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 12
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]
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No fee required.
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[ ]
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Fee computed on table below per Exchange Act
Rules 14a6(i)(1) and 011.
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(1)
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Title of each class of securities to which transaction
applies:
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(2)
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Aggregate number of securities to which transaction
applies:
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(3)
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Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 011 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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[ ]
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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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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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KANDI TECHNOLOGIES GROUP, INC.
Jinhua City
Industrial Zone
Jinhua, Zhejiang Province
Peoples Republic
of China 321016
November 2, 2016
Dear Stockholder:
You are cordially invited to
attend the Annual Meeting of Stockholders for the year ended December 31, 2015,
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 December 16, 2016,
at 7:00 a.m. E.T. (8:00 p.m. local time).
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 Stockholders Report, including
Letter to Stockholders and Annual Report on Form 10-K for fiscal year ended
December 31, 2015 over the Internet. This allows us to provide you with
information relating to our Annual Meeting of Stockholders for the year ended
December 31, 2015 in a fast and efficient manner. On or about November 4, 2016,
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 Stockholders Report, including Letter to Stockholders and Annual Report
on Form 10-K for fiscal year ended December 31, 2015 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,
/s/ Hu Xiaoming
Hu Xiaoming
Chairman of the Board
of Directors, President and Chief
Executive Officer
3
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 December 16, 2016
NOTICE HEREBY IS GIVEN that the
Annual Meeting of Stockholders for the year ended December 31, 2015 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 December 16, 2016,
at 7:00 a.m. E.T. (8:00 p.m. local time), to consider and act upon the
following:
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1.
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To elect seven directors, each to serve until the Annual
Meeting of Stockholders for the year ended December 31, 2016;
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2.
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To ratify the appointment of BDO China Shu Lun Pan
Certified Public Accountants LLP as the Companys independent auditor for
the fiscal year ended December 31, 2016;
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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.
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Stockholders of record at the
close of business on October 17, 2016 are entitled to receive notice of and to
vote at Annual Meeting of Stockholders for the year ended December 31, 2015 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
/s/ Hu Xiaoming
Hu Xiaoming
Chief Executive Officer and
Chairman of the
Board of Directors
Jinhua, Zhejiang Province, China
November 2, 2016
Important Notice Regarding the Availability of Proxy
Materials for the
Annual Meeting of Stockholders to be held on December
16, 2016:
WHETHER OR NOT YOU PLAN TO
ATTEND OUR ANNUAL MEETING OF STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2015,
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 ANNUAL MEETING
OF STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2015, YOU MAY REVOKE YOUR PROXY
AND VOTE IN PERSON IF YOU SO DESIRE.
4
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 December 16, 2016
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
Annual Meeting of Stockholders for the year ended December 31, 2015 (the Annual
Meeting) 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 December 16, 2016, at 7:00 a.m. E.T. (8:00 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 November 4, 2016, 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 Stockholders Report, including Letter to Stockholders and Annual Report
on Form 10-K for fiscal year ended December 31, 2015 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
Stockholders Report, including Letter to Stockholders and Annual Report on Form
10-K for fiscal year ended December 31, 2015, 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 Annual Meeting are
available by calling +86-579-8223-9856 or by written request to Wang Cheng
(Henry), at Jinhua City Industrial Zone, Jinhua, Zhejiang Province, China,
321016.
ABOUT THE 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 Annual Meeting or any postponement or adjournment of
that meeting. The Annual Meeting will be held on December 16, 2016, at 7:00 a.m.
E.T. (8:00 p.m. local time) 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 Annual Meeting,
stockholders will be asked to consider and vote to elect the nominees named
herein as directors to serve until the Annual Meeting of Stockholders for the
year ended December 31, 2016; to ratify the appointment of BDO China Shu Lun Pan
Certified Public Accountants LLP as the Companys independent auditor for the
fiscal year ended December 31, 2016; 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 October 17,
2016 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 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 Annual Meeting. At the close of business on the
record date, we had 47,699,638 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 November 4, 2016
to all stockholders entitled to vote at the Annual Meeting. A copy of the
Companys Annual Stockholders Report, including Letter to Stockholders and
Annual Report on Form 10-K for fiscal year ended December 31, 2015 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 Annual Meeting and help to conserve natural
resources. On or about November 4, 2016, 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 Stockholders Report, including Letter to Stockholders and Annual Report
on Form 10-K for fiscal year ended December 31, 2015, 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 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
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 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.
