UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant To Section 14(a) of the Securities Exchange Act of
1934
|
FILED
BY THE REGISTRANT
|
x
|
|
FILED
BY A PARTY OTHER THAN THE REGISTRANT
|
¨
|
Check the
appropriate box:
x
Preliminary
Proxy Statement
¨
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
¨
Definitive
Proxy Statement
¨
Definitive
Additional Materials
¨
Soliciting
Material Pursuant to Rule 14a-12
NEW
DRAGON ASIA CORP.
(Name of
Registrant as Specified In Its Charter)
Payment
of Filing Fee (Check the appropriate box):
x
No
fee required
¨
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
(1)
|
Title
of each class of securities to which transaction
applies:
|
|
(2)
|
Aggregate
number of securities to which transaction
applies:
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was
determined):
|
|
(4)
|
Proposed
maximum aggregate value of
transaction:
|
¨
Fee
previously paid with preliminary materials.
|
¨
|
Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its
filing.
|
|
(6)
|
Amount
Previously Paid:
|
|
(7)
|
Form,
Schedule or Registration Statement
No.:
|
NEW
DRAGON ASIA CORP.
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON __________, ____
TO
THE STOCKHOLDERS OF NEW DRAGON ASIA CORP.:
The
Annual Meeting of the Stockholders of New Dragon Asia Corp., a Florida
corporation (the “Company’), will be held on __________, ____, at 9:00 a.m. (New
York time), at the offices of Loeb & Loeb LLP, the Company’s counsel,
located at 345 Park Avenue, New York, New York 10154 and any adjournment thereof
(the “Annual Meeting”) for the following purposes:
1. To
approve an amendment to our Articles of Incorporation to increase the number of
authorized shares of Class A common stock, par value $0.0001 per share (
“Common Stock
”
) to 119,509,894
shares (the
“Authorized Share Increase
Proposal
”
);
2. To
approve an amendment to our Articles of Incorporation to effect a reverse
split of our Common Stock at a ratio of 1 for 100 (the “Reverse Split
Proposal
”)
;
3. To
elect six (6) directors to the Board of Directors of the Company to serve until
the next annual meeting of stockholders and until their successors are duly
elected and qualified; and
4. To
transact any other business as may properly be presented at the Annual Meeting
or any adjournment or postponement thereof.
Stockholders
of record at the close of business on __________, 2010 (the “Record Date”) are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof. As of the Record Date, 19,509,894 shares of the
Company’s Common Stock were issued in excess of the Company's Articles of
Incorporation. Such shares are void under Florida law and are not
entitled to vote at the Annual Meeting or to any other rights of a stockholder
of the Company. If the Authorized Share Increase Proposal and the
Reverse Split Proposal are approved, the Company intends to promptly file an
amendment to its Articles of Incorporation to effect the increase in authorized
shares and reverse split, with the result that such shares will then be entitled
to vote at the Annual Meeting and enjoy all other rights of a stockholder of the
Company.
Your
attention is directed to the Proxy Statement accompanying this Notice for a more
complete statement of matters to be considered at the Annual
Meeting.
YOUR
VOTE IS IMPORTANT. YOU ARE REQUESTED TO CAREFULLY READ THE PROXY STATEMENT.
PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
|
By
Order of the Board of Directors,
|
|
|
|
/s/ Li Xia
Wang
|
|
Name:
|
Li
Xia Wang
|
|
Title:
|
Chief
Executive Officer
|
Dated: December
__, 2010
NEW
DRAGON ASIA CORP.
PROXY
STATEMENT
FOR
ANNUAL
MEETING OF STOCKHOLDERS
TO
BE HELD ON __________, ____
INTRODUCTION
The
Annual Meeting of the Stockholders of New Dragon Asia Corp., a Florida
corporation (the “Company’), will be held on __________, ____, at 9:00 a.m. (New
York time), at the offices of Loeb & Loeb LLP, the Company’s counsel,
located at 345 Park Avenue, New York, New York 10154 and any adjournment thereof
(the “Annual Meeting”) for the following purposes:
1. To
approve an amendment to our Articles of Incorporation to increase the number of
authorized shares of Class A common stock, par value $0.0001 per share (
“Common Stock
”
) to 119,509,894
shares (the
“Authorized Share Increase
Proposal
”
);
2. To
approve an amendment to our Articles of Incorporation to effect a reverse
split of Common Stock at a ratio of 1 for 100 (the “Reverse Split Proposal
”)
;
and
3. To
elect six (6) directors to the Board of Directors of the Company to serve until
the next annual meeting of stockholders and until their successors are duly
elected and qualified; and
4. To
transact any other business as may properly be presented at the Annual Meeting
or any adjournment or postponement thereof.
Stockholders
of record at the close of business on __________, 2010 (the “Record Date”) are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof. As of the Record Date, 19,509,894 shares of the
Company’s Common Stock were issued in excess of the Company's Articles of
Incorporation. Such shares are void under Florida law and are not entitled to
vote at the Annual Meeting or to any other rights of a stockholder of the
Company.
If the
Authorized Share Increase Proposal and the Reverse Split Proposal are approved,
the Company intends to promptly file an amendment to its Articles of
Incorporation to effect the increase in authorized shares and reverse split,
with the result that such shares will then be entitled to vote at the Annual
Meeting and enjoy all other rights of a stockholder of the
Company.
SOLICITATION
AND REVOCATION
Proxies
in the form enclosed are solicited by and on behalf of the Board of Directors.
The persons named in the proxy have been designated as proxies by the Board of
Directors. Any proxy given in response to this solicitation and received in time
for the Annual Meeting will be voted as specified in the proxy. If no
instructions are given, proxies will be voted
|
|
Ÿ
|
“FOR”
the amendment of our Articles of Incorporation to increase the number
of authorized shares of our Common Stock,
|
|
|
Ÿ
|
“FOR”
the amendment of our Articles of Incorporation to effect
a reverse split of our Common Stock at a ratio of 1 for 100,
|
|
|
Ÿ
|
“FOR”
the election of the nominees listed below under “Election of Directors,”
and
|
|
|
Ÿ
|
in
the discretion of the proxies named on the proxy card with respect to any
other matters properly brought before the Meeting and any adjournments of
the meeting.
|
If any
other matters are properly presented at the Annual Meeting for action, the
persons named in the proxy will vote the proxies in accordance with their best
judgment. Any proxy given in response to this solicitation may be revoked by the
stockholder at any time before it is exercised by written notification delivered
to Ling Wang, our Chief Financial Officer, by voting in person at the Annual
Meeting, or by delivering another proxy bearing a later date. Attendance by a
stockholder at the Annual Meeting does not alone serve to revoke his or her
proxy.
QUORUM
The
presence, in person or by proxy, of a majority of the shares of Common Stock
issued and outstanding and entitled to vote at the Annual Meeting will
constitute a quorum at the Annual Meeting. During 2010, 19,509,894 shares
of the Company’s Class A common stock were issued in excess of the Company's
Articles of Incorporation. Such shares are void under Florida law and are not
entitled to vote at the Annual Meeting or to any other rights of a stockholder
of the Company.
If the
Authorized Share Increase Proposal and the Reverse Split Proposal are approved,
the Company intends to promptly file an amendment to its Articles of
Incorporation to effect the increase in authorized shares and reverse split,
with the result that such shares will then be entitled to vote at the Annual
Meeting and enjoy all other rights of a stockholder of the
Company.
If the Authorized Share Increase Proposal and the
Reverse Split Proposal are not approved, such shares will not be counted for
purposes of determining the presence of a quorum. A proxy submitted by a
stockholder may indicate that all or a portion of the shares represented by such
proxy are not being voted with respect to a particular matter. Similarly, a
broker may not be permitted to vote stock (“broker non-vote”) held in street
name on a particular matter in the absence of instructions from the beneficial
owner of such stock. The shares subject to a proxy which are not being voted on
a particular matter will not be considered shares entitled to vote on such
matter. These shares, however, may be considered present and entitled to vote on
other matters and will count for purposes of determining the presence of a
quorum.
GENERAL
INFORMATION ABOUT VOTING
WHO
CAN VOTE?
You can
vote your shares of Common Stock if our records show that you owned the shares
on the Record Date. As of the close of business on the Record Date, a
total of 100,000,000 shares of Common Stock are entitled to vote at the Annual
Meeting. Each share of Common Stock is entitled to one (1) vote on matters
presented at the Annual Meeting. During 2010, 19,509,894 shares
of the Company’s Class A common stock were issued in excess of the Company's
Articles of Incorporation. Such shares are void under Florida law and are not
entitled to vote at the Annual Meeting or to any other rights of a stockholder
of the Company.
HOW
DO I VOTE BY PROXY?
Follow
the instructions on the enclosed proxy card to vote on each proposal to be
considered at the Annual Meeting. Sign and date the proxy card and mail it back
to us in the enclosed envelope.
The
enclosed proxy, when properly signed and returned to the Company, will be voted
by the proxy holders at the Annual Meeting as directed by the proxy. Proxies
which are signed by stockholders but which lack any such specification will be
voted in favor of the proposals set forth in the Notice of Annual
Meeting.
WHAT
IF OTHER MATTERS COME UP AT THE ANNUAL MEETING?
The
matters described in this proxy statement are the only matters we know of that
will be voted on at the Annual Meeting. If other matters are properly presented
at the meeting, the proxy holders will vote your shares as they see
fit.
CAN
I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. A
proxy card may be revoked by a stockholder at any time before its exercise at
the Annual Meeting by giving Ling Wang, our Chief Financial Officer, a written
notice revoking your proxy card, or a duly executed proxy bearing a later date,
or by attendance at the Annual Meeting and electing to vote in
person.
CAN
I VOTE IN PERSON AT THE ANNUAL MEETING RATHER THAN BY COMPLETING THE PROXY
CARD?
Although
we encourage you to complete and return the proxy card to ensure that your vote
is counted, you can attend the Annual Meeting and vote your shares in
person.
HOW
ARE VOTES COUNTED?
We will
hold the Annual Meeting if holders of a majority of the shares of Common Stock
entitled to vote in person or by proxy either sign and return their proxy cards
or attend the meeting. If you sign and return your proxy card, your shares will
be counted to determine whether we have a quorum even if you abstain or fail to
vote on any of the proposals listed on the proxy card.
The
election of directors under proposal 3 will be approved by the affirmative
vote of a plurality of the shares of Common Stock presented in person or
represented by proxy at the Annual Meeting.
Proposals 1,
2 and 4 shall be approved upon the affirmative vote of a majority of the
shares of Common Stock entitled to vote at the Annual
Meeting. During 2010, 19,509,894 shares of the Company’s Class A
common stock were issued in excess of the Company's Articles of Incorporation.
Such shares are void under Florida law and are not entitled to vote at the
Annual Meeting or to any other rights of a stockholder of the
Company. Accordingly, 19,509,894 shares will be deducted from
the shares voted in favor of Proposals 1 and 2.
If the
Authorized Share Increase Proposal and the Reverse Split Proposal are approved,
the Company intends to promptly file an amendment to its Articles of
Incorporation to effect the increase in authorized shares and reverse split,
with the result that such shares will then be entitled to vote at the Annual
Meeting and enjoy all other rights of a stockholder of the
Company.
