SCHEDULE 14A
Proxy Statement
Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant [X] Filed by a Party
other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to §240.14a
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KANDI TECHNOLOGIES GROUP,
INC.
(Name of Registrant as Specified In Its
Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] |
No fee required. |
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Fee computed on table below per
Exchange Act Rules 14a6(i)(1) and 011. |
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Title of each class of securities to which
transaction applies: |
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Aggregate number of securities to which
transaction applies: |
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(3) |
Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 011 |
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(set forth the amount on which the filing fee
is calculated and state how it was determined): |
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(4) |
Proposed maximum aggregate value of
transaction: |
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(5) |
Total fee paid: |
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Fee paid previously with preliminary
materials. |
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Check box if any part of the fee is offset as provided by
Exchange Act Rule 011(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.:
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Filing Party: |
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Date Filed: |
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2
KANDI TECHNOLOGIES GROUP, INC.
Jinhua City
Industrial Zone
Jinhua, Zhejiang Province
Peoples
Republic of China 321016
April 10, 2015
Dear Stockholder:
You are cordially invited to
attend the 2015 Annual Meeting of Stockholders of Kandi Technologies Group,
Inc., a Delaware corporation, to be held at our executive office, located at 5F,
Tower 3, Xixixinzuo, No. 550 Xixi Road, Xihu District, Hangzhou City, Zhejiang
Province, China 310013 on May 20, 2015, at 9:00 p.m. local time (9:00 a.m.
E.T.).
The Notice of Annual Meeting of
Stockholders and Proxy Statement describe the formal business to be transacted
at the annual meeting. Our directors and officers will be present to respond to
appropriate questions from stockholders. We are providing our stockholders
access to our proxy materials and our Annual Report on Form 10-K, for fiscal
year ended December 31, 2014 over the Internet. This allows us to provide you
with information relating to our 2015 Annual Meeting of Stockholders in a fast
and efficient manner. On or about April 10, 2015, we will mail to our
stockholders a Notice of Internet Availability of Proxy Materials containing
instructions on how to access our proxy materials and Annual Report on Form
10-K, for fiscal year ended December 31, 2014 online and how to vote online. If
you receive this notice by mail, you will not receive a printed copy of the
materials unless you specifically request one. Included within this notice will
be instructions on how to request and receive printed copies of these materials
and a proxy card by mail.
Whether or not you plan to attend
the meeting, please vote as soon as possible. If you request a printed copy of
the proxy materials, please complete, sign, date, and return the proxy card you
will receive in response to your request as soon as possible or you can vote via
the Internet or by telephone. This will ensure that your shares will be
represented and voted at the meeting, even if you do not attend. If you attend
the meeting, you may revoke your proxy and personally cast your vote. Attendance
at the meeting does not of itself revoke your proxy.
Sincerely,
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Hu Xiaoming |
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Chief Executive Officer and |
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Chairman of the Board of Directors
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KANDI TECHNOLOGIES GROUP, INC.
Jinhua City
Industrial Zone
Jinhua, Zhejiang Province
Peoples
Republic of China 321016
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 20, 2015
NOTICE HEREBY IS GIVEN that the
2015 Annual Meeting of Stockholders of Kandi Technologies Group, Inc., a
Delaware corporation, will be held at our principal executive office, located at
5F, Tower 3, Xixixinzuo, No. 550 Xixi Road, Xihu District, Hangzhou City,
Zhejiang Province, China 310013 on May 20, 2015, at 9:00 p.m. local time (9:00
a.m. E.T.), to consider and act upon the following:
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To elect seven directors, each to serve until the 2016
Annual Meeting of Stockholders; |
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To amend the 2008 Omnibus Long-term Incentive Plan to
increase 9,000,000 shares that are available for issuance
thereunder; |
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To ratify the appointment of AWC (CPA) Limited (f/k/a:
Albert Wong & Co.) as the Companys independent auditor for the fiscal
year ended December 31, 2015; |
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To conduct an advisory vote on the compensation of our
named executive officers as disclosed in this proxy statement pursuant to
the compensation disclosure rules of the Securities and Exchange
Commission; and |
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To transact such other business as properly may come
before the annual meeting or any adjournments thereof. The Board of
Directors is not aware of any other business to be presented to a vote of
the stockholders at the annual meeting. |
Stockholders of record at the
close of business on March 30, 2015 are entitled to receive notice of and to
vote at the 2015 Annual Meeting and any adjournments thereof. We are furnishing
proxy materials to our stockholders on the Internet, rather than mailing printed
copies of those materials to each stockholder. If you received a Notice of
Internet Availability of Proxy Materials by mail, you will not receive a printed
copy of the proxy materials unless you request them. Instead, the Notice of
Internet Availability of Proxy Materials will instruct you as to how you may
access and review the proxy materials, and vote your proxy, on the Internet or
by telephone.
By Order of the Board of Directors
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Hu Xiaoming |
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Chief Executive Officer and |
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Chairman of the Board of Directors
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Jinhua, Zhejiang Province, China
April 10, 2015
Important Notice Regarding the Availability of Proxy
Materials for the
Annual Meeting of Stockholders to be held on May
20, 2015:
WHETHER OR NOT YOU PLAN TO
ATTEND OUR 2015 ANNUAL MEETING OF STOCKHOLDERS, YOUR VOTE IS IMPORTANT. PLEASE
FOLLOW THE INSTRUCTIONS ON THE NOTICE OF INTERNET AVAILABILITY OF PROXY
MATERIALS TO VOTE YOUR PROXY VIA THE INTERNET OR BY TELEPHONE OR REQUEST AND
PROMPTLY COMPLETE, EXECUTE AND RETURN THE PROXY CARD BY FOLLOWING THE
INSTRUCTIONS ON THE PROXY CARD. IF YOU ATTEND OUR 2015 ANNUAL MEETING OF
STOCKHOLDERS, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU SO DESIRE.
2
KANDI TECHNOLOGIES GROUP, INC.
Jinhua City
Industrial Zone
Jinhua, Zhejiang Province
Peoples
Republic of China 321016
PROXY STATEMENT
FOR THE ANNUAL MEETING
OF STOCKHOLDERS
To Be Held May 20, 2015
We are furnishing this proxy
statement to the stockholders of Kandi Technologies Group, Inc., a Delaware
corporation in connection with the solicitation, by the Board of Directors of
Kandi Technologies Group, Inc. (the Board), of proxies to be voted at our 2015
Annual Meeting of Stockholders to be held at our executive office, located at
5F, Tower 3, Xixixinzuo, No. 550 Xixi Road, Xihu District, Hangzhou City,
Zhejiang Province, China 310013 on May 20, 2015, at 9:00 p.m. local time, and at
any adjournments or postponements of the meeting.
When used in this proxy
statement, the terms we, us, our, the Company and Kandi refer to Kandi
Technologies Group, Inc., a Delaware corporation, and its wholly-owned
subsidiaries. China and the PRC refer to the Peoples Republic of China.
On or about April 10, 2015, we
will mail to our stockholders a Notice of Internet Availability of Proxy
Materials containing instructions on how to access our proxy materials and
Annual Report on Form 10-K, for fiscal year ended December 31, 2014 online and
how to vote online. You will be eligible to vote your shares electronically via
the Internet, by telephone or by mail by following the instructions on the
Notice of Internet Availability of Proxy Materials. If you receive Notice of
Internet Availability of Proxy Materials by mail, you will not receive a printed
copy of the materials unless you specifically request one. Included within this
notice will be instructions on how to request and receive printed copies of
these materials and a proxy card by mail.
This proxy statement, our Annual
Report on Form 10-K, for fiscal year ended December 31, 2014, and other proxy
materials, including the Proxy Card and the Notice of Annual Meeting, are
available free of charge online at www.proxyvote.com. Directions to our
2015 Annual Meeting of Stockholders are available by calling +86-579-8223-9856
or by written request to Zhu Xiaoying, at the Jinhua City Industrial Zone,
Jinhua, Zhejiang Province, China, 321016.
ABOUT THE 2015 ANNUAL MEETING
General: Date, Time and Place
We are providing this proxy
statement to you in connection with the solicitation, on behalf of our Board, of
proxies to be voted at our 2015 Annual Meeting of Stockholders (the 2015 Annual
Meeting) or any postponement or adjournment of that meeting. The 2015 Annual
Meeting will be held on May 20, 2015, at 9:00 p.m. local time (9:00 a.m. E.T.)
at our executive office, located at 5F, Tower 3, Xixixinzuo, No. 550 Xixi Road,
Xihu District, Hangzhou City, Zhejiang Province, China 310013.
Matters to be Considered and Voted Upon
At the 2015 Annual Meeting,
stockholders will be asked to consider and vote to elect the nominees named
herein as directors to serve until the 2016 Annual Meeting of Stockholders; to
amend the 2008 Omnibus Long-term Incentive Plan to increase 9,000,000 shares
that are available for issuance thereunder; to ratify the appointment of AWC
(CPA) Limited as the Companys independent auditor for the fiscal year ended
December 31, 2015; and to conduct an advisory vote on the compensation of our
named executive officers. The Board does not know of any matters to be brought
before the meeting other than as set forth in the notice of meeting. If any
other matters properly come before the meeting, the persons named in the form of
proxy or their substitutes will vote in accordance with their best judgment on
such matters.
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Record Date; Stock Outstanding and Entitled to Vote
Our Board established March 30, 2015 as
the record date. Only holders of shares of the Companys common stock, par value
$0.001 per share, as of the record date, are entitled to notice of, and to vote
at, the 2015 Annual Meeting. Each share of common stock entitles the holder
thereof to one vote per share on each matter presented to our stockholders for
approval at the 2015 Annual Meeting. At the close of business on the record
date, we had 46,284,855 shares of our common stock outstanding.
Internet Availability of Proxy Materials and Annual Report
These proxy solicitation
materials are available at www.proxyvote.com on or about April 10, 2015
to all stockholders entitled to vote at the 2015 Annual Meeting. A copy of the
Companys Annual Report on Form 10-K will be made available at
www.proxyvote.com concurrently with these proxy solicitation
materials.
