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Date
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June 6, 2019
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Time
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11:00 a.m., Pacific time
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Meeting Webcast Address
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virtualshareholdermeeting.com/ACMR2019
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Your vote is important.
Please see the detailed information that follows in the Proxy Statement.
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This summary highlights information contained elsewhere in this Proxy Statement. This summary
does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. References in this Proxy Statement to “ACM,” “ACM Research” and to “we,” “us,” “our” and similar terms,
refer to ACM Research, Inc.
Annual Meeting of Stockholders
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Time and Date
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11:00 a.m., Pacific time, on June 6, 2019.
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Meeting Webcast Address
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virtualshareholdermeeting.com/ACMR2019
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Record Date
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5 p.m., Eastern time, on April 24, 2019.
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Voting
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Stockholders will be entitled to one vote for each outstanding share of Class A common stock they hold of record as of the record
date and twenty votes for each outstanding share of Class B common stock they hold of record as of the record date.
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Total Votes Per Proposal
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52,088,766 votes, based on 14,186,966 shares of Class A Common Stock and 1,895,090 shares of Class B Common Stock outstanding as of
the record date.
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Annual Meeting Agenda
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Proposal
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Board
Recommendation
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Election of directors
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FOR
each nominee
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Ratification of appointment of independent auditor for 2019
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FOR
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How to Cast Your Vote
You can vote by any of the following methods:
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Until 11:59 p.m., Eastern time, on June 5, 2019
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At the Annual Meeting on June 6, 2019
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•
Internet:
From any web-enabled device:
proxyvote.com
•
Telephone:
+1.800.690.6903
•
Completed, signed and
returned
proxy card
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•
Internet:
J
oining the Annual Meeting at
virtualshareholdermeeting.com/ACMR2019
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Election of Directors
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As the first proposal, we are asking stockholders to elect the following six director nominees, each of whom currently
serves as a member of the board of directors. The following information pertains to each director nominee as of June 6, 2019.
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Director
Since
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Experience/
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Independent
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Committee
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Name
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Age
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Occupation
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Qualifications
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Yes
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No
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Memberships
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Other Boards
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David H. Wang
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57
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1998
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Founder, Chief Executive Officer and President of ACM Research
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•
Industry
•
Innovation
•
Leadership
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✔
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Haiping Dun
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69
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2003
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Retired Senior Director of Intel Corporation
President of Champion Microelectronic Corp.
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•
Industry
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Global
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Leadership
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✔
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•
Audit
•
Compensation
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•
Champion
Microelectronic Corp.
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Chenming C. Hu
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71
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2017
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Professor of Engineering and Computer Sciences, University of California, Berkeley
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•
Innovation
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Industry
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Education
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✔
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•
Nominating and
Governance
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•
Ambrella, Inc.
•
Inphi Corporation
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Tracy Liu
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54
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2016
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Founder of H&M Financial Consulting
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•
Finance
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Leadership
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Global
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✔
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•
Audit
•
Compensation
•
Nominating and
Governance
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Yinan Xiang
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44
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2017
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General Manager of Shanghai S&T Venture Capital (Group) Co. Ltd.
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•
Investor
designee
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Finance
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Industry
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✔
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•
Audit
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Zhengfan Yang
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38
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2018
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Director of Direct investment Division III, Sino IC Capital Co., Ltd.
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•
Investor designee
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Industry
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Finance
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✔
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•
Nominating and
Governance
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Board Representation
Additional Board Governance Practices
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Elections:
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Classified Board
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No
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Frequency of Director Elections
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Annual
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Voting Standard
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Majority
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Resignation Policy
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Yes
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Mandatory Retirement Age or Tenure
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No
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Chair:
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Separate Chair of the Board and CEO
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Yes
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Independent Lead Director
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Yes
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Robust Responsibilities and Duties Assigned to Independent Chair
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Yes
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Meetings:
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Number of Board Meetings Held in 2018
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7
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Directors Attending Fewer than 75% of Board Meetings in 2018
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None
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Independent Directors Meet without Management Present
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Yes
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Number of Standing Committee Meetings Held in 2018
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9
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Members Attending Fewer than 75% of Committee Meetings in 2018
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None
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Director Status:
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Directors Overboarded per ISS or Glass Lewis Voting Guidelines
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None
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Standing Board Committee Membership Independence
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100%
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Board Oversight of Company Strategy and Risk
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Yes
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Shares Pledged by Directors
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None
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Shareholder Rights:
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Cumulative Voting
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No
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Proxy Access Bylaw
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Yes
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Ratification of Appointment of Independent Auditor for 2019
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We are asking stockholders to ratify the audit committee’s retention of BDO China Shu Lun Pan Certified Public
Accountants LLP, an independent registered public accounting firm, as our independent auditor to examine and report on our consolidated financial statements for the fiscal year ending December 31, 2019.
Participation in the Virtual Annual
Meeting
The board of directors considers the appropriate format of our annual meeting of stockholders on an annual basis. This
year the board again chose a virtual meeting format for the Annual Meeting in an effort to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from any location around the world, at no
cost. The virtual meeting format will allow our stockholders to engage with us at the Annual Meeting from any geographic location, using any convenient internet connected devices, including smart phones and tablets, laptop or desktop computers.
We will be able to engage with all stockholders as opposed to just those who can afford to travel to an in-person meeting. The virtual format allows stockholders to submit questions and comments during the meeting.
The live audio webcast of the Annual Meeting will be available for listening by the general public, but participation
in the Annual Meeting, including voting shares and submitting questions, will be limited to stockholders. To ensure they can participate, stockholders and proxyholders should visit
virtualshareholdermeeting.com/ACMR2019
and enter the 16-digit control number included on their proxy card. If you wish to participate in the meeting and your shares are held in street name, you must obtain, from the broker,
bank or other organization that holds your shares, the information required, including a 16-digit control number, in order for you to be able to participate in, and vote at, the Annual Meeting.