Unless
otherwise stated, the enclosed proxy will be voted in accordance with the
instructions thereon.
Brokers
holding shares of the Company’s Common Stock in street name who do not receive
instructions are entitled to vote on the election of Directors and the
ratification of the Company’s independent auditors.
WHO
PAYS FOR THIS PROXY SOLICITATION?
We do. In
addition to sending you these materials, some of our employees may contact you
by telephone, by mail, by fax, by email, or in person. None of these employees
will receive any extra compensation for doing this.
GENERAL
INFORMATION ABOUT THE PROPOSALS
WHAT
PROPOSALS ARE STOCKHOLDERS BEING ASKED TO CONSIDER AT THE UPCOMING ANNUAL
MEETING?
In
proposal 1, we are seeking approval to increase our authorized shares of Common
Stock to 119,509,894 shares. In proposal 2, we are seeking approval to effect a
reverse split of our Common Stock at a ratio of 1 for 100. In proposal 3,
we are
seeking the election of six (6) directors to serve on the board of directors of
the Company until the next Annual Meeting of Stockholders and until their
successors are elected and qualified.
At this
year's annual meeting, we are not seeking ratification of the appointment of a
firm as the Company’s independent auditors due to the recent resignation of
Baker Tilly Hong Kong Limited (“Baker Tilly
”)
.
WHY
IS NEW DRAGON ASIA CORP. SEEKING STOCKHOLDER APPROVAL FOR THESE
PROPOSALS?
PROPOSAL NO.
1:
The Company’s Board of Directors has determined that it is in our best
interest to increase our authorized shares of Common Stock to cure the
over-issuance of 19,509,894 shares of Common Stock during 2010.
PROPOSAL NO. 2:
The Company’s
Board of Directors has determined that it is in our best interest to effect a
reverse split of our Common Stock of one share for one hundred shares
outstanding so that every one hundred outstanding shares of Common Stock before
the reverse stock split shall represent one share of common stock after the
stock split with all fractional shares rounded up to the next whole share. The
Board of Directors believes that the reverse stock split is necessary in view of
the recent significant decline in our stock price and will allow the Company’s
Common Stock to trade in a more realistic price range. Consequently,
the Board of Directors has recommended that we effect of a reverse split of our
Common Stock.
PROPOSAL NO. 3
: The Revised
Statutes of the State of Florida requires corporations to hold elections for
directors each year.
OUTSTANDING
SHARES AND VOTING RIGHTS
Stockholders
entitled to notice of, and to vote at the Annual Meeting and any adjournment
thereof, are stockholders of record at the close of business on the Record Date.
Persons who are not stockholders of record on the Record Date will not be
allowed to vote at the Annual Meeting. At the close of business on the Record
Date there were 119,509,894 shares of Common Stock issued and outstanding.
During 2010, 19,509,894 shares of the Company’s Class A common stock were
issued in excess of the Company's Articles of Incorporation. Such shares are
void under Florida law and are not entitled to vote at the Annual Meeting or to
any other rights of a stockholder of the
Company.
Accordingly, 19,509,894 shares will be deducted
from the shares voted in favor of Proposals 1 and 2.
If the
Authorized Share Increase Proposal and the Reverse Split Proposal are approved,
the Company intends to promptly file an amendment to its Articles of
Incorporation to effect the increase in authorized shares and reverse split,
with the result that such shares will then be entitled to vote at the Annual
Meeting and enjoy all other rights of a stockholder of the
Company.
We have
issued no other voting securities as of the Record Date. Each share of Common
Stock is entitled to one (1) vote on each matter to be voted upon at the Annual
Meeting. Holders of Common Stock are not entitled to cumulate their votes for
the election of directors.
SECURITY
OWNERSHIP OF MANAGEMENT
AND
CERTAIN BENEFICIAL OWNERS
The
following table sets forth, as of _________ __, 2010, certain information
concerning the beneficial ownership of Common Stock by (i) each stockholder
known to us to beneficially own five percent or more of our outstanding Common
Stock; (ii) each director; (iii) each executive officer; and (iv) all of our
executive officers and directors as a group, and their percentage ownership and
voting power. As of ________, 2010, there were 119,509,894 shares of Common
Stock outstanding, of which 19,509,894 shares are void under Florida law
and are not entitled to vote at the Annual Meeting or to any other rights of a
stockholder of the Company. The percentages set forth in the table below reflect
100,000,000 shares of outstanding Common Stock.
|
Name
and Address of Beneficial Owner
|
|
Amount
and Nature of
Beneficial
Ownership
|
|
|
Percent
of
Class
|
|
|
New
Dragon Asia Food Ltd.
10
Huangcheng Road (N), Longkou, Shandong Province, PRC
|
|
|
18,576,154
|
|
|
|
20.58
|
%
|
|
Heng
Jing Lu†
Chairman
|
|
|
18,576,154
|
(1)
|
|
|
20.58
|
%
|
|
Li
Xia Wang
†
Chief
Executive Officer and Director
|
|
|
-0-
|
|
|
|
*
|
|
|
Ling
Wang†
Chief
Financial Officer
|
|
|
-0-
|
|
|
|
*
|
|
|
Zhi
Yong Jiang†
Director
|
|
|
-0-
|
|
|
|
*
|
|
|
De
Lin Yang†
Director
|
|
|
-0-
|
|
|
|
*
|
|
|
Qi
Xue†
Director
|
|
|
-0-
|
|
|
|
*
|
|
|
Feng
Ju Chen†
Director
|
|
|
|
|
|
|
|
|
|
All
Directors and Executive Officers (7 people)
|
|
|
18,576,154
|
|
|
|
20.58
|
%
|
* Less
than one percent.
† Address
of referenced person is c/o New Dragon Asia Corp. 10 Huangcheng Road (N),
Longkou, Shandong Province, PRC 265701.
(1)
Represents shares owned by New Dragon Asia Food Ltd. Mr. Heng Jing Lu, our
Chairman, is the holder of record and beneficial holder of 100% of the equity
interests of New Dragon Asia Food Ltd.
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
The
Compensation Committee of our board of directors and our CEO, CFO and head of
Human Resources are collectively responsible for implementing and administering
all aspects of our benefit and compensation plans and programs, as well as
developing specific policies regarding compensation of our executive officers.
All of the members of our Compensation Committee, Qi Xue, Feng Ju Chen and Zhi
Yong Jiang, are independent directors.
Compensation
Objectives
Our
primary goal with respect to executive compensation has been to set compensation
at levels that attract and retain the most talented and dedicated executives
possible. Individual executive compensation is set at
levels believed to be comparable with executives in other companies
of similar size and stage of development operating in China. We also link
long-term stock-based incentives to the achievement of specified performance
objectives and to align executives’ incentives with stockholder value
creation.
The
Committee has implemented and maintained compensation policies that tie a
portion of executives’ overall compensation to our financial and operational
performance, as measured by revenues and net income, and to accomplishing
strategic goals such as merger and acquisitions, and fund raising. In
addition, as a policy for determining compensation, our Compensation Committee
has determined that an executive officer who is a Chinese national will be
entitled to a locally competitive package and an executive officer who is an
expatriate from Hong Kong will be paid a salary commensurate with those paid to
Hong Kong executives working in Hong Kong.
Elements
of Compensation
Base Salary
. All full time
executives are paid a base salary. For executives who are Chinese nationals,
including our CEO and Chairman, we do not have employment agreements. However,
we have an employment agreement with our CFO, which sets forth certain elements
of her compensation. In all cases, the Committee establishes a
minimum base salary for our executive officers. Base salaries for our executives
are established based on the scope of their responsibilities, taking into
account competitive market compensation paid by other companies in our industry
for similar positions, professional qualifications, academic background, and the
other elements of the executive’s compensation, including stock-based
compensation. Our intent is to set executives’ base salaries near the median of
the range of salaries for executives in similar positions with similar
responsibilities at comparable companies, in line with our compensation
philosophy. Base salaries are reviewed annually, and may be increased to align
salaries with market levels after taking into account the subjective evaluation
described previously.
Equity Incentive
Compensation
. We believe that long-term performance is achieved through
an ownership culture participated in by our executive officers through the use
of stock-based awards. Currently, we do not maintain any incentive compensation
plans based on pre-defined performance criteria. The Compensation Committee has
the general authority, however, to award equity incentive compensation, i.e.
stock options, to our executive officers in such amounts and on such terms as
the committee determines in its sole discretion. The Committee does
not have a determined formula for determining the number of options available to
be granted. Incentive compensation is intended to compensate officers
for accomplishing strategic goals such as mergers and acquisitions and fund
raising. The Compensation Committee will review each executive’s individual
performance and his or her contribution to our strategic goals periodically and
determine the amount of incentive compensation towards the end of the fiscal
year. Our Compensation Committee grants equity incentive compensation
at times when we do not have material non-public information to avoid timing
issues and the appearance that such awards are made based on any such
information.
Chinese Government Imposed
Compensation
. As a result of mandatory government employment standards,
our executives are also entitled to certain annual statutory benefits, including
fully subsidized, Company-paid health insurance, seven days of paid vacation and
unlimited paid sick leave.
Determination
of Compensation
Our CEO,
CFO and head of Human Resources meet frequently during the last several weeks of
our fiscal year to evaluate each non-executive employee’s performance and
determine his or her compensation for the following year. In the case
of our executive officers, the Compensation Committee similarly evaluates the
executive’s performance and the objectives set forth above at or about the end
of our fiscal year to determine executive compensation. The
Compensation Committee will also determine whether an executive officer is
eligible for incentive compensation and if it is deemed in the best interests of
the Company, the Committee may recommend that a certain number of stock options
be granted to the executive officer as compensation for certain qualitative
success during the fiscal year.
The
following table sets forth the cash and other compensation paid by us in 2009 to
all individuals who served as our chief executive officer and chief financial
officer, who we collectively refer to as the named executive officers
(“NEOs”). No other executives received total compensation greater
than $100,000 in 2008.
Summary
Compensation Table
|
|
|
|
|
Salary
|
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
|
Total
|
|
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Li Xia Wang
(i)
|
|
2009
|
|
|
20,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20,000
|
|
|
Chief
Executive Officer
|
|
2008
|
|
|
20,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20,000
|
|
|
and
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ling
Wang
|
|
2009
|
|
|
—
|
|
|
320,000
|
(ii)
|
|
|
—
|
|
|
|
320,000
|
|
|
Chief
Financial Officer
|
|
2008
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(i)
Amount reflects the compensation cost for the fiscal years ended December 25,
2009 and 2008, of the named executive officer’s option to purchase shares of our
common stock, calculated in accordance with SFAS 123R. See Note 15 to the
Company’s audited financial statements for the fiscal year ended Dember 25, 2009
included in Item 11 of our Annual Report on Form 10-K for the year ended
December 25, 2009 for a discussion of assumptions made by the Company in
determining the grant date fair value and compensation costs of these equity
awards.
(ii) Li
Xia Wang was promoted to CEO of the Company in 2004. Her annual salary is
$20,000.