Approval of the Appointment of
the Independent Auditor
. Under Delaware law and the Companys Bylaws, the
required vote to approve the appointment of BDO China Shu Lun Pan Certified
Public Accountants LLP as the Companys independent auditor for the fiscal year
ended December 31, 2016, 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.
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 (the SEC), 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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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 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 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 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: Wang Cheng (Henry), our Chief Financial
Officer, located in 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
Thursday, December 15, 2016.
In Person - stockholders may vote
in person at the Annual Meeting. To vote in person, come to the 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 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 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
verification of BDO China Shu Lun Pan Certified Public Accountants LLP 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 Annual Meeting for which we
did not receive adequate notice under the proxy rules promulgated by the
Securities and Exchange Commission (SEC).
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 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 Annual Meeting.
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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 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 Wang Cheng (Henry), located 5F, Tower 3, Xixixinzuo, No. 550 Xixi
Road, Xihu District, Hangzhou City, Zhejiang Province, China 310013
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 Annual Meeting and vote in person.
However, simply attending the Annual Meeting will not, by itself, revoke
your proxy.
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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 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 Wang Cheng (Henry) at 5F, Tower 3, Xixixinzuo, No. 550 Xixi Road, Xihu
District, Hangzhou City, Zhejiang Province, China 310013
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 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 Annual Meeting, during ordinary
business hours at our principal executive office. The list will also be
available for examination at the Annual Meeting.
Other Business
The Board is not aware of any
other matters to be presented at the 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 Annual
Meeting, the persons named in the accompanying proxy will vote in accordance
with their best judgment.
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Proposals of Stockholders for Annual Meeting of Stockholders
for the year ended December 31, 2016
Stockholder proposals will be
considered for inclusion in the proxy statement for the Annual Meeting of
Stockholders for the year ended December 31, 2016 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 September 17, 2017.
Stockholders who intend to
present a proposal at the Annual Meeting of Stockholders for the year ended
December 31, 2016 without inclusion of such proposal in our proxy materials for
the Annual Meeting of Stockholders for the year ended December 31, 2016 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 August
18, 2017, but no later than September 17, 2017, and must otherwise comply with
the notice requirements set forth under all applicable Exchange Act and SEC
rules. The chairman of our Annual Meeting of Stockholders for the year ended
December 31, 2016 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 Annual Meeting of Stockholders for the
year ended December 31, 2016 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 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 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 Annual Meeting. Six of the nominees were previously elected by our
stockholders at the Annual Meeting of Stockholders for the year ended December
31, 2014.
One nominee, Mei Bing will stand for election for the first
time.
If elected as a director at the
Annual Meeting, each of the nominees will serve a one-year term expiring at the
Annual Meeting of Stockholders for the year ended December 31, 2016 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 October
17, 2016:
Name
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Age
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Position
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Served From
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Hu Xiaoming
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59
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Chairman of the Board, President and
Chief Executive Officer
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June 2007
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Wang Cheng (Henry)
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43
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Chief Financial Officer, Director
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May 2015
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Qian Jingsong
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55
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Director
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January 2011
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Chen Liming
(1), (2), (3)
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79
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Director (Independent)
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May 2012
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Ni Guangzheng
(2), (3)
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77
|
Director (Independent)
|
November 2010
|
Jerry Lewin
(1)
|
61
|
Director (Independent)
|
November 2010
|
Henry Yu
(1),(2),(3)
|
62
|
Director (Independent)
|
July 2011
|
|
|
|
|
(1)
|
Member of Audit Committee
|
(2)
|
Member of Compensation Committee
|
(3)
|
Member of Nominating and Corporate Governance
Committee
|
Mr. Qian Jingsong will not stand for re-election at the Annual
Meeting.
Biographical Information of the Nominees
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.
10
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.
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 master 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.
11
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.
Mei Bing,
51, is nominated
as a director nominee of the Company at the Annual Meeting. Prior to that, Mr.