Stockholders can vote their shares and submit questions via the Internet during the Annual Meeting by accessing the
annual meeting website at
virtualshareholdermeeting.com/ACMR2019
. We will answer any timely submitted questions on a matter to be voted on at the Annual Meeting
before voting is closed on the matter. Following adjournment of the formal business of the Annual Meeting, we will address appropriate general questions from stockholders regarding ACM Research in the order in which the questions are received.
Questions relating to stockholder proposals or ACM Research may be submitted in the field provided in the web portal at or before the time the questions are to be discussed. All questions received during the Annual Meeting will be presented as
submitted, uncensored and unedited, except that we may omit certain personal details for data protection issues and we may edit profanity or other inappropriate language. If we receive substantially similar questions, we will group those
questions together and provide a single response to avoid repetition. Additional information regarding the submission of questions during the Annual Meeting can be found in our 2019 Rules of Conduct and Procedure, available at
virtualshareholdermeeting.com/ACMR2019
.
Online check-in to the Annual Meeting webcast will begin at 10:45 a.m., Pacific time, and you should allow ample time
to log in to the meeting webcast and test your computer audio system. During online check-in and continuing through the length of the Annual Meeting, we will have technicians standing by to assist you with any technical difficulties you
ma
y have accessing the virtual meeting.
If you encounter any difficulties accessing the Annual Meeting
during the check-in or at meeting time, you should call 800-586-1548 (US) or 303-562-9288 (International).
We have designed our virtual format to enhance, rather than constrain, stockholder access, participation and
communication. For example, stockholders will be able to communicate with us during the Annual Meeting so they can ask questions. An audio replay of the Annual Meeting will be made publicly available at
http://ir.acmrcsh.com/presentations
until our 2020 annual meeting of stockholders.
This audio replay will include each stockholder question addressed during the Annual Meeting. We are utilizing technology from Broadridge
Financial Solutions, Inc., or Broadridge, the leading virtual meeting solution. The Broadridge platform is expected to accommodate most, if not all, stockholders. Both we and Broadridge will test the platform technology before going “live” for
the Annual Meeting.
Questions
and Answers about the Annual Meeting
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Q:
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When and where will the Annual Meeting be held?
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A:
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This year the Annual Meeting of Stockholders of ACM Research, Inc., which we refer to as the Annual Meeting, will again be held exclusively by webcast at
virtualshareholdermeeting.com/ACMR2019,
beginning at 11:00 a.m., Pacific time, on June 6, 2019.
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Q:
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Who may join the Annual Meeting?
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A:
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The live audio webcast of the Annual Meeting will be available for listening by the general public, but participation in the Annual Meeting, including voting
shares and submitting questions, will be limited to stockholders. To ensure they can participate, stockholders and proxyholders should visit
virtualshareholdermeeting.com/ACMR2019
and enter the 16-digit control number included on their proxy card.
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Online check-in to the Annual Meeting webcast will begin at 10:45 a.m., Pacific time. We encourage you to
allow ample time to log in to the meeting webcast and test your computer audio system.
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Q:
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What materials have been prepared for stockholders in connection with the Annual Meeting?
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A:
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We are furnishing you and other stockholders of record with the following proxy materials:
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•
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our 2018 Annual Report to Stockholders, which we refer to as the 2018 Annual Report and which includes our Annual Report on Form 10‑K for the fiscal year ended
December 31, 2018 (including our audited consolidated financial statements for 2018 and 2017);
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•
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this Proxy Statement for the 2019 Annual Meeting, which we refer to as this Proxy Statement and which also includes a letter from our Chief Executive Officer and
President to stockholders, and a Notice of 2019 Annual Meeting of Stockholders; and
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•
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a proxy card for the Annual Meeting, which includes a control number for use in submitting proxies and accessing the Annual Meeting webcast, and a pre-addressed
envelope to be used to return the completed proxy card.
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These materials were first mailed to stockholders on or about April 30, 2019.
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Q:
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Are the proxy materials available via the Internet?
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A:
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You can access and review the proxy materials for the Annual Meeting at
2019proxy.acmrcsh.com
or
proxyvote.com
. In order to submit your proxies or access the Annual Meeting webcast, however, you will need to refer to the proxy card mailed to you upon
your request to obtain your 16-digit control number and other personal information needed to vote by proxy or virtually.
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A:
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The term “proxy,” when used with respect to stockholder, refers to either a person or persons legally authorized to act on the stockholder’s behalf or a format
that allows the stockholder to vote without being physically present at the Annual Meeting.
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Because it is important that as many stockholders as possible be represented at the Annual Meeting, the board of
directors is asking that you review this Proxy Statement carefully and then vote by following the instructions set forth on the proxy card. In voting prior to the Annual Meeting, you will deliver your proxy to the proxy holders, which means you will
authorize the proxy holders to vote your shares at the Annual Meeting in the way you instruct. The proxy holders consist of David H. Wang and Tracy Liu. All shares represented by valid proxies will be voted in accordance with the stockholder’s
specific instructions.
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Q:
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What matters will the stockholders vote on at the Annual Meeting?
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A:
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Proposal
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Election of the following six director nominees:
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•
David H. Wang
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•
Chenming C. Hu
|
•
Yinan Xiang
|
|
|
|
|
•
Haiping Dun
|
•
Tracy Liu
|
•
Zhengfan
Yang
|
|
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Proposal
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Ratification of appointment of our independent auditor for 2019.