The Company is furnishing proxy
materials to our stockholders primarily via the Internet, rather than mailing
printed copies of these materials to each stockholder. We believe that this
process should expedite stockholders receipt of proxy materials, lower the
costs incurred by us for the 2015 Annual Meeting and help to conserve natural
resources. On or about April 10, 2015, we will mail to each stockholder of
record and beneficial owners (other than those who previously requested
electronic or paper delivery) a Notice of Internet Availability of Proxy
Materials, in the form of a mailing titled Important Notice Regarding the
Availability of Proxy Materials, that contains instructions on how to access
and review the proxy materials, including this proxy statement and the Companys
Annual Report on Form 10-K, on a website referred to in such notice and how to
access a proxy card to vote on the Internet or by telephone. The Notice of
Internet Availability of Proxy Materials also contains instructions on how to
receive a paper copy of the proxy materials. If you receive a Notice of Internet
Availability of Proxy Materials by mail, you should not expect to receive a
printed copy of the proxy materials unless you request one. If you received a
Notice of Internet Availability of Proxy Materials by mail and would like to
receive a printed copy of our proxy materials, currently or on an ongoing basis,
please follow the instructions included in the Notice of Internet Availability
of Proxy Materials.
Quorum; Required Vote
A quorum of stockholders is
required for the transaction of business at the 2015 Annual Meeting. The
presence of at least a majority of all of our shares of common stock issued and
outstanding and entitled to vote at the meeting, present in person or
represented by proxy, will constitute a quorum at the meeting. Votes cast by
proxy or in person at the 2015 Annual Meeting will be tabulated by an election
inspector appointed for the meeting and will be taken into account in
determining whether or not a quorum is present. Abstentions and broker
non-votes, which occur when a broker has not received customer instructions and
indicates that it does not have the discretionary authority to vote on a
particular matter on the proxy card, will be included in determining the
presence of a quorum at the 2015 Annual Meeting.
Assuming that a quorum is
present, our stockholders may take action at the annual meeting with the votes
described below.
Election of Directors.
Under Delaware law and the Amended and Restated Bylaws of the Company
(Bylaws), the affirmative vote of a plurality of the votes cast by the holders
of our shares of common stock is required to elect each director. Consequently,
only shares that are voted in favor of a particular nominee will be counted
toward such nominees achievement of a plurality. Stockholders do not have any
rights to cumulate their votes in the election of directors. Abstentions and
broker non-votes will not be counted toward a nominee's total.
Amendment of the Companys
2008 Omnibus Long-term Incentive Plan. Under Delaware law and the Companys
Bylaws, the required vote to approve the amendment of the Companys 2008 Omnibus
Long-term Incentive Plan to increase 9,000,000 shares that are available for
issuance is the affirmative vote of a majority of the shares present in person
or represented by proxy and entitled to vote at the annual meeting.
Approval of the Appointment of
the Independent Auditor. Under Delaware law and the Companys Bylaws, the
required vote to approve the appointment of AWC (CPA) Limited as the Companys
independent auditor for the fiscal year ended December 31, 2015, is the
affirmative vote of a majority of the shares present in person or represented by
proxy and entitled to vote at the annual meeting.
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Advisory Vote on Executive
Compensation. Under Delaware law and the Companys Bylaws, the required vote
to approve the compensation of our named executive officers as disclosed in this
proxy statement pursuant to the compensation disclosure rules of the Securities
and Exchange Commission, is the affirmative vote of a majority of the shares
present in person or represented by proxy and entitled to vote at the annual
meeting.
Abstentions and Broker Non-Votes
Under applicable regulations, if
a broker holds shares on your behalf, and you do not instruct your broker how to
vote those shares on a matter considered routine, the broker may generally
vote your shares for you. A broker non-vote occurs when a broker has not
received voting instructions from you on a non-routine matter, in which case
the broker does not have authority to vote your shares with respect to such
matter. Rules that govern how brokers vote your shares have recently changed.
Unless you provide voting instructions to a broker holding shares on your
behalf, your broker may no longer use discretionary authority to vote your
shares on any of the matters to be considered at the 2015 Annual Meeting other
than the ratification of our independent registered public accounting firm.
Please vote your proxy so your vote can be counted.
Voting Procedure; Voting of Proxies; Revocation of Proxies
Stockholders of Record
If your shares are registered
directly in your name with our transfer agent, Corporate Stock Transfer, you are
considered the stockholder of record with respect to those shares. As the
stockholder of record, you may vote in person at the 2015 Annual Meeting or
vote, most conveniently vote by telephone, Internet or mail. Whether or not you
plan to attend the annual meeting, we urge you to vote by proxy to ensure your
vote is counted. You may still attend the 2015 Annual Meeting and vote in person
even if you have already voted by proxy.
By Internet stockholders may
vote on the internet by logging on to www.proxyvote.com and following the
instructions given.
By Telephone stockholders may
vote by calling 1-800-690-6903 (toll-free) with a touch tone telephone and
following the recorded instructions.
By Mail stockholders must
request a paper copy of the proxy materials to receive a proxy card and follow
the instructions given for mailing. A paper copy of the proxy materials may be
obtained by logging to www.proxyvote.com and following the instructions
given. To vote using the proxy card, simply print the proxy card, complete, sign
and date it and return it promptly to Vote Processing, c/o Broadridge, 51
Mercedes Way, Edgewood, New York 11717. In the alternative, the proxy card can
be mailed directly to the Company: Zhu Xiaoying, our Chief Financial Officer,
located in the Jinhua City Industrial Zone, Jinhua, Zhejiang Province, China,
321016 or to Kewa Luo at Kandi Technologies Group, Inc., 230 Park Avenue,
10th Floor, New York, NY 10169. Our Board has selected each of Hu Xiaoming and
Wang Cheng (Henry) to serve as proxies.
If you vote by telephone or via
the Internet, you do not need to return your proxy card. Telephone and Internet
voting are available 24 hours a day and will close at 11:59 P.M. Eastern Time on
Wednesday, May 19, 2015.
In Person - stockholders may vote
in person at the 2015 Annual Meeting. To vote in person, come to the 2015 Annual
Meeting and we will give you a ballot when you arrive.
The Board recommends that you
vote using one of the other voting methods, since it is not practical for most
stockholders to attend the 2015 Annual Meeting.
Shares of our common stock
represented by proxies properly voted that are received by us and are not
revoked will be voted at the 2015 Annual Meeting in accordance with the
instructions contained therein. If instructions are not given, such proxies will
be voted FOR election of each nominee for director named herein, FOR
amendment to increase 9,000,000 shares under the 2008 Omnibus Long-term
Incentive Plan, FOR appointment of AWC (CPA) Limited as Independent auditor, and
FOR approval of the compensation of our named executive officers
described in this proxy statement. In addition, we reserve the right to exercise
discretionary authority to vote proxies, in the manner determined by us, in our
sole discretion, on any matters brought before the 2015 Annual Meeting for which
we did not receive adequate notice under the proxy rules promulgated by the
Securities and Exchange Commission (SEC).
5
Street Name Stockholders
If you hold your shares in
street name through a stockbroker, bank or other nominee rather than directly
in your own name, you are considered the beneficial owner of such shares.
Because a beneficial owner is not a stockholder of record, you may not vote
these shares in person at the 2015 Annual Meeting unless you obtain a legal
proxy from the broker, bank or nominee that holds your shares, giving you the
right to vote those shares at the meeting. The Board recommends that you vote
using one of the other voting methods, since it is not practical for most
stockholders to attend the 2015 Annual Meeting.
If you hold your shares in
street name through a stockbroker, bank or other nominee rather than directly
in your own name, you can most conveniently vote by telephone, Internet or mail.
Please review the voting instructions on your voting instruction form.
Your proxy is revocable at any time before it is voted at the
2015 Annual Meeting in any of the following three ways:
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You may submit another properly completed proxy bearing a
later date. |
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You may send a written notice that you are revoking your
proxy to Zhu Xiaoying, located in Jinhua City Industrial Zone, Jinhua,
Zhejiang Province, China, 321016 or to Kewa Luo located at Kandi
Technologies Group, Inc., 230 Park Avenue, 10th Floor, New York, NY
10169. |
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You may attend the 2015 Annual Meeting and vote in
person. However, simply attending the 2015 Annual Meeting will not, by
itself, revoke your proxy. |
Dissenters Right of Appraisal
Under Delaware General
Corporation Law and the Companys Certificate of Incorporation, stockholders are
not entitled to any appraisal or similar rights of dissenters with respect to
any of the proposals to be acted upon at the 2015 Annual Meeting.
Proxy Solicitation
We will pay for the entire cost
of soliciting proxies. In addition to these proxy materials, our directors and
employees may also solicit proxies in person, by telephone or by other means of
communication. Directors and employees will not be paid any additional
compensation for soliciting proxies. We may also reimburse brokerage firms,
banks and other agents for the cost of forwarding proxy materials to beneficial
owners.
Householding
SEC rules permit us to deliver a
single Notice of Internet Availability of Proxy Materials or, if applicable, a
paper copy of our annual report and proxy statement, to one address shared by
two or more of our stockholders. This delivery method is referred to as
householding and can result in significant cost savings. To take advantage of
this opportunity, we have delivered only one Notice of Internet Availability of
Proxy Materials or, if applicable, a paper copy of the annual report and proxy
statement, to multiple stockholders who share an address, unless we received
contrary instructions from the impacted stockholders prior to the mailing date.
If you received a householded mailing this year and you would like to have
additional copies of our Notice of Internet Availability of Proxy Materials or,
if applicable, additional copies of our annual report and proxy statement mailed
to you or you would like to opt out of this practice for future mailings,
contact Zhu Xiaoying at the Jinhua City Industrial Zone, Jinhua, Zhejiang
Province, China, 321016 or to Kewa Luo located at Kandi Technologies
Group, Inc., 230 Park Avenue, 10th Floor, New York, NY 10169. We agree to
deliver promptly, upon written or oral request, a separate copy of this proxy
statement and annual report to any stockholder at the shared address to which a
single copy of those documents were delivered.
Stockholder List
For at least ten days prior to
the meeting, a list of stockholders entitled to vote at the 2015 Annual Meeting,
arranged in alphabetical order, showing the address of and number of shares
registered in the name of each stockholder, will be open for examination by any
stockholder, for any purpose related to the 2015 Annual Meeting, during ordinary
business hours at our principal executive office. The list will also be
available for examination at the 2015 Annual Meeting.
6
Other Business
The Board is not aware of any
other matters to be presented at the 2015 Annual Meeting other than those
mentioned in this proxy statement and our accompanying Notice of Annual Meeting
of Stockholders. If, however, any other matters properly come before the 2015
Annual Meeting, the persons named in the accompanying proxy will vote in
accordance with their best judgment.
