Check the appropriate box: (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): Date Filed: To the shareholders of Sino-Global Shipping America, Ltd.: 1044 Northern Boulevard, Roslyn, New York 11576-1514. The You are On behalf of the Board of Directors, I thank you for your support and continued interest in Sino-Global. Sincerely, This Notice and the Proxy Statement are first being mailed to shareholders on or about May 28, 2015. Sino-Global Shipping America, Ltd. Pursuant to the rules promulgated by the Securities and Exchange Commission, or SEC, we have elected to provide access to our proxy materials both by sending you this full set of proxy materials, including a proxy card, and by notifying you of the availability of our proxy materials on the Internet. By Order of the Board of Directors, This proxy statement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to the financial condition, results of operations, cash flows, financing plans, business strategies, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives of management and other matters. Statements in this document that are not historical facts are identified as forward-looking statements for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and Section 27A of the Securities Act of 1933, as amended, or the Securities Act. When we use the words “anticipate,” “estimate,” “project,” “intend,” “expect,” “plan,” “believe,” “should,” “likely” and similar expressions, we are making forward-looking statements. These forward-looking statements are found at various places throughout this proxy statement and any other documents we incorporate by reference in this proxy statement. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events. These forward-looking statements, including statements relating to our future business prospects, revenues, working capital, liquidity, capital needs and income, wherever they occur in this proxy statement, are estimates reflecting our best judgment. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in this proxy statement and those discussed from time to time in our Securities and Exchange Commission, or SEC, reports, including our annual report on Form 10-K for the year ended June 30, 2014 filed with the SEC on September 15, 2014 and our subsequently filed quarterly reports on Form 10-Q. You should read and consider carefully the information about these and other risks set forth under the caption “Risk Factors” in such filings. As used in this proxy statement, the terms “we,” “us,” “our,” the “Company,” and “Sino-Global” refer to Sino-Global Shipping America Ltd. and our subsidiaries and affiliates, unless the context indicates otherwise.UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATIONPROXY STATEMENT PURSUANT TO SECTIONProxy Statement Pursuant to Section 14(a)
OFof theTHE SECURITIES EXCHANGE ACT OFSecurities Exchange Act of 1934Filed by the Registrant x Filed by a Party other than the Registrant o ¨oPreliminary Proxy Statement o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) x Definitive Proxy Statement o Definitive Additional Materials o Soliciting Material Pursuant to Rule 14a-12§240.14a-12SINO-GLOBAL SHIPPING AMERICA, LTD.
x No fee required. o 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: _____(5) Total fee paid: _____o Fee paid previously with preliminary materials. o 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. (1) Amount Previously Paid: _____(2) Form, Schedule or Registration Statement No.: _____(3) Filing Party: _____(4) _____Sino-Global Shipping America, Ltd.
136-56 39thAvenue, Room #305Flushing,
1044 Northern Boulevard
Roslyn, New York 11354NOTICE OFFICIAL YEAR 2014 ANNUAL MEETING OF SHAREHOLDERSJanuary 21, 2014,11576-1514
June 11, 2015, at 11:10:00 a.m., BeijingNew York timeIt is my pleasure to invite youYou are cordially invited to attend our Fiscal Year 20142015 Annual Meeting of Shareholders on January 21, 2014,June 11, 2015, at 11:10:00 a.m., BeijingNew York time. The meeting will be held at the Company’s officeour executive offices located atRoom 1108, Tower B, TEWOO Plaza, No. 22 Liuyangdao, Dashi Industrial Zone, Xiqing District.Tianjin,People's Republic of China.mattersaccompanying Notice of Annual Meeting and Proxy Statement, which you are urged to read carefully, provides important information regarding the business to be acted uponconducted at the meetingannual meeting.as follows (as described more fullyrequested to complete, date and sign the enclosed proxy card and promptly return it in the accompanyingenclosed envelope or vote by telephone or Internet, whether or not you plan to attend the annual meeting. If you attend the meeting, you may vote in person even if you have previously submitted a proxy statement:card.Regardless of the number of shares you own or whether you plan to attend the annual meeting, it is important that your shares be represented and voted. If you hold your shares in “street name” (that is, through a broker, bank or other nominee), please complete, date and sign the voting instruction form that has been provided to you by your broker, bank or other nominee and promptly return it in the enclosed envelope or review the instructions in the materials forwarded by your broker, bank or other nominee regarding the option to vote on the Internet or by telephone. If you hold your shares directly and plan to attend the meeting in person, please remember to bring a form of personal identification with you and, if you are acting as a proxy for another shareholder, please bring written confirmation from the record owner that you are acting as a proxy. If you hold your shares in “street name” and plan to attend the meeting in person, please remember to bring a form of personal identification with you and proof of beneficial ownership.
/s/ Lei Cao
Mr. Lei Cao
CHAIRMAN OF THE BOARD OF DIRECTORS OF
SINO-GLOBAL SHIPPING AMERICA, LTD.
1044 Northern Boulevard
Roslyn, New York 11576-1514NOTICE OF 2015 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY JUNE 11, 2015Date and Time June 11, 2015, at 10:00 a.m., New York time Place 1044 Northern Boulevard, Roslyn, New York 11576-1514 Items of Business (1) To elect two Class I members ofII nominees named in the attached proxy statement to serve on the Board of Directors to serve a term expiring atuntil the Annual Meeting2018 annual meeting of the Shareholdersshareholders in 2017 or until their respective successors isare duly elected and qualified;(2) To approve, under NASDAQ Listing Rule 5635(a) the issuance pursuant to an Asset Purchase Agreement dated April 10, 2015 (“the Asset Purchase Agreement”) between the Company and Rong Yao International Shipping Limited (the “Vessel Seller”), of more than 20% of our issued and outstanding shares of common stock as of April 9, 2015, to the Vessel Seller in connection with our proposed acquisition of an 8,818 gross tonnage oil/chemical transportation tanker named the “Rong Zhou” (the “Vessel”), which in connection with such acquisition and in addition to the 1.2 million shares we issued to the Vessel Seller on April 10, 2015 as payment of the First Installment (as defined in the attached proxy statement), of the Vessel acquisition purchase price, we may, subject to shareholder approval of Proposal 2 and Proposal 3 in the attached proxy statement and agreement between the Company and the Vessel Seller, issue up to an additional $4.0 million of our shares of common stock at a price of $1.85 per share (2,162,162 additional shares) to the Vessel Seller as part of the remaining purchase price of the Vessel; (3) To approve, under NASDAQ Listing Rule 5635(b) any deemed “change of control” of the Company under NASDAQ Listing Rule 5635(b) resulting from the potential issuance by us to the Vessel Seller of up to a total of 3,362,162 shares we may issue to the Vessel Seller in connection with the proposed Vessel acquisition; (4) To ratify the appointment of Friedman LLP as the Company’s independent registered public accounting firm for our fiscal year ending June 30, 2015; (5) To vote on an advisory, nonbinding resolution to approve the compensation of the Company’s named executive officers as disclosed in the attached proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission; and (6) To transact any other business properly coming before the meeting. Record Date You can vote if, at the close of business on April 9, 2015 (the “Record Date”), you were a holder of record of our common stock. Proxy Voting All shareholders are cordially invited to attend the Annual Meeting in person. However, to ensure your representation at the Annual Meeting, you are urged to vote promptly by signing and returning the enclosed proxy card or by telephone or Internet, or if you hold your shares in street name using the voting instruction form provided by your broker, bank or nominee, or by accessing the website or toll-free number indicated on the voting instructions accompanying your proxy card to vote via the Internet or phone. The Board of Directors unanimously recommends that you vote to:
/s/ Lei Cao
Mr. Lei Cao
CHAIRMAN OF THE BOARD OF DIRECTORS OF
SINO-GLOBAL SHIPPING AMERICA, LTD.STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE 2015 ANNUAL MEETING OF SHAREHOLDERSWhy am I receiving these materials? The Board of Directors of Sino-Global Shipping America Ltd., or our Board of Directors, is providing these proxy materials to you in connection with our 2015 annual meeting of common shareholders, which will take place on Thursday, June 11, 2015. Our common shareholders are invited to attend the annual meeting and are entitled to and requested to vote on the proposals described in the attached proxy statement. What information is contained in the attached proxy statement? The information included in the attached proxy statement relates to the proposals to be voted on at the annual meeting, the voting process, information including compensation concerning directors and our most highly paid executive officers, and certain other required information. What am I voting on at the annual meeting? You will be voting on the following proposals:
(1) To elect two Class II nominees named in the attached proxy statement to serve on the Board of Directors until the 2018 annual meeting of shareholders in or until their respective successors are duly elected and qualified;(2) To approve, under NASDAQ Listing Rule 5635(a) the issuance pursuant to an Asset Purchase Agreement dated April 10, 2015 (“the Asset Purchase Agreement”) between the Company and Rong Yao International Shipping Limited (the “Vessel Seller”), of more than 20% of our issued and outstanding shares of common stock as of April 9, 2015, to the Vessel Seller in connection with our proposed acquisition of an 8,818 gross tonnage oil/chemical transportation tanker named the “Rong Zhou” (the “Vessel”), which in connection with such acquisition, and, in addition to the 1.2 million shares we issued to the Vessel Seller on April 10, 2015 as payment of the First Installment (as defined in the attached proxy statement), of the Vessel acquisition purchase price, we may, subject to shareholder approval of Proposal 2 and Proposal 3 in the attached proxy statement and agreement between us and the Vessel Seller, issue up to an additional $4.0 million of our shares at a price per share of $1.85 (2,162,162 additional shares), to the Vessel Seller as part of the remaining purchase price of the Vessel; (3) To approve, under NASDAQ Listing Rule 5635(b) any deemed “change of control” of the Company under NASDAQ Listing Rule 5635(b) resulting from the potential issuance to the Vessel Seller of up to a total of 3,362,162 shares we may issue in connection with the Vessel acquisition; (4) To ratify the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2014;2015;(3)(5) To vote on an advisory, nonbinding resolution to approve the compensation of the Company'sCompany’s named executive officers as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission; and(4)To vote on an advisory, nonbinding resolution to approve the frequency of advisory votes on named executive officer compensation;(5)To approve the increase of the number of authorized shares of Common Stock from 10 million to 50 million shares;(6) To approve the increase of the number of authorized shares of Preferred Stock from 1 million to 2 million shares;(7)To approve the implementation of a new share incentive plan with 10 million shares of Common Stock;(8)To approve the termination of certain restrictions related to the disposition of shares issued to Mr. Zhong Zhang pursuant to last year's annual meeting of shareholders; and(9)To transact any other business properly coming before the meeting. At the meeting, we will also report on the Company’s performance and operations during the fiscal year ended June 30, 2013 and respond to shareholder questions. A copy of our 2013 Annual Report on Form 10-K is enclosed.You may vote if you were a shareholder of record on December 2, 2013. Your vote is very important. Whether or not you plan to attend the annual meeting of shareholders, we urge you to vote and submit your proxy by telephone, the internet or by mail. If you are a registered shareholder and attend the meeting, you may revoke your proxy and vote your shares in person. If you hold your shares through a bank or broker and want to vote your shares in person at the meeting, please contact your bank or broker to obtain a legal proxy. Thank you for your support.Sincerely,/s/ Zhikang HuangZhikang HuangSecretaryThis Notice and the Proxy Statement are first being mailed to shareholders on or about December 31, 2013. ABOUT THE 2014 ANNUAL MEETING OF SHAREHOLDERSHow does the Board of Directors recommend I vote? Our Board of Directors unanimously recommends that you vote your shares of common stock: What am I voting on?You will be voting on(1)“FOR” the following proposals:(1)To elect two Class I members ofII nominees named in the attached proxy statement to serve on the Board of Directors, to serve a term expiring at the Annual Meeting of the Shareholders in 2017 or until their successors is duly elected and qualified;Directors; (2)“FOR” the proposed issuance to the Vessel Seller of more than 20% of our issued and outstanding common stock as of April 9, 2015, in connection with the Vessel acquisition; (2)To ratify(3)“FOR” any deemed “change of control” of the Company under NASDAQ Listing Rule 5635(b) resulting from the potential issuance to the Vessel Seller of up to a total of 3,362,162 shares in connection with the Vessel acquisition;(4)“FOR” the ratification of the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2014;2015; and (3)To vote on(5)“FOR” an advisory, nonbinding resolution to approve the compensation of the Company'sCompany’s named executive officers as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission;officers.(4)To vote on an advisory, nonbinding resolution to approve the frequency of advisory votes on named executive officer compensation;(5)To approve the increase of the number of authorizedWhat shares of Common Stock from 10 million to 50 million shares;(6)To approve the increase of the number of authorized shares of Preferred Stock from 1 million to 2 million shares;(7)To approve the implementation of a new share incentive plan with 10 million shares of Common Stock;(8)To approve the termination of certain restrictions related to the disposition of shares issued to Mr. Zhong Zhang pursuant to last year's annual meeting of shareholders; and(9)To transact any other business properly coming before the meeting.Who is entitled tocan I vote? You may vote if you owned shares of the Company’s Common Stockour common stock owned by you as of the close of business on December 2, 2013.April 9, 2015 (the “Record Date”). Each share of Common Stockcommon stock is entitled to one vote. As of December 2, 2013,April 9, 2015, we had 4,703,8416,200,841 shares of Common Stockcommon stock outstanding.How do I vote before the meeting? If you are a registered shareholder, meaning that you hold your shares in certificate form, you have three voting options: (1)(1)By Internet, which we encourage if you have Internet access, at the address shown on your proxy card; (2) By phone, at 1-800-652-VOTE or 8683telephone, using any touch-tone telephone to transmit your voting instructions;instructions by calling the number specified on your proxy card; or (3) By mail, by completing, signing and returning the enclosedyour proxy card. If you hold your shares through an account with a bank or broker, your ability to vote by the Internet depends on their voting procedures. Please follow the directions that your bank or broker provides. May I vote at the annual meeting? If you are a registered shareholder, you may vote your shares owned by you as or April 9, 2015 at the annual meeting if you attend in person. If you hold your shares through an account with a bank or broker, please follow the directions provided to you by your bank or broker. If you wish to vote in person at the meeting, please contact your bank or broker to learn the procedures necessary to allow you to vote your shares in person. Even if you plan to attend the meeting, we encourage you to vote your shares by proxy. You may vote by proxy through the Internet, by telephone or by mail.