(iii) On
May 5, 2009, we granted 2 million shares of our Common Stock to Ling Wang in
connection with her employment agreement dated as of April 1, 2009 with the
Company appointing Ms. Wang as the Company’s Chief Financial
Officer.
Outstanding
Equity Awards At Fiscal Year-end
|
Name
|
|
Number of
Securities Underlying
Unexercised Options (#)
Exercisable
|
|
|
Number of
Securities Underlying
Unexercised Options (#)
Unexercisable
|
|
|
Option
Exercise
Price ($)
|
|
Option Expiration
Date
|
|
Li Xia Wang
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
Peter Mak
|
|
|
6,000,000
|
|
|
|
—
|
|
|
$
|
1.82
|
|
February 12,
2010
|
Pension
Benefits
We do not
sponsor any qualified or non-qualified defined benefit plans.
Nonqualified
Deferred Compensation
We do not
maintain any non-qualified defined contribution or deferred compensation plans.
Our Compensation Committee, which is comprised solely of “outside directors” as
defined for purposes of Section 162(m) of the Code, may elect to provide our
officers and other employees with non-qualified defined contribution or deferred
compensation benefits if the Compensation Committee determines that doing so is
in our best interests.
COMPENSATION
OF DIRECTORS
We do not
provide cash or other compensation to our directors for their services as
members of the Board or for attendance at Board or committee meetings. However,
our directors will be reimbursed for reasonable travel and other expenses
incurred in connection with attending meetings of the Board and its committees.
EMPLOYMENT
CONTRACTS
We
entered into an Employment Contract dated as of April 1, 2009 with Ms. Ling
Wang, our Chief Financial Officer, pursuant to which she was granted 2 million
shares of our Common Stock.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Parties
are considered to be related if one party has the ability, directly or
indirectly, to control the other party or exercise significant influence over
the other party in making financial and operational decisions. Parties are also
considered to be related if they are subject to common control or common
significant influence. Particulars of significant transactions between the
Company and related companies are disclosed in the Company’s Annual
Report.
PROPOSAL
1
APPROVAL
OF AN AMENDMENT TO OUR ARTICLES
The
additional common shares would become part of the existing class of common
shares, and the additional shares would have the same rights and privileges as
the common shares now issued. There are no preemptive rights relating to the
common shares.
The
Articles of Incorporation presently authorizes the issuance of 100,000,000 Class
A common shares, 2,000,000 Class B common shares and 5,000,000 preferred shares,
each having a par value of $.0001 per share. Of the 100,000,000 presently
authorized Class A common shares, 119,509,894 shares were issued and outstanding
on ________, 2010, the record date of the Annual
Meeting. 19,509,894 shares of the Company’s Class A common
stock were issued in excess of the Company’s Articles of
Incorporation. Such shares are void under Florida law and are not
entitled to vote at the Annual Meeting or to any other rights of a stockholder
of the Company.
Amendment
“The
maximum number of shares that this Corporation shall be authorized to issue and
have outstanding at any one time shall be (i)
one hundred twenty six million five
hundred and nine thousand eight hundred and ninety four (126,509,894)
shares of common stock, par value $.0001 per share (“Common Stock”), of which
119,509,894
have been
designated as Class A Common stock and 2,000,000 shares have been designated as
Class B Common Stock, and (ii) five million (5,000,000) shares of Preferred
Stock having a par value of $.0001 per share.”
The only
changes in ARTICLE IV which will be effected if the proposal is approved are the
changes to the numbers set forth in bold face type above. Presently, ARTICLE IV
provides that the total number of shares of all classes that the Company has the
authority to issue is 107,000,000, of which 100,000,000 is designated Class A
common shares. All other provisions of ARTICLE IV will remain
unchanged.
Effective
Date
Vote
Required
The
laws of
Florida and our Articles of Incorporation require that, in
order for us to amend the Articles of Incorporation to give effect to the
increase in the number of
authorized common shares,
such amendment must be approved by our Board of Directors and approved by the
holders of a majority of the outstanding common shares entitled to vote on such
an amendment. During 2010, 19,509,894 shares of the Company’s Class A common
stock were issued in excess of the Company’s Articles of
Incorporation. Such shares are void under Florida law and are not
entitled to vote at the Annual Meeting or to any other rights of a stockholder
of the Company. Accordingly, 19,509,894 shares will be deducted from
the shares voted in favor of this proposal and the threshold for approval of
this proposal shall be 69,509,895 shares voted in favor.
PROPOSAL
2
REVERSE
SPLIT OF SERIES A COMMON STOCK
Purpose
of the Reverse Stock Split
The
Company’s Board of Directors has determined that it is in our best interest to
effect a reverse split of our Common Stock of one share for one hundred shares
outstanding so that every one hundred outstanding shares of common stock before
the stock split shall represent one share of common stock after the stock split
with all fractional shares rounded up to the next whole share. The Board of
Directors believes that the reverse stock split is necessary in view of the
recent significant decline in our stock price and will allow the Company’s
Common Stock to trade in a more realistic price range. Consequently,
the Board of Directors has recommended that we effect of a reverse split of our
Common Stock. The reverse stock split is not made pursuant to a plan
to periodically increase a security holder’s proportionate interest in the
assets or earnings and profits of the Company.
The form
of the proposed amendment to our Certificate of Incorporation to effect the
reverse stock split is attached to this Proxy Statement as
Annex D
. The amendment
will permit our Board to effect a reverse stock split of our Common Stock
following shareholder approval.
Principal
Effects of the Reverse Stock Split
On the
effective date of the stock split, each one hundred shares of our Common Stock
issued and outstanding immediately prior to the stock split effective date (the
“Old Shares”) will automatically and without any action on the part of the
shareholders be converted into one share of our Common Stock (the “New
Shares”). In the following discussion, we provide examples of the
effects of a one-for-one hundred reverse stock split.
Corporate
Matters.
The reverse stock split would have the following
effects on the number of shares of common stock outstanding:
|
|
·
|
in
a one-for-one hundred reverse stock split, every one hundred of our Old
Shares owned by a stockholder would be exchanged for one (1) New Share;
and
|
|
|
·
|
the
number of shares of our Common Stock issued and outstanding will be
reduced from 119,509,894 shares to 1,195,099
shares.
|
The
reverse stock split will be effected simultaneously for all of our outstanding
Common Stock and the exchange ratio will be the same for all of our outstanding
Common Stock. The reverse stock split will affect all of our stockholders
uniformly and will not affect any stockholder’s percentage ownership interests
in the Company, except to the extent that the reverse stock split results in any
of our stockholders owning a fractional share. As described below, stockholders
and holders of options and warrants holding fractional shares will have their
shares rounded up to the nearest whole number. Common Stock issued pursuant to
the reverse stock split will remain fully paid and non-assessable. We will
continue to be subject to the periodic reporting requirements of the Securities
Exchange Act of 1934, as amended.
Fractional Shares.
No scrip
or fractional share certificates will be issued in connection with the reverse
stock split. Stockholders who otherwise would be entitled to receive fractional
shares because they hold a number of Old Shares not evenly divisible by the 1
for 100 reverse stock split ratio, will be entitled, upon surrender
of certificate(s) representing these shares, to a number of shares of
New Shares rounded up to the nearest whole number. The ownership of a fractional
interest will not give the stockholder any voting, dividend or other rights
except to have his or her fractional interest rounded up to the nearest whole
number when the New Shares are issued.
Holders
of options and warrants to purchase shares of Common Stock, who upon exercise of
their options or warrants would otherwise be entitled to receive fractional
shares, because they hold options which upon exercise would result in a number
of shares of Common Stock not evenly divisible by the 1 for 100 reverse stock
split ratio, will receive a number of shares of Common Stock rounded up to the
nearest whole number.
Authorized Shares
. Upon
effectiveness of the reverse stock split, the number of authorized shares of
common stock would remain the same. Authorized but unissued shares
will be available for issuance, and we may issue such shares in future
financings or otherwise. If we issue additional shares, the ownership interest
of holders of our Common Stock would be diluted. Also, the issued shares may
have rights, preferences or privileges senior to those of our Common
Stock.
Accounting Matters
. The
reverse stock split will not affect the par value of our common stock. As a
result, on the effective date of the reverse stock split, the stated capital on
our balance sheet attributable to our common stock will be reduced in proportion
to the reverse stock split ratio (that is, in a one-for-one hundred reverse
stock split, the stated capital attributable to our Common Stock will be reduced
to one-one hundredth of its existing amount) and the additional paid-in capital
account shall be credited with the amount by which the stated capital is
reduced. The per share net income or loss and net book value of our Common Stock
will also be increased because there will be fewer shares of our common stock
outstanding.
Potential Anti-Takeover
Effect.
Although the increased proportion of unissued authorized shares
to issued shares could, under certain circumstances, have an anti-takeover
effect (for example, by permitting issuances that would dilute the stock
ownership of a person seeking to effect a change in the composition of our Board
or contemplating a tender offer or other transaction for the combination of the
Company with another company), the reverse stock split proposal is not being
proposed in response to any effort of which we are aware to accumulate our
shares of common stock or obtain control of us, nor is it part of a plan by
management to recommend a series of similar actions to our Board and
stockholders. Other than the reverse stock split proposal, our Board does not
currently contemplate recommending the adoption of any other corporate action
that could be construed to affect the ability of third parties to take over or
change control of the Company.
Procedure
for Effecting a Reverse Stock Split and Exchange of Stock
Certificates
The
reverse stock split will become effective upon the filing of the Certificate of
Amendment to our Certificate of Incorporation which we refer to as the effective
time (Effective Time). Beginning at the Effective Time, each certificate
representing Old Shares will be deemed for all corporate purposes to evidence
ownership of New Shares.
As soon
as practicable after the Effective Time, stockholders will be notified that the
reverse stock split has been effected. The Company expects that its transfer
agent, American Stock Transfer Company, will act as exchange agent for purposes
of implementing the exchange of stock certificates. Holders of Old Shares will
be asked to surrender to the exchange agent certificates representing Old Shares
in exchange for certificates representing New Shares in accordance with the
procedures to be set forth in the letter of transmittal the Company sends to its
stockholders. No new certificates will be issued to any stockholder until such
stockholder has surrendered such stockholder’s outstanding certificate(s),
together with the properly completed and executed letter of transmittal, to the
exchange agent. Any Old Shares submitted for transfer, whether pursuant to a
sale, other disposition or otherwise, will automatically be exchanged for New
Shares.
STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY
CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
U.S.
Federal Income Tax Consequences of the Reverse Stock Split
The
following is a summary of certain material U.S. federal income tax consequences
of the reverse stock split to a stockholder (hereinafter a “U.S. stockholder”)
that is a “United States person,” as defined in the Internal Revenue Code of
1986, as amended (the “Code”). It does not purport to be a complete discussion
of all of the possible U.S. federal income tax consequences of the reverse stock
split and is included for general information only. Further, it does not address
any state, local or foreign income or other tax consequences.