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|
Q:
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Who can vote at the Annual Meeting?
|
|
A:
|
Stockholders of record of Class A and Class B common stock at 5 p.m. EDST on April 24, 2019 the record date, will be entitled to vote at the Annual Meeting. As of
the record date, there were outstanding a total of 14,186,966 shares of Class A common stock, each of which will be entitled to one vote on each proposal, and 1,895,090 shares of Class B common stock, each of which will be entitled to
twenty votes on each proposal. As a result, up to a total of 52,088,766 votes can be cast on each proposal.
|
|
Q:
|
What is a stockholder of record?
|
|
A:
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A stockholder of record is a stockholder whose ownership of our common stock is reflected directly on the books and records of our transfer agent, Computershare
Trust Company, N.A.
|
|
Q:
|
What does it mean for a broker or other nominee to hold shares in “street name”?
|
|
A:
|
If you beneficially own shares held in an account with a broker, bank or similar organization, that organization is the stockholder of record and is considered to
hold those shares in “street name.” An organization that holds your beneficially owned shares in street name will vote in accordance with the instructions you provide. If you do not provide the organization with specific voting
instructions with respect to a proposal, the organization’s authority to vote your shares will, under the rules of the Nasdaq Global Market or NASDAQ, depend upon whether the proposal is considered a “routine” or a non-routine matter.
|
|
•
|
The organization generally may vote your beneficially owned shares on routine items for which you have not provided voting instructions to the organization. The
only routine matter expected to be voted on at the Annual Meeting is the ratification of the appointment of our independent auditor for 2019 (Proposal 2).
|
|
•
|
The organization generally may not vote on non-routine matters, including Proposal 1. Instead, it will inform the inspector of election that it does not have the
authority to vote on those matters. This is referred to as a “broker non-vote.”
|
For the purpose of determining a quorum, we will treat as present at the Annual Meeting any proxies that are voted on
any of the two proposals to be acted upon by the stockholders, including abstentions or proxies containing broker non-votes.
|
Q:
|
How do I vote my shares if I do not attend the Annual Meeting?
|
|
A:
|
If you are a stockholder of record,
you
may vote prior to the Annual Meeting as follows:
|
|
•
|
Via the Internet:
|
You may vote via the Internet by going to
proxyvote.com
, in accordance with the voting instructions on the proxy card. Internet voting is available 24 hours a day until 11:59 p.m., Eastern time, on June 5, 2019. You will be given the opportunity to
confirm that your instructions have been recorded properly.
|
|
•
|
By Telephone
:
|
You may vote by calling +1.800.690.6903 and following the instructions provided on the telephone line.
Telephone voting is available 24 hours a day until 11:59 p.m., Eastern time, on June 5, 2019. Easy-to-follow voice prompts will allow you to vote your shares and confirm that your instructions have been recorded properly.
|
|
•
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By Mail
:
|
If you obtain a proxy card by mail, you may vote by returning the completed and signed proxy card in a
postage-paid return envelope that will be provided with the proxy card.
|
If you hold shares in street name,
you may vote by following the voting instructions provided by your bank, broker or other nominee. In general, you may vote prior to the Annual Meeting as follows:
|
•
|
Via the Internet:
|
You may vote via the Internet by going to
proxyvote.com
, in accordance with the voting instructions on the proxy card. Internet voting is available 24 hours a day until 11:59 p.m., Eastern time, on June 5, 2019. You will be given the opportunity to
confirm that your instructions have been recorded properly.
|
|
•
|
By Telephone:
|
You may vote by calling +1.800.454.8683 and following the instructions provided on the telephone line.
Telephone voting is available 24 hours a day until 11:59 p.m., Eastern time, on June 5, 2019. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been recorded properly.
|
For your information, voting via the Internet is the least expensive to ACM, followed by telephone
voting, with voting by mail being the most expensive.
|
Q:
|
Can I vote at the Annual Meeting?
|
|
A:
|
If you are a stockholder of record, you may vote
virtually
at the Annual Meeting, whether or not you
previously voted. If your shares are held in street name, you must obtain a written proxy, executed in your favor, from the stockholder of record to be able to vote at the Annual Meeting.
|
|
Q:
|
Can I ask questions at the Annual Meeting?
|
|
A:
|
You may submit questions via the Internet during the Annual Meeting by participating in the webcast at
virtualshareholdermeeting.com/ACMR2019
. We will answer any timely submitted questions on a matter to be voted on at the Annual Meeting before voting is closed on the matter. Following adjournment of the
formal business of the Annual Meeting, we will address appropriate general questions from stockholders regarding ACM in the order in which the questions are received. Questions relating to the stockholder proposals or ACM may be submitted
in the field provided in the web portal at or before the time the questions are to be discussed. All questions received during the Annual Meeting will be presented as submitted, uncensored and unedited, except that we may omit certain
personal details for data protection issues and we may edit profanity or other inappropriate language. If we receive substantially similar questions, we will group those questions together and provide a single response to avoid
repetition. Additional information regarding the submission of questions during the Annual Meeting can be found in our 2019 Rules of Conduct and Procedure, available at
http://ir.acmrcsh.com/presentations
.
|
|
Q:
|
Why is the Annual Meeting being conducted as a virtual meeting?
|
|
A:
|
The board considers the appropriate format of our annual meeting of stockholders on an annual basis. This year the board again chose a virtual meeting format for
the Annual Meeting in an effort to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from any location around the world, at no cost. The virtual meeting format will allow our
stockholders to engage with us at the Annual Meeting from any geographic location, using any convenient internet-connected devices, including smart phones and tablet, laptop or desktop computers.
|
We will be able to engage with all stockholders as opposed to just those who can afford to travel to an
in-person meeting. The virtual format allows stockholders to submit questions and comments during the meeting. We are utilizing technology from Broadridge Financial Solutions, Inc., or Broadridge, the leading virtual meeting solution. The Broadridge
platform is expected to accommodate most, if not all, stockholders. Both we and Broadridge will test the platform technology before going “live” for the Annual Meeting.
|
Q:
|
If I am unable to participate in the live audio webcast of the Annual Meeting, may I listen at a later date?
