board, is a
partner of the ChinaVest Group and a principal of ChinaVest V LLC, the general
partner of ChinaVest V LP. Our purchase of a convertible promissory note from
ChinaPalmInfo was an arm's-length, negotiated transaction, and Mr. Keen did not
participate in the negotiation or approval of the transaction.
STOCK PRICE PERFORMANCE
The following graph shows a comparison of cumulative total stockholder returns
for AsiaInfo's Common Stock, the JP Morgan H&Q Technology Index and the Nasdaq
Stock Market Index for U.S. and foreign companies. The graph assumes the
investment of $100 on March 2, 2000, the date of AsiaInfo's initial public
offering./1/ The data regarding AsiaInfo assumes an investment at the initial
public offering price of $24.00 per share of AsiaInfo's Common Stock. The
performance shown is not necessarily indicative of future performance.
JPMorgan H&Q The NASDAQ Stock Market
Date AsiaInfo Holdings, Inc. Technology Index (U.S. and Foreign Companies)
---- ----------------------- ---------------- ----------------------------
03/02/2000 100.000 100.000 100.000
03/31/2000 252.083 92.240 95.858
06/30/2000 186.208 82.851 83.091
09/30/2000 78.917 81.344 76.738
12/31/2000 39.083 52.861 51.401
03/31/2001 50.542 36.965 38.216
06/30/2001 82.292 41.206 44.926
09/30/2001 49.542 26.989 31.102
12/31/2001 72.583 36.538 40.525
/1/ The graph is based on an initial stock price of $24 per share, the price at
which the Common Stock was offered in our initial public offering; the last
sale price on the Nasdaq National Market on the first day of trading, March
3, 2000, was $99.5625.
16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of our Common Stock as of February 25, 2002 of (i) each person
(including any "group" as that term is used in section 13(d)(3) of the Exchange
Act) known to AsiaInfo to beneficially own more than 5% of our Common Stock,
(ii) each director or director nominee of AsiaInfo, (iii) each executive
officer of AsiaInfo, and (iv) all directors and executive officers of AsiaInfo
as a group.
Common Stock
---------------------------------------
Number of Shares
Name of Beneficial Owner(/1/) Beneficially Held(/2/) Percent of Class
----------------------------- ---------------------- ----------------
Warburg Pincus Ventures, L.P.(/3/)... 4,025,105
Warburg Pincus Ventures
International, L.P.(/3/)............ 4,025,105
12/F St. George's Building, 2 Ice
House
Street, Central, Hong Kong
Subtotal............................. 8,050,210 18.9%
ChinaVest IV, L.P.(/4/).............. 4,127,516
ChinaVest IV-A, L.P.(/4/)............ 475,147
ChinaVest IV-B, L.P.(/4/)............ 196,779
c/o ChinaVest Ltd.
Dina House, 19/F, 11 Duddell Street,
Central,
Hong Kong
Subtotal............................. 4,799,442 11.2%
Capital Group International,
Inc.(/5/)........................... 2,514,000 5.9%
11100 Santa Monica Boulevard
Los Angeles, California 90025
USA
James Ding(/6/)...................... 5,839,908 13.3%
Fan Bao(/7/)......................... 237,500 *
Alan D. Bickell(/8/)................. 139,400 *
Chang Sun(/9/)....................... 5,000 *
Steve Zhang(/10/).................... 98,000 *
Ying Han(/11/)....................... 87,000 *
Michael Zhao(/12/)................... 643,380 1.5%
Louis Lau(/13/)...................... 1,913,029 4.5%
Patrick L. Keen(/14/)................ 5,000 *
Steve Chang.......................... -- --
Edward S. Tian(/15/)................. 6,362,450 14.4%
Yuanqin Gu(/16/)..................... 41,550 *
All directors and executive officers
as a group (12 persons)............. 15,372,217 33.4%
--------
* Less than 1% of the outstanding common stock.
(1) Unless otherwise noted above, the address for each of the beneficial owners
is c/o AsiaInfo Holdings, Inc., 4/F Zhongdian Information Tower, 6
Zhongguancun South Street, Haidian District, Beijing 100086, PRC.
(2) This table is based on information supplied by executive officers,
directors and stockholders of AsiaInfo and on Schedules 13D or 13G filed
with the SEC. Beneficial ownership is determined in accordance with the
rules of the SEC. In computing the number of shares beneficially owned by a
person and the percentage ownership of that person, shares of our Common
Stock subject to options
17
or warrants held by that person that are currently exercisable or will
become exercisable within 60 days after February 25, 2002 are deemed
beneficially owned and outstanding, but such shares are not deemed
outstanding for purposes of computing percentage ownership of any other
person. Unless otherwise indicated in the footnotes below, the persons and
entities named in the table have sole voting and investment power with
respect to all shares beneficially owned, subject to community property
laws where applicable.