For example, the state and local tax consequences of the reverse
stock split may vary significantly as to each U.S. stockholder, depending upon
the state in which such stockholder resides or does business. Also, it does not
address the tax consequences to holders that are subject to special tax rules,
such as banks, insurance companies, regulated investment companies, personal
holding companies, foreign entities, nonresident alien individuals,
broker-dealers and tax-exempt entities. In addition, the discussion does not
consider the tax treatment of partnerships or other pass-through entities or
persons who hold our shares through such entities. The discussion below is based
on the provisions of the United States federal income tax law as of the date
hereof, which is subject to change retroactively as well as prospectively. This
summary also assumes that the Old Shares were, and the New Shares will be, held
as a “capital asset,” as defined in the Code (generally, property held for
investment). The tax treatment of a stockholder may vary depending upon the
particular facts and circumstances of such stockholder. The discussion below
regarding the U.S. federal income tax consequences of the reverse stock split
also is not binding on the Internal Revenue Service or the
courts. Accordingly, each stockholder is urged to consult with his or
her own tax advisor with respect to the tax consequences of the reverse stock
split.
No gain
or loss should be recognized by a U.S. stockholder upon such stockholder’s
exchange of Old Shares for New Shares pursuant to the reverse stock split. The
aggregate tax basis (and the holding period) of the New Shares received in the
reverse stock split (including any fraction of a New Share deemed to have been
received) should be the same as such stockholder’s aggregate tax basis (and
holding period) in the Old Shares being exchanged. Special tax basis
and holding period rules may apply to holders that acquired different blocks of
stock at different prices or at different times. Holders should
consult their own tax advisors as to the applicability of these special rules to
their particular circumstances.
Vote
Required
During
2010, 19,509,894 shares of the Company’s Class A Common Stock were issued
in excess of the Company’s Articles of Incorporation. Such shares are void under
Florida law and are not entitled to vote at the Annual Meeting or to any other
rights of a stockholder of the Company. Accordingly,
19,509,894
shares will be deducted from the shares voted in favor this proposal and the
threshold for approval of this proposal shall be 69,509,895
shares voted in favor.
Dissenters’
Rights of Appraisal
We are a
Florida corporation and are governed by the Florida Business Corporation
Act. Holders of our voting securities are not entitled to dissenters’
rights under Section 607.1301 of the Florida Business Corporation Act with
respect to the reverse split of the Company’s Common Stock.
Interest
of Certain Persons in Matters to be Acted Upon
No
director, executive officer, associate of any director or executive officer or
any other person has any substantial interest, direct or indirect, by security
holdings or otherwise, in the stock split that is not shared by all other
shareholders of ours.
PROPOSAL
3
ELECTION
OF DIRECTORS
Six (6)
director nominees are seeking to be elected at the Annual Meeting, to hold
office until the next Annual Meeting of Stockholders and until their successors
are elected and qualified. Management expects that each of the nominees will be
available for election, but if any of them is not a candidate at the time the
election occurs, it is intended that such proxy will be voted for the election
of another nominee to be designated by the Board of Directors to fill any such
vacancy.
Pursuant
to the rules of the NYSE Amex, the four independent directors of our Board have
nominated the current directors as candidates for election as directors, to
serve until the next annual meeting of stockholders and until their respective
successors have been elected and qualified. For more information about our
nominations procedures and other corporate governance matters, see “Corporate
Governance” later in this Proxy Statement. In case any of these nominees should
become unavailable for election to the Board, an event which is not anticipated,
the persons named as proxies, or their substitutes, will have full discretion
and authority to vote or refrain from voting for any other nominee in accordance
with their judgment.
The Board
of Directors unanimously recommends that you vote for the election of each of
the nominated directors. Unless otherwise specified in the form of proxy, the
proxies solicited by the management will be voted “FOR” the election of the
candidates. The election of directors requires a plurality of the shares of
Common Stock present and voting at the Meeting.
DIRECTORS
AND EXECUTIVE OFFICERS OF THE COMPANY
|
NAME
|
|
AGE
|
|
POSITION
|
|
DIRECTOR
SINCE
|
|
|
|
|
|
|
|
|
|
Heng
Jing Lu
|
|
58
|
|
Chairman
|
|
2003
|
|
|
|
|
|
|
|
|
|
Li
Xia Wang
|
|
51
|
|
Director
and Chief Executive Officer
|
|
2003
|
|
|
|
|
|
|
|
|
|
Zhi
Yong Jiang
|
|
43
|
|
Independent
Non-Executive Director
|
|
2003
|
|
|
|
|
|
|
|
|
|
De
Lin Yang
|
|
55
|
|
Independent
Non-Executive Director
|
|
2003
|
|
|
|
|
|
|
|
|
|
Qi
Xue
|
|
57
|
|
Independent
Non-Executive Director
|
|
2003
|
|
|
|
|
|
|
|
|
|
Feng
Ju Chen
|
|
54
|
|
Independent
Non-Executive Director
|
|
2004
|
The
business experience during at least the last five years of each of these
individuals is as follows:
Mr. Heng Jing Lu
, Chairman of
the Company, graduated from The Shandong Institute of Economics in accounting
and is a PRC qualified accountant. Before joining the Company on December 15,
2003, he had been working in the oil and grain industry for over 30
years. Prior to joining the Company, he was the director of the Oil
and Grain Bureau of Longkou, Shandong PRC where he had worked since 1975. He has
extensive experience in the management of agricultural and food related
enterprises and strategic planning. He is primarily responsible for business
development and overall company management.
Ms. Li Xia Wang
, director and
Chief Executive Officer of the Company, graduated from The Shandong Institute of
Economics in accounting and is a PRC qualified accountant. She joined the
Longkou Oil & Grain Group Company in 1980 where she has remained, her last
position being Deputy General Manager. She has over 20 years of extensive
experience in the field of finance and accounting. She became a director of the
Company on December 15, 2003, and its Chief Executive Officer in
2004.
Mr. Zhi Yong Jiang
,
independent non-executive director of the Company since December 15, 2003,
currently serves on the audit committee, acting as Chairman. He graduated from
Yantai Oil & Grain College with a degree in finance & accounting. He had
been working with Longkou Jinsheng Electronics Co. Ltd since 2000 and prior to
joining the Company, his last position was Vice President of Longkou Soybean
Food Co., Ltd. He has been working in the accounting and financing field for
more than 19 years in different industries. He has extensive experience in the
field of finance and accounting.
Mr. De Lin Yang
, independent
non-executive director of the Company since December 15, 2003, is currently the
chairman of the Yantai Hong Yuan CPA, a public accounting firm. Mr. Yang
graduated from Shandong Gan Bu Distance Learning University with a bachelor
degree in Accounting. He joined the Longkou City Ceramics Factory as an
accountant in 1975 and was promoted to Chief Accountant in 1982. From 1989 to
1999, Mr. Yang served as the deputy chairman of the Longkou City CPA. In 2000,
Mr. Yang joined the Yantai Hong Yuan CPA as the deputy chairman and was promoted
to the chairman of the firm in 2002.
Mr. Qi Xue
, independent
non-executive director of the Company since March 15, 2003, graduated in 1987
from The Official Institute of Beijing Chemical Industry Management with a
diploma of higher education specializing in industrial accounting. He is an
associate member of The Chinese Institute of Certified Public Accountants. Since
1999, he has been the Principal of the Longkou Huayu Certified Public
Accountants Co. Ltd.
Ms. Feng Ju Chen
, independent
non-executive director of the Company, graduated from Yantai University in
business management and is a member of The Chinese Institute of Certified Public
Accountants. She has been the accounting manager of the Audit Bureau of Longkou
City for more than 20 years. She has extensive experience in the field of
accounting and joined the Company as a director on April 15, 2004.
There are
no family relationships between the directors and executive
officers.
INFORMATION
ABOUT DIRECTOR NOMINEES
Mr. Heng Jing Lu
, Chairman of
the Company - see biographical information set forth above under “Directors and
Executive Officers.”
Ms. Li Xia Wang
, director and
Chief Executive Officer of the Company - see biographical information set forth
above under “Directors and Executive Officers.”
Mr. Zhi Yong Jiang
,
independent non-executive director of the Company - see biographical information
set forth above under “Directors and Executive Officers.”
Mr. De Lin Yang
, independent
non-executive director of the Company - see biographical information set forth
above under “Directors and Executive Officers.”
Mr. Qi Xue
, independent
non-executive director of the Company - see biographical information set forth
above under “Directors and Executive Officers.”
Ms. Feng Ju Chen
, independent
non-executive director of the Company - see biographical information set forth
above under “Directors and Executive Officers.”
Section 16(a) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), requires our executive
officers and directors and persons who own more than 10% of a registered class
of our equity securities to file with the Securities and Exchange Commission
(the “SEC”) initial statements of beneficial ownership, reports of changes in
ownership and annual reports concerning their ownership of common stock and
other of our equity securities, on Forms 3, 4 and 5 respectively. Based on
Company records and other information, we believe that all SEC filing
requirements applicable to our directors and executive officers were complied
with for 2009 except that:
Ling Wang
did not timely file a Form 4 reflecting the acquisition of 2,000,000 shares of
Common Stock on May 14, 2009.
Ling Wang
did not timely file a Form 4 reflecting the sale of an aggregate of 50,000
shares of Common Stock on August 12, 2009.
CORPORATE
GOVERNANCE
We
believe that good corporate governance and fair and ethical business practices
are crucial not only to the proper operation of our company, but also to
building and maintaining confidence in the integrity, reliability and
transparency of the securities markets. We have kept abreast of the actions
taken in the past year and a half by Congress, the SEC and the NYSE Amex to
improve and enhance corporate governance, and we take our responsibilities in
this area very seriously. This section explains some of the things we have done,
or are considering, to improve the way we run the Company.
CODE
OF CONDUCT AND ETHICS
Our Board
of Directors has adopted a Code of Conduct and Ethics (the “Code”) that applies
to all of our employees, officers and directors. The Code covers compliance with
law; fair and honest dealings with the company, with competitors and with
others; fair and honest disclosure to the public; and procedures for compliance
with the Code. You can obtain a copy of the Code by sending a written request to
the attention of Ms. Ling Wang, 10 Huangcheng Road (N), Longkou, Shandong
Province, PRC.
BOARD,
COMMITTEE AND STOCKHOLDER MEETINGS
The NYSE
Amex marketplace rules (the “NYSE Amex Rules”) require that our Board of
Directors must meet at least quarterly. During the fiscal year ended December
25, 2009, the Board met eight times. The Audit Committee met four
times. No director attended fewer than 75% of the meetings of the
Board of Directors and the total number of meetings held by all committees of
the Board
of Directors
on which he served.
It is our
policy that all members of the Board of Directors attend the Annual Meeting of
Stockholders in person, although we recognize that directors occasionally may be
unable to attend for personal or professional reasons. We generally hold a
meeting of the Board on the same date as the annual stockholder
meeting.
BOARD
AND COMMITTEE INDEPENDENCE
Board of Directors
. The NYSE
Amex Rules require that a majority of our Board of Directors must be
“independent” and no director qualifies as independent until the Board makes an
affirmative determination to that effect. In making this determination about a
director, the Board must affirmatively conclude that the director does not have
a material relationship with us that would interfere with the exercise of his or
her independent judgment in carrying out the responsibilities of a director.