Can I change my mind after I return my proxy? | You may change your vote at any time before the polls close at the conclusion of voting at the meeting. You may do this by (1) signing another proxy card with a later date and returning it to us before the meeting, (2) voting again over the Internet prior to 11:59 p.m., |
What if I return my proxy card but do not provide voting instructions? | Proxies that are signed and returned but do not contain instructions will be voted in favor of all proposals | |
What does it mean if I receive more than one proxy card or instruction form? | It indicates that your shares are registered differently and are in more than one account. To ensure that all shares are voted, please either vote each account by telephone or on the Internet, or sign and return all proxy cards. We encourage you to register all your accounts in the same name and address. Those holding shares through a bank or broker should contact your bank or broker and request consolidation. |
Will my shares be voted if I do not provide my proxy or instruction form? | If you are a registered shareholder and do not provide a proxy, you must attend the meeting in order to vote your shares. If you hold shares through an account with a bank or broker, your shares may be voted even if you do not provide voting instructions on your instruction form. Brokerage firms have the authority to vote shares for which their customers do not provide voting instructions on certain routine matters. The ratification of Friedman LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, | |
How can I attend the meeting? | The meeting is open to all holders of | |
May shareholders ask questions at the annual meeting? | Yes. Representatives of the Company will answer questions of general interest at the end of the meeting. | |
How many votes must be present to hold the annual meeting? | In order for us to conduct our annual meeting, a majority of our issued and outstanding shares of common stock as of April 9, 2015 must be present in person or by proxy at the annual meeting. This is referred to as a quorum. Abstentions and broker non-votes will be counted for purposes of establishing a quorum at the meeting. Your shares are counted as present at the meeting if you attend the meeting and vote in person or if you properly return a proxy by Internet, telephone or mail. | |
Where can I find a | A copy of |
How many votes are needed to approve the Company’s proposals? | Proposal 1. The nominees receiving the highest number of | |
Proposal 2. The approval, under NASDAQ Listing Rule 5635(a), of the issuance to the Vessel Seller of more than 20% of our issued and outstanding common stock as of April 9, 2015, in connection with our proposed acquisition of the Vessel pursuant to the Asset Purchase Agreement, which in connection with such acquisition, and, in addition to the 1.2 million shares we issued to the Vessel Seller on April 10, 2015 as payment of the First Installment (as defined in the proxy statement), of the purchase price of the Vessel acquisition, we may, subject to shareholder approval of Proposal 2 and Proposal 3 in the attached proxy statement and agreement between us and the Vessel Seller, issue up to an additional $4.0 million of our shares of common stock at a price of $1.85 per share (2,162,162 additional shares) to the Vessel Seller as part of the remaining purchase price of the Vessel, requires that a vote “For” the proposal be cast by a majority of the votes cast at the meeting. | ||
Proposal | ||
Proposal 4.The ratification of the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, | ||
Proposal |
Sino-Global Shipping America, Ltd.
1044 Northern Boulevard
Roslyn, New York 11576-1514
A brief biography of each Director in each Class follows. You are asked to vote for the Class II nominees to serve as Class II members of the Board of Directors. The Class II nominees for our Board of Directors have consented to serve if elected. The term of the Class I members of the Board of Directors continue until 2017 and the term of the Class III members of the Board of Directors continue until 2016.
Nominees for election as Class | ||
| ||
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Lei Cao
51 | Mr. Cao is our Chief Executive Officer and a Director. Mr. Cao founded |
55 | Dr. Liu currently serves as the vice president in charge of accounting and finance to China Sun-Trust Group Ltd. and has held this position since 2001. Dr. Liu was a financial controller for Huaxing Group Ltd from 1998 to 2001. From 1996 through 1998, he was the chief accountant of China Enterprise Consulting Co., Ltd. Before working in industry, Dr. Liu taught accounting and finance in a university for more than ten years and has published tens of books and articles. Dr. Liu is a CPA in China. He received a PhD, master and bachelor degrees from Tianjin University of Finance and Economics. Dr. Liu has been chosen to serve as a director because of his accounting and business knowledge and experience in working with |
Class I members of the Board of Directors whose terms continue to 2017: | ||
Ming Zhu Independent Director Age — 56 Director since 2014 | Mr. Zhu has been an international business consultant with RMCC Investment LLC, a Richmond, Virginia based consulting firm, since 1994. Mr. Zhu holds a master’s degree in tourism and business from Virginia Commonwealth University. Mr. Zhu has also served as an independent director at eFuture Information Technology Inc. since 2007 and as an independent director of Tri-Tech Holding, Inc. since 2012. Mr. Zhu was chosen as a director because of his experience with public companies and knowledge of our company. |
Anthony S. Chan Acting Chief Financial Officer and Executive Vice President Age — 51 Director since 2014 | Mr. Chan has served as our Acting Chief Financial Officer and Executive Vice President and a director since 2014. He is a CPA licensed in New York with over 25 years of professional experience in auditing, SEC reporting, mergers and acquisitions (M&A), SOX compliance, internal controls and risk management. Mr. Chan has advised and audited public companies and privately-held organization across various industries including manufacturing, shipping, media and publishing, entertainment, communications, insurance, and real estate. Prior to joining us in 2013, Mr. Chan was an audit partner specializing in the delivery of assurance and advisory services to public companies with operations in China. From 2012 until 2013, Mr. Chan was an audit partner with UHY LLP. From 2011 until 2012, he was an audit partner at Friedman LLP. From 2007 through 2011, he was a partner at Berdon LLP, an auditing firm. In addition, Mr. Chan was a former divisional CFO for a publicly traded company and had spent more than a decade at Big Four accounting firms delivering quality assurance and M&A consulting services. His international experience also includes providing financial due diligence for strategic and financial buyers on various cross-border opportunities in mainland China, Taiwan, Finland, Mexico, and Puerto Rico. Mr. Chan is a Director on the Board of Directors of the New York State Society of Certified Public Accountants and a member of the editorial board for The CPA Journal. Mr. Chan was chosen as a director because of his expertise with auditing, SEC reporting, internal control procedures, M&A transactions and his business restructuring experience. | |
Class III members of the Board of Directors whose terms continue to 2016: | ||
Jing Wang Independent Director Age — 67 Director since 2007 | ||
|
Involvement in Certain Legal Proceedings | To the best of our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities or commodities laws, any laws respecting financial institutions or insurance companies, any law or regulation prohibiting mail or wire fraud in connection with any business entity or been subject to any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization, except for matters that were dismissed without sanction or settlement. None of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC. |
Board Leadership Structure | Mr. Lei Cao currently holds both the positions of Chief Executive Officer and Chairman of the Board. These two positions have not been consolidated into one position; Mr. Cao simply holds both positions at this time. The Board of Directors believes that Mr. Cao’s service as both Chief Executive Officer and Chairman of the Board is in the best interests of the Company and its shareholders. Mr. Cao possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company and its business and is thus best positioned to develop agendas that ensure that the Board’s time and attention are focused on the most critical matters. His combined role enables decisive leadership, ensures clear accountability, and enhances the Company’s ability to communicate its message and strategy clearly and consistently to the Company’s shareholders, employees, customers, vendors and suppliers. | |
We do not have a lead independent director because of the foregoing reasons and also because we believe our independent directors are encouraged to freely voice their opinions on a relatively small company board. We believe this leadership structure is appropriate because we are a smaller reporting company as such we deem it appropriate to be able to benefit from the guidance of Mr. Cao as both our Chief Executive Officer and Chairman of the Board. | ||
Risk Oversight | Our Board of Directors plays a significant role in our risk oversight. The Board of Directors makes all relevant Company decisions. As such, it is important for us to have our Chief Executive Officer serve on the Board as he plays a key role in the risk oversight of the Company. As a smaller reporting company with a small board of directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters. |
For additional information regarding, among other related items, our Board of Directors, Corporate Governance, the Compensation Committee, the Audit Committee and the Corporate Governance Committee and compensation of our named executive officers please see page 19.
WE RECOMMEND THAT YOU VOTE FOR THE ELECTION
OF THE TWO (2) CLASS II NOMINEES TO THE BOARD OF DIRECTORS.