Mei served as Chief Financial Officer and Board Secretary of Skystar
Bio-Pharmaceutical Company, a publicly traded leading biotechnology company in
China since July 2011. From June 2015 through June 2016, Mr. Mei also served as
an Independent Non-Executive Member of the Board of Directors and Chairman of
Audit Committee of PharmaMax Corporation in China. From January 2006 through
July 2011, Mr. Mei served as Chief Financial Officer of Avineon, Inc., a
multinational technology company in the U.S., where he managed the Companys
global financial operations in North America, Asia and Europe. Previously, Mr.
Mei served as Controller of Arrowhead Global Solutions, Inc. (now part of Harris
Corporation), a global provider of satellite communications to remote and harsh
environments in the U.S. In addition, Mr. Mei served as Controllers of PICS,
Inc. and Thompson Hospitality Corporation, a member of the Compass Group family
of companies. Mr. Mei is a seasoned financial executive with over 15 years of
distinguished corporate executive career with large multinational enterprises
and middle market companies in the U.S. and China. Mr. Mei received a B.S. in
Economics from Zhejiang University in Hangzhou, China and holds an M.B.A. from
The Fuqua School of Business at Duke University where he graduated with
distinction as a Fuqua Scholar. Mr. Mei is a Certified Public Accountant (CPA)
in the State of Maryland, a Certified Management Accountant (CMA), a Chartered
Global Management Accountant (CGMA), and a Certified Valuation Analyst (CVA).
Mr. Meis strong leadership skills and extensive corporate finance experience
qualifies him to serve on our Board and led the Board to conclude that he should
be nominated to serve 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 of Directors recommends that the stockholders vote
FOR the election of each of the director nominees named in this proxy
statement.
12
PROPOSAL 2
RATIFICATION OF INDEPENDENT AUDITOR
The Audit Committee has selected
BDO China Shu Lun Pan Certified Public Accountants LLP (BDO China) as the
Companys independent auditor for the fiscal year ended December 31, 2016, and
has further directed that management submit the selection of BDO China for
ratification by the shareholders at the 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.
Neither representatives of BDO
China nor AWC (CPA) Limited (f/k/a: Albert Wong & Co.), our former
independent auditor (AWC), are expected to be present at the Annual Meeting,
either in person or by teleconference.
On April 12, 2016, the Company
dismissed AWC as the Companys independent registered public accounting firm.
The decision to dismiss AWC was approved by the Companys audit committee.
The principal accountants
reports of AWC on the financial statements of the Company as of and for the
fiscal years ended December 31, 2015 and 2014 did not contain any adverse
opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles.
During the Companys two most
recent fiscal years and the subsequent interim period through April 12, 2016,
there were no disagreements with AWC on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreement(s), if not resolved to the satisfaction of AWC, would have caused
it to make reference to the subject matter of the disagreement(s) in connection
with its report. During the Companys two most recent fiscal years and the
subsequent interim period through April 12, 2016, there were no reportable
events of the type described in Item 304(a)(1)(v) of Regulation S-K.
The Company provided AWC with a
copy of the foregoing disclosure and requested AWC to furnish the Company with a
letter addressed to the Securities and Exchange Commission (the SEC) stating
whether it agrees with the statements made therein. A copy of such letter, dated
April 13, 2016, furnished by AWC is filed as Exhibit 16.1 to the Current Report
on Form 8-K filed with the SEC on April 13, 2016.
On April 12, 2016, the Companys
audit committee approved the engagement of BDO China as the Companys new
independent registered public accounting firm.
During the Companys two most
recent fiscal years and the subsequent interim period through April 12, 2016,
neither the Company nor anyone on its behalf consulted with BDO China regarding
(i) the application of accounting principles to a specified transaction, either
completed or proposed; the type of audit opinion that might be rendered on the
Company's financial statements, and neither a written report nor oral advice was
provided that BDO China concluded was an important factor considered by the
Company in reaching a decision as to the accounting, auditing or financial
reporting issue; or (ii) any matter that was either the subject of a
disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and its related
instructions) or a reportable event (as described in Item 304(a)(1)(v) of
Regulation S-K).
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 BDO China.
The Board of Directors recommends a vote FOR the
ratification of the appointment of BDO China Shu Lun Pan Certified Public
Accountants LLP as the Companys independent auditor.
13
PROPOSAL NO. 3
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
3.