Under the NYSE Amex Rules, the Board considered, among other factors, the
director’s current and historic relationships with us and our competitors,
suppliers, customers and auditors, including compensation directly or indirectly
paid to the director; the director’s professional and family relationships with
management and other directors; the relationships that the director’s current
and former employers may have with us; and the relationships between us and
other companies of which the director may be a director or executive officer.
The NYSE Amex Rules require that the independent directors meet on a regular
basis as often as necessary to fulfill their responsibilities, including at
least annually in executive session.
As a
result of this review, the Board has determined that the following directors,
comprising a majority of the entire Board, are independent: De Lin Yang, Qi Xue,
Zhi Yong Jiang and Feng Ju Chen.
COMPENSATION
COMMITTEE
We have a
Compensation Committee of the Board. The Compensation Committee is governed by a
written charter, which is annexed hereto as Annex A. The Compensation Committee
consists of Qi Xue, Feng Ju Chen and Zhi Yong Jiang. Compensation decisions
during the fiscal year ended December 25, 2009 were made by a majority of the
directors of Committee. The Committee is charged with the responsibility of
reviewing and approving executive officers’ compensations. The Chairman of the
Compensation Committee is Zhi Yong Jiang. Each member of the Compensation
Committee meets the independent requirements applicable to such committee under
the NYSE Amex Rules.
The
Compensation Committee makes recommendations to the Board of Directors
concerning salaries and incentive compensation for our officers, including our
Chief Executive Officer, and employees and administers our stock option
plans.
COMPENSATION
COMMITTEE REPORT
The
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis contained in this Proxy Statement with the Company’s management.
Based on such review and discussions and relying thereon, we have recommended to
the Company’s Board of Directors that the Compensation Discussion and Analysis
contained in this Proxy Statement be included in the Company’s Annual
Report on Form 10-K for the year ended December 25, 2009 and in this Proxy
Statement.
|
|
COMPENSATION
COMMITTEE
|
|
|
|
|
|
Zhi
Yong Jiang, Chair
|
|
|
Qi
Xue
|
|
|
Feng
Ju Chen
|
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation
Committee have any relationship with the Company or any of its officers of
employees other than in connection with their role as a
director. None of the members of the Compensation Committee have
participated in any related party transactions with the Company since the
beginning of the Company’s last fiscal year.
NOMINATING
COMMITTEE
Under the
NYSE Amex Rules, nominees for our Board must be selected either by a nominating
committee consisting entirely of independent directors or by a majority of the
independent directors, acting pursuant to a standing resolution governing the
nominating process. Given the size of our company and the significant committee
responsibilities that many directors already have, we have chosen to assign this
function to the independent directors rather than to a nominating committee.
Consequently, our four independent directors, Qi Xue, Feng Ju Chen, De Lin Yang
and Zhi Yong Jiang, are responsible for nominations. They act pursuant to a
standing resolution. To date, the independent directors have not engaged any
third parties to assist them in identifying candidates for the
Board.
Among the
tasks that our independent directors may undertake in this capacity are
these:
|
|
-
|
Identifying
and selecting those persons who will be nominees for
director.
|
|
|
-
|
Considering
factors relevant to the selection of nominees, including requirements of
law, stock exchange listing standards, matters of character, judgment,
business experience and areas of expertise, the diversity of the Board,
and other factors.
|
|
|
-
|
Recruiting
appropriate candidates when necessary, and reviewing the qualifications of
any candidates nominated by
stockholders.
|
|
|
-
|
Evaluating
from time to time the size and composition of the Board and its
committees.
|
|
|
-
|
Evaluating
the function and performance of the Board and its
directors.
|
Nomination
by Stockholders
Our
By-laws include a provision that permits a stockholder of record, that
beneficially owned more than five percent of our voting stock for at least one
year as of the date of the recommendation, to submit to us the name of any
person whom the stockholder wishes to nominate as a candidate for election to
the Board. In general, such a submission must be received by our corporate
secretary at our principal office prior to the scheduled date of the annual
stockholder meeting, and must contain all information about the candidate that
would be required to be disclosed in a proxy statement prepared and filed under
federal and state law, as well as the proposed nominee’s consent to be named as
a nominee and to serve if elected. The stockholder must also provide information
about his or her identity and the number of shares owned. If the nomination is
made by a stockholder holding shares in “street name,” then the identity and
ownership information must be furnished about the beneficial owner of the
shares. A candidate submitted by a stockholder as a nominee need not be
nominated by the independent directors.
We are
required to include in our future proxy statements information about a
recommended stockholder nominee, but only when the following criteria are
met:
|
|
Ÿ
|
The
proposed nomination is received by a date not later than the 120th day
before the date (i.e., the month and day) of our proxy statement released
to stockholders in connection with the prior year’s annual
meeting.
|
|
|
Ÿ
|
The
stockholder or stockholder group making the proposal has beneficially
owned more than 5% of our voting stock for at least a
year.
|
If those
criteria are met, and provided that we have written consent from the proposed
candidate and from the stockholder or stockholder group, we would be obliged to
identify in our proxy statement the name of the candidate and the stockholder or
stockholder group making the nomination, and to disclose our position regarding
the nomination.
AUDIT
COMMITTEE REPORT
Role
of the Audit Committee
The Audit
Committee operates under a written charter. The Audit Committee consists of
three directors, Qi Xue, Zhi Yong Jiang and Feng Ju Chen, each of whom meets the
independence requirements and standards currently established by the NYSE Amex
and the SEC. In addition, the Board of Directors has determined that Mr. Qi
Xue is an “audit committee financial expert” and “independent” as defined under
the relevant rules of the SEC and the NYSE Amex. The Audit Committee
assists the Board of Directors in fulfilling its oversight of the quality and
integrity of the Company’s financial statements and the Company’s compliance
with legal and regulatory requirements. The Audit Committee is responsible for
retaining (subject to stockholder ratification) and, as necessary, terminating,
the independent auditors, annually reviews the qualifications, performance and
independence of the independent auditors and the audit plan, fees and audit
results, and pre-approves audit and non-audit services to be performed by the
auditors and related fees. The Audit Committee also oversees the performance of
the Company’s internal audit and compliance functions. The Chairman
of the Audit Committee is Zhi Yong Jiang.
Additionally,
the Audit Committee has responsibilities and authority necessary to comply with
Exchange Act rules relating to (i) direct responsibility for the appointment,
compensation, retention and oversight of our accountants, (ii) treatment of
complaints and concerns relating to accounting, internal accounting controls,
and auditing matters, (iii) the engagement of independent counsel and other
advisors, and (iv) determining appropriate funding for audit and audit committee
related expenses. These and other aspects of the Audit Committee’s authority are
more particularly described in the Audit Committee charter adopted by the Board
of Directors in December 2003, filed as Annex B to this Proxy
Statement.
Review
of our Audited Financial Statements for the Fiscal Year ended December 25,
2009
The Audit
Committee has reviewed and discussed our audited financial statements for the
fiscal year ended December 25, 2009 with management. The Audit Committee has
discussed with Baker Tilly Hong Kong Limited, our former independent public
accountants, the matters required to be discussed by SAS 61.
The Audit
Committee reviewed with the Company’s financial managers and the independent
auditors overall audit scopes and plans, the results of internal and external
audit examinations, evaluations by the auditors of the Company’s internal
controls, and the quality of the Company’s financial reporting.
The Audit
Committee has reviewed with management the audited financial statements in the
Annual Report, including 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. In
addressing the quality of management’s accounting judgments, members of the
Audit Committee asked for management’s representations that the audited
consolidated financial statements of the Company have been prepared in
conformity with generally accepted accounting principles and have expressed to
both management and the independent auditors their general preference for
conservative policies when a range of accounting options is
available.
In its
meetings with representatives of the independent auditors, the Audit Committee
asks them to address, and discusses their responses to several questions that
the Audit Committee believes are particularly relevant to its oversight. These
questions include:
|
|
Ÿ
|
Are
there any significant accounting judgments made by management in preparing
the financial statements that would have been made differently had the
independent auditors themselves prepared and been responsible for the
financial statements?
|
|
|
Ÿ
|
Based
on the independent auditors’ experience and their knowledge of the
Company, do the Company’s financial statements fairly present to
investors, with clarity and completeness, the Company’s financial position
and performance for the reporting period in accordance with generally
accepted accounting principles and SEC disclosure
requirements?
|
|
|
Ÿ
|
Based
on the independent auditors’ experience and their knowledge of the
Company, has the Company implemented internal controls and internal audit
procedures that are appropriate for the
Company?
|
The Audit
Committee believes that by thus focusing its discussions with the independent
auditors, it can promote a meaningful dialogue that provides a basis for its
oversight judgments.
The Audit
Committee also discussed with the independent auditors all other matters
required to be discussed by the auditors with the Audit Committee under
Statement on Auditing Standards No. 61 (“Communication with Audit Committees”).
The Audit Committee received and discussed with the independent auditors their
annual written report on their independence from the Company and its management,
which is made under Independence Standards Board Standard No. 1 (“Independence
Discussions with Audit Committees”), and considered with the independent
auditors whether the provision of financial information systems design and
implementation and other non-audit services provided by them to the Company
during 2009 was compatible with the independent auditors’
independence.
In
performing all of these functions, the Audit Committee acts only in an oversight
capacity. The Audit Committee reviews the Company’s SEC reports prior to filing
and intends to continue this practice in the future. In addition, the Audit
Committee reviews all quarterly earnings announcements in advance of their
issuance with management and representatives of the independent auditors. In its
oversight role, the Audit Committee relies on the work and assurances of the
Company’s management, which has the primary responsibility for financial
statements and reports, and of the independent auditors, who, in their report,
express an opinion on the conformity of the Company’s annual financial
statements to generally accepted accounting principles.
In
reliance on these reviews and discussions, and the report of the independent
auditors, the Audit Committee has recommended to the Board of Directors, and the
Board has approved, that the audited financial statements be included in the
Company’s Annual Report on Form 10-K for the year ended December 25, 2009, for
filing with the Securities and Exchange Commission.
|
|
AUDIT
COMMITTEE
|
|
|
|
|
|
Zhi
Yong Jiang, Chair
|
|
|
Qi
Xue
|
|
|
Feng
Ju Chen
|
AUDIT
FEES
Public
Accountants’ fees
Crowe
Horwath LLP (“Crowe”) was our independent accountants for the fiscal year ending
December 25, 2008 and the period from December 26, 2009 through November 25,
2009. On November 25, 2009, the Audit Committee Chairman of the Company was
notified that the auditor-client relationship between the Company and Crowe had
ceased due to Crowe’s resignation. The Audit Committee engaged Jimmy C.H. Cheung
& Co. (“JCHC”) to serve as its independent auditor, effective December 21,
2009.
On
February 3, 2010, the Company was notified that effective immediately, the US
audit practice of JCHC had merged with Baker Tilly resulting in the resignation
of JCHC as independent registered public accounting firm for the Company. On
February 5, 2010, the Chairman of the Audit Committee appointed Baker Tilly as
the Company’s new independent registered public accounting firm. JCHC
was recently appointed by the Company and did not provide an audit report on the
financial statements of the Company as of and for the years ended December 25,
2009 and 2008.