Proposals of Stockholders for 2016 Annual Meeting
Stockholder proposals will be
considered for inclusion in the proxy statement for the 2016 Annual Meeting in
accordance with Rule 14a-8 under Securities Exchange Act of 1934, as amended
(the Exchange Act), if they are received by the Company, on or before December
11, 2015.
Stockholders who intend to
present a proposal at the 2016 Annual Meeting of Stockholders without inclusion
of such proposal in our proxy materials for the 2016 Annual Meeting are required
to provide notice of such proposal not less than ninety (90) days nor more than
one hundred twenty (120) days prior to the one-year anniversary of the preceding
years annual meeting; provided, however, that if the date of the annual meeting
is more than thirty (30) days before or more than sixty (60) days after such
anniversary date, notice by the stockholder to be timely must be so delivered,
or mailed and received, not earlier than the one hundred and twentieth (120th)
day prior to such annual meeting, and not later than the ninetieth (90th) day
prior to such meeting or tenth (10th) day following the day on which public
disclosure of the date of such annual meeting was first made. Therefore,
stockholder proposals must be received by us no earlier than September 1, 2016,
but no later than October 1, 2016, and must otherwise comply with the notice
requirements set forth under all applicable Exchange Act and SEC rules. The
chairman of our 2016 Annual Meeting may refuse to allow the transaction of any
business or acknowledge the nomination of any person not made in compliance with
the requisite procedures.
Stockholder notice shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting: (i) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and address, as they appear on our books, of the
stockholder proposing such business, (iii) the class and number of shares of the
Company, which are beneficially owned by the stockholder, (iv) any material
interest of the stockholder in such business and (v) any other information that
is required to be provided by the stockholder pursuant to Regulation 14A under
the Exchange Act, in his capacity as a proponent to a stockholder proposal.
A stockholders notice relating
to nomination for directors shall set forth as to each person, if any, whom the
stockholder proposes to nominate for election or re-election as a director: (i)
the name, age, business address and residence address of such person, (ii) the
principal occupation or employment of such person, (iii) the class and number of
shares of the Company, which are beneficially owned by such person, (iv) a
description of all arrangements or understandings between the stockholder and
each nominee and any other person(s) (naming such person(s)) pursuant to which
the nominations are to be made by the stockholder and (v) any other information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Exchange Act (including without limitation
such persons written consent to being named in our Proxy Statement, if any, as
a nominee and to serving as a director if elected).
Proposals and notices of
intention to present proposals at the 2016 Annual Meeting should be addressed to
Wang Cheng (Henry) at 5F, Tower 3, Xixixinzuo, No. 550 Xixi Road, Xihu District,
Hangzhou City, Zhejiang Province, China 310013.
Voting Results of 2015 Annual Meeting
Voting results will be published
in a Current Report on Form 8-K issued by us within four (4) business days
following the 2015 Annual Meeting.
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PROPOSAL 1 ELECTION OF DIRECTORS
Nominees
Our Bylaws provide that the Board
shall consist of not less than one (1) nor more than eleven (11) directors.
Vacancies on the Board may be filled only by persons elected by a majority of
the remaining directors. A director elected by the Board to fill a vacancy
(including a vacancy created by an increase in the Board) will serve for the
remainder of the one year term in which the vacancy occurred and until the
directors successor is elected and qualified. This includes vacancies created
by an increase in the number of directors.
Our Board currently consists of
seven (7) members. Six of our current directors will stand for re-election at
the 2015 Annual Meeting. Six of the nominees were previously elected by our
stockholders at the 2014 Annual Meeting. One nominee, Wang Cheng (Henry)
will be stand for election for the first time.
If elected as a director at the
2015 Annual Meeting, each of the nominees will serve a one-year term expiring at
the 2016 Annual Meeting of Stockholders and until his successor has been duly
elected and qualified. Biographical information regarding each of the nominees
is set forth below. No family relationships exist among any of our director
nominees or executive officers.
Each of the nominees has
consented to serve as a director if elected. If any nominee should be
unavailable to serve for any reason (which is not anticipated), the Board may
designate a substitute nominee or nominees (in which event the persons named on
the enclosed proxy card will vote the shares represented by all valid proxy
cards for the election of such substitute nominee or nominees), allow the
vacancies to remain open until a suitable candidate or candidates are located,
or by resolution provide for a lesser number of directors.
Executive Officers and Directors
The following table sets forth certain information regarding
our executive officers and directors as of April 10, 2015:
Name |
Age |
Position |
Served From |
Hu Xiaoming |
58 |
Chairman of the Board, President |
June 2007 |
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and Chief Executive Officer |
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Wang Cheng (Henry) |
42 |
Chief Financial Officer, Director |
May 2015 |
Qian Jingsong |
54 |
Director |
January 2011 |
Chen Liming (1), (2), (3) |
78 |
Director (Independent) |
May 2012 |
Ni Guangzheng (2), (3) |
76 |
Director (Independent) |
November 2010 |
Jerry Lewin (1) |
60 |
Director (Independent) |
November 2010 |
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Henry Yu (1),(2),(3) |
61 |
Director (Independent) |
July 2011 |
____________________________ |
(1) |
Member of Audit Committee |
(2) |
Member of Compensation Committee |
(3) |
Member of Nominating and Corporate Governance
Committee |
Biographical Information
Hu Xiaoming was appointed
as our Chief Executive Officer, President and Chairman of the Board in June
2007. Prior to joining the Company, from October 2003 to April 2005, Mr. Hu
served as the Project Manager (Chief Scientist) in the WX Pure Electric Vehicle
Development Important Project of Electro-vehicle in the State 863 Plan. From
October 1984 to March 2003, Mr. Hu served as: (i) Factory Director of the
Yongkang Instrument Factory, (ii) Factory Director of the Yongkang Mini Car
Factory, (iii) Chairman and General Manager of the Yongkang Vehicle Company,
(iv) General Manager of the Wan Xiang Electric Vehicle Developing Center and (v)
the General Manager of the Wan Xiang Battery Company. Mr. Hu personally owned 4
invention patents and 7 utility model patents, which he transferred to the
Company in fiscal year 2012. Mr. Hus experience as our Chief Executive Officer
and President, as well as Chairman of the Board, and extensive scientific and
operational knowledge and expertise qualifies him to serve as Chairman of the
Board and led the Board to conclude that he should be nominated to serve another
term as a director.
8
Wang Cheng (Henry) was
appointed as Chief Financial Officer, effective May 1, 2015. Mr. Wang has
over 20 years of international financial management experience. Before joining
the Company, Mr. Wang served as CFO for Shanghai Always Marketing Service Co.,
LTD., one of the largest field marketing service agencies in China, leading its
procurement and finance departments since May 2014. Prior to that, Mr. Wang
worked for Renesola Ltd. (NYSE: SOL), an international leading brand and
technology provider of green energy products, initially as Vice President of
Finance since January 2010, ascending to CFO in July 2011. Mr. Wang holds both
certifications as Certified Public Accountants ("CPA") in China and Certified
Internal Auditor ("CIA"). He earned a Master's degree in Law from Renmin
University of China and a Master's of Business Administration from the Open
University of Hong Kong. Mr. Wangs prior experience in accounting and finance
qualifies him to serve a director of the Company and led the Board to conclude
that he should be nominated to serve us as a director.
Qian Jingsong was
appointed as a director of the Company on January 31, 2011. In addition, since
October 2009, Mr. Qian has served as Deputy General Manager of Zhejiang Kandi
Vehicles Co. Ltd., our wholly-owned operating subsidiary. Prior to joining the
Company, from October 2006 to October 2009, Mr. Qian served in multiple
capacities for Chery Karry Automobile, including Head of the Engineering
Construction Group (2006-2007), Vice Manager of the Q21 Project (2007),
Assistant General Manager of the Production Management and Integrated Management
Departments (2007-2009). During his tenure at Chery Karry Automobile, Mr. Qian
was in charge of quality assurance and participated in strategy, planning and
product development work for Chery mini-cars. From August 1999 to September
2006, Mr. Qian served as Deputy General Manager and Executive General Manager of
Anhui Huayang Auto Manufacturing Co.,LTD, where he oversaw technical
improvement, product development, administrative personnel, and external
affairs. Mr. Qian received a degree in Professional Ordnance from the Aerospace
Staff University in Nanjing, China in 1983. Mr. Qians experience in the
automobile and mini-car industries and his expertise in quality assurance and
planning and product development qualifies him to serve on our Board and led the
Board to conclude that he should be nominated to serve another term as a
director.
Ni Guangzheng was
appointed as a director of the Company in November 2010. Mr. Ni is a permanent
member of the Chinese Society of Electrical Engineering, and, since 1998, has
served as the Deputy Director of Technical Committee & Director of EV
Research Institute of National ERC of Power Electronic Technology. Mr. Ni has
extensive experience in the areas of electro-technical and electrical
engineering. Mr. Ni has served as: Head of Department of Electrical Engineering
at Zhejiang University (1994 to 1998), Deputy Director of Electro-technical
Theory Committee of China Electro-Technical Society (1989 to 1993), Director of
the National ERC of Power Electronic Technology (1996 to 1998) and Deputy
Director of the Large Electrical Machine Committee of Chinese Society of
Electrical Engineering (1997 to 1999). Mr. Ni received his bachelor degree in
electrical machine and a masters degree in Electro-technology theory from Xian
Jiaotong University. Mr. Nis leadership skills and extensive engineering
experience, as well as his electrical and technical expertise, qualifies him to
serve on our Board and led the Board to conclude that he should be nominated to
serve another term as a director.
Jerry Lewin was appointed
as a director of the Company in November 2010. Jerry Lewin currently serves as
Senior Vice President of Field Operations for Hyatt Hotels Corporation and is
responsible for managing 35 hotels throughout the North American continent. Mr.
Lewin has been with Hyatt since 1987. In his capacity as Senior Vice President,
Mr. Lewin supervises a number of areas, including finance, sales and marketing,
public relations, customer service, engineering, and human resources. Mr. Lewin
serves as a member of the Hyatt Hotels Corporations Managing Committee and sits
on the board of directors of the New York City Hotel Association. Since July
2009, Mr. Lewin has served as a director of EFT Biotech Holdings, Inc. Mr. Lewin
currently serves as the President of the New York Law Enforcement Foundation and
as the President of the NY State Troopers PBA Signal 30 Fund. Mr. Lewin has
served in various management capacities for several hotel companies in San
Francisco, Oakland, Los Angeles, San Diego and Las Vegas. Mr. Lewin received his
Bachelor of Science degree from Cornell University and completed the Executive
Development Program at J.L. Kellogg Graduate School of Management at
Northwestern University. Mr. Lewins leadership skills and extensive management
experience qualifies him to serve on our Board and led the Board to conclude
that he should be nominated to serve another term as a director.