(3) Voting and investment control over the shares of Common Stock owned by
Warburg Pincus Ventures, L.P. and Warburg Pincus Ventures International,
L.P. is held by Warburg, Pincus & Co., the corporate general partner and
investment manager of both limited partnerships, and not by any single
individual.
(4) Voting and investment control over the shares of Common Stock owned by
ChinaVest IV, L.P. and ChinaVest IV-A, L.P. are held by their general
partner, ChinaVest Partners IV, a Delaware general partnership, and not by
any single individual. Voting and investment control over the shares of
Common Stock owned by ChinaVest IV-B, L.P. is held by its general partner
and investment manager, ChinaVest Management Limited, a Bermuda company,
and not by any single individual.
(5) According to a Schedule 13G filed jointly by Capital Group International,
Inc., a California company ("CGI"), and Capital International, Inc., a
California company ("CI") on February 11, 2002, CGI is the parent holding
company of a group of investment management companies that hold investment
power and, in some cases, voting power of 2,514,000 shares of AsiaInfo's
Common Stock. This figure includes 2,460,800 shares, representing 5.8% of
AsiaInfo's Common Stock, held by CI, an investment adviser registered
under Section 203 of the Investment Advisers Act of 1940, as amended, and
a wholly-owned subsidiary of CGI. CI is deemed to be the beneficial owner
of 2,460,800 shares as a result of acting as investment adviser to various
investment companies and institutional accounts. CGI and CI each disclaims
beneficial ownership of any of these shares pursuant to Rule 13d-4 under
the Exchange Act.
(6) Includes 1,200,000 shares held by AIFF Associates LLC, a Delaware limited
liability company of which Mr. Ding is a member; 1,120,000 shares held in
a grantor retained annuity trust for the benefit of Mr. Ding and his
family; 1,120,000 shares held in grantor retained annuity trust for the
benefit of Nina Ding; and 6,000 shares held in a revocable trust for the
benefit of Rene Ding; 600,000 shares held by Nina Ding; and options to
acquire beneficial ownership of 1,095,000 shares that are currently
exercisable or will become exercisable within 60 days after February 25,
2002.
(7) Includes 100,000 shares held by eCubator Corp (BVI), which is a holding
company jointly owned and controlled by Mr. Bao and his wife; and options
to acquire beneficial ownership of 137,500 shares that are currently
exercisable or will become exercisable within 60 days after February 25,
2002.
(8) Includes 96,400 shares held by the Alan D. Bickell Family Trust and
options to acquire beneficial ownership of 43,000 shares that are
currently exercisable or will become exercisable within 60 days after
February 25, 2002.
(9) Mr. Sun, a director of AsiaInfo, is a Managing Director of Warburg, Pincus
& Co., which manages Warburg Pincus Ventures, L.P. and Warburg Pincus
Ventures International L.P. Figure includes options to acquire beneficial
ownership of 5,000 shares that are currently exercisable or will become
exercisable within 60 days after February 25, 2002.
(10) Includes options to acquire beneficial ownership of 98,000 shares that
are currently exercisable or will become exercisable within 60 days after
February 25, 2002.
(11) Includes options to acquire beneficial ownership of 87,000 shares that
are currently exercisable or will become exercisable within 60 days after
February 25, 2002.
(12) Includes 34,090 shares held by Mr. Zhao's son, Christopher Zhao and
options to acquire beneficial ownership of 387,500 shares that are
currently exercisable or will become exercisable within 60 days after
February 25, 2002.
(13) Includes 358,900 shares held by ten limited partnerships established by
Mr. Lau for the benefit of various members of his extended family and
options to acquire beneficial ownership of 5,000 shares that are
currently exercisable or will become exercisable within 60 days after
February 25, 2002.
(14) Mr. Keen, a director of AsiaInfo, is a partner of the ChinaVest Group and
a director of ChinaVest Ltd. Figure includes options to acquire
beneficial ownership of 5,000 shares that are currently exercisable or
will become exercisable within 60 days after February 25, 2002.
(15) Includes 1,200,000 shares held by AIFF Associates LLC, a Delaware limited
liability company of which Dr. Tian is a member; 234,760 shares held in
the S.T. China 2000 Qualified Grantor Retained Annuity Trust for the
benefit of Dr. Tian and his family; 234,760 shares held in the Q.K. 2000
Qualified Grantor Retained Annuity Trust for the benefit of Dr. Tian and
his family; 4,000 shares held in a revocable trust for the benefit of Dr.