For
fiscal years ended December 25, 2009 and 2008, fees for services provided by
Crowe Horwath LLP were as follows:
|
|
|
2009
|
|
|
2008
|
|
|
Audit
Fees
|
|
$
|
61,000
|
|
|
$
|
228,471
|
|
|
Audit
Related Fees
|
|
|
6,000
|
|
|
|
-
|
|
|
Tax
Fees
|
|
$
|
-
|
|
|
$
|
9,000
|
|
|
|
|
|
|
|
|
|
|
|
|
All
other fees
|
|
|
-
|
|
|
|
-
|
|
For
fiscal year ended December 25, 2009, fees for services provided by Baker Tilly
were as follows:
|
|
|
2009
|
|
|
Audit
Fees
|
|
$
|
120,000
|
|
|
Audit
Related Fees
|
|
|
-
|
|
|
Tax
Fees
|
|
$
|
-
|
|
|
|
|
|
|
|
|
All
other fees
|
|
|
-
|
|
On
December 8, 2010, we were notified that Baker Tilly had resigned as
independent registered public accounting firm for the Company. Baker
Tilly’s audit report on the financial statements of the Company as of and for
the year ended December 25, 2009 did not contain an adverse opinion or a
disclaimer of opinion, nor did it include any qualification or modification as
to uncertainty, audit scope or accounting principles. Baker Tilly did
not deliver an audit report on the financial statements of the Company as of and
for the year ended December 25, 2008.
During
the fiscal year ended December 25, 2009 through December 8, 2010,
there were: (i) no disagreements between the Company and Baker Tilly on any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of Baker Tilly, would have caused Baker Tilly to make reference to
the subject matter of the disagreement in their reports on the Company’s
financial statements for such years, and (ii) no reportable events within the
meaning set forth in Item 304(a)(1)(v) of Regulation S-K.
Audit
Fees were for professional services rendered for the audit of the Company’s
annual financial statements, the review of quarterly financial statements, and
the preparation of statutory and regulatory filings. Audit-Related Fees relate
to professional services rendered in connection with accounting consultations
relating to SEC reviews on filings. Tax fees consist of fees billed for
professional services for tax compliance, tax planning and tax advice. These
services include assistance regarding federal, state and international tax
compliance and planning, tax audit defense, and mergers and
acquisitions.
Pre-Approval
Policies and Procedures
In accordance with the SEC’s auditor
independence rules, the Audit Committee has established the following policies
and procedures by which it approves in advance any audit or permissible
non-audit services to be provided to the Company by its independent
auditor.
Prior to the engagement of the
independent auditor for any fiscal year’s audit, management submits to the Audit
Committee for approval lists of recurring audit, audit-related, tax and other
services expected to be provided by the auditor during that fiscal year. The
Audit Committee adopts pre-approval schedules describing the recurring services
that it has pre-approved, and is informed on a timely basis, and in any event by
the next scheduled meeting, of any such services rendered by the independent
auditor and the related fees.
The fees for any services listed in a
pre-approval schedule are budgeted, and the Audit Committee requires the
independent auditor and management to report actual fees versus the budget
periodically throughout the year. The Audit Committee will require additional
pre-approval if circumstances arise where it becomes necessary to engage the
independent auditor for additional services above the amount of fees originally
pre-approved. Any audit or non-audit service not listed in a pre-approval
schedule must be separately pre-approved by the Audit Committee on a
case-by-case basis. Every request to adopt or amend a pre-approval
schedule or to provide services that are not listed in a pre-approval schedule
must include a statement by the independent auditors as to whether, in their
view, the request is consistent with the SEC’s rules on auditor
independence.
The Audit
Committee will not grant approval for:
|
|
-
|
any
services prohibited by applicable law or by any rule or regulation of
the SEC or other regulatory body applicable to the
Company;
|
|
|
-
|
provision
by the independent auditor to the Company of strategic consulting services
of the type typically provided by management consulting firms;
or
|
|
|
-
|
the
retention of the independent auditor in connection with a transaction
initially recommended by the independent auditor, the tax treatment of
which may not be clear under the Internal Revenue Code and related
regulations and which it is reasonable to conclude will be subject to
audit procedures during an audit of the Company’s financial
statements.
|
Tax services proposed to be provided by
the auditor to any director, officer or employee of the Company who is in an
accounting role or financial reporting oversight role must be approved by the
Audit Committee on a case-by-case basis where such services are to be paid for
by the Company, and the Audit Committee will be informed of any services to be
provided to such individuals that are not to be paid for by the
Company.
In determining whether to grant
pre-approval of any non-audit services in the “all other” category, the Audit
Committee will consider all relevant facts and circumstances, including the
following four basic guidelines
:
|
|
-
|
whether
the service creates a mutual or conflicting interest between the auditor
and the Company;
|
|
|
-
|
whether
the service places the auditor in the position of auditing his or her own
work;
|
|
|
-
|
whether
the service results in the auditor acting as management or an employee of
the Company; and
|
|
|
-
|
whether
the service places the auditor in a position of being an advocate for the
Company.
|
STOCKHOLDER
COMMUNICATIONS
Our
stockholders may communicate directly with the members of the Board of Directors
or the individual Chair of standing Board committees by writing directly to
those individuals c/o New Dragon Asia Corp. at the following address: 10
Huangcheng Road (N), Longkou, Shandong Province, PRC 265701.
INDEMNIFICATION
The
Company’s Certificate of Incorporation limits the liability of its directors for
monetary damages arising from a breach of their fiduciary duty as directors,
except to the extent otherwise required by the Revised Statutes of the State of
Florida. Such limitation of liability does not affect the availability of
equitable remedies such as injunctive relief or rescission.
The
Company’s Bylaws provide that the Company shall indemnify its directors and
officers to the fullest extent permitted by Florida law, including in
circumstances in which indemnification is otherwise discretionary under Florida
law. The Company has entered into indemnification agreements with its officers
and directors containing provisions that may require the Company, among other
things, to indemnify such officers and directors against certain liabilities
that may arise by reason of their status or service as directors or officers
(other than liabilities arising from willful misconduct of a culpable nature),
to advance their expenses incurred as a result of any proceeding against them as
to which they could be indemnified, and to obtain directors’ and officers’
insurance if available on reasonable terms.
SOLICITATION
OF PROXIES
We are
soliciting proxies in the enclosed form and paying the cost of the solicitation.
In addition to the use of the mails, we may solicit proxies personally or by
telephone or telegraph using the services of our directors, officers and regular
employees at nominal cost. We will reimburse banks, brokerage firms and other
custodians, nominees and fiduciaries for expenses incurred in sending proxy
material to beneficial owners of our stock.
MANNER
FOR VOTING PROXIES
The
shares represented by all valid proxies received by mail will be voted in the
manner specified. Where specific choices are not indicated, the shares
represented by all valid proxies received will be voted: (1) for the nominees
for directors named earlier in this proxy statement and (2) for ratification of
the selection of the independent auditor. Should any matter not described above
be properly presented at the meeting, the persons named in the proxy form will
vote in accordance with their judgement.
2011
STOCKHOLDER PROPOSALS
Rule 14a-4 of the SEC proxy rules
allows the Company to use discretionary voting authority to vote on matters
coming before an annual meeting of stockholders if the Company does not have
notice of the matter at least 45 days before the date corresponding to the date
on which the Company first mailed its proxy materials for the prior year’s
annual meeting of stockholders or the date specified by an overriding advance
notice provision in the Company’s By-Laws. The Company’s By-Laws do not contain
such an advance notice provision. For the Company’s 2011 Annual Meeting of
Stockholders, stockholders must submit such written notice to the Secretary of
the Company on or before [
], 2011. Stockholders of the Company wishing to include proposals in the proxy
material for the 2011 Annual Meeting of Stockholders must submit the same in
writing so as to be received by Ling Wang, the Chief Financial Officer of the
Company on or before [ ],
2011. Such proposals must also meet the other requirements of the
rules of the SEC relating to stockholder proposals.
HOUSEHOLDING
OF PROXY MATERIALS
Some
banks, brokers and other nominee record holders may employ the proactive of
“householding” proxy statement and annual reports. This means that only one copy
of this Proxy Statement and the accompanying Annual Report may have been sent to
multiple stockholders residing at the same household. If you would to obtain an
additional copy of this Proxy Statement and the accompanying Annual Report,
please contact Ling Wang, our Chief Financial Officer. If you want to receive
separate copies of the Company’s proxy statement and annual report in the
future, or if you are receiving multiple copies and would like to receive only
one copy for your household, you should contact your bank, broker or other
nominee record holder.
OTHER
BUSINESS
Management is not aware of any matters
to be presented for action at the Annual Meeting, except matters discussed in
the Proxy Statement. If any other matters properly come before the meeting, it
is intended that the shares represented by proxies will be voted in accordance
with the judgment of the persons voting the proxies.
AVAILABILITY
OF FORM 10-K
We are
providing without charge to each person solicited by this Proxy Statement a copy
of our Annual Report on Form 10-K for the Fiscal Year ended December 25, 2009,
including our financial statements but excluding the exhibits to Form 10-K. The
Form 10-K includes a list of the exhibits that were filed with it, and we will
furnish a copy of any such exhibit to any person who requests it upon the
payment of our reasonable expenses in providing the requested exhibit. For
further information, please contact Ms Ling Wang, Chief Financial Officer, New
Dragon Asia Corp., 10 Huangcheng Road (N), Longkou, Shandong Province, PRC,
telephone 86-595 8951 567. Our Annual Report on Form 10-K and our other filings
with the SEC, including the exhibits, are available for free on the SEC’s
Internet site (
http://www.sec.gov
).
WHERE
YOU CAN FIND MORE INFORMATION
We file
annual and quarterly reports, proxy statements and other information with the
SEC. Stockholders may read and copy any reports, statements or other information
that we file at the SEC’s public reference rooms in Washington, D.C., New York,
New York, and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information about the public reference rooms. Our public filings are
also available from commercial document retrieval services and at the Internet
Web site maintained by the SEC at http://www.sec.gov. The Company’s annual
report on Form 10-K was mailed along with this proxy statement.
STOCKHOLDERS
SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROXY STATEMENT TO VOTE THEIR SHARES AT THE ANNUAL MEETING. NO ONE HAS BEEN
AUTHORIZED TO PROVIDE ANY INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED
IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED OCTOBER 8, 2010.
STOCKHOLDERS SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY
STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE.
__________,
2010
|
|
By
Order of Board of Directors,
|
|
|
|
|
|
/s/ Li Xia Wang
|
|
|
Name:
Li Xia Wang
|
|
|
Title:
Chief Executive Officer
|
ANNEX
A
NEW
DRAGON ASIA CORP.
COMPENSATION
COMMITTEE CHARTER
PURPOSE
The
purpose of the Compensation Committee (the “
Compensation
Committe
e”) of the board of directors (the “
Board
”) of
New Dragon Asia Corporation (the “
Company
”)
is: (i) to review and approve corporate goals and objectives relevant to
compensation of the Company’s Chief Executive Officer and Chief Financial
Officer, who we collectively refer to as the named executive officer (“
NEOs
”),
evaluate the NEO’s performance in light of those goals and objectives, and
determine and approve the NEO’s compensation level based on this evaluation; and
“ii” to produce any report on executive officer compensation as required to
prepare by the rules and regulations of the Securities and Exchange Commission
(the “
SEC
”).