What am I voting on? | To approve, under NASDAQ Listing Rule 5635(a) the issuance pursuant to an Asset Purchase Agreement dated April 10, 2015 (“the Asset Purchase Agreement”) between the Company and Rong Yao International Shipping Limited (the “Vessel Seller”), of more than 20% of our issued and outstanding shares of common stock as of April 9, 2015, to the Vessel Seller in connection with our proposed acquisition of an 8,818 gross tonnage oil/chemical transportation tanker named the “Rong Zhou” (the “Vessel”), which in connection with such acquisition, and, in addition to the 1.2 million shares we previously issued to the Vessel Seller on April 10, 2015 as payment of the First Installment (as defined in below) of the Vessel acquisition purchase price pursuant to the Asset Purchase Agreement, we may, subject to shareholder approval of this Proposal | |
Certain information regarding the Vessel acquisition and related items. | Pursuant to the Asset Purchase Agreement, we agreed to purchase from the Vessel Seller for $10.5 million, the Vessel. The $10.5 million purchase price for the Vessel payable by us to the Vessel Seller will be paid as follows: | |
(iii) the remaining $2.78 million balance of the purchase price (which is subject to adjustments as provided in the Asset Purchase Agreement for defects discovered during our inspection, trial run and for a period of 12 months following the closing of the Vessel acquisition) in cash, additional shares of our restricted common stock and/or a combination thereof, as agreed to by the parties (the “Final Installment”). | ||
To satisfy a portion of the remaining $8.28 million purchase price owed by us to the Vessel Seller we may in our discretion, but subject to shareholder approval of this Proposal 2 and Proposal 3 set forth below, and agreement between us and the Vessel Seller, issue up to an additional $4.0 million of our shares at a price of $1.85 per share (2,162,162 additional shares) to the Vessel Seller. The aggregate number of shares of common stock we may issue to the Vessel Seller as a portion of the Vessel purchase price, however, shall not exceed a in the aggregate a total of 3,362,162 shares (which includes the 1.2 million shares issued to the Vessel Seller on April 10, 2015 as payment of the First Installment pursuant to the Asset Purchase Agreement). | ||
In the event the above mentioned and/or other conditions to closing have not been satisfied by the Vessel Seller or waived by us, we may elect to (x) not close, in which event the Vessel Seller will be required to immediately pay to us $2.22 million in cash and we will have a lien on and a security interest in the Vessel to secure payment of such amount by the Vessel Seller to us, or (y) close on the acquisition of the Vessel and reduce the purchase price of the Vessel in such amount as agreed to between us and the Vessel Seller in order for us to repair any defects to the Vessel and have the Vessel conform to required industry standards, as the case may be. In no event, however, will the Vessel Seller be obligated to return to us any of the 1.2 million shares we previously issued to it. | ||
Why does the Company need Shareholder Approval? | Our common stock is listed on the NASDAQ Capital Market and, as a result, we are subject to the Nasdaq Listing Rules. Because the issuance of all of the additional 2,162,162 shares of our common stock to the Vessel Seller together with the 1.2 million shares issued on April 10, 2015 to the Vessel Seller as the First Installment, would result in us issuing greater than 20% of our issued an outstanding common stock as of April 9, 2015 to the Vessel Seller, we are required pursuant to NASDAQ Listing Rule 5635(a) to obtain shareholder approval prior to the issuance to the Vessel Seller of any of such 2,162,162 additional shares of common stock to maintain our listing of our common stock on NASDAQ Capital Market. | |
NASDAQ Listing Rule 5635(a) requires shareholder approval prior to the issuance of securities in connection with the acquisition of another company (which includes asset acquisitions) if such securities are not issued in a public offering and (A) have, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of common stock (or securities convertible into or exercisable for common stock); or (B) the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities (the “20% Rule”). |
As of the Record Date, April 9, 2015, we had issued and outstanding 6,200,841 shares of common stock. In connection with our proposed acquisition of the Vessel, we may issue to the Vessel Seller up to a total of 3,362,162 shares of our common stock (of which we previously issued 1.2 million to the Vessel Seller in the First Installment pursuant to the Asset Purchase Agreement), which if all such 3,362,162 shares were issued to the Vessel Seller, the Vessel Seller would own approximately 35.15% of our issued and outstanding common stock as of April 9, 2015. As a result, the aggregate number of shares of our common stock we may issue to the Vessel Seller in connection with our proposed acquisition of the Vessel could result in the issuance of more than 20% of our outstanding common stock as of April 9, 2015. | ||
Accordingly, we are seeking shareholder approval for this Proposal 2 to satisfy the shareholder approval requirement of the 20% Rule. Under the NASDAQ Listing Rule 5635(a), the minimum vote which will constitute shareholder approval of this Proposal 2 for the purposes of the 20% Rule is a majority of the total votes cast on the proposal in person or by proxy at the annual meeting. | ||
We did not seek advance shareholder approval of the potential issuance of all of the 3,362,162 shares we may issue to the Vessel Seller, because the 1.2 million shares we issued to the Vessel Seller in the First Installment prior to shareholder approval was less than 20% of our issued and outstanding common stock, and, as such, prior shareholder approval was not required pursuant to NASDAQ Listing Rule 5635(a). | ||
What effect, if any, will the issuance of additional shares of our common stock to the Vessel Seller pursuant to Proposal 2 have on our existed security holders? | If Proposals 2 and 3 are adopted the Company may issue shares of common stock to the Vessel Seller in excess of 20%. More specifically, if Proposals 2 and 3 are approved by the shareholder and we agree with the Vessel Seller to issue additional shares of common stock to the Vessel Seller as partial payment of the remaining portion of the Vessel acquisition purchase price, shareholders will experience an immediate dilution in the net tangible book value of their shares of our common stock. As of April 9, 2015 , we had 6,200,841 shares of common stock outstanding. If we issued all of the 3,362,162 shares to the Vessel Seller in connection with the Vessel acquisition (of which 1.2 million shares were issued to the Vessel Seller on April 10, 2015 as payment of the First Installment of the Vessel acquisition purchase price) the total number of shares outstanding would be 9,563,003, representing an approximately fifty-four (54%) percent increase in the number of shares issued and outstanding after such issuance compared to the number of shares issued and outstanding on April 9, 2015. | |
Additionally, the sale or any resale into the public markets of any shares issued to the Vessel Seller could cause the market price of our Common Stock to decline. |
What voting options do I have? | Shareholders may vote “For” or “Against” this Proposal 2. A vote of “For” would mean that a shareholder is voting in favor of the issuance by us of more than 20% of our common stock to the Vessel Seller as of April 9, 2015 in connection with our proposed acquisition of the Vessel. Specifically, we may issue up to a total of 3,362,162 shares to the Vessel Seller in connection with the Vessel acquisition (of which 1.2 million shares were issued to the Vessel Seller on April 10, 2015 as payment of the First Installment of the Vessel acquisition purchase price), and, subject to shareholder approval of Proposal 2 and Proposal 3 and agreement between us and the Vessel Seller, we may issue to the Vessel Seller up to an additional $4.0 million of our shares at a price of $1.85 per share (2,162,162 additional shares) as partial payment of the remaining portion of the Vessel acquisition purchase price. | |
What vote is required to approve this proposal? | Approval of this Proposal 2 requires the affirmative vote of a majority of the shares present or represented by proxy and voting at an Annual Meeting. | |
May the Vessel Seller vote the 1.2 million shares we previously issued to it as payment of the First Installment of the Vessel acquisition purchase price at the 2015 annual shareholders meeting? | No, because (i) we issued such 1.2 million shares to the Vessel Seller on April 10, 2015, the day after the Record Date, and (ii) NASDAQ IM-5635-2, interpreting NASDAQ Listing Rule 5635, prohibits such voting by the Vessel Seller on this Proposal 2 and Proposal 3. |
What if the proposal is not approved? | If shareholders do not approve Proposal 2, the Company in likelihood will not complete the Vessel acquisition. | |
What if our shareholders approve Proposal 3, but do not approve Proposal 2? | If shareholders do not approve Proposal 2, the Company in likelihood will not complete the Vessel acquisition. |
WE RECOMMEND THAT YOU VOTE FOR THE ISSUANCE MORE THAN 20% OF OUR ISSUED AND OUTSTANDING SHARES OF COMMON STOCK AS OF APRIL 9, 2015, TO THE VESSEL SELLER IN CONNECTION WITH OUR PROPOSED ACQUISITION OF THE VESSEL, WHICH IN CONNECTION WITH SUCH ACQUISITION AND IN ADDITION TO THE 1.2 MILLION SHARES WE ISSUED TO THE VESSEL SELLER AS PAYMENT OF THE FIRST INSTALLMENT OF THE VESSEL ACQUISITION PURCHASE PRICE, WE MAY, SUBJECT TO APPROVAL OF THIS PROPOSAL 2 AND PROPOSAL 3 BELOW AND AGREEMENT BETWEEN US AND THE VESSEL SELLER, ISSUE TO THE VESSEL SELLER UP TO AN ADDITIONAL $4.0 MILLION OF OUR SHARES AT A PRICE OF $1.85 PER SHARE (2,162,162 ADDITIONAL SHARES) AS PART OF THE REMAINING PURCHASE PRICE OF THE VESSEL.
What am I voting on? | To approve, under NASDAQ Listing Rule 5635(b) any deemed “change of control” of the Company resulting from the potential issuance to the Vessel Seller of up to a total of 3,362,162 shares of our common stock in connection with the Vessel acquisition. | |
Why does the Company need Shareholder Approval? | NASDAQ Listing Rule 5635(b) requires shareholder approval prior to any issuance or potential issuance which will result in any deemed “change of control” of an issuer under NASDAQ Listing Rule 5635(b), which may be deemed to occur if after a transaction a single investor or an affiliated investor group acquires, or has the right to acquire as little as 20% of the common stock (or securities convertible into or exercisable for common stock) or voting power of an issuer and such ownership would be the largest ownership position of the issuer. | |
Assuming we issue to the Vessel Seller all of the 3,362,162 shares of our common stock in connection with our proposed acquisition of the Vessel (which includes the 1.2 million shares we issued to the Vessel Seller as the First Installment on April 10, 2015), such issuance would result in the Vessel Seller owning 35.15% of our issued and outstanding common stock and being our largest shareholder. This would result in a deemed “change of control” under NASDAQ Listing Rule 5635(b). | ||
Accordingly, we are seeking shareholder approval of any deemed “change of control” (as used in NASDAQ Listing Rule 5635(b)) resulting from the issuance of any of the up to a total of 3,362,162 shares to the Vessel Seller in connection with the Vessel acquisition that would be deemed a “change of control” under NASDAQ Listing Rule 5635(b). Shareholders should note that a “change of control” as described under NASDAQ Listing Rule 5635(b) applies only with respect to the application of NASDAQ Listing Rule 5635(b), and does not constitute a “change of control” for purposes of Virginia law, our organizational documents or for any other purpose. | ||
What voting options do I have? | Shareholders may vote “For” or “Against” this Proposal 3. A vote of “For” would mean that a shareholder is voting in favor of any deemed “change of control” under NASDAQ Listing Rule 5635(b) resulting from the issuance of up to a total of 3,362,162 shares to the Vessel Seller in the proposed Vessel acquisition pursuant to the Asset Purchase Agreement. | |
What vote is required to approve this proposal? | Approval of this Proposal 3 requires the affirmative vote of a majority of the shares present or represented by proxy and voting at an Annual Meeting. |
May the Vessel Seller vote the 1.2 million shares we previously issued to it as payment of the First Installment of the Vessel acquisition purchase price at the 2015 annual shareholder meeting? | No, because (i) we issued such 1.2 million shares to the Vessel Seller on April 10, 2015, the day after the Record Date, and (ii) NASDAQ IM-5635-2, interpreting NASDAQ Listing Rule 5635, prohibits such voting by the Vessel Seller on Proposal 2 and this Proposal 3. | |
What if the proposal is not approved? | If shareholders do not approve Proposal 3, the Company in likelihood will not complete the Vessel acquisition. | |
What if our shareholders approve Proposal 2, but do not approve Proposal 3? | If shareholders do not approve Proposal 3, the Company in likelihood will not complete the Vessel acquisition. |
WE RECOMMEND THAT YOU VOTE TO APPROVE ANY DEEMED “CHANGE OF
CONTROL” OF THE COMPANY UNDER NASDAQ LISTING RULE 5635(B) RESULTING
FROM THE PROPOSED ISSUANCE TO THE VESSEL SELLER OF UP TO A TOTAL OF
3,362,162 SHARES IN THE VESSEL ACQUISITION
What am I voting on? | A proposal to ratify the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, | |
What services does Friedman LLP provide? | Audit services provided by Friedman LLP for fiscal | |
Will a representative of Friedman LLP be present at the meeting? | One or more representatives of Friedman LLP will be present at the meeting. The representatives will have an opportunity to make a statement if they desire and will be available to respond to questions from shareholders. | |
What if this proposal is not approved? | If the shareholders do not ratify the appointment, |
What vote is required to ratify this proposal? | This Proposal |
WE RECOMMEND THAT YOU VOTE FOR THE RATIFICATION OF FRIEDMAN LLP
AS THE COMPANY’S FISCAL YEAR 2015 INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM.