|
|
A:
|
An audio replay of the Annual Meeting will be posted and publicly available at
http://ir.acmrcsh.com/presentations
following the Annual Meeting and will remain publicly available until our next annual meeting of stockholders in 2020. This audio replay will cover the entire Annual Meeting, including each stockholder question addressed during the Annual
Meeting.
|
|
Q:
|
May I change my vote or revoke my proxy?
|
|
A:
|
If you are a stockholder of record and previously delivered a proxy, you may subsequently change or revoke your proxy at any time before it is exercised by:
|
|
•
|
voting via the Internet or telephone at a later time;
|
|
•
|
submitting a completed and signed proxy card with a later date; or
|
|
•
|
voting via the Internet at the Annual Meeting.
|
If you are a beneficial owner of shares held in street name, you should contact your bank, broker or other nominee for
instructions as to whether, and how, you can change or revoke your proxy.
|
Q:
|
What happens if I do not give specific voting instructions?
|
|
A:
|
If you are a stockholder of record and you return a proxy card without giving specific voting instructions, the proxy holders will vote your shares in the manner
recommended by the board on both proposals presented in this Proxy Statement and as the proxy holders may determine in its discretion on any other matters properly presented for a vote at the Annual Meeting.
|
If you are a beneficial owner of shares held in street name and
do not provide specific voting instructions to the broker, bank or other organization that is the stockholder of record of your shares, the organization generally may vote on routine, but not non-routine, matters. The only routine matter expected
to be voted on at the Annual Meeting is the ratification of the appointment of our independent auditor for 2019 (Proposal 2). If the organization does not receive instructions from you on how to vote your shares on Proposal 1, your shares will be
subject to a broker non-vote and no vote will be cast on those matters. See “
Q. What does it mean for a broker or other nominee to hold shares in ‘street name’?
” above.”
|
Q:
|
What should I do if, during check-in or the meeting, I have technical difficulties or trouble accessing the virtual meeting website?
|
|
A:
|
Online check-in to the Annual Meeting webcast will begin at 10:45 a.m., Pacific time. You should allow ample time to log in to the meeting webcast and test your computer audio system. During online check-in and
continuing through the length of the Annual Meeting, we will have technicians standing by to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing the Annual
Meeting during the check-in or at meeting time, you should call 800-586-1548 (US) or 303-562-9288 (International).
|
|
Q:
|
What if other matters are presented at the Annual Meeting?
|
|
A:
|
If a stockholder of record provides a proxy by voting in any manner described in this Proxy Statement, the proxy holders will have the discretion to vote on any
matters, other than the two proposals presented in this Proxy Statement, that are properly presented for consideration at the Annual Meeting. We do not know of any other matters to be presented for consideration at the Annual Meeting.
|
Vote Required for Election or Approval
Introduction
ACM’s only voting securities are the outstanding shares of Class A and Class B common stock, which we refer to collectively
as common stock. As of the record date, which is 5 p.m. EDST on April 24 , 2019, there were outstanding 14,186,966 shares of Class A common stock, each of which will be entitled to one vote on each proposal, and 1,895,090 shares of Class B common
stock, each of which will be entitled to twenty votes on each proposal. Based on the number of votes for each share of Class A and Class B common stock, up to a total of 52,088,766 votes can be cast on each proposal.
Only stockholders of record as of the record date will be entitled to notice of, and to vote at, the Annual Meeting. A
majority of the votes attributable to outstanding shares of common stock present virtually or represented by proxy and entitled to vote on any matters to be considered at the Annual Meeting will constitute a quorum for the transaction of business at
the Annual Meeting. For the purpose of determining a quorum, we will treat as present at the Annual Meeting any proxies that are voted on any matter to be acted upon by the stockholders, as well as abstentions or any proxies containing broker
non-votes.
|
|
Election of Directors
|
Each director will be elected by a majority of the votes cast with respect to that director, with the
number of votes “for” a director exceeding the number of votes “against” the director. Votes to “abstain” will not be counted for the purpose of determining whether a director is elected. Similarly, broker non-votes will not have any effect on the
outcome of the election of directors, since broker non-votes are not counted as “votes cast.”
Under our Certificate of Incorporation, our Bylaws and the Delaware General Corporation Law, a director holds office until a
successor is elected and qualified or until his or her earlier resignation or removal. Each of the nominees currently serves as one of our directors. If any of the nominees is not elected at the Annual Meeting, then the Bylaws provide that the
director shall offer to resign from the board of directors. Pursuant to a Director Resignation Policy approved by the board in October 2017, the nominating and governance committee will make a recommendation to the board whether to accept or reject
the resignation, or whether other action should be taken. The board will consider and act on the recommendation of the nominating and governance committee and will promptly, if required, publicly disclose its decision and the rationale behind it. The
director who offers his or her resignation will not participate in the decision of the nominating and governance committee or the board. If the board accepts such resignation, then the board may fill the vacancy resulting from that resignation or may
reduce the number of directors that constitutes the entire board so that no vacancy exists.
|
|
Ratification of Appointment of Independent Auditor for 2019
|
The ratification of BDO China Shu Lun Pan Certified Public Accountants LLP as our independent auditor for the year ending
December 31, 2019 must be approved by affirmative votes constituting a majority of the votes entitled to be voted and present virtually or represented by proxy at the Annual Meeting. Abstentions will count as votes against this proposal, since shares
with respect to which the stockholder abstains will be deemed present and entitled to vote. Because this proposal is considered a routine matter, discretionary votes by brokers will be counted.
Board of Directors Overview
Under our Bylaws and the Delaware General Corporation Law, our business and affairs are managed by or under the direction of
the board of directors, which selectively delegates responsibilities to its standing committees.