COMPOSITION
The
Compensation Committee is a standing committee of the Board. The Committee shall
consist of not less than three members of the Board, each of whom satisfies the
independence criteria of applicable law and the rules of the American Stock
Exchange (“
AMEX
”) in
effect from time to time (subject to any exceptions allowed by such rules and
any waivers granted by such authorities).
The
members of the Committee shall be appointed by the Board and shall serve until
such member’s successor is duly elected and qualified or until such member’s
earlier resignation or removal. The member of the Committee may be removed, with
or without cause, by a majority vote of the Board.
MEETING
The
Committee shall meet as least one time annually, or more frequently as
circumstances dictate. The chairman of the Board or any member of the Committee
may call meetings of the Committee. All meetings of the Committee may be held
telephonically.
AUTHORITY
AND RESPONSIBLITIES
The Board
delegates the Committee the express authority and responsibility to the
following:
|
1.
|
Establish
the Company’s general compensation philosophy, and, in consultation with
senior management, oversee the development and implementation of
compensation programs.
|
|
2.
|
At
least annually, review and approve corporate goals and objectives relevant
to compensation of the NEO, evaluate the NEO’s performance in light of
those goals and objectives, and determine and approve the NEO’s
compensation level based on this
evaluation.
|
|
3.
|
At
least annually, review and approve all compensation arrangements with the
NEO including, without limitation: (i) the annual base salary level; (ii)
the annual incentive opportunity level; (iii) the long-term incentive
opportunity level; (iv) employment agreement, severance arrangements and
change-in-control agreements/provisions, in each case as, when and if
appropriate; and (v) any special or supplemental
benefits.
|
|
4.
|
Periodically
review the compensation of the Company’s directors and make
recommendations to the Board with respect
thereto.
|
|
5.
|
Administer,
interpret and take all other actions necessary or appropriate as granted
to the Committee under the Company’s executive compensation and other
plans.
|
|
6.
|
Review
and discuss with management the Compensation Discussion and Analysis
(“
CD&A
”)
required by SEC Regulation S-K, Item 402. Based upon such review and
discussion, determine whether to recommend to the Board that the CD&A
be included in theCompany’s proxy statement ( the “
Proxy
Statement
”) or Annual Report on Form 10-K (the “
Annual
Report
”).
|
|
7.
|
Arrange
for the preparation of and approve the Compensation Committee Report to be
included in the Proxy Statement or Annual
Report.
|
|
8.
|
Meet
at such times and report to the Board regarding its deliberations, as
necessary or appropriate.
|
|
9.
|
Have
sole authority to retain and discharge, and approve fees and other terms
and conditions for retention of, compensation consultants to assist in
consideration of the compensation of the NEO and other executive officers
and directors. In addition, approve any compensation payable by the
Company to such consultants, including the fees, terms and other
conditions for the performance of such
services.
|
|
10.
|
Direct
any officer or employee of the Company or request any employee of the
Company’s advisors, consultants or counsel or such other individual as it
may deem appropriate to attend a Committee meeting or meet with any
Committee members.
|
|
11.
|
Review
the Committee’s charter on an annual basis and recommend changes, as
appropriate, to the Board.
|
|
12.
|
Evaluate
the performance of the Committee on an annual
basis.
|
|
13.
|
Exercise
such other powers and perform such other duties as may from time to time
be delegated to the Committee by the
Board.
|
The term
“compensation” shall be construed comprehensively including by way of example,
but not by way of limitation, salary, any supplemental payments, incentive
payments, bonuses, performance shares, share incentives, dividend equivalents,
options, or restricted shares.
RESOURCES
The
committee shall have the resources and appropriate funding, as determined by the
Committee, to discharge its duties and responsibilities.
REPORT
TO THE BOARD
The
Committee shall report periodically to the Board on all matters for which the
Committee has been delegated responsibility. The report to the Board may take
the form of an oral report by the chairman or any other member of the Committee
designated by the Committee to make such report.
CHARTER
ADOPTED
October
25, 2006
ANNEX
B
NEW
DRAGON ASIA CORP.
AUDIT
COMMITTEE CHARTER
PURPOSE
The Audit
Committee shall assist the Board of Directors in its oversight of (1) the
integrity of the Corporation's financial statements and its financial reporting
and disclosure practices, (2) the soundness of the Corporation's systems of
internal controls regarding finance and accounting compliance, (3) the
independence and qualifications of the Corporation's independent auditors, (4)
the performance of the Corporation's internal audit function and its independent
auditors, and (5) the Corporation's compliance with legal and regulatory
requirements and the soundness of the Corporation's ethical and environmental
compliance programs. The Audit Committee is also responsible for preparing the
report required to be included in the Corporation's proxy
statement.
MEMBERSHIP
The Audit
Committee shall consist of at least three Directors. The members of the Audit
Committee shall meet the independence and expertise requirements of the AMEX
Rules and the Securities and Exchange Commission.
No member
of the Audit Committee may serve on the audit committee of more than three
public companies, including the Corporation, unless the Board (1) determines
that such simultaneous service would not impair the ability of the member to
effectively serve on the Audit Committee and (2) discloses this determination in
the Corporation's proxy statement.
The
members of the Audit Committee shall be appointed at least annually by the
Board, with one of the members appointed as Committee Chair. Audit Committee
members may be replaced by the Board.
RESPONSIBILITIES
In
performing its oversight responsibilities, the Audit Committee
shall:
FINANCIAL
STATEMENT AND DISCLOSURE MATTERS
|
14.
|
Review
and discuss the Corporation's quarterly financial statements, including
disclosures made in "Management's Discussion and Analysis of Financial
Condition and Results of Operations", with management and the independent
auditors prior to the filing of the Corporation's quarterly report on Form
10-Q, including a discussion with the independent auditors of the matters
required to be discussed by Statement of Auditing Standards No. 61 ("SAS
No. 61"), as amended.
|
|
15.
|
Review
and discuss the Corporation's annual financial statements, including
disclosures made in "Management's Discussion and Analysis of Financial
Condition and Results of Operations", with management and the independent
auditors prior to the filing of the Corporation's annual report on Form
10-K, including a discussion with the independent auditors of the matters
required to be discussed by SAS No. 61, as
amended.
|
|
16.
|
Discuss
with management the Corporation's earnings press releases (paying
particular attention to the use of any "pro forma" or "adjusted" non-GAAP
information), as well as the nature of financial information and earnings
guidance provided to securities analysts and rating agencies. The Audit
Committee's discussion in this regard may be general in nature and need
not take place in advance of each instance in which the Corporation may
provide financial information or earnings
guidance.
|
|
17.
|
Discuss
with management the Corporation's major financial risk exposures and the
steps management has taken to monitor and control such exposures,
including the Corporation's risk assessment and risk management
policies.
|
|
18.
|
Review,
with management, the internal auditors and the independent auditors, major
issues regarding accounting principles and financial statement
presentations, including any significant changes in the Corporation's
selection or application of accounting principles, and major issues as to
the adequacy of the Corporation's internal controls and any special audit
steps adopted in light of material control deficiencies. In this regard,
the Audit Committee should obtain and discuss with management and the
independent auditors reports and analyses from management and the
independent auditors concerning: (a) all critical accounting policies and
practices to be used by the Corporation, (b) significant financial
reporting issues and judgments made in connection with the preparation of
the financial statements, including all alternative treatments of
financial information within generally accepted accounting principles
("GAAP") that have been discussed with management, the ramifications of
the use of the alternative disclosures and treatments, and the treatment
preferred by the independent auditors, and (c) any other material written
communications between the independent auditors and
management.
|
|
19.
|
Review
with the independent auditors (a) any audit problems or other difficulties
encountered during the course of the audit process, including any
restrictions on the scope of the independent auditors' activities or
access to required information and any significant disagreements with
management and (b) management's response to such
matters.
|
|
20.
|
Resolve
any disagreements between management and the independent auditors
regarding financial reporting.
|
|
21.
|
Review
periodically the effect of regulatory and accounting initiatives, as well
as off-balance sheet structures, on the financial statements of the
Corporation.
|
OVERSIGHT
OF THE CORPORATION'S RELATIONSHIP WITH ITS INDEPENDENT AUDITORS
|
1.
|
Appoint
or replace the Corporation's independent auditors (subject, if applicable
to stockholder ratification), and approve all fees payable to the
independent auditors. The independent auditors shall report directly to
the Audit Committee.
|
|
2.
|
Approve,
in advance, all audit services, and all non-audit services provided by the
Corporation's independent auditors that are not specifically prohibited
under the Sarbanes-Oxley Act. Non-audit services need not be approved in
advance only if (a) the aggregate amount of all such non-audit services
are not more than 5% of all amounts paid to the independent auditors
during the fiscal year, (b) they were not recognized to be non-audit
services at the time of the engagement and (c) they are promptly brought
to the attention of the Audit Committee and approved prior to the
completion of the audit. The Committee may delegate pre-approval authority
to one or more members of the Committee, but all such decisions must be
presented to the full Committee at its next regularly scheduled
meeting.
|
|
3.
|
Review,
at least annually, the qualifications, performance and independence of the
independent auditors. In conducting its review and evaluation, the
Committee should:
|
|
|
a)
|
Obtain
and review a report by the Corporation's independent auditors describing:
(i) the auditing firm's internal quality-control procedures; (ii) any
material issues raised by the most recent internal quality-control review,
or peer review, of the auditing firm, or by any inquiry or investigation
by governmental or professional authorities, within the preceding five
years, respecting one or more independent audits carried out by the
auditing firm, and any steps taken to deal with any such issues; and (iii)
all relationships between the independent auditors and the
Corporation;
|
|
|
b)
|
Review
and evaluate the lead audit
partner;
|
|
|
c)
|
Assure
the rotation of the lead audit partner and the audit partner responsible
for reviewing the audit as required by
law;
|
|
|
d)
|
Discuss
with the independent auditors any disclosed relationships or services that
may impact the objectivity and independence of the independent
auditors;
|
|
|
e)
|
Consider
whether, in order to assure continuing auditor independence, there should
be regular rotation of the audit firm
itself;
|
|
|
f)
|
Take
into account the opinions of management and the Corporation's internal
auditors;
|
|
|
g)
|
Present
its conclusions with respect to the independent auditors to the Board and,
if necessary, recommend that the Board take appropriate action to satisfy
itself of the qualifications, performance and independence of the
independent auditors.
|
|
4.
|
Set
clear hiring policies for employees or former employees of the independent
auditors. At a minimum, these policies should provide that any registered
public accounting firm may not provide audit services to the Corporation
if the CEO, controller, CFO, chief accounting officer or any person
serving in an equivalent capacity for the Corporation was employed by such
accounting firm and participated in the audit of the Corporation within
one year of the initiation of the current
audit.
|
OVERSIGHT
OF THE CORPORATION'S INTERNAL AUDIT FUNCTION
|
1.
|
Review
the scope and effectiveness of internal auditing
activities.
|
|
2.
|
Review
and discuss with the independent auditors the responsibilities, budget and
staffing of the Corporation's internal audit
function.
|
COMPLIANCE
OVERSIGHT
|
1.
|
Review,
with the Corporation's general counsel, any legal matter that could have a
significant impact on the Corporation's financial
statements.
|
|
2.
|
Annually
review the Corporation's compliance program for its Code of Ethics and
Conduct and the results of internal audit's review of the expense accounts
of the Corporation's elected
officers.
|
|
3.
|
Annually
review the status of the Corporation's environmental compliance
program.
|
|
4.
|
Establish
procedures for (a) the receipt, retention and treatment of complaints
received by the Corporation regarding accounting, internal accounting
controls or auditing matters and (b) the confidential, anonymous
submission by employees of the Corporation of concerns regarding
questionable accounting or auditing
matters.
|
MEETINGS;
OPERATIONAL MATTERS AND REPORTS
The Audit
Committee shall meet at least four times annually, or more frequently as
circumstances dictate.