What am I voting on? | We are asking our shareholders to approve, on an advisory basis, the compensation of the Company’s Named Executive Officers for | |
Is this vote binding on our Company? | As an advisory vote, this proposal is not binding upon our Company, the Board or the Compensation Committee and will not be construed as overruling a decision by our Company, the Board or the Compensation Committee or creating or implying any additional fiduciary duty for our Company, the Board or the Compensation Committee. However, the Compensation Committee and the Board value the opinions expressed by shareholders in their vote on this proposal and will continue to consider the outcome of the vote when making future compensation decisions regarding named executive officers. | |
How often will shareholders vote on named executive officer compensation? | Our current policy is to provide shareholders with an opportunity to approve the compensation of the named executive officers every year at the annual meeting of shareholders. It is expected that the next such vote will occur at the | |
What vote is required to approve this proposal? | Approval of this Proposal | |
What are shareholders being asked to approve? | The Board of Directors is requesting your non-binding approval of the following resolution: | |
Resolved, that the shareholders approve, in a nonbinding vote, the compensation of the Company’s Named Executive Officers, as disclosed in this proxy statement. | ||
What if this proposal is not approved? | Pursuant to Section 14A of the Exchange Act, this vote is advisory only, and accordingly, is not binding on the Company or on our Board of Directors. Although the vote is non-binding, the Compensation Committee and the Board of Directors will carefully consider the outcome of the vote when making future compensation decisions. |
WE RECOMMEND THAT YOU VOTE IN FAVOR OF THE NONBINDING ADVISORY
RESOLUTION APPROVING NAMED EXECUTIVE OFFICER COMPENSATION.
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What if a nominee is unwilling or unable to serve? | Each of the nominees listed in the Proxy Statement has agreed to serve as a director, if elected. If for some unforeseen reason a nominee becomes unwilling or unable to serve, proxies will be voted for a substitute nominee selected by the Board of Directors. | |
How are directors compensated? | Non-employee directors are entitled to receive $5,000 per quarter. From time to time we may issue securities to our directors as well in compensation for services, but the amount and frequency of such grants is not set. In addition, non-employee directors are entitled to receive compensation for their actual travel expenses for each Board of Directors meeting attended. | |
How does the Board determine which directors are independent? | The Board of Directors reviews the independence of each director yearly. During this review, the Board of Directors considers transactions and relationships between each director (and his or her immediate family and affiliates) and the Company and its management to determine whether any such relationships or transactions are inconsistent with a determination that the director is independent in light of applicable law, listing standards and the Company’s director independence standards. The Company believes that it maintains a majority of independent directors who are deemed to be independent under the definition of independence provided by NASDAQ Listing Rule 5605(a)(2). | |
What role does the Corporate Governance Committee play in selecting nominees to the Board of Directors? | Two of the primary purposes of the Board’s Corporate Governance Committee are (i) to develop and implement policies and procedures that are intended to ensure that the Board of Directors will be appropriately constituted and organized to meet its fiduciary obligations to the Company and its shareholders and (ii) to identify individuals qualified to become members of the Board of Directors and to recommend to the Board of Directors the director nominees for the annual meeting of shareholders. The Corporate Governance Committee is also responsible for considering candidates for membership on the Board of Directors submitted by eligible shareholders. The Corporate Governance Committee’s charter is available on the Company’s website atwww.sino-global.com and in print upon request. The Corporate Governance Committee of the Company’s Board of Directors was the only entity or person to nominate and/or recommend any of the director nominees. | |
Are the members of the Corporate Governance Committee independent? | Yes. All members of the Corporate Governance Committee have been determined to be independent by the Board of Directors. |
How does the Corporate Governance Committee identify and evaluate nominees for director? | The Corporate Governance Committee considers candidates for nomination to the Board of Directors from a number of sources. Current members of the Board of Directors are considered for re-election unless they have notified the Company that they do not wish to stand for re-election. The Corporate Governance Committee also considers candidates recommended by current members of the Board of Directors, members of management or eligible shareholders. From time to time the Board may engage a firm to assist in identifying potential candidates, although the Company did not engage such a firm to identify any of the nominees for director proposed for election at the meeting. |
The Corporate Governance Committee evaluates all candidates for director, regardless of the person or firm recommending such candidate, on the basis of the length and quality of their business experience, the applicability of such candidate’s experience to the Company and its business, the skills and perspectives such candidate would bring to the Board of Directors and the personality or “fit” of such candidate with existing members of the Board of Directors and management. The Corporate Governance Committee does not have a specific policy in place with regard to the consideration of diversity when identifying director nominees; however, the corporate governance committee does consider diversity of opinion and experience when nominating directors. | ||
What are the Corporate Governance Committee’s policies and procedures for considering director candidates recommended by shareholders? | The Corporate Governance Committee will consider all candidates recommended by eligible shareholders. An eligible shareholder is a shareholder (or group of shareholders) who owns at least 5% of the Company’s outstanding shares and who has held such shares for at least one year as of the date of the recommendation. A shareholder wishing to recommend a candidate must submit the following documents to the Secretary of the Company at Sino-Global Shipping America, Ltd., |
• a recommendation that identifies the name and address of the shareholder and the person to be nominated; | ||
• | documentation establishing that the shareholder making the recommendation is an eligible shareholder; | |
• | the written consent of the candidate to serve as a director of the Company, if elected; | |
• | a description of all arrangements between the shareholders and such nominee pursuant to which the nomination is to be made; and | |
• | such other information regarding the nominee as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC. |
Upon timely receipt of the required documents, the Company’s Secretary will determine whether the shareholder submitting the recommendation is an eligible shareholder based on such documents. If the shareholder is not an eligible shareholder, the Corporate Governance Committee may, but is not obligated to, evaluate the candidate and consider such candidate for nomination to the Board of Directors. | ||
If the candidate is to be evaluated by the Corporate Governance Committee, the Secretary will request a detailed resume, an autobiographical statement explaining the candidate’s interest in serving as a director of the Company, a completed statement regarding conflicts of interest, and a waiver of liability for a background check from the candidate. | ||
What are the minimum qualifications required to serve on the Company’s Board of Directors? | All members of the Board of Directors must possess the following minimum qualifications as determined by the Corporate Governance Committee: |
• A director must demonstrate integrity, accountability, informed judgment, financial literacy, creativity and vision; | ||
• | A director must be prepared to represent the best interests of all Company shareholders, and not just one particular constituency; | |
• | A director must have a record of professional accomplishment in his or her chosen field; and | |
• | A director must be prepared and able to participate fully in Board activities, including membership on committees. |
What other considerations does the Corporate Governance Committee consider? | The Corporate Governance Committee believes it is important to have directors from various backgrounds and professions in order to ensure that the Board of Directors has a wealth of experiences to inform its decisions. Consistent with this philosophy, in addition to the minimum standards set forth above, business and managerial experience and an understanding of financial statements and financial matters are very important. | |
How may shareholders communicate with the members of the Board of Directors? | Shareholders and others who are interested in communicating directly with members of the Board of Directors, including communication of concerns relating to accounting, internal accounting controls or audit matters, or fraud or unethical behavior, may do so by writing to the directors at the following address: | |
Name of Director or Directors | ||
c/o Zhikang Huang, Secretary | ||
Sino-Global Shipping America, Ltd. 1044 Northern Boulevard Roslyn, New York 11576-1514 |
Does the Company have a Code of Conduct? | The Company has adopted a Code of Conduct, which is applicable to all directors, officers and associates of the Company, including the principal executive officer and the principal financial and accounting officer. The complete text of the Code of Conduct is available on the Company’s web site atwww.sino-global.com and is also available in print upon request. The Company intends to post any amendments to or waivers from its Code of Conduct (to the extent applicable to the Company’s principal executive officer and principal financial and accounting officer) at this location on its web site. | |
How often did the Board meet in fiscal | The Board of Directors met a total of | |
What are the committees of the Board? | During fiscal |
Compensation Committee | The members of the Compensation Committee | |
Ming Zhu (who replaced Dennis O. Laing | ||
Tieliang Liu | ||
Jing Wang, Chairman | ||
The Compensation Committee held one meeting during the fiscal year ended June 30, |
• Making recommendations to the Board of Directors concerning executive management organization matters generally; | ||
• | In the area of compensation and benefits, making recommendations to the Board of Directors concerning employees who are also directors of the Company, consult with the CEO on matters relating to other executive officers, and make recommendations to the Board of Directors concerning policies and procedures relating to executive officers; provided, however, that the Committee shall have full decision-making powers with respect to compensation for executive officers to the extent such compensation is intended to be performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code; |
• Making recommendations to the Board of Directors regarding all contracts of the Company with any officer for remuneration and benefits after termination of regular employment of such officer; | ||
• | Making recommendations to the Board of Directors concerning policy matters relating to employee benefits and employee benefit plans, including incentive compensation plans and equity based plans; and | |
• | Administering the Company’s formal incentive compensation programs, including equity based plans. |
The Compensation Committee may not delegate its authority to other persons. Similarly, the Compensation Committee has not engaged a compensation consultant to assist in the determination of executive compensation issues. While the Company’s executives will communicate with the Compensation Committee regarding executive compensation issues, the Company’s executive officers do not participate in any executive compensation decisions. |
Audit Committee | The members of the Audit Committee | |
Ming Zhu (who replaced Dennis O. Laing | ||
Tieliang Liu, Chairman | ||
Jing Wang | ||
The Audit Committee held |
• | Review and recommend to the directors the independent auditors to be selected to audit the financial statement of the Company; | ||