The board has adopted and operates under Governance Guidelines that
reflect our current governance practices in accordance with applicable statutory and regulatory requirements, including those of the SEC and Nasdaq. The Governance Guidelines are available on our website at
http://ir.acmrcsh.com/static-files/3446be5b-f608-4932-86c9-d9eff14ca2ac
Under the Governance Guidelines, we expect directors to regularly attend meetings of the board and of all committees on which
they serve and to review the materials sent to them in advance of those meetings. We expect nominees for election at each annual meeting of stockholders to participate in the Annual Meeting. Our last annual meeting was held on June 14, 2018. We did
not hold a stockholder meeting in 2017.
The board generally expects to hold four regular meetings per year and to meet on other occasions when circumstances
require. Directors spend additional time preparing for board and committee meetings, and we may call upon directors for advice between meetings. We encourage our directors to attend director education programs. The board held seven meetings in 2018.
No director attended less than 75% of the total number of board meetings during the director’s term.
The Governance Guidelines provide that the board will meet in executive session at least twice a year without management in
attendance. The Lead Director presides at each executive session.
The board maintains an audit committee, a compensation committee and a nominating and governance committee. The board has
adopted charters for each of the committees, and those charters are to be reviewed annually by the committees and the board. Our website provides access to:
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the audit committee charter at:
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media.corporate-ir.net/media_files/IROL/25/254659/acm-ac-charter-final.pdf
;
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the compensation committee charter at:
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media.corporate-ir.net/media_files/IROL/25/254659/acm-cc-charter-final.pdf
; and
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the nominating and governance committee charter at:
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media.corporate-ir.net/media_files/IROL/25/254659/acm-ngc-charter-final.pdf
.
The committees have the functions and responsibilities described in the sections below.
So long as the outstanding shares of Class B common stock represent a majority of the combined voting power of Class A and
Class B common stock voting together, all directors will be elected for annual terms and we will not have a classified board. If outstanding shares of Class B common stock represent less than a majority of the combined voting power of common stock at
any time, we thereafter will have a classified board consisting of three classes of approximately equal size, each serving staggered three-year terms. Our directors would be allocated by the then-current board among the three classes.
In November 2017, the board adopted Communications Policies pursuant to which our Chief Executive Officer, our Chief Financial Officer and their
designees are the only individuals authorized to communicate on our behalf with the media, industry and trade organizations, market professionals and stockholders. The Communications Policies were designed to limit the persons whose statements
trigger our public disclosure obligations under Regulation FD of the SEC. By limiting the number of spokespersons, the Communications Policies help ensure that all communications to members of the public are made by persons who are fully informed
about both our company and the guidelines and risks applicable to external communications, and they reduce the risk of inconsistent statements to the public. We believe these precautions are particularly appropriate given our status as a newly public
and our executives and directors relatively limited experience in speaking to the public on our behalf.
Independence of Directors
The board of directors must consist of a majority of independent directors not only under the requirements of Nasdaq but
also under the Governance Guidelines.
Under Nasdaq rules, independent directors must comprise a majority of a listed company’s board within twelve months from the
date of listing. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and governance committees be independent within twelve months from the date of listing.
Audit committee members must also satisfy additional independence criteria, including those set forth in Rule 10A-3 under the Securities Exchange Act, and compensation committee members must also satisfy additional independence criteria, including
those set forth in Rule 10C-1 of the Securities Exchange Act. Under Nasdaq rules, a director will qualify as an “independent director” only if, in the opinion of that company’s board, that person does not have a relationship that would interfere with
the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Rule 10A-3 under the Securities Exchange Act, a member of an audit committee of a listed company may not,
other than in his or her capacity as a member of the audit committee, the board or any other board committee: (a) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries,
other than compensation for board service; or (b) be an affiliated person of the listed company or any of its subsidiaries.
In order to be considered independent for purposes of Rule 10C-1 under the Securities Exchange Act, each member of the
compensation committee must be a member of the board of the listed company and must otherwise be independent. In determining independence requirements for members of compensation committees, the national securities exchanges and national securities
associations are to consider relevant factors, including: (a) the source of compensation of a member of the board of a listed company, including any consulting, advisory or other compensatory fee paid by the listed company to such member; and (b)
whether a member of the board of a listed company is affiliated with the listed company, a subsidiary of the listed company or an affiliate of a subsidiary of the listed company.
The board annually reviews the independence of all non-employee directors. In April 2018 the board established categorical
standards consistent with the corporate governance standards of Nasdaq to assist the board in making determinations of the independence of board members. A copy of our Standards for Director Independence is posted on our website at
http://ir.acmrcsh.com/static-files/4211086b-a968-414e-888d-007c1906489d
. These categorical standards require that, to be independent, a director may not have a material
relationship with ACM. Even if a director meets all categorical standards for independence, the board reviews other relationships with ACM in order to conclude that each independent director has no material relationship with ACM either directly or
indirectly.
Based upon information requested from and provided by each director concerning the director’s background, employment and
affiliations, including family relationships, the board has determined that each of Haiping Dun, Tracy Liu, Yinan Xiang and Zhengfan Yang qualify as independent directors in accordance with the rules of Nasdaq and Rules 10C-1 and 10A-3 under the
Securities Exchange Act. The board has also determined that Chenming Hu will qualify as an independent director in accordance with the rules of Nasdaq and Rules 10C-1 and 10A-3 under the Securities Exchange Act as of May 31, 2019. The independent
members of the board will hold separate regularly scheduled executive session meetings at which only independent directors are present.
Director Nomination Rights
In connection with our sale and issuance of capital stock in 2017, we, and certain other stockholders, have entered into a voting agreement with
Shanghai S&T Venture Capital (Group) Co. Ltd., or SSTVC, and a nomination and voting agreement with Xinxin (Hongkong) Capital Co., Limited, or XinXin.