The Audit
Committee is to meet periodically in separate executive sessions with each of
management, the Corporation's independent auditors and its internal
auditor.
The Audit
Committee may form and delegate authority to subcommittees when
appropriate.
In
connection with its duties and responsibilities, the Audit Committee shall have
the authority to retain outside legal, accounting or other advisors, including
the authority to approve the fees payable by the Corporation to such advisors
and other retention terms.
The Audit
Committee shall annually review its performance. In addition, the Audit
Committee shall review and reassess the adequacy of this Charter annually and
recommend to the Board any changes it considers necessary or
advisable.
The Audit
Committee shall report regularly to the Board, including with respect to any
issues that arise with respect to the quality or integrity of the Corporation's
financial statements, the Corporation's compliance with legal or regulatory
requirements, the performance and independence of the Corporation's independent
auditors or the performance of the internal audit function.
LIMITATION
OF AUDIT COMMITTEE'S ROLE
The Audit
Committee's role is one of oversight. Management is responsible for preparing
the Corporation's financial statements, and the independent auditors are
responsible for auditing those financial statements. Management is responsible
for the fair presentation of the information set forth in the financial
statements in conformity with GAAP. The independent auditors' responsibility is
to provide their opinion, based on their audits, that the financial statements
fairly present, in all material respects, the financial position, results of
operations and cash flows of the Corporation in conformity with GAAP. While the
Audit Committee has the responsibilities and powers set forth in this Charter,
it is not the duty of the Audit Committee to plan or conduct audits or to
determine that the Corporation's financial statements and disclosures are
complete and accurate and are in conformity with GAAP. Further, it is not the
duty of the Audit Committee to assure compliance with applicable laws and
regulations, the Corporation's Code of Ethics and Conduct or its environmental
compliance program.
Annex
C
Articles of
Amendment
to
Articles of
Incorporation
of
New Dragon
Asia Corp.
(
Name
of Corporation as currently filed with the Florida Dept. of State
)
_________________
(Document Number of Corporation (if
known)
Pursuant to the provisions of section
607.1006, Florida Statutes, this
Florida
Profit Corporation
adopts
the following amendment(s) to its Articles of Incorporation:
A.
If amending
name, enter the new name of the corporation:
The new name must be distinguishable and
contain the word “corporation,” “company,” or “incorporated” or the abbreviation
“Corp.,” “Inc.,” or Co.,” or the designation “Corp,” “Inc,” or “Co”. A
professional corporation name must contain the word “chartered,” “professional
association,” or the abbreviation “P.A.”
B.
Enter new
principal office address, if applicable:
(Principal office
address
MUST
BE A STREET ADDRESS
)
C.
Enter new
mailing address, if applicable:
(Mailing address
MAY
BE A POST OFFICE BOX
)
D.
If amending
the registered agent and/or registered office address in
Florida
, enter the
name of the new registered agent and/or the new registered office
address:
Name of New
Registered Agent
:
New
Registered Office Address
:
(
Florida
street
address)
,
Florida
(City) (Zip
Code)
New
Registered Agent’s Signature, if changing Registered Agent:
I hereby accept the appointment as
registered agent. I am familiar with and accept the obligations of the
position.
Signature of New Registered Agent, if
changing
If amending
the Officers and/or Directors, enter the title and name of each officer/director
being removed and title, name, and address of each Officer and/or Director being
added:
(
Attach additional
sheets, if necessary)
E. If amending or
adding additional Articles, enter change(s) here
:
Pursuant
to the provisions of section 607.10006, Florida Statutes, the Company adopts the
following amendment to its Amended and Restated Articles of
Incorporation:
1. The
first paragraph of Article IV of the Amended and Restated Articles of
Incorporation is hereby amended by deleting the text in the first paragraph
thereof in its entirety and inserting the following in lieu
thereof:
“The
maximum number of shares that this Corporation shall be authorized to issue and
have outstanding at any one time shall be (i) one hundred twenty six million
five hundred and nine thousand eight hundred and ninety four (126,509,894)
shares of common stock, par value $.0001 per share (“Common Stock”), of which
119,509,894 have been designated as Class A Common stock and 2,000,000 shares
have been designated as Class B Common Stock, and (ii) five million (5,000,000)
shares of Preferred Stock having a par value of $.0001 per share.”
2. The
amendment to Article IV of the Amended and Restated Articles of Incorporation
were adopted by the unanimous written consent of the board of directors of the
Company on _________, 2010.
3. The
amendment to Article IV of the Amended and Restated Articles of Incorporation
was approved by the shareholders of the Company on _______, 2010. The
number of votes cast for such amendment by the shareholders was sufficient for
approval.
F. If an amendment provides for an
exchange, reclassification, or cancellation of issued shares, provisions for
implementing the amendment if not contained in the amendment
itself:
(
if not applicable,
indicate N/A
)
The date of each amendment(s)
adoption:
(date of adoption is
required)
Effective date if
applicable:
(no more than 90 days after amendment
file date)
Adoption of Amendment(s) (CHECK
ONE)
x
The amendment(s) was/were adopted by the
shareholders. The number of votes cast for the amendment(s) by the shareholders
was/were sufficient for approval.
o
The amendment(s) was/were approved by
the shareholders through voting groups.
The following
statement must be separately provided for each voting group entitled to vote
separately on the amendment(s):
“The number of votes cast for the
amendment(s) was/were sufficient for approval by .”
(voting
group)
o
The amendment(s) was/were adopted by the
board of directors without shareholder action and shareholder action was not
required.
o
The amendment(s) was/were adopted by the
incorporators without shareholder action and shareholder action was not
required.
Dated
Signature
(By a director, president or other
officer – if directors or officers have not been selected, by an incorporator –
if in the hands of a receiver, trustee, or other court appointed fiduciary by
that fiduciary)
(Typed or printed name of person
signing)
(Title of person
signing)
Annex
D
Articles
of Amendment
to
Articles
of Incorporation
of
New Dragon Asia
Corp.
(
Name of
Corporation as currently filed with the Florida Dept. of
State
)
_________________
(Document
Number of Corporation (if known)
Pursuant
to the provisions of section 607.1006, Florida Statutes, this
Florida Profit
Corporation
adopts the following amendment(s) to its Articles of
Incorporation:
A.
If amending name,
enter the new name of the corporation:
The
new name must be distinguishable and contain the word “corporation,” “company,”
or “incorporated” or the abbreviation “Corp.,” “Inc.,” or Co.,” or the
designation “Corp,” “Inc,” or “Co”. A professional corporation name must contain
the word “chartered,” “professional association,” or the abbreviation
“P.A.”
B.
Enter new principal
office address, if applicable:
(Principal office address
MUST BE
A STREET ADDRESS
)
C.
Enter new mailing
address, if applicable:
(Mailing address
MAY BE A
POST OFFICE BOX
)
D.
If amending the
registered agent and/or registered office address in Florida, enter the name of
the
new registered agent and/or
the new registered office address:
Name of New Registered
Agent
:
New
Registered Office Address
:
(Florida street
address)
, Florida
(City) (Zip
Code)
New Registered Agent’s
Signature, if changing Registered Agent:
I
hereby accept the appointment as registered agent. I am familiar with and accept
the obligations of the position.
Signature
of New Registered Agent, if changing
If amending the Officers
and/or Directors, enter the title and name of each officer/director being
removed and title, name, and
address of each Officer and/or Director being added:
(
Attach additional sheets, if
necessary)
E. If amending or adding additional
Articles, enter change(s) here
:
Pursuant
to the provisions of section 607.10006, Florida Statutes, the Company adopts the
following amendment to its Amended and Restated Articles of
Incorporation:
1. The
first paragraph of Article IV of the Amended and Restated Articles of
Incorporation is hereby amended by deleting the text in the first paragraph
thereof in its entirety and inserting the following in lieu
thereof:
The
maximum number of shares that this Corporation shall be authorized to issue and
have outstanding at any one time shall be (i) one hundred seven million
(107,000,000) shares of common stock, par value $.0001 per share (“Common
Stock”), of which 100,000,000 shares have been designated as Class A Common
Stock and 2,000,000 shares have been designated as Class B Common Stock, and
(ii) five million (5,000,000) shares of Preferred Stock having a par value of
$.0001 per share.
Effective
upon filing (the “Effective Date”), every one hundred (100) shares of the
Corporation’s issued and outstanding Common Stock shall be combined into one (1)
fully paid and nonassessable share of Common Stock. Prior to the reverse split,
the Corporation had 119,509,894 shares outstanding. After the reverse split, the
Corporation will have 1,195,099 shares outstanding.
2. The
amendment to Article IV of the Amended and Restated Articles of Incorporation
were adopted by the unanimous written consent of the board of directors of the
Company on _________, 2010.
3. The
amendment to Article IV of the Amended and Restated Articles of Incorporation
was approved by the shareholders of the Company on _______, 2010. The number of
votes cast for such amendment by the shareholders was sufficient for
approval.
F.
If an amendment provides for an exchange, reclassification, or cancellation of
issued shares,
provisions
for implementing the amendment if not contained in the amendment
itself:
(
if not applicable, indicate
N/A
)
The
date of each amendment(s) adoption:
(date
of adoption is required)
Effective
date if applicable:
(no
more than 90 days after amendment file date)
Adoption
of Amendment(s) (CHECK ONE)
x
The amendment(s)
was/were adopted by the shareholders. The number of votes cast for the
amendment(s)
by the
shareholders was/were sufficient for approval.
¨
The amendment(s)
was/were approved by the shareholders through voting groups.
The following statement
must
be separately provided for each voting group entitled to vote separately on the
amendment(s):
“The
number of votes cast for the amendment(s) was/were sufficient for approval
by .”
(voting
group)
¨
The amendment(s)
was/were adopted by the board of directors without shareholder action and
shareholder
action
was not required.
¨
The amendment(s)
was/were adopted by the incorporators without shareholder action and shareholder
action
was not required.
Dated
Signature
(By a
director, president or other officer – if directors or officers have not been
selected, by an incorporator – if in the hands of a receiver, trustee, or other
court appointed fiduciary by that fiduciary)
(Typed or
printed name of person signing)
(Title of
person signing)
Nwd Group (AMEX:NWD)
Historical Stock Chart
From Apr 2024 to May 2024
Nwd Group (AMEX:NWD)
Historical Stock Chart
From May 2023 to May 2024