• | Meet with the independent auditors and management of the Company to review the scope of the proposed audit for the current year and the audit procedures to be utilized, and at the conclusion thereof review such audit, including any comments or recommendations of the independent auditors; |
• | Review with the independent auditors and financial and accounting personnel the adequacy and effectiveness of the accounting and financial controls of the Company. The Committee elicits recommendations for the improvement of such internal control procedures or particular areas where new or more detailed controls or procedures are desirable. The Committee emphasizes the adequacy of such internal controls to expose any payments, transactions, or procedures that might be deemed illegal or otherwise improper; | ||
• | Review the internal accounting function of the Company, the proposed audit plans for the coming year and the coordination of such plans with the Company’s independent auditors; | ||
• | Review the financial statements contained in the annual report to shareholders with management and the independent auditors to determine that the independent auditors are satisfied with the disclosure and contents of the financial statements to be presented to the shareholders; | ||
• | Provide sufficient opportunity for the independent auditors to meet with the members of the Committee without members of management present. Among the items discussed in these meetings are the independent auditors’ evaluation of the Company’s financial, accounting, and auditing personnel, and the cooperation that the independent auditors received during the course of the audit; | ||
• | Review accounting and financial human resources and succession planning within the Company; |
• | Submit the minutes of all meetings of the Audit Committee to, or discuss the matters discussed at each committee meeting with, the Board of Directors; and | ||
• | Investigate any matter brought to its attention within the scope of its duties, with the power to retain outside counsel for this purpose, if, in its judgment, that is appropriate. |
The Audit Committee has established procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls and auditing matters, including procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. | ||
Corporate Governance Committee | The members of the Corporate Governance Committee are: | |
Ming Zhu, Chairman (who replaced Dennis O. Laing Tieliang Liu Jing Wang |
The Corporate Governance Committee had one meeting during the fiscal year ended June 30, |
• | Identify individuals qualified to become members of the Board of Directors and to make recommendations to the Board of Directors with respect to candidates for nomination for election at the next annual meeting of shareholders or at such other times when candidates surface and, in connection therewith, consider suggestions submitted by shareholders of the Company; | ||
• | Determine and make recommendations to the Board of Directors with respect to the criteria to be used for selecting new members of the Board of Directors; | ||
• | Oversee the process of evaluation of the performance of the Company’s Board of Directors and committees; | ||
• | Make recommendations to the Board of Directors concerning the membership of committees of the Board and the chairpersons of the respective committees; | ||
• | Make recommendations to the Board of Directors with respect to the remuneration paid and benefits provided to members of the Board in connection with their service on the Board or on its committees; and | ||
• | Evaluate Board and committee tenure policies as well as policies covering the retirement or resignation of incumbent directors. |
The Board of Directors has determined to provide a process by which shareholders may communicate with the Board as a whole, a Board committee or individual director. Shareholders wishing to communicate with the Board as a whole, a Board committee or an individual member may do so by sending a written communication addressed to the Board of Directors of the Company or to the committee or to an individual director, c/o Zhikang Huang, Secretary, Sino-Global Shipping America, Ltd., |
For information as to the business history of our Chief Executive Officer, Mr. Cao, and our Acting Chief Financial Officer, Mr. Anthony S. Chan, see the section “Proposal | ||
Zhikang “Michael” Huang | ||
Chief Operating Officer | ||
Age — 36 | ||
Mr. Huang has been our Chief Operating Officer since 2010. Prior to 2010, he served as Director of Sino-Global Shipping Australia, for which he was responsible for regional operations, marketing and regulation oversight. From 2006 through 2010, Mr. Huang served as our Company’s Vice President, with duties focused on company operation and strategy, international shipping and marketing. From 2004 through 2006, Mr. Huang served as our Company’s Operations Manager, and from 2002 through 2004, he served as an operator with our Company. Mr. Huang obtained his degree in English from Guangxi University in 1999. | ||
Employment Agreements With The Company’s Named Executive Officers | ||
We are, however, permitted to terminate an employee for cause without penalty to our company, where the employee has committed a crime or the employee’s actions or inactions have resulted in a material adverse effect to us. |
Summary Compensation Table | The following table shows the annual compensation paid by us to Mr. Lei Cao, our Principal Executive Officer, and Mr. Mingwei Zhang, our Principal Accounting and Financial Officer, for the years ended June 30, |
Securities- | |||||||||||||||||||||||||
based | All other | ||||||||||||||||||||||||
Salary | Bonus | compensation | compensation | Total | |||||||||||||||||||||
Name | Year | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||
Lei Cao, Principal Executive Officer | 2013 | 150,811 | — | — | (1) | — | 150,811 | ||||||||||||||||||
2012 | 198,550 | — | — | (1) | — | 198,550 | |||||||||||||||||||
Mingwei Zhang, Principal Accousnting and Financial Officer | 2013 | 75,999 | — | — | (1) | — | 75,999 | ||||||||||||||||||
2012 | 131,309 | — | — | (1) | — | 131,309 |
Name | Year | Salary US$ | Bonus US$ | Securities-based compensation US$ | All other compensation US$ | Total US$ | ||||||||||||||||||
Lei Cao, Principal Executive Officer | 2014 | 180,000 | — | — | (1) | — | 180,000 | |||||||||||||||||
2013 | 150,811 | — | — | (1) | — | 150,811 | ||||||||||||||||||
Anthony S. Chan, Acting Chief Financial Officer | 2014 | 150,000 | 100,000 | (2) | 250,000 | |||||||||||||||||||
2013 | (3) | |||||||||||||||||||||||
Mingwei Zhang, Principal Accounting and Financial Officer | 2014 | 100,000 | — | — | (1) | — | 100,000 | |||||||||||||||||
2013 | 60,000 | — | — | (1) | — | 60,000 |
(1) | We granted each of Mr. Cao and Mr. Zhang options to purchase 36,000 shares of our Common Stock for $7.75 per share. We granted these options on May 20, 2008. Although we recognize $53,114 in compensation expense for these options as 10,800 options vested for each of Mr. Cao and Mr. Zhang in fiscal year 2013, changes in SEC disclosure requirements require us to disclose the grant date fair value of these shares. As the grant was made in fiscal year 2008, the amount is not reflected in this summary compensation table. |
(2) In connection with hiring Mr. Chan in September 2013, we paid him a one-time hiring bonus in fiscal year 2014. (3) We hired Mr. Chan in September 2013, and he received no compensation in fiscal year 2013. Director Compensation(1)
Fees | |||||||||||||||||||||||||||||
earned | Non-equity | Nonqualified | |||||||||||||||||||||||||||
or paid | Stock | Option | incentive plan | deferred | All other | ||||||||||||||||||||||||
in cash | awards | awards | compensation | compensation | compensation | Total | |||||||||||||||||||||||
Name | ($) | ($) | ($)(2) | ($) | earnings ($) | ($) | ($) | ||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | ||||||||||||||||||||||
Dennis Laing | 13,000 | 0 | 0 | 0 | 0 | 0 | 13,000 | ||||||||||||||||||||||
Tielang Liu(3) | 4,000 | 0 | 0 | 20,100 | 0 | 0 | 24,100 | ||||||||||||||||||||||
Jing Wang | 13,000 | 0 | 0 | 0 | 0 | 0 | 13,000 | ||||||||||||||||||||||
Joseph Jhu(4) | 9,000 | 0 | 0 | 0 | 0 | 0 | 9,000 |
Name | Fees earned or paid in cash ($) | Stock awards ($) | Option awards ($)(2) | Non-equity incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | |||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | |||||||||||||||||||||
Dennis Laing(3) | 20,000 | 0 | 0 | 0 | 0 | 0 | 20,000 | |||||||||||||||||||||
Tieliang Liu | 20,000 | 0 | 0 | 0 | 0 | 0 | 20,000 | |||||||||||||||||||||
Jing Wang | 20,000 | 0 | 0 | 0 | 0 | 0 | 20,000 | |||||||||||||||||||||
Ming Zhu(4) | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
(1) | This table does not include Mr. Lei Cao, |
(2) | We did not grant any stock awards, option awards, non-equity incentive plan compensation awards or nonqualified deferred compensation earnings awards to any of our directors in fiscal year 2014; accordingly, we have excluded such columns from the above table. We granted options to purchase 10,000 shares of our | |
common stock to Mr. |
(3) Mr. Dennis O. Laing retired as a director effective as of August 15, 2014. (4) Mr. Ming Zhu joined our Board of Directors on August 15, 2014 and thus received no compensation as a director in fiscal year 2014. Equity Compensation Plan Information
(c) Number of securities | |||||||||||||
(a) Number of securities | remaining available for future | ||||||||||||
to be issued upon | (b) Weighted-average | issuance under equity | |||||||||||
exercise of outstanding | exercise price of | compensation plans (excluding | |||||||||||
options, warrants and | outstanding options, | securities reflected in column | |||||||||||
Plan category | rights | warrants and rights | (a)) | ||||||||||
Equity compensation plans approved by security holders | $ | 102,000 | $ | 6.90 | 200,903 | ||||||||
Equity compensation plans not approved by security holders | - | - | - | ||||||||||
Total | 102,000 | $ | 6.90 | 200,903 |
Plan category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted- average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
Equity compensation plans approved by security holders | $ | 66,000 | $ | 6.88 | 9,636,903 | (1) | ||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | $ | 66,000 | $ | 6.88 | 9,636,903 |
(1) Pursuant to our 2008 Incentive Plan, we are authorized to issue options to purchase 302,903 shares of our common stock. All of the 66,000 outstanding options disclosed in the above table are taken from the 2008 Incentive Plan. Pursuant to our 2014 Incentive Plan, we are authorized to issue, in the aggregate, 10,000,000 shares of common stock or other securities convertible or exercisable for common stock. We have not issued any options or convertible securities under the 2014 Incentive Plan; however, we have issued, in the aggregate, 600,000 shares of common stock to consultants to our Company. Accordingly, we may issue options to purchase 236,903 shares under the 2008 Incentive Plan, and we may issue 9,400,000 shares of common stock or other securities convertible or exercisable for common stock under the 2014 Incentive Plan. Outstanding Equity Awards at Fiscal Year-End
Option Awards(1) | ||||||||||||||||||||
Equity | ||||||||||||||||||||
incentive | ||||||||||||||||||||
plan | ||||||||||||||||||||
awards: | ||||||||||||||||||||
Number of | Number of | Number of | ||||||||||||||||||
securities | securities | securities | ||||||||||||||||||
underlying | underlying | underlying | Option | |||||||||||||||||
unexercised | unexercised | unexercised | exercise | Option | ||||||||||||||||
options (#) | options (#) | unearned | price | expiration | ||||||||||||||||
Name | exercisable | unexercisable | options (#) | ($) | date | |||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||
Lei Cao, Principal Executive Officer | 36,000 | 0 | 0 | $ | 7.75 | May 19, 2018 | ||||||||||||||
Mingwei Zhang, Principal Accounting and Financial Officer | 36,600 | 0 | 0 | $ | 7.75 | May 19, 2018 |
Option Awards(1) | ||||||||||||||||||||
Name (a) | Number of securities underlying unexercised options (#) exercisable (b) | Number of securities underlying unexercised options (#) unexercisable (c) | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) (d) | Option exercise price ($) (e) | Option expiration date (f) | |||||||||||||||
Lei Cao, Principal Executive Officer | 36,000 | 0 | 0 | $ | 7.75 | May 19, 2018 | ||||||||||||||
Mingwei Zhang, Principal Accounting and Financial Officer | 36,600 | 0 | 0 | $ | 7.75 | May 19, 2018 |
(1) | Our Company has not made any stock awards. For this reason, we have excluded the following columns from this table: (g) Number of shares or units of stock that have not vested (#); (h) Market value of shares of units of stock that have not vested ($); (i) Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#); and (j) Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($). |