Tian's daughter, Stephanie Tian; 751,225 shares held by Goldman Sachs as
collateral for a forward contract; 512,240 shares held by Dr. Tian's
wife, Qin Kong; 750,000 shares held by Morgan Stanley & Company as
collateral for a forward contract; and options to acquire beneficial
ownership of 1,460,000 shares that are currently exercisable or will
become exercisable within 60 days after February 25, 2002.
(16) Includes options to acquire beneficial ownership of 36,550 shares that
are currently exercisable or will become exercisable within 60 days after
February 25, 2002.
18
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires AsiaInfo's executive officers and
directors, and persons who own more than 10% of a registered class of
AsiaInfo's equity securities, to file certain reports regarding ownership of,
and transactions in, AsiaInfo's securities with the SEC. Such executive
officers, directors and 10% stockholders are also required by SEC rules to
furnish AsiaInfo with copies of all Section 16(a) forms that they file. Based
solely on its review of the copies of such forms received by it, or written
representations from certain reporting persons, AsiaInfo believes that for the
year ended December 31, 2001, all reporting persons complied with Section 16(a)
filing requirements, except that Mr. Ding was late in reporting a transaction
that occurred in January 2001, and Mr. James Li, Vice President of Human
Resources and Administration of AsiaInfo, was late in reporting a transaction
that occurred in July 2001. Messrs. Chang Sun and Patrick Keen were also late
in reporting transactions that occurred in January 2001 and were required to be
reported by February 14, 2002.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Stockholder proposals which are intended to be presented by such stockholders
at AsiaInfo's 2003 Annual Meeting of stockholders must be received by the
Secretary of AsiaInfo at the Company's principal executive offices no later
than November 22, 2002, in order to be considered for inclusion in the proxy
statement and form of proxy/voting instruction card relating to that meeting
pursuant to Rule 14a-8 under the Exchange Act. In order for a proposal
submitted outside of Rule 14a-8 to be considered "timely" within the meaning of
Rule 14a-4(c), such proposal must be received prior to February 5, 2003.
OTHER MATTERS
The Board knows of no other matters to be submitted to the Annual Meeting. If
any other matters properly come before the Annual Meeting, then the persons
named in the enclosed form of proxy will vote the shares they represent in such
manner as the Board may recommend.
To the extent that this proxy statement is incorporated by reference into any
other filing by AsiaInfo under the Securities Act or the Exchange Act, the
sections of this proxy statement titled "Compensation Committee Report," "Audit
Committee Report," (to the extent permitted by the rules of the SEC) and "Stock
Price Performance" will not be deemed incorporated unless specifically provided
otherwise in such filing.
By Order of the Board of Directors
/s/ James Ding
------------------------------------
James Ding
President and Chief Executive
Officer
March 22, 2002
Beijing, PRC
19
TO THE HOLDERS OF
COMMON STOCK OF
AsiaInfo Holdings, Inc.
The Bank of New York, (the "transfer agent"), has received advice
that the 2002 Annual Meeting of stockholders of AsiaInfo
Holdings, Inc. (the "Annual Meeting") will be held at 4/th/ Floor,
Zhongdian Information Tower, 6 Zhongguancun South Street, Haidian
District, Beijing, PRC, on April 23, 2002, at 2:00 p.m., local
time, for the purposes set forth in the enclosed Notice of
Meeting.
The attached proxy is being solicited by the Board of Directors
of AsiaInfo. If you are desirous of having the individuals named
in the attached proxy card vote your common stock for or against
the proposals or any of them, at the Annual Meeting, kindly
execute and forward to the transfer agent the attached proxy. The
enclosed postage paid envelope is provided for this purpose. This
proxy should be executed in such manner as to show clearly
whether you desire the individuals named in the attached proxy
card to vote for or against the proposals or any of them, as the
case may be. The proxy MUST be forwarded in sufficient time to
reach the transfer agent before 4:00 p.m., New York time, Monday,
April 22, 2002. Only the registered holders of record at the
close of business on March 1, 2002 will be entitled to execute
the proxy.
Due to the limited amount of time available before the proxy
deadline, the proxy can be faxed (with the original to follow by
mail) to the transfer agent at +1(646) 638-7812.
The Bank of New York.
Date: March 22, 2002
AsiaInfo Holdings, Inc.