Henry Yu was appointed as
a director of the Company on July 1, 2011. Mr. Yu serves as a Managing Director
& Regional Manager of Global Financial Institutions (Asia) of Fifth Third
Bank. Prior to his current position, Mr. Yu served as Senior Vice President of
the East West Bank from July 2011 to September 2012. Prior to that, Mr. Yu
served as the President of Shanghai Bosun Capital Advisors in Shanghai, China
from January to June 2011. From January 2008 to December 2010, Mr. Yu served as
Head of Business Development at Standard Chartered Bank in China. From November
1999 to December 2007, Mr. Yu served as Managing Director of Global Trade
Solutions of SunTrust Bank in Atlanta, Georgia. From January 1995 to November
1999, Mr. Yu served as Group Vice President of Comerica Bank in Chicago,
Illinois. Mr. Yu started his banking career in 1981 with Bank of America in HK.
Currently, Mr. Yu serves as Chair of the Advisory Board of the National
Association of Chinese-Americans and serves as an Advisor to Chinas Federation
of Overseas Chinese. Mr. Yu is currently a member of the Foundation Board
Trustees of Georgia Perimeter College, board member of Georgia State
Universitys China Task Force, and member of the Asian Studies Board of the
Kennesaw State University. From 2003 to 2007, Mr. Yu held Series 7 and 62
Certifications from the Financial Industry Regulatory Authority. Mr. Yu received
his Bachelor of Arts degree in Economics from the University of Michigan in 1978
and his MBA in Finance from the University of Detroit in 1980. Mr. Yus
leadership skills and extensive financial experience qualifies him to serve on
our Board and led the Board to conclude that he should be nominated to serve
another term as a director.
9
Chen Liming was appointed
as a director of the Company on May 1, 2012. Mr. Chen serves as an advisor to AA
Wind & Solar Energy Development Group, LLC. Prior to his current position,
from February 2009 to October 2010, Mr. Chen participated in a joint venture
with Mr. Qiu Youmin, the former designer of Geely Automobile Co., Ltd., and
assisted in the development of super mini three seat pure electric vehicles.
From June 2008 to July 2009, he participated in the development of Lithium Iron
Phosphate Battery with Shanghai Yuankai Group. Mr. Chen served as a Professor of
Electrical Engineering at Zhejiang University from 1983 to 1997. In addition,
Mr. Chen served as a visiting scholar in the Electrical Engineering Department
at Columbia University in New York City from 1981 to 1983 and as a professor in
Electrical Engineering at Zhejiang University from 1960 to 1981. Mr. Chen
received his bachelor degree from Southeast University in Jiangsu, China in
1960. Mr. Chens experience in the automobile and mini-car industries, extensive
electrical engineering experience and knowledge, and knowledge of current
corporate finance and accounting techniques and market activities qualifies him
to serve on our Board and led the Board to conclude that that he should be
nominated to serve another term as a director.
All directors hold office until
the next annual meeting of stockholders and until their successors have been
duly elected and qualified. There are no membership qualifications for
directors. There are no arrangements or understandings pursuant to which our
directors are selected or nominated.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF EACH OF THE
DIRECTOR NOMINEES NAMED IN THIS PROXY STATEMENT.
10
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE COMPANYS 2008 OMNIBUS LONG-TERM
INCENTIVE PLAN
TO INCREASE 9,000,000 SHARES OF COMMON STOCK RESERVED
UNDER THE PLAN
Our Board has approved an
Amendment 1 to the Companys 2008 Omnibus Long-term Incentive Plan (the Plan)
for an increase of 9,000,000 shares of common stock that are available for the
issuance under the Plan (the Amendment) and recommends that the Amendment be
approved and adopted by the Companys stockholders and directs that such
proposal be submitted at the 2015 Annual Meeting.
On December 19, 2008, to assist
the Company in attracting, retaining, and rewarding high-quality executives,
employees, directors and other persons who provide services to the Company, our
Board approved the Plan to grant the eligible participants awards. The total
number of shares reserved and available for delivery in connection with awards
under the Plan was 4,000,000.
As of the Record Date, we had
issued shares of restricted stock or stock options to purchase of shares of
common stock in an aggregate of 3,439,169 shares and 560,831 shares of common
stock were available for issuance under the Plan.
The Board has reviewed the Plan
and determined that the Plan requires additional available shares for issuance
to provide flexibility with respect to stock-based compensation that the Board
believes is necessary to establish appropriate long-term incentives to achieve
our objectives. Our Board believes that it is advisable to increase the
4,000,000 share limit to 13,000,000 shares in order to attract and compensate
employees, officers, directors and other eligible participants upon whose
judgment, initiative and effort we depend. The issuance of award under the Plan
to these eligible participants is designed to align the interests of such
participants with those of our stockholders.
The proposed amendment to the
Plan increases the number of shares of common stock that may be issued as awards
under the Plan by 9,000,000 shares, or approximately 19.4% of the 46,284,855
shares of common stock outstanding as of March 30, 2015. As amended, the Plan
will continue to provide that all of the shares authorized for issuance
(including the increased shares) may be granted as incentive stock options as
long as other awards pursuant to the Plan and the Plan will also continue to
provide for appropriate adjustments in the number of shares in the event of a
stock dividend, recapitalization, merger or similar transaction.
The following is a summary of the
principal features of the Plan. The summary below is qualified in its entirety
by the terms of the Plan, as proposed to be amended, a copy of which is attached
hereto as Exhibit A and is incorporated by reference herein.
The purpose of the 2008 Omnibus
Plan is to assist the Company in attracting, retaining, and rewarding
high-quality executives, employees, directors and other persons who provide
services to the Company, enabling such persons to acquire or increase a
proprietary interest in the Company and to strengthen the mutuality of interests
between such persons and to provide annual and long-term incentives to expend
their maximum efforts in the creation of shareholder value. The 2008 Omnibus
Plan is administered by the Compensation Committee, such other committee as
determined by the Board of Directors, or a subcommittee consisting solely of
non-employee, outside directors. The 2008 Omnibus Plan does not limit the
availability of awards to any particular class or classes of Eligible Employees.
If an award were to lapse or rights to an award otherwise were to terminate, the
shares subject to the award would be available for future awards to the extent
permitted by applicable federal securities laws. Awards granted under the Plan
are not transferable, except in the event of the participant's death. In the
event of a change in control, a right to exercise that was not previously
exercisable and vested shall become fully exercisable and vested at the time of
change in control. The total number of shares reserved and available for
delivery in connection with awards under the Plan is 4,000,000.
Awards to Eligible Employees
under the Plan is made in the form of stock options, stock appreciation rights
("SARs"), restricted stock, restricted stock units ("RSUs") and annual incentive
and performance awards. The Compensation Committee, in its sole discretion,
designates whom is eligible to receive awards, determines the form of each
award, determines the number of shares of stock subject to each award,
establishes the exercise price of each award and such other terms and conditions
applicable to the award as the Compensation Committee deems appropriate.
Stock option awards can be either
incentive or non-incentive. In either case, the exercise price of the option
would not be less than the fair market value of the underlying shares as of the
date the award is granted. Options would become exercisable at such times as may
be established by the Compensation Committee when granting the award. No stock
option could be exercised more than ten years after the date the option is
granted.
11
A SAR allows the holder, upon
exercise, to receive the excess of the fair market value of one share of Common
Stock of the Company on the date of exercise over the grant price of the SAR.
The Compensation Committee shall determine the circumstances under which a SAR
may be exercised, the month of exercise and method of settlement. SARs may be
awarded independently or in tandem with other awards.
Vote Required and Board of Directors Recommendation
Assuming a quorum is present, the
affirmative vote of a majority of the shares present at the annual meeting and
entitled to vote, either in person or by proxy, is required for approval of
Proposal 2.
The Board of Directors recommends a vote FOR the approval
of amendment to the Companys 2008 Omnibus Long-term Incentive Plan to increase
9,000,000 of shares of common stock reserved under the plan.
12
PROPOSAL 3
APPROVAL OF INDEPENDENT AUDITOR
The Audit Committee has selected
AWC (CPA) Limited (f/k/a: Albert Wong & Co.) as the Companys independent
auditor for the fiscal year ended December 31, 2015, and has further directed
that management submit the selection of independent auditors for ratification by
the shareholders at the 2015 Annual Meeting. The shareholders are being asked to
ratify this appointment so that the Audit Committee will know the opinion of the
shareholders. However, the Audit Committee has sole authority to appoint the
independent registered public accounting firm.
Representatives of AWC (CPA)
Limited are not expected to be present at the 2015 Annual Meeting, either in
person or by teleconference.
The affirmative vote of the
holders of a majority of the shares present in person or represented by proxy
and entitled to vote at the annual meeting will be required to ratify the
selection of AWC (CPA) Limited.
The Board of Directors recommends a vote FOR the
ratification of the appointment of AWC (CPA) Limited as the Companys
independent auditor.
13
PROPOSAL NO. 4
ADVISORY VOTE ON EXECUTIVE COMPENSATION
(Say-On-Pay)
The Company is seek a non-binding advisory vote from its
stockholders to approve the compensation of the Companys executive officers as
described under Executive Compensation and the tabular disclosure regarding
our named executive officers compensation (together with the accompanying
narrative disclosure) in this proxy statement.
This proposal, commonly known as a say-on-pay proposal, gives
the Companys stockholders the opportunity to express their views on our
executive officers compensation. Because your vote is advisory, it will not be
binding upon the Board of Directors. However, the Compensation Committee will
take into account the outcome of the vote when making future executive officer
compensation decisions. This vote is not intended to address any specific item
of compensation, but rather the overall compensation of our named executive
officers as described pursuant to applicable SEC rules in this proxy statement.