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 2015 fiscal year, our independent directors met
4times 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, 2015, the Board held 4 meetings and acted through unanimous consent on 4
different occasions. In addition, the Audit Committee held 5 meetings; the
Nominating and Corporate Governance Committee held 1 meeting; and the
Compensation Committee held 1 meeting. During the year ended December 31, 2015,
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
2015 Annual Meeting.
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.
15
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.), our former independent auditor, and BDO China
Shu Lun Pan Certified Public Accountants LLP (BDO China), our current
independent auditor, to the Company are permissible under applicable laws and
regulations. During fiscal year 2015, 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 former principal accountant, AWC (CPA) Limited
(formerly, Albert Wong & Co.) for the years ended December 31, 2015 and 2014
respectively.
|
|
2015
|
|
|
2014
|
|
Audit Fees
|
$
|
364,000
|
|
$
|
310,000
|
|
Audit Related Fees
|
$
|
-
|
|
$
|
-
|
|
All Other Fees
|
$
|
11,841
|
|
$
|
13,493
|
|
TOTAL FEES
|
$
|
375,841
|
|
$
|
323,493
|
|
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 2015, 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 Annual Meeting, as filed with the Commission.
Compensation Committee of the Board of
Directors
Respectfully submitted,
/s/ Chen Liming (Chairman)
/s/ Henry Yu
/s/ Ni Guangzheng
November 2, 2016
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 2015, 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 Wang Cheng
(Henry), 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
October 17, 2016, 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 47,699,638
shares of our Common Stock issued and outstanding on October 17, 2016.
|
|
Amount and Nature
|
|
Title of Class
|
Name of Beneficial
Owner
|
of Beneficial
|
Percent of Class
|
|
|
Ownership
|
|
Common Stock
|
Excelvantage Group
Limited(3 )
|
12,000,000(1)
|
25.16%
|
Common Stock
|
Hu Xiaoming
|
13,138,077(2)
|
27.54%
|
Common Stock
|
Wang Cheng(Henry)
|
6,500
|
*
|
Common Stock
|
Qian Jingsong
|
9,000
|
*
|
Common Stock
|
Henry Yu
|
50,000
|
*
|
Common Stock
|
Jerry Lewin
|
50,000
|
*
|
Common Stock
|
Ni Guangzheng
|
-
|
-
|
Common Stock
|
Chen Liming
|
-
|
-
|
All officers and directors
|
|
13,253,577
|
27.79%
|
* 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) 1,138,077 shares owned directly by Mr. Hu,
(ii) 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
2015 fiscal year to each of our non-executive directors:
Name
|
|
Fees
Earned
or
Paid
in
Cash
($)(2)
|
|
|
Stock
Awards
($)
(1)(2)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Nonqualified
Deferred
Compensation
Earnings
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
Ni Guangzheng
|
$
|
9,615
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
9,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qian Jingsong
|
$
|
-
|
|
|
478,000
|
|
|
1,454,682
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
1,932,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Yu
|
$
|
24,000
|
|
|
18,100
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
42,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerry Lewin
|
$
|
24,000
|
|
|
26,500
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
50,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chen Liming $
|
|
9,615
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
9,615
|
|
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, 2015, 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 $801) 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 $801)
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 August
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, 2015, 40,000 shares of restricted common stock had
been issued to Mr. Lewin and Mr. Yu, respectively.
The aggregate number of stock
options and restricted outstanding, as of December 31, 2015, for each of the
non-named executive officer directors were as follows:
Name
|
|
Options
|
|
|
Restricted
|
|
|
|
|
|
|
stock
|
|
Qian Jingsong
|
|
500,000
|
|
|
0
|
|
Henry Yu
|
|
0
|
|
|
40,000
|
|
Chen Liming
|
|
0
|
|
|
0
|
|
Ni Guangzheng
|
|
0
|
|
|
0
|
|
Jerry Lewin
|
|
0
|
|
|
40,000
|
|
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
|
59
|
Chairman of the Board,
President and Chief Executive Officer
|
Wang Cheng (Henry)
|
43
|
Chief Financial Officer
|
Summary Compensation Table
The following table summarizes the compensation earned during
the years ended December 31, 2015, 2014 and 2013, by those individuals who
served as our Chief Executive Officer or Chief Financial Officer during any part
of fiscal year 2015 or any other executive officer with total compensation in
excess of $100,000 during fiscal year 2015. The individuals listed in the table
below are referred to as the named executive officers.