[LOGO OF ASIAINFO(TM)]
2002 ANNUAL MEETING OF STOCKHOLDERS, APRIL 23, 2002.
The undersigned stockholder(s) of AsiaInfo Holdings, Inc., a Delaware
corporation, hereby acknowledge(s) receipt of the Notice of 2002 Annual Meeting
of stockholders and Proxy Statement, each dated March 22, 2002, and hereby
appoint(s) Adams Lin, Ying Han and each of them, proxies and attorneys-in-fact,
with full power of substitution, on behalf and in the name of the undersigned,
to represent the undersigned at the 2002 Annual Meeting of stockholders of
AsiaInfo Holdings, Inc., to be held on April 23, 2002 at 2:00 p.m., local time,
at 4/th/ Floor, Zhongdian Information Tower, 6 Zhongguancun South Street,
Haidian District, Beijing, PRC and at any adjournment or adjournments thereof,
and to vote all shares of common stock which the undersigned would be entitled
to vote if then and there personally present, on the matters set forth on the
reverse side.
This form of proxy must be signed by you or your attorney duly authorized in
writing or, in the case of a corporation, must either be under its common seal
or under the hand of an officer or attorney duly authorized.
In order to be valid, this form of proxy with the power of attorney or other
authority, if any under which it is signed, must be deposited with the transfer
agent no later than 4:00 p.m., New York time, on Monday, April 22, 2002 in order
to be counted in the Annual Meeting on April 23, 2002. You may also vote your
shares in person at the Annual Meeting. Due to the limited amount of time
available before the proxy deadline, the completed proxy can be faxed (with the
original to follow by mail) to the transfer agent, at +1(646) 638-7812.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
To change your address If you have any comments
please mark this box [_] please mark this box. [_] ASIAINFO HOLDINGS, INC.
P.O. BOX 11169
______________________________ ___________________________________ NEW YORK, N.Y. 10203-0169
______________________________ ___________________________________
(Continued and to be dated and signed on the reverse side.)
---------------- -----------------------------------------------------
VOTE BY TELEPHONE OR THE INTERNET
AsiaInfo 24 Hours a Day - 7 Days a Week
Holdings, Inc. Save your Company money - It's Fast and Convenient
-----------------------------------------------------
----------------
There are Three Ways to Vote Your Proxy
TELEPHONE INTERNET MAIL
--------- -------- ----
1-866-593-3363 https://www.proxyvotenow.com/asi
. Use any touch-tone telephone. . Go to the website address listed . Vote, sign and date your proxy
above. card.
. Have your Proxy Form in hand. OR OR
. Have your Proxy Form in hand. . Detach the card from the Proxy
. Enter your Control Number located Form.
in the box below. . Enter your Control Number located
in the box below. . Return the card in the postage-paid
. Follow the simple recorded envelope provided.
instructions. . Follow the simple instructions.
Your telephone or Internet vote authorizes
the named proxies to vote your shares in the
same manner as if you marked, signed and
returned the proxy card. If you have
submitted your proxy by telephone or the
Internet there is no need for you to mail
back your proxy.
-----------------------------------------------
CONTROL NUMBER FOR
TELEPHONE OR INTERNET VOTING
-----------------------------------------------
1-866-593-3363
CALL TOLL-FREE TO VOTE
DETACH PROXY CARD HERE IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET
PLEASE VOTE, DATE, SIGN, [x]
[_] AND RETURN PROMPTLY IN
THE RETURN ENVELOPE. Votes must be indicated
(x) in Black or Blue ink.
1. Election of Director THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 AND 2. FOR AGAINST ABSTAIN
2. Proposal to ratify the appointment of Deloitte [_] [_] [_]
FOR WITHHOLD Touche Tohmatsu as AsiaInfo's independent
ALL [_] FOR ALL [_] EXCEPTIONS [_] auditors for fiscal year 2002.
Nominee: 01-Edward S. Tian; 02-Chang Sun and 03-Michael Zhao
(INSTRUCTIONS: To withhold authority to vote for any nominee, mark the
"Exceptions" box and write the nominee's name in the space provided below.)
*Exceptions _________________________________________________________
The shares represented by this proxy when properly executed will be voted in the
manner directed herein by the undersigned stockholder(s). IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2. If any other matters properly
come before the meeting, the persons named in this proxy will vote in their
discretion, provided that they will not vote in the election of directors for
persons for whom authority to vote has been withheld.
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S C A N L I N E
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PLEASE SIGN exactly as your name appears at left. Joint owners should each sign.
Executors, administrators, trustees, etc. should so indicate when signing. If
signer is a corporation, please sign full name by duly authorized officer.