Audit Committee Report And Fees Paid to Independent Registered Public Accounting Firm | ||
Who served on the Audit Committee of the Board of Directors? | The members of the Audit Committee as of June 30, | |
What document governs the activities of the Audit Committee? | The Audit Committee acts under a written charter, which sets forth its responsibilities and duties, as well as requirements for the Audit Committee’s composition and meetings. The Audit Committee Charter is available on the Company’s website atwww.sino-global.com under Investor Relations. | |
How does the Audit Committee conduct its meetings? | During fiscal | |
Does the Audit Committee review the periodic reports and other public financial disclosures of the Company? | The Audit Committee reviews each of the Company’s quarterly and annual reports, including Management’s Discussion of Results of Operations and Financial Condition. As part of this review, the Audit Committee discusses the reports with the Company’s management and considers those required communication and audit report prepared by the independent registered public accounting firm about the Company’s SEC filings, as well as related matters such as the quality (and not just the acceptability) of the Company’s accounting principles, alternative methods of accounting under generally accepted accounting principles and the preferences of the independent registered public accounting firm in this regard, the Company’s critical accounting policies and the clarity and completeness of the Company’s financial and other disclosures. |
What is the role of the Audit Committee in connection with the financial statements and controls of the Company? | Management of the Company has primary responsibility for the consolidated financial statements and internal control over financial reporting. The independent registered public accounting firm has responsibility for the audit of the Company’s consolidated financial statements. The responsibility of the Audit Committee is to oversee financial and control matters, among other responsibilities fulfilled by the Committee under its charter. The Committee meets regularly with the independent registered public accounting firm, without the presence of management, to ensure candid and constructive discussions about the Company’s compliance with accounting standards and best practices among public companies comparable in size and scope to the Company. The Audit Committee also regularly reviews with its outside advisors material developments in the law and accounting literature that may be pertinent to the Company’s financial reporting practices. |
What has the Audit Committee done with regard to the Company’s audited financial statements for fiscal | The Audit Committee has: |
• | reviewed and discussed the audited consolidated financial statements with the Company’s management; and | ||
• | discussed with Friedman LLP, independent registered public accounting firm for the Company, the matters required to be discussed by |
Has the Audit Committee considered the independence of the Company’s auditors? | The Audit Committee has received from Friedman LLP the written disclosures and the letter required to be provided to Audit Committees, and the Audit Committee has discussed with Friedman LLP its independence. The Audit Committee has concluded that Friedman LLP is independent from the Company and its management. | |
Has the Audit Committee made a recommendation regarding the audited financial statements for fiscal | Based upon its review and the discussions with management and the Company’s independent registered public accounting firm, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements for the Company be included in the Company’s Annual Report on Form 10-K for fiscal | |
Has the Audit Committee reviewed the fees paid to the independent registered public accounting firm during fiscal | The Audit Committee has reviewed and discussed the fees paid to Friedman LLP during | |
Who prepared this report? | This report has been furnished by the members of the Audit Committee as of June 30, |
What is the Company’s policy regarding the retention of the Company’s auditors? | The Audit Committee has adopted a policy regarding the retention of the independent registered public accounting firm that requires pre-approval of all services by the Audit Committee. | |
Fees Paid to Independent Registered Public Accounting Firm | ||
Audit Fees | During fiscal | |
Audit Related Fees | ||
The Company has not paid Friedman LLP for audit-related services in fiscal year 2014 and 2013. | ||
Tax Fees | The Company paid Friedman LLP $13,000 for tax services in fiscal | |
All Other Fees | The Company has not paid Friedman LLP for any other services in fiscal |
Beneficial Ownership Of Common Stock | This table below contains certain information about officers, directors and beneficial owners known to the Company as of |
Title of | Amount of Beneficial | Percentage | |||||||||||
Name and Address | Class | Ownership | Ownership | ||||||||||
Mr. Lei Cao (1) | common | 1,420,040 | (2) | 29.96 | % | ||||||||
Mr. Mingwei Zhang (1) | common | 36,000 | (2) | * | % | ||||||||
Mr. Jing Wang (1) | common | 10,000 | (3) | * | % | ||||||||
Mr. Dennis O. Laing (1) | common | 10,000 | (3) | * | % | ||||||||
Mr. Tieliang Liu (1) | common | 2,000 | (4) | * | % | ||||||||
Total Officers and Directors (5 individuals) | common | 1,476,040 | 30.80 | % | |||||||||
Other Five Percent Shareholders | |||||||||||||
Mr. Zhong Zhang (5) | common | 1,800,000 | 38.27 | % | |||||||||
Mr. Daniel E. Kern (6) | common | 389,100 | (7) | 8.27 | % |
Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock. Shares of our common stock subject to options or warrants that are exercisable or exercisable within 60 days of the date of this prospectus are considered outstanding and beneficially owned by the person holding the options or warrants for the purposes of calculating the percentage ownership of that person but not for the purpose of calculating the percentage ownership of any other person. Except as disclosed in the footnotes to this table and subject to applicable community property laws, we believe that each shareholder identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the shareholder. |
Title of Class | Number of Shares of Common Stock Beneficially Owned | Percentage of Shares Beneficially Owned | ||||||||||
Director and Executive Officers: | ||||||||||||
Mr. Lei Cao(1)(2) | Common | 1,366,040 | 18.37 | % | ||||||||
Mr. Anthony S. Chan | Common | 0 | *% | |||||||||
Mr. Zhikang Huang | Common | 0 | *% | |||||||||
Mr. Jing Wang(3) | Common | 10,000 | *% | |||||||||
Mr. Tieliang Liu(4) | Common | 2,000 | *% | |||||||||
Mr. Ming Zhu | Common | 0 | *% | |||||||||
All Current Officers and Directors as a group (5 persons) | 1,378,040 | 18.50 | % | |||||||||
5% Shareholders: | ||||||||||||
Rong Yao International Shipping Limited(5) | Common | 1,200,000 | 16.21 | % | ||||||||
Mr. Zhong Zhang(6) | Common | 1,800,000 | 24.32 | % | ||||||||
Mr. Daniel E. Kern(7) | Common | 389,100 | 5.26 | % |
* | Less than 1%. |
(1) | The individual’s address is c/o Sino-Global Shipping America, Ltd., |
(2) | Mr. Cao |
(3) |
(4) |
(5) | Rong Yao International Shipping Ltd., a Hong Kong corporation is owned solely by Zhou Shan City Xin Mao Digital Electronics Co., Ltd., a PRC company (“Zhou Shan”), and that the Vessel Seller and Zhou Shan each have voting and dispositive power of all such 1.2 million shares of our common stock, and the selling shareholder’s principal place of business is Room D, 101F, Tower A, Billion Centre, 1 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong. |
(6) | Mr. Zhong Zhang’s address is |
Mr. Kern’s address is 1027 Goldenrod Ave., Corona Del Mar, CA 92625. | ||
We have been advised that Mr. Kern owns 176,200 shares in his individual name, 187,900 shares in the Daniel E. Kern ROTH IRA, and 25,000 shares through Kern Asset Management. Mr. Kern maintains sole voting and dispositive power as to these shares. |
General | ||
Compensation Committee Interlocks and Insider Participation | None of the members of the Board of Directors who served on the Compensation Committee during the fiscal year ended June 30, | |
Compliance with Section 16(a) Beneficial Ownership Reporting Requirements | Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and executive officers and persons who own more than ten percent of a registered class of the Company’s equity securities to file with the Securities and Exchange Commission reports of ownership and changes in beneficial ownership of the Company’s Common Stock. Directors, executive officers and greater than ten percent shareholders are required to furnish the Company with copies of all Section 16(a) forms they file. |
Except as set forth in the following paragraph, based solely upon a review of Forms 3 and 4 and amendments thereto furnished to the Company under 17 CFR 240.16a-3(e) during its most recent fiscal year and Forms 5 and amendments thereto furnished to the Company with respect to its most recent fiscal year, and any written representation referred to in paragraph (b)(1) of this section, the Company is not aware of any director, officer, beneficial owner of more than ten percent of any class of equity securities of the Company registered pursuant to Section 12 that failed to file on a timely basis, as disclosed in the above Forms, reports required by Section 16(a) during the most recent fiscal year or prior years. | ||
Availability of Form 10-K and Annual Report to Shareholders | Rules promulgated by the SEC require us to provide an Annual Report to Shareholders who receive this Proxy Statement. We will also provide copies of the Annual Report to brokers, dealers, banks, voting trustees and their nominees for the benefit of their beneficial owners of record. Additional copies of the Annual Report on Form 10-K for the fiscal year ended June 30, | |
Shareholder Proposals | ||
To be considered for inclusion in next year’s Proxy Statement or considered at next year’s annual meeting but not included in the Proxy Statement, shareholder proposals must be submitted in writing by November 1, | ||
Other Proposed Actions | If any other items or matters properly come before the meeting, the proxies received will be voted on those items or matters in accordance with the discretion of the proxy holders. | |
Solicitation by Board; Expenses of Solicitation | Our Board of Directors has sent you this Proxy Statement. Our directors, officers and associates may solicit proxies by telephone or in person. We will also reimburse the expenses of brokers, nominees and fiduciaries that send proxies and proxy materials to our shareholders. |
Exhibit A
SINO-GLOBAL SHIPPING AMERICA, LTD.
2014 STOCK INCENTIVE PLAN
(a) The purpose of the Sino-Global Shipping America, Ltd. 2014 Stock Incentive Plan (the “Plan”) is to further the long term stability and financial success of Sino-Global Shipping America, Ltd. (the “Company”) by attracting and retaining personnel, including employees, non-employee directors, and consultants, through the use of stock incentives. It is believed that ownership of Company stock will stimulate the efforts of those employees upon whose judgment, interest and efforts the Company is and will be largely dependent for the successful conduct of its business.
(b) The Plan was recommended by the Board of Directors on December 18, 2013 and adopted by the shareholders of the Company on January __, 2014 (the “Effective Date”).
(a)Act. The Securities Exchange Act of 1934, as amended.
(b)Affiliate. The meaning assigned to the term “affiliate” under Rule 12b-2 of the Act.
(c)Applicable Withholding Taxes. The aggregate amount of federal, state and local income and payroll taxes that the Company is required to withhold (based on the minimum applicable statutory withholding rates) in connection with any exercise of an Option or the award, lapse of restrictions or payment with respect to Plan Stock Grant.
(d)Award. The award of an Option or Plan Stock Grant under the Plan.
(e)Beneficiary. The person or persons entitled to receive a benefit pursuant to an Award upon the death of a Participant.
(f)Board. The Board of Directors of the Company.
(g)Cause. Dishonesty, fraud, misconduct, gross incompetence, gross negligence, breach of a material fiduciary duty, material breach of an agreement with the Company, unauthorized use or disclosure of confidential information or trade secrets, or conviction or confession of a crime punishable by law (except minor violations), in each case as determined by the Committee, which determination shall be binding. Notwithstanding the foregoing, if “Cause” is defined in an employment agreement between a Participant and the Company, “Cause” shall have the meaning assigned to it in such agreement.
(h)Change of Control.