The Company believes that its compensation policies and
decisions are designed to deliver a performance-based pay philosophy, are
aligned with the long-term interests of the Companys stockholders and are
competitive. Our principal compensation policies, which enable it to attract and
retain talented executive officers to lead the Company in the achievement of our
business objectives, include:
|
|
The Company makes annual cash compensation
decisions based on assessment of our performance against measurable
financial goals, as well as each executives individual performance.
|
|
|
|
|
|
The Company emphasizes long-term incentive compensation
awards that collectively reward executive officers based on our
performance, external and internal peer equity compensation practices, and
the executive officers job responsibilities. |
|
|
|
|
|
The Company designs pay practices to retain a
highly talented and experienced senior executive team. |
|
|
|
|
|
The Company encourages stock ownership by our
senior executive officers. |
As a result, the Company is presenting this proposal, which
gives you as a stockholder the opportunity to approve, on an advisory basis, the
Companys executive officer compensation as disclosed in this proxy statement
under the heading entitled Executive Compensation by voting for or against the
following resolution:
RESOLVED, that the Companys stockholders approve the
compensation of the named executive officers on an advisory basis, the
compensation of the individuals identified in the Summary Compensation Table, as
disclosed in this proxy statement (which disclosure includes the compensation
tables and the accompanying narratives within the Executive Compensation
section).
Vote Required; Board of Directors Recommendation
This Say-on-Pay proposal is advisory and non-binding. To be
approved, on a non-binding advisory basis, this proposal must receive the
affirmative vote of a majority of the shares entitled to vote and present, in
person or by properly executed proxy, at the annual meeting. However, the
approval or disapproval of this proposal by stockholders will not require the
Board or the Compensation Committee to take any action regarding the Companys
executive compensation practices. The final decision on the compensation and
benefits of the Companys named executive officers and on whether, and if so,
how to address stockholder disapproval remains with the Board and the
Compensation Committee. Brokers are prohibited from giving proxies to vote on
executive compensation matters unless the beneficial owner of such shares has
given voting instructions on the matter. This means that if your broker is the
record holder of your shares, you must give voting instructions to your broker
with respect to Proposal if you want your broker to vote your shares on Proposal
4.
The Board of Directors believes that the compensation of the
executive officers is appropriate and recommends a vote FOR the approval of the
executive compensation as described in the compensation discussion and analysis
and the compensation tables and otherwise in this proxy statement.
14
CORPORATE GOVERNANCE
Leadership Structure and Role in Risk Oversight
Mr. Hu has served as Chairman of
the Board, President and Chief Executive Officer of the Company since June 2007.
Our Board continues to believe there are important advantages to Mr. Hu serving
in both roles at this time. Mr. Hu is the director most familiar with our
business and industry and is best situated to propose Board agendas and lead
Board discussions on important matters. Mr. Hu provides a strong link between
management and the Board, which promotes clear communication and enhances
strategic planning and implementation of corporate strategies. Another advantage
is the clarity of leadership provided by one person representing us to
employees, stockholders and other stakeholders. Further, four of our seven
current Board members have been deemed to be independent by our Board;
therefore, we believe our board structure provides sufficient independent
oversight of our management.
Our Board is responsible for
oversight of the Companys risk management practices while management is
responsible for the day-to-day risk management processes. In the Boards
opinion, this division of responsibilities is the most effective approach for
addressing the risks facing the Company. The Board receives periodic reports
from management regarding the most significant risks facing the Company. In
addition, the Audit Committee assists the Board in its oversight of our risk
assessment and risk management policies. Our Audit Committee is empowered to
appoint and oversee our independent registered public accounting firm, monitor
the integrity of our financial reporting processes and systems of internal
controls and provide an avenue of communication among our independent auditors,
management, our internal auditing department and our Board.
The Board has not named a lead independent director.
Diversity
The Board does not have a formal
policy with respect to Board nominee diversity. However, in recommending
proposed nominees to the full Board, the Nominating and Corporate Governance
Committee considers diversity in the context of the Board as a whole and
considers personal characteristics (gender, ethnicity and age), skills and
experiences, qualifications and the background of current and prospective
directors as important factors in identifying and evaluating potential director
nominees, so that the Board, as a whole, will possess what the Board believes
are the appropriate skills, talent, expertise and backgrounds necessary to meet
the long-term interests of our stockholders and the goals and objectives of the
Company.
Director Independence
Our Board reviews each nominees
relationship with the Company in order to determine whether a director nominee
is independent pursuant to the listing rules of NASDAQ. Our Board has determined
that each of Jerry Lewin, Chen Liming, Henry Yu and Ni Guangzheng meets the
independence requirements and standards currently established by NASDAQ. All of
the members of each of the Audit Committee, the Compensation Committee and the
Nominating and Corporate Governance Committee are independent as defined in
NASDAQ Rule 5605(a)(2).
As required under applicable
NASDAQ listing standards, in the 2014 fiscal year, our independent directors met
4 times in regularly scheduled executive sessions at which only our independent
directors were present.
Board Meetings and Committee Meeting; Annual Meeting
Attendance
During the year ended December
31, 2014, the Board held 1 meeting and acted through unanimous consent on 7
different occasions. In addition, the Audit Committee held 7 meetings; the
Nominating and Corporate Governance Committee held 2 meetings; and the
Compensation Committee held 1 meeting. During the year ended December 31, 2014,
each of the directors attended, in person or by telephone, more than 75% of the
meetings of the Board and the committees on which he or she served. We encourage
our Board members to attend our Annual Meetings, but we do not have a formal
policy requiring attendance. All of our then sitting Board members attended the
2014 Annual Meeting.
15
Audit Committee
The Audit Committee currently
consists of Henry Yu, Jerry Lewin and Chen Liming, each of whom is independent
under NASDAQ listing standards. Mr. Yu serves as Chairman of our Audit
Committee. The Board determined that each of Mr. Yu and Mr. Lewin qualifies as
an audit committee financial expert, as defined by Item 407 of Regulation S-K
and NASDAQ Rule 5605(a)(2). In reaching this determination, the Board made a
qualitative assessment of Mr. Yus and Mr. Lewins level of knowledge and
experience based on a number of factors, including formal education and business
experience.
The Audit Committee has been
established in accordance with Section 3(a)(58)(A) of the Exchange Act. The
Audit Committee is responsible for assisting the Board in fulfilling its
oversight responsibilities with respect to: (i) the financial reports and other
financial information provided by us to the public or any governmental body;
(ii) our compliance with legal and regulatory requirements; (iii) our systems of
internal controls regarding finance, accounting and legal compliance that have
been established by management and the Board; and (iv) our auditing, accounting
and financial reporting processes generally. In addition, the Audit Committee is
responsible for the appointment, retention, compensation and oversight of the
work of any registered public accounting firm employed by the Company (including
resolution of disagreements between management and the accounting firm regarding
financial reporting) for the purpose of preparing or issuing an audit report or
related work or performing other audit, review or other services. Any such
registered public accounting firm must report directly to the Audit Committee.
The Audit Committee has the ultimate authority and responsibility to evaluate
and, where appropriate, replace the registered public accounting firm. The Audit
Committees policy is to pre-approve all audit and non-audit services by
category, including audit-related services, tax services, and other permitted
non-audit services. In accordance with the policy, the Audit Committee regularly
reviews and receives updates on specific services provided by our independent
registered public accounting firm. All services rendered by AWC (CPA) Limited
(f/k/a: Albert Wong & Co.) to the Company are permissible under applicable
laws and regulations. During fiscal year 2014, all services requiring
pre-approval and performed by AWC (CPA) Limited were approved in advance by the
Audit Committee in accordance with the pre-approval policy. The Audit Committee
operates under a written charter, a copy of which is available on our website at
www.en.kandivehicle.com under the link Investor Relations.
Principal Accounting Fees and Services
The following table represents
the aggregate fees from our principal accountant, AWC (CPA) Limited (f/k/a:
Albert Wong & Co.), and other accounting related service providers for the
years ended December 31, 2014 and 2013 respectively.
|
|
2014 |
|
|
2013 |
|
Audit Fees |
$ |
310,000
|
|
$ |
261,000
|
|
Audit Related Fees |
$ |
- |
|
$ |
- |
|
Tax Fees |
$ |
- |
|
|
- |
|
All Other Fees |
$ |
13,493 |
|
$ |
9,330 |
|
TOTAL FEES |
$ |
323,493 |
|
$ |
270,330 |
|
Fees for audit services include
fees associated with the annual audit and reviews of our quarterly reports.
Audit-related fees mainly include the fees associated with the financial
instruments and assets evaluation, while all other fees include fees incurred
for services performed in connection with filing of tax returns and overhead
costs.
Compensation Committee
The Compensation Committee
currently consists of Chen Liming (Chairman), Henry Yu and Ni Guangzheng, each
of whom is independent under NASDAQ listing standards. Mr. Chen currently serves
as Chairman of our Compensation Committee. The Compensation Committee is
responsible for the administration of all salary, bonus and incentive
compensation plans for our officers and key employees. The Compensation
Committee reviews and, as it deems appropriate, recommends to the Board
policies, practices and procedures relating to the compensation of the officers
and other managerial employees and the establishment and administration of
employee benefit plans. It advises and consults with the officers of the Company
as may be requested regarding managerial personnel policies. The Compensation
Committee has the authority to engage independent advisors to assist it in
carrying out its duties. During fiscal year 2014, the Compensation Committee did
not engage the services of any independent advisors, experts or other third
parties. We believe that the functioning of our Compensation Committee complies
with, any applicable requirements of the NASDAQ Global Select Market and SEC
rules and regulations. The Compensation Committee operates under a written
charter, which is available on our website at www.en.kandivehicle.com
under the link Investor Relations.
16
Compensation Committee Interlocks and Insider Participation
in Compensation Decisions
All members of the Compensation
Committee are independent directors. No member of our Compensation Committee is
a current or former officer or employee of the Company or any of its
subsidiaries, and no director or executive officer of the Company is a director
or executive officer of any other corporation that has a director or executive
officer who is also a director of the Company.
Compensation Committee Report on Executive Compensation
The following report has been submitted by the Compensation
Committee of our Board of Directors:
The Compensation Committee of our
Board of Directors has reviewed and discussed our Compensation Discussion and
Analysis with management. Based on this review and discussion, the Compensation
Committee recommended to our Board of Directors that the Compensation Discussion
and Analysis be included in our definitive proxy statement on Schedule 14A for
our 2015 Annual Meeting, as filed with the Commission.
Compensation Committee of the Board of
Directors
Respectfully submitted,
Chen Liming (Chairman)
Henry Yu
Ni Guangzheng
April 10, 2015
The foregoing Compensation Committee Report does not
constitute soliciting material and shall not be deemed filed or incorporated by
reference into any other filing of our company under the Securities Act or the
Exchange Act, except to the extent we specifically incorporate this Compensation
Committee Report by reference therein.