Pursuant to our voting agreement with SSTVC, SSTVC has the right to designate one individual for nomination to the board of
directors. The rights and obligations of the parties under the voting agreement will be in effect as long as SSTVC continues to beneficially own all of the 1,666,170 shares of Class A common stock that have been issued to SSTVC. Yinan Xiang was
initially designated by SSTVC and was appointed as a member of the board effective upon the completion of our initial public offering in November 2017. Ms. Xiang is the designee of SSTVC, and has been nominated by the board, for re-election at the
Annual Meeting.
Pursuant to our nomination and voting agreement with Xinxin, Xinxin has the right to designate one individual for nomination
to the board. In addition, holders who will have 53.8% of the voting power of Class A and Class B common stock, voting together, as of the record date of the Annual Meeting, including David H. Wang, our Chair of the Board, Chief Executive Officer and
President, and Haiping Dun, our Lead Director, have agreed to vote their shares of common stock for the election of the nominee designated by Xinxin. The rights and obligations of the parties under the nomination and voting agreement with Xinxin will
be in effect as long as Xinxin and its affiliates continue to hold at least 625,000 shares of Class A common stock that have been issued to Xinxin. Zhengfan Yang was initially designated by XinXin and was appointed as a member of the board in January
2018. Mr. Yang is the designee of Xinxin, and has been nominated by the board, for re-election at the Annual Meeting.
We have a Code of Business Conduct applicable to all directors, officers
and employees of ACM Research and its subsidiaries. We have posted the Code of Business Conduct on our website at
http://ir.acmrcsh.com/static-files/fdff1cd1-dfea-4a25-a8a6-ae2394fa5d53
. We will post any amendments to the Code of Business Conduct on our website. In accordance with the requirements of the SEC and Nasdaq, we will also post waivers applicable to any of our officers or
directors from provisions of the Code of Business Conduct on our website. We have not granted any such waivers to date.
We have implemented whistleblower procedures, which establish format protocols for receiving and handling complaints from employees. Any concerns
regarding accounting or auditing matters reported under these procedures are to be communicated promptly to the audit committee of the board of directors.
The board of directors has responsibility for the oversight of our risk management processes and, either as a whole or
through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process includes receiving regular reports from board committees and
members of senior management to enable the board to understand our risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, strategic and
reputational risk.
The audit committee of the board reviews information regarding liquidity and operations, and oversees our management of
financial risks. Periodically, the audit committee reviews our policies with respect to risk assessment, risk management, loss prevention and regulatory compliance. Oversight by the audit committee includes direct communication with our external
auditors, and discussions with management regarding significant risk exposures and the actions management has taken to limit, monitor or control such exposures. The compensation committee is responsible for assessing whether any of our compensation
policies or programs has the potential to encourage excessive risk-taking. The nominating and governance committee of the board manages risks associated with the independence of the board, corporate disclosure practices and potential conflicts of
interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire board is regularly informed through committee reports about such risks.
Matters of significant strategic risk are considered by the board as a whole.
Board Leadership Structure
The board of directors recognizes that it is important to determine an optimal board leadership structure to ensure the
independent oversight of management as the company continues to grow. We do not have a policy on whether the offices of Chair of the Board and Chief Executive Officer should be separate and, if they are to be separate, whether the Chair of the Board
should be selected from among the independent directors or should be an employee. Our board has determined that it is in our best interests to have both a Chair of the Board and a Lead Director. Our board has appointed David H. Wang, our Chief
Executive Officer and President, to serve as Chair of the Board and Haiping Dun, an independent director, to serve as Lead Director. Among other things, the Chair of the Board shall prepare agendas for, and preside over, meetings of the board and the
Lead Director shall assist the Chair of the Board in preparing agendas and shall serve as the principal liaison between the Chair of the Board and the other directors. Our board believes that this is the appropriate leadership structure for us at
this time and will allow the board to fulfill its role with appropriate independence.
The board has concluded that our current leadership structure is appropriate at this time. However, the board will continue
to periodically review our leadership structure and may make such changes in the future as it deems appropriate.
The principal responsibilities of the audit committee include:
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appointing, approving the compensation of, and assessing the independence of our registered public accounting firm;
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overseeing the work of our registered public accounting firm, including through the receipt and consideration of reports from such
firm;
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reviewing and discussing with management and the registered public accounting firm our annual and quarterly financial statements and
related disclosures;
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monitoring our internal control over financial reporting and our disclosure controls and procedures;
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meeting independently with our registered public accounting firm and management;
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furnishing the audit committee report required by SEC rules;
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reviewing and reassessing the adequacy of our conflict of interest policy; and
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overseeing our risk assessment and risk management policies.
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Our independent auditor is ultimately accountable to the audit committee. The audit committee has the ultimate authority and
responsibility to select, evaluate, approve terms of retention and compensation of, and, where appropriate, replace the independent auditor.
The current members of the audit committee are Tracy Liu, who serves as chair, Haiping Dun and Yinan Xiang. All three members are standing for
re-election at the Annual Meeting. The board has determined that each of the audit committee members is financially literate and is a “non-employee director” as defined in Rule 16b-3 promulgated under the Securities Exchange Act. The board also
determined that each of the current members of the audit committee is independent, as defined in the listing standards of Nasdaq, and is an “outside director” as that term is defined in Internal Revenue Code Section 162(m). The board has also
determined that Ms. Liu is an audit committee financial expert in accordance with the standards of the SEC.
The audit committee held four meetings in 2018. No member attended less than 75% of the total number of audit committee meetings held while the
member served on the audit committee.
Nominating and Governance Committee
The principal responsibilities of the
nominating and governance committee
include:
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identifying, evaluating, and making recommendations to the board of directors and our stockholders concerning nominees for election to the board, to each of the
board’s committees and as committee chairs;
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annually reviewing the performance and effectiveness of the board and developing and overseeing a performance evaluation process;
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annually evaluating the performance of management, the board and each board committee against their duties and responsibilities relating to corporate governance;
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annually evaluating adequacy of our corporate governance structure, policies and procedures; and
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providing reports to the board regarding the committee’s nominations for election to the board and its committees.