(i) The acquisition by any unrelated person of beneficial ownership (as that term is used for purposes of the Act) of 50% or more of the then outstanding shares of common stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors. The term “unrelated person” means any person other than (x) the Company and its subsidiaries, (y) an employee benefit plan or related trust sponsored by the Company or its subsidiaries, and (z) a person who acquires stock of the Company pursuant to an agreement with the Company that is approved by the Board in advance of the acquisition. For purposes of this subsection, a “person” means an individual, entity or group, as that term is used for purposes of the Act;
(ii) Any tender or exchange offer, merger or other business combination, sale of assets or any combination of the foregoing transactions, and the Company is not the surviving corporation; and
(iii) A liquidation of the Company.
(i)Code. The Internal Revenue Code of 1986, as amended.
(j)Committee. The Compensation Committee of the Board.
(k)Company. Sino-Global Shipping America, Ltd.
(l)Company Stock. The common stock of the Company, without par value per share. In the event of a change in the capital structure of the Company (as provided in Section 12 below), the shares resulting from such a change shall be deemed to be Company Stock within the meaning of the Plan.
(m)Consultant. A person rendering services to the Company who is not an “employee” for purposes of employment tax withholding under the Code.
(n)Corporate Change. A consolidation, merger, dissolution or liquidation of the Company, or a sale or distribution of assets or stock (other than in the ordinary course of business) of the Company; provided that, unless the Committee determines otherwise, a Corporate Change shall only be considered to have occurred with respect to Participants whose business unit is affected by the Corporate Change.
(o)Date of Grant. The date as of which an Award is made by the Committee.
(p)Disability or Disabled. As to an Incentive Option, a Disability within the meaning of Code Section 22(e)(3). As to all other Incentive Awards, the Committee shall determine whether a Disability exists and such determination shall be conclusive.
(q)Fair Market Value.
(i) If Company Stock is traded on a national securities exchange or the NASDAQ Stock Market, the average of the highest and lowest registered sales prices of Company Stock on such exchange or the NASDAQ Stock Market;
(ii) If Company Stock is traded in the over-the-counter market, the average between the closing bid and asked prices as reported by the NASDAQ Stock Market; or
(iii) If shares of Company Stock are not publicly traded, the Fair Market Value shall be determined by the Committee using any reasonable method in good faith.
Fair Market Value shall be determined as of the applicable date specified in the Plan or, if there are no trades on such date, the value shall be determined as of the last preceding day on which Company Stock is traded.
(r)Incentive Option. An Option intended to meet the requirements of, and qualify for favorable Federal income tax treatment under, Code Section 422.
(s)Nonstatutory Stock Option. An Option that does not meet the requirements of Code Section 422, or that is otherwise not intended to be an Incentive Option and is so designated.
(t)Option. A right to purchase Company Stock granted under the Plan, at a price determined in accordance with the Plan.
(u)Participant. Any individual who receives an Award under the Plan.
(v)Plan Stock Grant. Company Stock awarded upon the terms and subject to the restrictions set forth in Section 7 below.
(w)Rule 16b-3. Rule 16b-3 of the Act, including any corresponding subsequent rule or any amendments to Rule 16b-3 enacted after the effective date of the Plan.
(x)10% Shareholder. A person who owns, directly or indirectly, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate. Indirect ownership of stock shall be determined in accordance with Code Section 424(d).
3. General. Awards of Options and Plan Stock Grants may be granted under the Plan. Options granted under the Plan may be Incentive Options or Nonstatutory Stock Options.
4. Stock. Subject to Section 12 of the Plan, there shall be reserved for issuance under the Plan a total of 10,000,000 unissued shares of Company Stock. Shares allocable to Options granted under the Plan that expire or otherwise terminate unexercised and shares that are forfeited pursuant to restrictions on Plan Stock Grant awarded under the Plan may again be subjected to an Award under this Plan. For purposes of determining the number of shares that are available for Awards under the Plan, such number shall, if permissible under Rule 16b-3, include the number of shares surrendered by a Participant or retained by the Company (a) in connection with the exercise of an Option or (b) in payment of Applicable Withholding Taxes.
(a) Any employee of, non-employee director of, or Consultant to the Company or its affiliates or subsidiaries, who, in the judgment of the Committee, has contributed or can be expected to contribute to the profits or growth of the Company is eligible to become a Participant. The Committee shall have the power and complete discretion, as provided in Section 14, to select eligible Participants and to determine for each Participant the terms, conditions and nature of the Award and the number of shares to be allocated as part of the Award; provided, however, that any award made to a member of the Committee must be approved by the Board. The Committee is expressly authorized to make an Award to a Participant conditioned on the surrender for cancellation of an existing Award.
(b) The grant of an Award shall not obligate the Company to pay an employee any particular amount of remuneration, to continue the employment of the employee after the grant or to make further grants to the employee at any time thereafter.
(c) Non-employee directors and Consultants shall not be eligible to receive the Award of an Incentive Option.
(a) Whenever the Committee deems it appropriate to grant Options, notice shall be given to the Participant stating the number of shares for which Options are granted, the Option price per share, whether the options are Incentive Options or Nonstatutory Stock Options, and the conditions to which the grant and exercise of the Options are subject. This notice, when duly accepted in writing by the Participant, shall become a stock option agreement between the Company and the Participant.
(b) The Committee shall establish the exercise price of Options. The exercise price of an Incentive Option shall be not less than 100% of the Fair Market Value of such shares on the Date of Grant, provided that if the Participant is a 10% Shareholder, the exercise price of an Incentive Option shall be not less than 110% of the Fair Market Value of such shares on the Date of Grant. The exercise price of a Nonstatutory Stock Option Award shall not be less than 100% of the Fair Market Value of the shares of Company Stock covered by the Option on the Date of Grant.
(c) Options may be exercised in whole or in part at such times as may be specified by the Committee in the Participant’s stock option agreement. The Committee may impose such vesting conditions and other requirements as the Committee deems appropriate, and the Committee may include such provisions regarding a Change of Control or Corporate Change as the Committee deems appropriate.
(d) The Committee shall establish the term of each Option in the Participant’s stock option agreement. The term of an Incentive Option shall not be longer than ten years from the Date of Grant, except that an Incentive Option granted to a 10% Shareholder may not have a term in excess of five years. No option may be exercised after the expiration of its term or, except as set forth in the Participant’s stock option agreement, after the termination of the Participant’s employment. The Committee shall set forth in the Participant’s stock option agreement when, and under what circumstances, an Option may be exercised after termination of the Participant’s employment or period of service; provided that no Incentive Option may be exercised after (i) three months from the Participant’s termination of employment with the Company for reasons other than Disability or death, or (ii) one year from the Participant’s termination of employment on account of Disability or death. The Committee may, in its sole discretion, amend a previously granted Incentive Option to provide for more liberal exercise provisions, provided however that if the Incentive Option as amended no longer meets the requirements of Code Section 422, and, as a result the Option no longer qualifies for favorable federal income tax treatment under Code Section 422, the amendment shall not become effective without the written consent of the Participant.
(e) An Incentive Option, by its terms, shall be exercisable in any calendar year only to the extent that the aggregate Fair Market Value (determined at the Date of Grant) of Company Stock with respect to which Incentive Options are exercisable by the Participant for the first time during the calendar year does not exceed $100,000 (the “Limitation Amount”). Incentive Options granted under the Plan and all other plans of the Company and any parent or Subsidiary of the Company shall be aggregated for purposes of determining whether the Limitation Amount has been exceeded. The Board may impose such conditions as it deems appropriate on an Incentive Option to ensure that the foregoing requirement is met. If Incentive Options that first become exercisable in a calendar year exceed the Limitation Amount, the excess Options will be treated as Nonstatutory Stock Options to the extent permitted by law.
(f) If a Participant dies and if the Participant’s stock option agreement provides that part or all of the Option may be exercised after the Participant’s death, then such portion may be exercised by the personal representative of the Participant’s estate during the time period specified in the stock option agreement.
(g) If a Participant’s employment or services is terminated by the Company for Cause, the Participant’s Options shall terminate as of the date of the misconduct.
(a) Whenever the Committee deems it appropriate to grant a Plan Stock Grant Award, notice shall be given to the Participant stating the number of shares of Plan Stock Grant for which the Award is granted and the terms and conditions to which the Award is subject. This notice, when accepted in writing by the Participant, shall become an Award agreement between the Company and the Participant. Certificates representing the shares shall be issued in the name of the Participant, subject to the restrictions imposed by the Plan and the Committee. A Plan Stock Grant Award may be made by the Committee in its discretion without cash consideration.
(b) The Committee may place such restrictions on the transferability and vesting of Plan Stock Grant as the Committee deems appropriate, including restrictions relating to continued employment and financial performance goals. Without limiting the foregoing, the Committee may provide performance or Change of Control or Corporate Change acceleration parameters under which all, or a portion, of the Plan Stock Grant will vest on the Company’s achievement of established performance objectives. Plan Stock Grant may not be sold, assigned, transferred, disposed of, pledged, hypothecated or otherwise encumbered until the restrictions on such shares shall have lapsed or shall have been removed pursuant to subsection (c) below.
(c) The Committee may provide in a Plan Stock Grant Award, or subsequently, that the restrictions will lapse if a Change of Control or Corporate Change occurs. The Committee may at any time, in its sole discretion, accelerate the time at which any or all restrictions will lapse or may remove restrictions on Plan Stock Grant as it deems appropriate.
(d) A Participant shall hold shares of Plan Stock Grant subject to the restrictions set forth in the Award agreement and in the Plan. In other respects, the Participant shall have all the rights of a shareholder with respect to the shares of Plan Stock Grant, including, but not limited to, the right to vote such shares and the right to receive all cash dividends and other distributions paid thereon. Certificates representing Plan Stock Grant shall bear a legend referring to the restrictions set forth in the Plan and the Participant’s Award agreement. If stock dividends are declared on Plan Stock Grant, such stock dividends or other distributions shall be subject to the same restrictions as the underlying shares of Plan Stock Grant.
(a) Options may be exercised by giving written notice of the exercise to the Company, stating the number of shares the Participant has elected to purchase under the Option. Such notice shall be effective only if accompanied by the exercise price in full in cash; provided that, if the terms of an Option so permit, the Participant may (i) deliver Company Stock that the Participant has owned for at least six months (valued at Fair Market Value on the date of exercise), or (ii) exercise any applicable net exercise provision contained therein. Unless otherwise specifically provided in the Option, any payment of the exercise price paid by delivery of Company Stock acquired directly or indirectly from the Company shall be paid only with shares of Company Stock that have been held by the Participant for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes).
(b) Notwithstanding anything herein to the contrary, Awards shall always be granted and exercised in such a manner as to conform to the provisions of Rule 16b-3.
9.Applicable Withholding Taxes. Each Participant shall agree, as a condition of receiving an Award, to pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, all Applicable Withholding Taxes with respect to the Award. Until the Applicable Withholding Taxes have been paid or arrangements satisfactory to the Company have been made, no stock certificates (or, in the case of Plan Stock Grant, no stock certificates free of a restrictive legend) shall be issued to the Participant. As an alternative to making a cash payment to the Company to satisfy Applicable Withholding Tax obligations, the Committee may establish procedures permitting the Participant to elect to (a) deliver shares of already owned Company Stock (subject to such restrictions as the Committee may establish, including a requirement that any shares of Company Stock so delivered shall have been held by the Participant for not less than six months) or (b) have the Company retain that number of shares of Company Stock that would satisfy all or a specified portion of the Applicable Withholding Taxes. Any such election shall be made only in accordance with procedures established by the Committee and in accordance with Rule 16b-3.