Nominating and Governance Committee
The Nominating and Corporate
Governance Committee (the Nominating Committee) currently consists of Ni
Guangzheng (Chairman), Henry Yu and Chen Liming, each of whom is independent
under NASDAQ listing standards. During fiscal year ended 2014, Mr. Ni served as
Chairman of the Nominating Committee. The responsibilities of the Nominating
Committee include: (i) identifying individuals qualified to serve as directors
or fill any interim vacancies; (ii) recommending to the Board the selection of
director nominees for each meeting of the stockholders at which directors are
elected; (iii) advising the Board with respect to the composition, procedures
and committees of the Board; and (iv) considering any other corporate governance
issues that may arise from time to time, and developing appropriate
recommendations for the Board. In recommending nominees to the Board, the
Nominating Committee considers various criteria, including the ability of the
individual to meet the NASDAQ independence requirements, general business
experience, general financial experience, knowledge of the Companys industry
(including past industry experience), education, and demonstrated character and
judgment. The Nominating Committee uses its, as well as the entire Boards,
network of contacts when compiling a list of potential director candidates and
has the authority to engage outside consultants. The Nominating Committee will
consider director nominees recommended by a stockholder if the stockholder mails
timely notice to the Secretary of the Company at its principal offices, which
notice includes (i) the name, age and business address of such nominee, (ii) the
principal occupation of such nominee, (iii) a brief statement as to such
nominees qualifications, (iv) a statement that such nominee consents to his or
her nomination and will serve as a director if elected, (v) whether such nominee
meets the definition of an independent director under the NASDAQ listing
standards and (vi) the name, address, class and number of shares of capital
stock of the Company held by the nominating stockholder. Any person nominated by
a stockholder for election to the Board will be evaluated based on the same
criteria as all other nominees. The Nominating Committee operates under a
written charter, a copy of which was filed as an exhibit to a Current Report on
a Form 8-K, filed November 5, 2007 and is available on our website at
www.en.kandivehicle.com under the link Investor Relations.
Director Nomination Procedures
The Nominating Committee is generally responsible for
soliciting recommendations for candidates for the Board, developing and
reviewing background information for such candidates, and making recommendations
to the Board with respect to candidates for directors proposed by stockholders.
The nomination process involves a careful examination of the performance and
qualifications of each incumbent director and potential nominees before deciding
whether such person should be recommended for nomination by the Nominating
Committee and nominated by the Board. The Board believes that the business
experience of its directors has been, and continues to be, critical to the
Companys success. Directors should possess integrity, independence, energy,
forthrightness, analytical skills and commitment to devote the necessary time
and attention to the Companys affairs. Directors must possess a willingness to
challenge and stimulate management and the ability to work as part of a team in
an environment of trust.
17
In selecting candidates for appointment or re-election to the
Board, the Nominating Committee considers the following criteria: (i) personal
and professional ethics and integrity, including a reputation for integrity and
honesty in the business community; (ii) experience as an executive officer of
companies or as a senior leader of complex organizations, including scientific,
government, financial or technological organizations; (iii) financial knowledge,
including an understanding of finance, accounting, the financial reporting
process, and company measures for operating and strategic performance; (iv)
ability to critically and independently evaluate business issues, contributing a
diverse perspectives or viewpoints, and making practical and mature judgments;
(v) a genuine interest in the Company, and the ability to spend the time
required to make substantial contributions as a director; and (vi) no conflict
of interest or legal impediment that would interfere with the duty of loyalty to
the Company and its stockholders. In addition, the Nominating Committee reviews
the qualifications of the directors to be appointed to serve as members of the
Audit Committee to ensure that they meet the financial literacy and
sophistication requirements under the NASDAQ rules and that at least one of them
qualifies as an audit committee financial expert under the rules of the
SEC.
The Board will generally consider all relevant factors,
including, among others, each nominees applicable expertise and demonstrated
excellence in his or her field, the usefulness of such expertise to the Company,
the availability of the nominee to devote sufficient time and attention to the
affairs of the Company, the nominees reputation for personal integrity and
ethics, and the nominees ability to exercise sound business judgment. Director
nominees are reviewed in the context of the existing membership of the Board
(including the qualities and skills of the existing directors), the operating
requirements of the Company and the long-term interests of its stockholders.
There were no arrangements or understandings between any of our
directors and any other person pursuant to which any director was to be selected
as a director or selected as a nominee.
Family Relationships
No family relationships exist among any of our current director
nominees or executive officers.
Stockholder Communications
The Board welcomes communications from our stockholders, and
maintains a process for stockholders to communicate with the Board. Stockholders
who wish to communicate with the Board may send a letter to the Chairman of the
Board of Kandi Technologies Group, Inc., at Jinhua City Industrial Zone, Jinhua,
Zhejiang Province, Peoples Republic of China 321016. The mailing envelope must
contain a clear notation indicating that the enclosed letter is a
Stockholder-Board Communication. All such letters should identify the author
as a security holder. All such letters will be reviewed by the Chairman of the
Board and submitted to the entire Board no later than the next regularly
scheduled Board meeting.
Code of Ethics
We have adopted a code of ethics as defined by regulations promulgated
under the Securities Act of 1933, as amended, and the Exchange Act that applies
to all of our directors and employees worldwide, including our principal
executive officer, principal financial officer and principal
accounting officer. A current copy of our Code of Ethics is available on our
website (http://en.kandivehicle.com//default.aspx). A copy of our Code of
Ethics will be provided to you without charge upon written request to Zhu
Xiaoying, Kandi Technologies Group, Inc., Jinhua City Industrial Zone, Jinhua,
Zhejiang Province, Peoples Republic of China, 321016.
18
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information known to us, as of
March 9, 2015, relating to the beneficial ownership of shares of common stock by
each person who is known by us to be the beneficial owner of more than five
percent (5%) of the outstanding shares of common stock; each director; each
executive officer; and all executive officers and directors as a group. We
believe that all persons named in the table have sole voting and investment
power with respect to all shares of common stock shown as being owned by them.
The applicable percentages of ownership are based on an aggregate of 46,284,855
shares of our Common Stock issued and outstanding on March 9, 2015.
|
|
Amount and |
|
|
|
Nature |
|
|
|
of Beneficial |
Percent of |
Title of Class |
Name of Beneficial Owner
|
Ownership |
Class |
Common Stock |
Excelvantage Group Limited (3)
|
12,000,000(1) |
25.9% |
Common Stock |
Hu Xiaoming |
12,938,077(2) |
28.0% |
Common Stock |
Zhu Xiaoying |
591,746 |
1.3% |
Common Stock |
Qian Jingsong |
4,000 |
* |
Common Stock |
Henry Yu |
35,000 |
* |
Common Stock |
Jerry Lewin |
35,000 |
* |
Common Stock |
Ni Guangzheng |
- |
- |
Common Stock |
Chen Liming |
- |
- |
All officers and directors |
|
13,603,823 |
29.4% |
* Less than 1%
(1) |
On March 29, 2010, Hu Xiaoming, our Chief Executive
Officer, President and Chairman of the Board of Directors, became the sole
stockholder of Excelvantage Group Limited. Through his position as the
sole stockholder in Excelvantage Group Limited, Mr. Hu has the power to
dispose of or direct the disposition of the shares of common stock in
Excelvantage Limited Group. As a result, Mr. Hu may, under the rules of
the Securities and Exchange Commission, be deemed to be the beneficial
owner of the shares of common stock. |
|
|
(2) |
Includes (i) 818,500 shares owned directly by Mr. Hu,
(ii) 119,577 shares that were issued according to the plan award , and
(iii) 12,000,000 shares owned by Excelvantage Group Limited. As reflected
in footnote 1, Mr. Hu may be deemed to be the beneficial owner of these
shares. |
|
|
(3) |
Principal offices located at Jinhua City Industrial Zone,
Jinhua City, Zhejiang Province, China 321016. |
NON-EMPLOYEE DIRECTOR COMPENSATION
Director Compensation (excluding Named Executive Officers)
The following table sets forth certain information regarding
the compensation earned by or awarded during the 2014 fiscal year to each of our
non-executive directors:
|
|
Fees |
|
|
|
|
|
|
|
|
Non-Equity |
|
|
Nonqualified |
|
|
|
|
|
|
|
|
|
Earned |
|
|
Stock |
|
|
Option |
|
|
Incentive Plan |
|
|
Deferred |
|
|
All Other |
|
|
|
|
|
|
or Paid in |
|
|
Awards |
|
|
Awards |
|
|
Compensation |
|
|
Compensation |
|
|
Compensation |
|
|
Total |
|
Name |
|
Cash |
|
|
($) (1)(2) |
|
|
($) |
|
|
($) |
|
|
Earnings |
|
|
($) |
|
|
($) |
|
|
|
($)(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ni Guangzheng |
$ |
9,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qian Jingsong |
$ |
65,060 |
|
|
478,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
543,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Yu |
$ |
24,000 |
|
|
31,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
55,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerry Lewin |
$ |
24,000 |
|
|
37,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
61,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chen Liming |
$ |
9,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,759 |
|
19
(1) |
The amounts in these columns represent the aggregate
grant date fair value of stock awards granted to our non-named executive
officer directors during fiscal year ended December 31, 2014, in
accordance with ASC Topic 718. On December 30, 2013, the Compensation
Committee and the Board of Directors approved the grant of common stock to
certain executive officers and directors of the Company. The grant date
fair value of each share of common stock awarded was $11.95. |
|
|
(2) |
In setting director compensation, we consider the
significant amount of time that directors spend fulfilling their duties to
the Company, as well as the skill level required to serve as a director
and manage the affairs of the Company. Certain directors receive a monthly
fee as follows: (i) Ni Guangzheng receives a monthly fee of RMB 5,000
(approximately $813) starting 2014.; (ii) Jerry Lewin receives a monthly
fee of $2,000; (iii) Henry Yu receives a monthly fee of $2,000; and (iv)
Chen Liming receives a monthly fee of RMB 5,000 (approximately $813)
starting 2014. |
In connection with his appointment to the Board of Directors in
July 2011, the Board of Directors authorized the Company to issue to Mr. Yu with
5,000 shares of Company's restricted common stock every six months, par value
$0.001. Similarly, in July 2011, the Board of Directors authorized the Company
to issue to Mr. Lewin with 5,000 shares of Company's restricted common stock
every six months, par value $0.001. As of December 31, 2014, 30,000 shares of
restricted common stock had been issued to Mr. Lewin and Mr. Yu each.