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The current members of the
nominating and governance committee
are Chenming Hu, who serves as chair, Tracy Liu and Zhengfan Yang.
All three members are standing for re-election at the Annual Meeting. The board has determined that each
of Ms. Liu and Mr. Yang is independent, as defined in the listing standards of Nasdaq.
The board has determined that Dr. Hu is not independent under the requirements contemplated by the Securities Exchange Act
or the listing standards of Nasdaq. See “Certain Relationships and Related-Person Transactions—Advisory Board Agreement.” In accordance with NASDAQ Listing Rule IM-5605-6 and our nominating and governance committee charter, Dr. Hu continued to serve
on the nominating and governance committee despite his status as a non-independent director as the board determined that, due to exceptional and limited circumstances, Dr. Hu’s membership on the committee is required by the best interests of ACM and
its stockholders. The board believes that relying on these provisions has not and will not materially adversely affect the ability of the nominating and governance committee to act independently, to perform its duties, and to fulfill its obligations
to ACM and its stockholders. Additionally, the board has determined that Dr. Hu will qualify as independent, as defined in the listing standards of Nasdaq, as of May 31, 2019.
The
nominating and governance committee
has the sole authority to retain, oversee and terminate any consulting or search firm to be used to identify
director candidates or assist in evaluating director compensation and to approve any such firm’s fees and retention terms. The nominating and governance committee held four meetings in 2018. No member attended less than 75% of the total number of
nominating and governance committee meetings held while the member served on the nominating and governance committee.
The nominating and governance committee will consider director nominees recommended by our stockholders in accordance with
our Policy and Procedure for Stockholder Nominations to the Board adopted by the nominating and governance committee and approved by the board in April 2018, a copy of which is posted on our website at
http://ir.acmrcsh.com/static-files/01b22d4f-d523-4d9e-a1ac-56030666adad
. Recommendations should be submitted to our Corporate Secretary in writing at ACM Research, Inc., 42307 Osgood Road, Suite I, Fremont, California 94539, along with additional
required information about the nominee and the stockholder making the recommendation. Information on qualifications for nominations to the board and procedures for stockholder nominations to the board is included below under “Proposal 1. Election of
Directors—Director Qualifications” and “—Identifying and Evaluating Nominees for Directors.”
The principal responsibilities of the compensation committee include:
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evaluating the performance of our Chief Executive Officer and determining the Chief Executive Officer’s salary and contingent compensation based on his or her
performance and other relevant criteria;
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identifying the corporate and individual objectives governing the Chief Executive Officer’s compensation;
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approving the compensation of our other executive officers;
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making recommendations to the board with respect to director compensation;
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reviewing and approving the terms of certain material agreements;
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overseeing and administering our equity incentive plans and employee benefit plans;
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preparing the annual compensation committee report required by SEC rules; and
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conducting a review of executive officer succession planning, as necessary, reporting its findings and recommendations to the board, and working with the board in
evaluating potential successors to executive officer positions.
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The current members of the compensation committee are Haiping Dun, who serves as chair, and Tracy Liu. Each of the
compensation committee members is standing for re-election at the Annual Meeting. The board has determined that each of Dr. Dun and Ms. Liu is independent, as defined in the listing standards of Nasdaq, is a “non-employee director” as defined in Rule
16b-3 promulgated under the Securities Exchange Act and is an “outside director” as that term is defined in Internal Revenue Code Section 162(m).
The compensation committee held one meeting in 2018. Each then-serving member participated in the meeting of the compensation committee. The
compensation committee has the sole authority to retain, oversee and terminate any compensation consultant to be used to assist in the evaluation of executive compensation and to approve the consultant’s fees and retention terms.
Compensation Committee Interlocks and Insider Participation
During 2018 none of the members of the compensation committee was an officer or employee of our company or our subsidiaries and none of our
executive officers served as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on the board or compensation committee.
Certain Relationships and Related-Person Transactions
In October 2017 the board of directors adopted a Conflict of Interest Policy
applicable to all directors, officers and employees of our company and our subsidiaries. We have posted the Conflict of Interest Policy on our website at
http://ir.acmrcsh.com/static-files/c9bb9bf0-847b-4f79-b747-bf7e5bb06994
. We will post any amendments to the Conflict of Interest Policy on our website.
The Conflict of Interest Policy requires each director and executive officer, including their immediate family members, to
provide written notice of any potential related-party transaction, defined by the policy to mirror the definition of Item 404 of Regulation S-K of the SEC (with the exception that the policy includes a monetary threshold of $100,000 as opposed to the
threshold of $120,000 set by Item 404 of Regulation S-K) to the Chair of the Board (or to the Chief Executive Officer if such transaction involves the Chair of the Board, or to the Chief Financial Officer if such transaction involves the Chief
Executive Officer), including all information that the Chair of the Board, the Chief Executive Officer or the Chief Financial Officer may request. Upon receiving all relevant information, the board may approve the transaction if it determines that
the transaction is in the best interests of, and fair to, us, may require modifications to the transaction to make it acceptable for approval, or may reject it. The board may also establish guidelines for ongoing management of a specific
related-party transaction. The policy requires that continuing related-party transactions are reviewed on at least an annual basis. Additionally, the policy requires that all directors and executive officers complete a questionnaire in connection
with each of our annual proxy statements, in which they are asked to disclose family relationships and other related-party transactions.
The following is a description of transactions since January 1, 2017 to which we have been a party, in which the amount
involved exceeded or will exceed $120,000 and in which any of our directors, executive officers or beneficial owners of more than 5% of any series or class of our preferred or common stock, or an affiliate or immediate family member thereof, had or
will have a direct or indirect material interest, other than compensation, termination and change-in-control arrangements. The transactions set forth below were approved by a majority of the board, including a majority of the independent and
disinterested members of the board. We believe we have executed all of the transactions set forth below on terms no less favorable to us than we could have obtained from unaffiliated third parties. It is our intention to ensure that all future
transactions between us and our officers, directors and principal stockholders and their affiliates are approved by the audit committee and a majority of the members of the board, including a majority of the independent and disinterested members of
the board, and are on terms no less favorable to us than those that we could obtain from unaffiliated third parties.