20
Name
and
Principal
Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)(4)
|
|
|
Option
Awards
($)(5)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hu Xiaoming (1)
|
|
2015
|
|
$
|
29,076
|
|
|
-
|
|
$
|
1,195,000
|
|
|
2,618,428
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
3,842,504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEO,
President
and
|
|
2014
|
|
$
|
29,277
|
|
|
-
|
|
$
|
1,195,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
1,224,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman
of the
Board
|
|
2013
|
|
$
|
32,268
|
|
|
-
|
|
$
|
1,428,945
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
1,461,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wang Cheng (2)
|
|
2015
|
|
$
|
80,717
|
|
|
-
|
|
$
|
77,675
|
|
|
1,454,682
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
1,613,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CFO,
Director
|
|
2014
|
|
$
|
-
|
|
|
-
|
|
$
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
$
|
-
|
|
|
-
|
|
$
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhu Xiaoying (3)
|
|
2015
|
|
$
|
26,844
|
|
|
-
|
|
$
|
119,500
|
|
|
1,163,746
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
1,310,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former CFO,
Director
|
|
2014
|
|
$
|
19,518
|
|
|
-
|
|
$
|
717,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
736,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
$
|
24,201
|
|
|
-
|
|
$
|
857,365
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
$
|
881,566
|
|
(1)
|
Mr. Hu was appointed as CEO and President of the Company
on June 29, 2007.
|
|
|
(2)
|
Mr. Wang was appointed as CFO of the Company on May 1,
2015.
|
|
|
(3)
|
Ms. Zhu was appointed as CFO of the Company on June 29,
2007 and resigned from her position on April 30, 2015.
|
|
|
(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.
|
|
|
(5)
|
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 2015, 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.
21
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 2008
Plan). At our 2008 annual meeting of shareholders, our stockholders approved
the adoption of the 2008 Plan. As of December 31, 2015, 7,500,000 options have
been granted under the 2008 Plan to the Company's employees and directors, of
which 2,593,332 have been exercised, and 6,668 have been forfeited.
On December 30, 2013, the Board
of Directors approved a proposal (as submitted by the Compensation Committee) of
an award (Boards Pre-Approved Award Grant Sub-Plan under the 2008 Plan) for
selected executives and other key employees comprising a total of 335,000 for
each fiscal year beginning with the 2013 fiscal year under the 2008 Plan to be
delivered upon the Company's determination that the Company's Non-GAAP Net
Income for the fiscal year increased by 10%. Non-GAAP Net Income means the
Company's net income for a particular year calculated in accordance with GAAP,
excluding option-related expenses, stock award expenses, and the effects caused
by the change of fair value of financial derivatives. For example, if Non-GAAP
Net Income for the 2013 fiscal year increases by 10% compared to the Non-GAAP
Net Income for the 2012 fiscal year, the selected executives and other key
employees will each be granted his or her target amount of common stock of the
Company at the end of March 2014. If Non-GAAP Net Income in 2013 is less than
Non-GAAP Net Income in 2012, then no common stock will be granted. If Non-GAAP
Net Income in 2013 increases compared to Non-GAAP Net Income in 2012 but the
increase is less than 10%, then the target amount of the common stock grant will
be proportionately decreased. If Non-GAAP Net Income in 2013 increases compared
to Non- GAAP Net Income in 2012 but the increase is more than 10%, then the
target amount of the common stock grant will be proportionately increased.
On July 25, 2014, the Board of
Directors approved a proposal submitted by the Compensation Committee to modify
the languages of Boards Pre-Approved Award Grant Sub-Plan under the 2008 Plan. The
modification was to replace the languages of in the future years the stock
grant amount will be adjusted accordingly based on the Non-GAAP net income in
2013 and the Exhibit A attached hereto; if the Non-GAAP net income in one year
is less than the Non-GAAP net income in the previous year, then no stock will be
granted in that year; if the Non-GAAP net income continues increasing, the stock
grant amount will increase according to the Non-GAAP net income increase
percentage with the languages of in the future years if the Non-GAAP net
income in one year increases 10% compared with the previous year, the total
amount of stock listed in the Exhibit A attached to the original Resolutions
will be granted to certain employees (management of the Company is authorized to
determine list of employees and stock amount rewarded based on position
adjustment of employees, performance and tenure of each employee in that year);
if the Non-GAAP net income in one year is less than the Non-GAAP net income in
the previous year, then no stock will be granted in that year; if the Non-GAAP
net income in one year is 10% less than or 10% more than the Non-GAAP net income
in the previous year, then the stock grant amount will decrease or increase
according to the Non-GAAP net income decrease or increase percentage, but the
total amount rewarded may not be over 200%.