(a) In general, Awards, by their terms, shall not be transferable by the Participant except by will or by the laws of descent and distribution or except as described below. Options shall be exercisable, during the Participant’s lifetime, only by the Participant or by his guardian or legal representative.
(b) Notwithstanding the provisions of (a) and subject to federal and state securities laws, the Committee may grant Nonstatutory Stock Options that permit a Participant to transfer the Options to one or more immediate family members, to a trust for the benefit of immediate family members, or to a partnership, limited liability company, or other entity the only partners, members, or interest-holders of which are among the Participant’s immediate family members. Consideration may not be paid for the transfer of Options. The transferee of an Option shall be subject to all conditions applicable to the Option prior to its transfer. The agreement granting the Option shall set forth the transfer conditions and restrictions. The Committee may impose on any transferable Option and on stock issued upon the exercise of an Option such limitations and conditions as the Committee deems appropriate.
11.Termination, Modification, Change. If not sooner terminated by the Board, this Plan shall terminate at the close of business on the tenth anniversary of the Effective Date. No Awards shall be made under the Plan after its termination. The Board may terminate the Plan or may amend the Plan in such respects as it shall deem advisable; provided that, if and to the extent required by Rule 16b-3, no change shall be made that increases the total number of shares of Company Stock reserved for issuance pursuant to Awards granted under the Plan (except pursuant to Section 12), expands the class of persons eligible to receive Awards, or materially increases the benefits accruing to Participants under the Plan, unless such change is authorized by the shareholders of the Company. Notwithstanding the foregoing, the Board may unilaterally amend the Plan and Awards as it deems appropriate to ensure compliance with Rule 16b-3 and to cause Incentive Options to meet the requirements of the Code and regulations thereunder. Except as provided in the preceding sentence, a termination or amendment of the Plan shall not, without the consent of the Participant, adversely affect a Participant’s rights under an Award previously granted to him.
(a) In the event of a stock dividend, stock split or combination of shares, spin-off, reclassification, recapitalization, merger or other change in the Company’s capital stock (including, but not limited to, the creation or issuance to shareholders generally of rights, options or warrants for the purchase of common stock or preferred stock of the Company), the number and kind of shares of stock or securities of the Company to be issued under the Plan (under outstanding Awards and Awards to be granted in the future), the exercise price of options, and other relevant provisions shall be appropriately adjusted by the Committee, whose determination shall be binding on all persons. If the adjustment would produce fractional shares with respect to any Award, the Committee may adjust appropriately the number of shares covered by the Award so as to eliminate the fractional shares.
(b) In the event the Company distributes to its shareholders a dividend,or sells or causes to be sold to a person other than the Company or a Subsidiary shares of stock in any corporation (a “Spinoff Company”) which, immediately before the distribution or sale, was a majority owned Subsidiary of the Company, the Committee shall have the power, in its sole discretion, to make such adjustments as the Committee deems appropriate. The Committee may make adjustments in the number and kind of shares or other securities to be issued under the Plan (under outstanding Awards and Awards to be granted in the future), the exercise price of Options, and other relevant provisions, and, without limiting the foregoing, may substitute securities of a Spinoff Company for securities of the Company. The Committee shall make such adjustments as it determines to be appropriate, considering the economic effect of the distribution or sale on the interests of the Company’s shareholders and the Participants in the businesses operated by the Spinoff Company, and subject to the proviso that any such adjustments or new options shall not be made or granted, respectively, that would result in subjecting the Plan to variable plan accounting treatment. The Committee’s determination shall be binding on all persons. If the adjustment would produce fractional shares with respect to any Award, the Committee may adjust appropriately the number of shares covered by the Award so as to eliminate the fractional shares.
(c) To the extent required to avoid a charge to earnings for financial accounting purposes, adjustments made by the Committee pursuant to this Section 12 to outstanding Awards shall be made so that both (i) the aggregate intrinsic value of an Award immediately after the adjustment is not greater than or less than the Award’s aggregate intrinsic value before the adjustment and (ii) the ratio of the exercise price per share to the market value per share is not reduced.
(d) Notwithstanding anything in the Plan to the contrary, the Committee may take the foregoing actions without the consent of any Participant, and the Committee’s determination shall be conclusive and binding on all persons for all purposes. The Committee shall make its determinations consistent with Rule 16b-3 and the applicable provisions of the Code.
13.Change of Control. In the event of a Change of Control or Corporate Change, the Committee may take such actions with respect to Awards as the Committee deems appropriate. These actions may include, but shall not be limited to, the following:
(a) At the time the Award is made, provide for the acceleration of the vesting schedule relating to the exercise or realization of the Award so that the Award may be exercised or realized in full on or before a date initially fixed by the Committee;
(b) Provide for the purchase or settlement of any such Award by the Company for any amount of cash equal to the amount which could have been obtained upon the exercise of such Award or realization of a Participant’s rights had such Award been currently exercisable or payable;
(c) Make adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change of Control or Corporate Change; provided, however, that to the extent required to avoid a charge to earnings for financial accounting purposes, such adjustments shall be made so that both (i) the aggregate intrinsic value of an Award immediately after the adjustment is not greater than or less than the Award’s aggregate intrinsic value before the Award and (ii) the ratio of the exercise price per share to the market value per share is not reduced; or
(d) Cause any such Award then outstanding to be assumed, or new rights substituted therefore, by the acquiring or surviving legal entity in such Change of Control or Corporate Change.
(a) The Plan shall be administered by the Committee, who shall be appointed by the Board. The Board may designate the Compensation Committee of the Board, or a subcommittee of the Compensation Committee, to be the Committee for purposes of the Plan. If and to the extent required by Rule 16b-3, all members of the Committee shall be “Non-Employee Directors” as that term is defined in Rule 16b-3, and the Committee shall be comprised solely of two or more “outside directors” as that term is defined for purposes of Code section 162(m). If any member of the Committee fails to qualify as an “outside director” or (to the extent required by Rule 16b-3) a “Non-Employee Director,” such person shall immediately cease to be a member of the Committee and shall not take part in future Committee deliberations. The Board of Directors may from time to time may appoint members of the Committee and fill vacancies, however caused, in the Committee.
(b) The Committee shall have the authority to impose such limitations or conditions upon an Award as the Committee deems appropriate to achieve the objectives of the Award and the Plan. Without limiting the foregoing and in addition to the powers set forth elsewhere in the Plan, the Committee shall have the power and complete discretion to determine (i) which eligible persons shall receive an Award and the nature of the Award, (ii) the number of shares of Company Stock to be covered by each Award, (iii) whether Options shall be Incentive Options or Nonstatutory Stock Options, (iv) the Fair Market Value of Company Stock, (v) the time or times when an Award shall be granted, (vi) whether an Award shall become vested over a period of time, according to a performance-based vesting schedule or otherwise, and when it shall be fully vested, (vii) the terms and conditions under which restrictions imposed upon an Award shall lapse, (viii) whether a Change of Control or Corporate Change exists, (ix) the terms of incentive programs, performance criteria and other factors relevant to the issuance of Plan Stock Grant or the lapse of restrictions on Plan Stock Grant or Options, (x) when Options may be exercised, (xi) whether to approve a Participant’s election with respect to Applicable Withholding Taxes, (xii) conditions relating to the length of time before disposition of Company Stock received in connection with an Award is permitted, (xiii) notice provisions relating to the sale of Company Stock acquired under the Plan, and (xiv) any additional requirements relating to Awards that the Committee deems appropriate. Notwithstanding the foregoing, no “tandem stock options” (where two stock options are issued together and the exercise of one option affects the right to exercise the other option) may be issued in connection with Incentive Options.
(c) The Committee shall have the power to amend the terms of previously granted Awards so long as the terms as amended are consistent with the terms of the Plan and, where applicable, consistent with the qualification of an option as an Incentive Option. The consent of the Participant must be obtained with respect to any amendment that would adversely affect the Participant’s rights under the Award, except that such consent shall not be required if such amendment is for the purpose of complying with Rule 16b-3 or any requirement of the Code applicable to the Award.
(d) The Committee may adopt rules and regulations for carrying out the Plan. The Committee shall have the express discretionary authority to construe and interpret the Plan and the Award agreements, to resolve any ambiguities, to define any terms, and to make any other determinations required by the Plan or an Award agreement. The interpretation and construction of any provisions of the Plan or an Award agreement by the Committee shall be final and conclusive. The Committee may consult with counsel, who may be counsel to the Company, and shall not incur any liability for any action taken in good faith in reliance upon the advice of counsel.
(e) A majority of the members of the Committee shall constitute a quorum, and all actions of the Committee shall be taken by a majority of the members present. Any action may be taken by a written instrument signed by all of the members, and any action so taken shall be fully effective as if it had been taken at a meeting.
15.Issuance of Company Stock. The Company shall not be required to issue or deliver any certificate for shares of Company Stock before (i) the admission of such shares to listing on any stock exchange on which Company Stock may then be listed, (ii) receipt of any required registration or other qualification of such shares under any state or federal securities law or regulation that the Company’s counsel shall determine is necessary or advisable, and (iii) the Company shall have been advised by counsel that all applicable legal requirements have been complied with. The Company may place on a certificate representing Company Stock any legend required to reflect restrictions pursuant to the Plan, and any legend deemed necessary by the Company’s counsel to comply with federal or state securities laws. The Company may require a customary written indication of a Participant’s investment intent. Until a Participant has been issued a certificate for the shares of Company Stock acquired, the Participant shall possess no shareholder rights with respect to the shares.
16.Rights Under the Plan. Title to and beneficial ownership of all benefits described in the Plan shall at all times remain with the Company. Participation in the Plan and the right to receive payments under the Plan shall not give a Participant any proprietary interest in the Company or any Affiliate or any of their assets. No trust fund shall be created in connection with the Plan, and there shall be no required funding of amounts that may become payable under the Plan. A Participant shall, for all purposes, be a general creditor of the Company. The interest of a Participant in the Plan cannot be assigned, anticipated, sold, encumbered or pledged and shall not be subject to the claims of his creditors.
17.Beneficiary. A Participant may designate, on a form provided by the Committee, one or more beneficiaries to receive any payments under Awards of Plan Stock Grant or Plan Stock Grant after the Participant’s death. If a Participant makes no valid designation, or if the designated beneficiary fails to survive the Participant or otherwise fails to receive the benefits, the Participant’s beneficiary shall be the first of the following persons who survives the Participant: (a) the Participant’s surviving spouse, (b) the Participant’s surviving descendants,per stirpes, or (c) the personal representative of the Participant’s estate.
18.Notice. All notices and other communications required or permitted to be given under this Plan shall be in writing and shall be deemed to have been duly given if delivered personally or mailed first class, postage prepaid, as follows: (a) if to the Company—at its principal business address to the attention of the Secretary; (b) if to any Participant—at the last address of the Participant known to the sender at the time the notice or other communication is sent.
19.Interpretation. The terms of this Plan and Awards granted pursuant to the Plan are subject to all present and future regulations and rulings of the Secretary of the Treasury relating to the qualification of Incentive Options under the Code or compliance with Code section 162(m), to the extent applicable, and they are subject to all present and future rulings of the Securities and Exchange Commission with respect to Rule 16b-3. If any provision of the Plan or an Award conflicts with any such regulation or ruling, to the extent applicable, the Committee shall cause the Plan to be amended, and shall modify the Award, so as to comply, or if for any reason amendments cannot be made, that provision of the Plan and/or the Award shall be void and of no effect.