The aggregate number of stock options and restricted
outstanding, as of December 31, 2014, for each of the non-named executive
officer directors were as follows:
Name |
Options |
Restricted Stock |
Qian Jingsong |
0 |
0 |
Henry Yu |
0 |
30,000 |
Chen Liming |
0 |
0 |
Ni Guangzheng |
0 |
0 |
Jerry Lewin |
0 |
30,000 |
EXECUTIVE COMPENSATION
General
Certain information concerning our executive officers as of the
date of this proxy statement is set forth below. Officers are elected annually
by the Board and serve at the discretion of the Board.
Name
|
|
Age |
|
Position With Our Company |
Hu Xiaoming |
|
58 |
|
Chairman of the Board,
President and Chief Executive Officer |
Zhu Xiaoying |
|
44 |
|
Chief Financial Officer
|
Summary Compensation Table
The following table summarizes the compensation earned during
the years ended December 31, 2014, 2013 and 2012, by those individuals who
served as our Chief Executive Officer or Chief Financial Officer during any part
of fiscal year 2014 or any other executive officer with total compensation in
excess of $100,000 during fiscal year 2014. The individuals listed in the table
below are referred to as the named executive officers.
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
Nonqualified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
|
Deferred |
|
|
All |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
Option |
|
|
Plan |
|
|
Compensation |
|
|
Other |
|
|
|
|
|
|
|
|
|
Salary |
|
|
Bonus |
|
|
Awards |
|
|
Awards |
|
|
Compensation |
|
|
Earnings |
|
|
Compensation |
|
|
Total |
|
Name and Principal Position |
|
Year |
|
|
($) |
|
|
($) |
|
|
($)(3) |
|
|
($)(4) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
Hu Xiaoming (1) |
|
2014 |
|
$ |
29,277 |
|
|
|
|
$ |
1,195,000 |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
$ |
1,224,27 |
|
CEO, President and |
|
2013 |
|
$ |
32,268 |
|
|
|
|
$ |
1,428,945 |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
$ |
1,461,21 |
|
Chairman of the
Board |
|
2012 |
|
$ |
31,646 |
|
|
|
|
|
|
|
$ |
5,877 |
|
|
|
|
|
|
|
|
|
|
$ |
37,52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhu Xiaoying (2)
|
|
2014 |
|
$ |
19,518 |
|
|
|
|
$ |
717,000 |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
$ |
736,51 |
|
CFO |
|
2013 |
|
$ |
24,201 |
|
|
|
|
$ |
857,365 |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
$ |
881,56 |
|
|
|
2012 |
|
$ |
23,735 |
|
|
|
|
$ |
|
|
$ |
3,820 |
|
|
|
|
|
|
|
|
|
|
$ |
27,55 |
|
(1) |
Mr. Hu was appointed as CEO and President of the Company
on June 29, 2007. |
|
|
(2) |
Ms. Zhu was appointed as CFO of the Company on June 29,
2007. |
|
|
(3) |
The amounts in this column reflect the aggregate grant
date fair value under FASB ASC Topic 718 of awards made during the
respective year. As of the date of this report, the stock awards to Mr. Hu
and Ms. Zhu had been granted, but not yet issued. |
|
|
(4) |
The amounts in this column reflect the aggregate grant
date fair value under FASB ASC Topic 718 of awards made during the
respective year |
Narrative to Summary Compensation Table
In fiscal 2014, the primary components of our executive
compensation programs were base salary and equity compensation. We use base
salary to fairly and competitively compensate our executives, including the
named executive officers, for the jobs we ask them to perform. We view base
salary as the most stable component of our executive compensation program, as
this amount is not at risk. We believe that the base salaries of our executives
should be targeted at or above the median of base salaries for executives in
similar positions with similar responsibilities at comparable companies,
consistent with our compensation philosophy. At the end of the year, each
executives performance is evaluated by our Compensation Committee which takes
into account the individuals performance, responsibilities of the position,
adherence to our core values, experience, and external market conditions and
practices.
Omnibus Long-Term Incentive Plan (LTIP) Long Term Equity
Compensation
We believe it is a customary and competitive practice to
include an equity-based element of compensation to the overall compensation
package for our named executive officers. We believe that a significant portion
of the compensation paid to our named executive officers should be
performance-based and therefore at risk. Awards made are granted under the Kandi
Technologies Group, Inc. Omnibus Long-Term Incentive Plan (the Plan). At our
2008 annual meeting of shareholders, our stockholders approved the adoption of
the Plan, As of December 31, 2014, 2,600,000 options have been granted under the
Plan to the Company's employees and directors, of which 2,593,332 have been
exercised, and 6,668 have been forfeited.
The Plan is intended to enhance the Companys and its
affiliates ability to attract and retain highly qualified officers, directors,
key employees and other persons, and to motivate such officers, directors, key
employees and other persons to serve the Company to expend maximum effort to
improve the business results and earnings of the Company, by providing to such
persons an opportunity to acquire or increase a direct proprietary interest in
the operations and future success of the Company. To this end, the Plan provides
for the grant of stock options, stock appreciation rights, restricted stock,
restricted stock units, unrestricted stock and cash awards. Any of these awards
may, but need not, be made as performance incentives to reward attainment of
annual or long-term performance goals in accordance with the terms hereof. Stock
options granted under the Plan may be non-qualified stock options or incentive
stock options. The stock options vest ratably over three years and expire in ten
years from the grant date.
21
The Compensation Committee, in its sole discretion, designates
who is eligible to receive awards, determines the form of each award, determines
the number of shares of stock subject to each award, establishes the exercise
price of each award and such other terms and conditions applicable to the award
as the Compensation Committee deems appropriate. Options would become
exercisable at such times as may be established by the Compensation Committee
when granting the award. No stock option may be exercised more than ten years
after the date the option is granted.
Outstanding Equity Awards at 2014 Fiscal Year-End
The following table sets forth information regarding all
unexercised, outstanding equity awards held, as of December 31, 2014, by those
individuals who served as our named executive officers during any part of fiscal
year 2014.
|
|
|
|
|
Option Awards |
|
|
|
|
|
|
|
|
|
|
|
Stock Awards |
|
|
|
|
|
|
Number of Securities Underlying Unexercised
Options (#) |
|
|
Number of Securities Underlying Unexercised
Options(#) |
|
|
Equity Incentive
Plan
Awards: Number of Securities Underlying
Unexercised
Unearned |
|
|
Option Exercise Price |
|
|
Option Expiration |
|
|
Number
of Shares or Units of
Stock
That Have
Not Vested |
|
|
Market
Value of Shares or Units of
Stock That Have Not Vested |
|
|
Equity Incentive
Plan
Awards: Number of
Unearned
Shares,
Units or Other
Rights
That Have Not |
|
|
Equity Incentive
Plan
Awards:
Market or Payout Value of Unearned
Shares,
Units
or Other
Rights That
Have Not Vested |
|
Name |
|
Exercisable |
|
|
Unexercisable |
|
|
Options (#) |
|
|
($) |
|
|
Date |
|
|
(#) |
|
|
($) |
|
|
Vested (#) |
|
|
($) |
|
Hu Xiaoming (1)(3) |
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhu Xiaoying (2)(3)
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Mr. Hu was appointed as CEO and President of the Company
on June 29, 2007. |
|
|
(2) |
Ms. Zhu was appointed as CFO of the Company on June 29,
2007. |
|
|
(3) |
According to the award performance targets set up
pursuant to the Plan, which was approved on December 30, 2013, the
Compensation Committee and the Board approved the grant of common stock
for 100,000 shares of common stock to Mr. Hu and 60,000 to Ms. Zhu in
2014. These shares have been granted to Mr. Hu and Ms. Zhu but have not
been issued by the Company as of the date herein. |
|
|
(4) |
The grant date fair value of each share of common stock
awarded is $11.95, calculated in accordance with FASB Topic
718. |
Employment Agreements
We have employment agreements with our named executive
officers. The agreements provide an annual salary of RMB 360,000 and RMB 240,000
for Mr. Hu and Ms. Zhu, respectively, with bonus to be decided at the discretion
of our Board at the year-end. The employment agreements for Mr. Hu and Ms. Zhu
each have a three (3) year term, ending on June 9, 2017.
22
Potential Payments Upon Termination or Change of Control
Under Chinese law, we may only terminate employment agreements
without cause and without penalty by providing notice of non-renewal one month
prior to the date on which the employment agreement is scheduled to expire. If
we fail to provide this notice or if we wish to terminate an employment
agreement in the absence of cause, as defined in the agreement, then we are
obligated to pay the employee one months salary for each year we have employed
the employee. We are, however, permitted to terminate an employee for cause
without penalty pursuant to the employment agreement. If the named executive
officer is not terminated for cause, the Company will pay the executive
officers salary as described above. Upon termination, any unvested options are
forfeited.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Related Persons
The Board of Directors must approve all related party
transactions. All material related party transactions will be made or entered
into on terms that are no less favorable to us than can be obtained from
unaffiliated third parties. During fiscal years ended December 31, 2014 and
2013, there were no transactions involving any of our current Directors or
executive officers.
Other than as set forth below, for fiscal years ended December
31, 2014 and 2013, the Company was not involved in any related party
transactions.
The following table lists the amount due from related parties
as of December 31, 2014 and 2013.
|
|
2014 |
|
|
2013 |
|
Eliteway |
|
620,410 |
|
|
2,800,958 |
|
Total due from related party |
|
620,410 |
|
|
2,800,958 |
|
During fiscal year ended December 31, 2014, 2013 and 2012, the
Company sold products to Kandi USA Inc. carrying trade name of Eliteway
Motorsports (Eliteway) amounting to $2,981,944, $6,906,807 and $5,297,548,
respectively. As of December 31, 2014 and 2013, outstanding receivable due from
Eliteway was $620,410 and $2,800,958, respectively.
Mr. Hu Wangyuan was the sole shareholder and officer of
Eliteway which served as a US importer of the Company's products. Mr. Hu
Wangyuan is the adult son of the Company's chairman and Chief Executive Officer,
Mr. Hu Xiaoming. For the year ended December 31, 2014, 2013and 2012, Eliteway
and Mr. Hu Wangyuan were financially independent from the Company. The
transactions between the Company and Eliteway were carried at arm's-length
without preferential terms comparing with other customers at the comparative
order size or volume.
PROCEDURES FOR APPROVAL OF RELATED PARTY TRANSACTIONS
In May 2014, we adopted a written Management Policy of
Related-Party Transaction (the Policy). According to the Policy, a Related
Transaction is any transaction, includes, but not limited to, any financial
transaction, arrangement, relationship (including any indebtedness or guarantee
of indebtedness) or any series of similar transactions, arrangements or
relationships, since the beginning of the Companys last fiscal year, or any
currently proposed transaction, and the amount involved exceeds $120,000, and in
which any related party had or will have a direct or indirect material
interest. The Policys definition of a Related Party is in line with the
definition set forth in the instructions to Item 404(a) of Regulation S-K
promulgated by the SEC.