On May 20, 2015, the shareholders
of the Company approved an increase of 9,000,000 shares under the 2008 Plan at
its annual meeting. The fair value of each award granted under the 2008 Plan is
determined based on the closing price of the Companys stock on the date of
grant of the award. To the extent that the performance goal is not met and so no
shares become due, no compensation cost is recognized and any recognized
compensation cost during the applicable year is reversed. The number of shares
of common stock granted under the 2008 Plan with respect to fiscal 2014 was
670,000 shares based on the Non-GAAP Net Income of the year of 2014. The
compensation expense is recognized in General and Administrative Expenses. On
April 23, 2015 and June 7, 2015, the Company granted 550,000 shares and 120,000
shares, respectively, to the senior management and key employee as year 2014
performance awards. The number of shares of common stock granted under the 2008
Plan with respect to fiscal 2015 was 670,000 shares based on the Non-GAAP Net
Income of the year of 2015.
On May 29, 2015, the Compensation
Committee of the Board of Directors of the Company approved the grant of stock
options to purchase 4,900,000 shares of common stock at an exercise price of
$9.72 per share to the Companys senior staff. The stock options will vest
ratably over three years and expire on the tenth anniversary of the grant date.
As of December 31, 2015, no option shares are exercised. The granted stock
option to the directors and officers are as below:
Name
|
|
Stock Options
|
|
|
|
|
|
Hu Xiaoming
|
|
900,000
|
|
|
|
|
|
Wang Cheng(Henry)
|
|
500,000
|
|
|
|
|
|
Qian Jingsong
|
|
500,000
|
|
22
The 2008 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 2008 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 2008
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.
On September 26, 2016, the Board
approved to terminate the previous Boards Pre-Approved Award Grant Sub-Plan
under the 2008 Plan and adopted a new plan to reduce the base of the stock award
for selected executives and key employees from 335,000 shares of common stock to
250,000 shares of common stock for each fiscal year. The other term remain the
same as the previous Boards Pre-Approved Award Grant Sub-Plan.
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 2015 Fiscal Year-End
The following table sets forth
information regarding all unexercised, outstanding equity awards held, as of
December 31, 2015, by those individuals who served as our named executive
officers during any part of fiscal year 2015.
Name
|
|
Number of
Securities
underlying
Unexercised
Options(#)
Exercisable
|
|
|
Number of
Securities
underlying
Unexercised
Options(#)
Unexercisable
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
|
|
Option
Exercise
Price ($)
|
|
|
Option
Expiration
Date
|
|
|
Number
of
Shares
or Units
of Stock
That
Have Not
Vested
(#)
|
|
|
Market
Value
of
Shares or
Units of
Stock
That
Have Not
Vested
($)
|
|
|
Awards:
Number of
Unearned
Shares,
Units
or
Other
Rights
That Have
Not
Vested
(#)
|
|
|
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hu Xiaoming (1)(4)
|
|
-
|
|
|
-
|
|
|
900,000
|
|
$
|
9.72
|
|
|
5/28/2025
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wang Cheng (2)(4)
|
|
-
|
|
|
-
|
|
|
500,000
|
|
$
|
9.72
|
|
|
5/28/2025
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhu Xiaoying (3)
|
|
-
|
|
|
-
|
|
|
400,000
|
|
$
|
9.72
|
|
|
5/28/2025
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
(1)
|
Mr. Hu was appointed as CEO and President of the Company
on June 29, 2007.
|
(2)
|
Mr. Henry Wang was appointed as CFO of the Company on May
1, 2015.
|
(3)
|
Ms. Zhu was appointed as CFO of the Company on June 29,
2007 and has resigned from her position on April
30, 2015.
|
23
(4)
|
The grant date fair value of each share of common stock
option is $9.72, calculated in accordance with FASB Topic
718.
|
Employment Agreements
We have employment agreements
with our named executive officers. The agreements provide an annual salary for
Mr. Hu and Mr. Wang Cheng (Henry), with bonus to be decided at the discretion of
our Board at the year-end. The employment agreements for Mr. Hu has a three (3)
year term, ending on June 9, 2017, and the employment agreements for Mr. Wang
Cheng (Henry) has a three (3) year term, ending on April 30, 2018.