Issuance and Exercise of Warrant
In December 2016 Shengxin (Shanghai) Management Consulting Limited Partnership, or SMC, paid 20,123,500 RMB (approximately
$3.0 million as of the date of funding) to ACM Shanghai for potential investment pursuant to terms to be subsequently negotiated. SMC is a PRC limited partnership owned by Jian Wang and other employees of our subsidiary ACM Shanghai. Jian Wang, who
is the general partner of SMC, is our Vice President, Research and Development and the brother of our Chief Executive Officer and President David H. Wang.
In March 2017 we issued to SMC a warrant exercisable to purchase 397,502 shares of Class A common stock at a price of $7.50
per share, for a total exercise price of approximately $3.0 million. The warrant was exercisable for cash or on a cashless basis, at the option of SMC, at any time on or before May 17, 2023 to acquire all, but not less than all, of the shares of
Class A common stock subject to the warrant.
In March 2018 we entered into a warrant exercise agreement with ACM Shanghai and SMC pursuant to which SMC exercised the SMC warrant in full by
issuance to us of a senior secured promissory note in the principal amount of approximately $3.0 million. We transferred the SMC note to ACM Shanghai, in exchange for an intercompany promissory note issued by ACM Shanghai to us in the principal
amount of approximately $3.0 million. Each of the two notes bears interest at a rate of 3.01% per annum and matures on August 17, 2023. As security for its performance of its obligations under its note, SMC granted to ACM Shanghai a security interest
in the 397,502 shares of Class A common stock issued to SMC upon its exercise of the warrant.
Advisory Board Agreement
In May 2016 we entered into an Advisory Board Agreement with one of our directors, Chenming Hu, under which Dr. Hu agreed to
serve as a member of our advisory board and to use commercially reasonable efforts to provide us with various advisory services for a term extending until May 2020. We agreed to pay to Dr. Hu consulting fees of $25,000 per calendar quarter during the
terms of the agreement and we granted to Dr. Hu in May 2016 an option to purchase up to 83,333 shares of common stock at $3.00 per share, all of which have vested.
Director and Executive Compensation and
Indemnification Agreements
Please see “Director Compensation” and “Executive Compensation” for a discussion regarding the compensation of our
non-employee directors and our executive officers.
In April 2017 we entered enter into indemnification agreements with our directors and executive officers. Under these agreements, we agree to
indemnify, to the fullest extent permitted by Delaware law (subject to certain limitations), each of our directors and executive officers against any and all expenses incurred by the director or officer in connection with proceedings because of his
or her status as one of our directors or executive officers. In addition, these indemnification agreements provide that, to the fullest extent permitted by Delaware law, we will pay for all expenses incurred by our directors and executive officers in
connection with a legal proceeding arising out of their service to us.
Our director compensation program is intended to enhance our ability to attract, retain and motivate non-employee directors
of exceptional ability and to promote the common interest of directors and stockholders in enhancing the value of the common stock. The board of directors reviews director compensation at least annually based on recommendations by the nominating and
governance committee. The nominating and governance committee has the sole authority to engage a consulting firm to evaluate director compensation.
In October 2017 we adopted a policy with respect to the compensation payable to certain of our non-employee directors, which
became effective upon the completion of our initial public offering on November 7, 2017. Under this policy, each qualifying non-employee director is eligible to receive compensation for board and committee service consisting of annual cash retainers
and equity awards. Our qualifying non-employee directors receive the following annual cash retainers for their service:
DIRECTOR ANNUAL CASH RETAINERS
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Position
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Retainer
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Lead Director
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$20,000
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Other Directors
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15,000
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Audit Committee Chair
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4,000
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Other Audit Committee Members
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3,000
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Compensation Committee Chair
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4,000
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Other Compensation Committee Members
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3,000
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Nominating and Governance Committee Chair
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4,000
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Other Nominating and Governance Committee Members
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3,000
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Equity awards for qualifying non-employee directors will consist of (a) an initial equity award with a
value of $75,000, upon initial election to the board, subject to vesting and to continued service on the board, and (b) annual equity awards with a value of $35,000, subject to vesting and continued service on the board.
Directors may be reimbursed for reasonable out-of-pocket expenses incurred in attending board and
committee meetings.
In October 2017 the board adopted a Director Compensation Policy. Under this policy, each director receives $75,000 in
restricted stock units upon his or her initial election to the board. These restricted stock units are subject to vesting restrictions that are contingent upon continued board service. Additionally, on the date of each annual meeting of stockholders,
each director who (a) is not a designee nominated to the board pursuant to existing agreements to which ACM is a party and (b) is continuing his or her board service following the date of the then‑current annual meeting of stockholders, shall receive
$35,000 in restricted stock units, subject to vesting restrictions. Pursuant to the terms of the Director Compensation Policy, none of our directors were eligible to receive this annual equity compensation in 2018. Mr. Dun will be eligible beginning
on the date of the Annual Meeting, Ms. Liu will be eligible beginning on the date of our 2020 annual meeting of stockholders and Dr. Hu will be eligible beginning on the date of our 2021 annual meeting of stockholders. Ms. Xiang and Mr. Yang do not
qualify for eligibility to receive this annual equity compensation because they are designees nominated to the board pursuant to existing agreements to which ACM is a party, as described under “Corporate Governance—Director Nomination Rights.”
The following table shows the total compensation for non-employee directors during 2018. David H. Wang,
our sole executive officer who served as a member of the board during 2018, did not receive any additional compensation for such service as a director.