Under the Policy, The Companys proposed material related
transaction with related person shall be submitted to the Board for
consideration and discussion after independent director presents his/her
approval opinion beforehand. The Audit Committee shall conduct audit on the
related transaction and develop a written opinion, and can engage independent
finance advisor to issue a report as a basis of its judgment, then submit it to
the Board. The Policy states that the Board meeting can be held as long as
non-affiliated directors over half of the Board attend, and any resolution made
by the Board must be approved by over half of non-affiliated directors.
23
The Company should execute written agreement when it conducts
related transaction to specify its pricing policy. Related transaction pricing
of the Company should be fair and performed according to government-set price,
guidance prices of government, comparable market price or fee standards of
independent third party, or reasonable composition price. Any related
transaction between the Company and related person shall be disclosed in the
form of interim report, involving name of the related person explanation on such
related relationship, the related person's interest in the transaction,
including his or her position(s) or relationship(s), and the approximate amount
involved in the related transaction.
For daily related transaction, the Company should conclude an
agreement in writing with related person and disclose pricing policy and its
basis, method to determine range of trading volume and other main terms, and
report to the Audit Committee the total amount involved in this agreement for
its consideration and discussion.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
that the Company's directors and executive officers and persons who beneficially
own more than ten percent (10%) of a registered class of its equity securities,
file with the SEC reports of ownership and changes in ownership of its common
stock and other equity securities. Executive officers, directors, and greater
than ten percent (10%) beneficial owners are required by SEC regulation to
furnish the Company with copies of all Section 16(a) reports that they file.
Based solely upon a review of the copies of such reports furnished to us or
written representations that no other reports were required, the Company
believes that, during fiscal year 2014, all filing requirements applicable to
its executive officers, directors, and greater than ten percent (10%) beneficial
owners were met, except for the following: (i) Mr. Hu Xiaoming and Ms. Zhu
Xiaoying did not file on time the Form 4s after being issued 119,577 and 71,746
shares of common stock, respectively, under the Companys 2008 Omnibus Long-Term
Incentive Plan on May 22, 2014; (ii) Henry Yu did not file on time the Form 4s
after being issued 5,000 shares on March 24, 2014 and September 8, 2014,
respectively; and (iii) Jerry Lewin did not file on time the Form 4s after being
issued 5,000 shares on March 24, 2014 and September 8, 2014, respectively. As of
the date of this proxy statement, all of the filings mentioned above have been
made.
24
AUDIT COMMITTEE REPORT
The Audit Committee has furnished the following report on its
activities during the fiscal year ended December 31, 2014. The report is not
deemed to be soliciting material or filed with the SEC or subject to the
SECs proxy rules or to the liabilities of Section 18 of the Exchange Act, and
the report shall not be deemed to be incorporated by reference into any prior or
subsequent filing under the Securities Act or the Exchange Act except to the
extent that the Company specifically incorporates it by reference into any such
filing. The Audit Committee charter sets forth the responsibilities of the Audit
Committee. A copy of the Audit Committee charter is available on our website at
http://en.kandivehicle.com//default.aspx under the links Investor Relations --
Corporate Governance.
The primary function of the Audit Committee is to assist the
Board in its oversight and monitoring of our financial reporting and auditing
process. Management has primary responsibility for our financial statements and
the overall reporting process, including maintaining effective internal control
over financial reporting and assessing the effectiveness of our system of
internal controls. The independent registered public accounting firm audits the
annual financial statements prepared by management, expresses an opinion as to
whether those financial statements fairly present our financial position,
results of operations and cash flows in conformity with U.S. generally accepted
accounting principles, and discusses with the Audit Committee any issues they
believe should be raised with the Audit Committee. These discussions include a
discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements. The Audit Committee monitors our
processes, relying, without independent verification, on the information
provided to it and on the representations made by management and the independent
registered public accounting firm.
The Audit Committee has reviewed and discussed the audited
financial statements with our management and representatives of AWC (CPA)
Limited, our independent registered public accounting firm. The Audit Committee
has discussed AWC (CPA) Limiteds judgments as to the quality, not just the
acceptability, of our accounting principles and such other matters as are
required to be discussed with the Audit Committee by Statement on Auditing
Standards No. 114 (which superseded Statement on Auditing Standards No. 61),
other standards of the Public Company Accounting Oversight Board (United
States), rules of the SEC, and other applicable regulations. The Audit Committee
also received the written disclosures and the letter from AWC (CPA) Limited
required by applicable requirements of the Public Company Accounting Oversight
Board regarding the firms independence from our management and has discussed
with AWC (CPA) Limited its independence. The members of the Audit Committee
considered whether the services provided by AWC (CPA) Limited, for the year
ended December 31, 2014, are compatible with maintaining their independence. The
Board has delegated to the Audit Committee the authority to approve the
engagement of our independent registered public accounting firm.
Based upon its reviews and discussions, the Audit Committee
recommended to our Board that the audited financial statements be included in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 for
filing with the SEC and the Board approved that recommendation.
Henry Yu (Chairman)
Jerry Lewin
Chen Liming
April 10, 2015
25
SUBMISSION OF SHAREHOLDER PROPOSALS
If you wish to have a proposal included in our proxy statement
and form of proxy for next years annual meeting in accordance with Rule 14a-8
under the Exchange Act, your proposal must be received by us at our principal
executive office on or before December 11, 2015. A proposal which is received
after that date or which otherwise fails to meet the requirements for
shareholder proposals established by the SEC will not be included. The
submission of a shareholder proposal does not guarantee that it will be included
in the proxy statement.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed reports, proxy statements and other information
with the SEC. You may read and copy any document we file with the SEC at the
SECs Public Reference Room at 100 F Street, N.W., Washington, D.C. 20549. You
may obtain information on the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains a website that contains the reports, proxy
statements and other information we file electronically with the SEC. The
address of the SEC website is www.sec.gov.
You may request, and we will provide at no cost, a copy of
these filings, including any exhibits to such filings, by writing or telephoning
us at the following address: Attn: Zhu Xiaoying at the Jinhua City Industrial
Zone, Jinhua, Zhejiang Province, China, 321016. You may also access these
filings at our web site under the investor relations link at
http://en.kandivehicle.com//default.aspx.
ANNUAL REPORT
A copy of the Companys Annual Report on Form 10-K for the year
ended December 31, 2014, which has been filed with the SEC pursuant to the
Exchange Act, is included with this proxy statement. Additional copies of this
proxy statement and/or the Annual Report, as well as copies of any Quarterly
Report may be obtained without charge upon written request to Kandi Technologies
Group, Inc., Jinhua City Industrial Zone, Jinhua, Zhejiang Province, Peoples
Republic of China, 321016, or on the SECs internet website at
www.sec.gov.
YOUR VOTE IS IMPORTANT
You are cordially invited to attend the 2015 Annual Meeting.
However, to ensure that your shares are represented at the meeting, please
submit your proxy or voting instructions. Please see the instructions on the
proxy and voting instruction card. Submitting a proxy or voting instructions
will not prevent you from attending the 2015 Annual Meeting and voting in
person, if you so desire, but will help the Company secure a quorum and reduce
the expense of additional proxy solicitation.
BY ORDER OF THE BOARD OF DIRECTORS
April 10, 2015 |
/s/ Hu
Xiaoming |
|
Hu Xiaoming |
|
Chairman of the Board, President and |
|
Chief Executive Officer |
26
Exhibit A
AMENDMENT TO
2008 OMNIBUS LONG-TERM INCENTIVE PLAN
OF KANDI TECHNOLOGIES GROUP, INC.
Kandi Technologies Group, Inc. (the Company) previously
approved and adopted the 2008 Omnibus Long-Term Incentive Plan (the Plan) to
enhance the Companys and its affiliates ability to attract and retain highly
qualified officers, directors, key employees and other persons, and to motivate
such officers, directors, key employees and other persons to serve the Company
and its affiliates and to expend maximum effort to improve the business results
and earnings of the Company. By this Amendment, the Company desires to amend its
name as mentioned in the Plan, and amend the Plan to increase the number of
shares available under the Plan.
1. Capitalized terms used but not otherwise defined herein
shall have the respective meanings assigned to such terms in the Plan.
2. The effective date of this Amendment to the Plan shall be
May 20, 2015, upon the shareholders approval.
3. The Title of the Plan is amended and restated in its
entirety as follows:
KANDI TECHNOLOGIES GROUP, INC.
2008 OMNIBUS LONG-TERM
INCENTIVE PLAN
4. The first paragraph of the Plan is amended and restated in
its entirety as follows:
Kandi Technologies Group, Inc., a Delaware corporation (the
Company), sets forth herein the terms of its 2008 Omnibus Long-Term Incentive
Plan (the Plan), as follows:
5. Section 2.10 of the Plan is amended and restated in its
entirety as follows:
2.10. Company means Kandi Technologies Group,
Inc., a Delaware corporation, or any successor corporation.
6. Section 2.26 of the Plan is amended and restated in its
entirety as follows:
2.26. Plan means this Kandi Technologies
Group, Inc. 2008 Omnibus Long-Term Incentive Plan.
7. The first paragraph under Section 4 of the Plan is amended
and restated in its entirety as follows:
Subject to adjustment as provided in Section 15 hereof,
the maximum number of shares of Stock available for issuance under the Plan
shall be 13,000,000. All such shares of Stock available for issuance under the
Plan shall be available for issuance pursuant to Incentive Stock Options. Stock
issued or to be issued under the Plan shall be authorized but unissued shares;
or, to the extent permitted by applicable law, issued shares that have been
reacquired by the Company. The maximum number of Common Stock that will be
awarded to any one Grantee during any calendar year shall not exceed 1,000,000.
8. This Amendment shall amend only the provisions of the Plan
as set forth herein. Those provisions of the Plan not expressly amended hereby
shall be considered in full force and effect.
27
IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed by its duly authorized representative on this April 10, 2015.
|
Kandi Technologies Group, Inc. |
|
|
|
|
|
|
|
By: /s/ Hu
Xiaoming
|
|
Name: Hu Xiaoming |
|
Title: Chief Executive Officer
|
28
Exhibit B
Proxy Card
29
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