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 month's 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 remaining portion of the executive officer's salary.
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, 2015 and 2014, there were no transactions involving any of our current
directors or executive officers.
Other than as set forth below,
for the fiscal years ended December 31, 2015 and 2014, the Company was not
involved in any related party transactions.
The following table lists the
amount due from related parties as of December 31, 2015 and 2014.
|
|
2015
|
|
|
2014
|
|
Eliteway
|
$
|
-
|
|
$
|
620,410
|
|
Service Company
|
|
40,606,162
|
|
|
-
|
|
Total due from related party
|
$
|
40,606,162
|
|
$
|
620,410
|
|
The following table lists the
sales to related parties during the years of 2015, 2014 and 2013:
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Eliteway
|
$
|
-
|
|
$
|
2,981,944
|
|
$
|
6,906,807
|
|
|
|
|
|
|
|
|
|
|
|
Service Company
|
|
42,032,060
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
42,032,060
|
|
$
|
2,981,944
|
|
$
|
6,906,807
|
|
Mr. Hu Wangyuan was the sole
shareholder and officer of Eliteway which served as an US importer of the
Company's products. Mr. Hu Wangyuan is the adult son of Mr. Hu Xiaoming, the
Company's Chairman and Chief Executive Officer. For the year ended December 31,
2015, 2014 and 2013, 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.
The Company has 9.5% ownership of
Service Company and The Company Chairman and CEO Mr.Hu also has 13% ownership of Service Company. The main transactions between the
Company and Service Company is that Service Company needs to buy battery for the
speed upgrade and also EV parts for the repairing and maintenance for its
operating electric vehicles.
24
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.
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 2015,
all filing requirements applicable to its executive officers, directors, and
greater than ten percent (10%) beneficial owners were met, except for the
following:(i) Hu Xiaoming did not file on time the Form 4 after being issued
100,000 shares on June 7, 2015; (ii) Zhu Xiaoying did not file on time the Form
4 after being issued a total of 60,000 shares on April 23 and July 6, 2015, and
400,000 stock options on May 27, 2015; (iii) Henry Yu did not file on time the
Form 4 after being issued a total of 15,000 shares on February 2, 2015, August
17, 2015 and February 1, 2016; (iv) Jerry Lewin did not file on time the Form 4
after being issued a total of 15,000 shares on February 2, 2015, August 17, 2015
and February 1, 2016; and (v) Qian Jinsong did not file on time the Form 4 after
being issued 500,000 stock options on May 27, 2015 and being issued 40,000
shares on April 23, 2015, and the sold of 31,000 shares on June 18, 2015. As of
the date of this report, all of the filings mentioned above have been made.
AUDIT COMMITTEE REPORT
The Audit Committee has furnished
the following report on its activities during the fiscal year ended December 31,
2015. 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.
25
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 former independent registered public
accounting firm. The Audit Committee has discussed AWC (CPA) Limited 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, 2015, are compatible with maintaining its
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, 2015 for filing with the SEC and the Board
approved that recommendation.
/s/ Henry Yu (Chairman)
/s/ Jerry
Lewin
/s/ Chen Liming
November 2, 2016
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 September 17,
2017. 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: Wang Cheng
(Henry) at 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
.
26
ANNUAL REPORT
A copy of the Companys Annual
Report on Form 10-K for fiscal year ended December 31, 2015, 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 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 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
November 2, 2016
|
/s/ Hu
Xiaoming
|
|
Hu Xiaoming
|
|
Chairman of the Board, President and
|
|
Chief Executive Officer
|
27
Exhibit A
Internet Notice and Access Card
28
29
30
31
Exhibit B
Proxy Card
32
33
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