Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by
the Registrant x
Filed by
a Party other than the Registrant ¨
Check the
appropriate box:
¨
|
Preliminary
Proxy Statement
|
¨
|
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
x
|
Definitive
Proxy Statement
|
¨
|
Definitive
Additional Materials
|
¨
|
Soliciting
Material Pursuant to Section
240.14a-12
|
Andatee
China Marine Fuel Services Corporation
|
(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):
¨
|
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:
__________________________
|
¨
|
Fee
paid previously with preliminary
materials.
|
¨ Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1)
|
Amount
Previously Paid:
________________________________________________________
|
(2)
|
Form,
Schedule or Registration Statement No.
_______________________________________
|
(3)
|
Filing
Party:
__________________________________________________________________
|
(4)
|
Date
Filed:
___________________________________________________________________
|
Andatee
China Marine Fuel Services Corporation
Notice
of Annual Meeting and Proxy Statement
Annual
Meeting to be held on October 22, 2010 at 10 a.m. EST at the offices of Cozen
O’Connor at 277 Park Avenue, 20th Floor,
New York, NY 10172
Andatee
China Marine Fuel Services Corporation
Unit C,
No. 68 West Binhai Road, Xigang District Dalian
People’s
Republic of China
Notice
of Annual Meeting of Shareholders to be Held on October 22, 2010
Dear
Shareholder:
NOTICE IS
HEREBY GIVEN that an Annual Meeting of Shareholders (the “Annual Meeting”) of
Andatee China Marine Fuel Services Corporation is to be held on October 22,
2010, at 10 a.m. EST, at the offices of Cozen O’Connor at 277 Park Avenue,
20TH
Floor, New York, NY 10172, for the following purposes:
|
1.
|
To
elect directors, each to serve until the next annual meeting of
shareholders or until each successor is duly elected and
qualified;
|
|
2.
|
To
ratify the appointment of Jewett, Schwartz, Wolfe &
Associates as independent registered public accounting firm of the Company
for the fiscal year ending December 31, 2010;
and
|
|
3.
|
To
transact such other business as may properly come before the Annual
Meeting and any adjournments or postponements
thereof.
|
Details
relating to the above matters are set forth in the attached Proxy
Statement. All shareholders are cordially invited to attend the
Annual Meeting; however, only shareholders of record at the close of business on
August 30, 2010 (“Record Date”) are entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof. A complete list of these
stockholders will be open for the examination of any shareholder of record at
the principal executive offices of the Company, but will be closed at least 10
days immediately preceding the Annual Meeting. The list will also be
available for the examination of any shareholder of record present at the Annual
Meeting. The Annual Meeting may be adjourned or postponed from time
to time without notice other than by announcement at the meeting.
The Board of Directors recommends
that you vote FOR Proposals 1 and 2.
We look
forward to seeing you at the meeting in October.
Sincerely,
|
|
/s/ An
Fengbin
|
|
An
Fengbin
|
Chairman
of the Board, Chief Executive
Officer
|
September
14, 2010
Whether or not you plan to attend the
meeting in person, please complete, sign and date the enclosed proxy and return
it promptly in the enclosed return envelope. No postage is required
if mailed in the United States. You may also vote your shares by telephone
voting which is explained in further detail on your proxy card. Shareholders who
execute a proxy card may nevertheless attend the meeting, revoke their proxy and
vote their shares in person.
Important
Notice Regarding the Availability of Proxy Materials for our Annual Meeting of
Shareholders to be held on October 22, 2010:
Electronic
copies of this Proxy Statement, the form of proxy and the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2009 are available at
http://www.cstproxy.com/andatee/2010.
Information
about the Annual Meeting and Voting
Why
did you send me this proxy statement?
This
proxy statement and the enclosed proxy card are furnished in connection with the
solicitation of proxies by the Board of Directors of Andatee China Marine Fuel
Services Corporation, a Delaware corporation, for use at the Annual Meeting of
its shareholders to be held on October 22, 2010, at the offices of Cozen
O’Connor at 277 Park Avenue, 20th Floor, New York, NY 10172 at 10 a.m. EST, and
at any adjournments or postponements of the Annual Meeting. This
proxy statement summarizes the information you need to make an informed vote on
the proposals to be considered at the Annual Meeting. However, you do
not need to attend the Annual Meeting to vote your shares. Instead,
you may simply complete, sign and return the enclosed proxy card using the
envelope provided, or vote by telephone as described on the proxy
card. The terms “Andatee,” “Company,” “we,” or “our” refer to Andatee
China Marine Fuel Services Corporation.
What
are the purposes of this meeting?
The Board
of Directors, on behalf of Andatee, is seeking your affirmative vote for the
following:
|
1.
|
To
elect directors, each to serve until the next annual meeting of
shareholders or until each successor is duly elected and
qualified;
|
|
2.
|
To
ratify the appointment of Jewett, Schwartz, Wolfe & Associates as
independent registered public accounting firm of the Company for the
fiscal year ending December 31, 2010;
and
|
|
3.
|
To
transact such other business as may properly come before the Annual
Meeting and any adjournments or postponements
thereof.
|
Management
of the Company did not receive any shareholder proposals for inclusion in this
Proxy Statement by the date prescribed therefor and is not aware of any other
matters to be presented for action at the Annual Meeting. If, however, any other
matters properly come before the Annual Meeting, it is intended that the persons
named in the accompanying proxy card will vote at their discretion pursuant to
the proxy card in accordance with their best judgment on such
matters.
Who
may attend the meeting?
Only
shareholders, their proxy holders, and our invited guests may attend the Annual
Meeting. If you plan to attend, please bring identification, and, if
you hold shares in street name, you should bring your bank or broker statement
showing your beneficial ownership of Andatee stock in order to be admitted to
the meeting.
Who
can vote?
You can
vote at the Annual Meeting in all matters properly brought before the Annual
Meeting if, as of the close of business on the record date, August 30, 2010, you
were a holder of record of the Company’s common stock. On the Record
Date, there were 9,610,159 shares of our common stock issued and
outstanding.
How
many votes do I have?
Each
share of common stock is entitled to one vote on each matter presented at the
Annual Meeting.
Why
would the Annual Meeting be postponed?
The
Annual Meeting will be postponed if a quorum is not present on the date of the
Annual Meeting. In order for any business to be conducted, the
holders of a majority of the shares issued and outstanding and entitled to vote
at the meeting must be present, either in person or represented by proxy. If a
quorum is not present, the meeting may be adjourned or postponed by those
shareholders who are represented. The meeting may be rescheduled at the time of
the adjournment with no further notice of the rescheduled time. An adjournment
will have no effect on the business to be conducted.
Shares
represented by proxies received but marked as abstentions will be included in
the calculation of the number of shares considered to be present at the meeting.
Shares held in a brokerage account that are voted by the broker or other nominee
on some but not all matters will be treated as shares present for purposes of
determining the presence of a quorum. However, if you hold your shares in street
name and do not provide voting instructions to your broker, your shares will not
be voted on any proposal on which your broker does not have discretionary
authority to vote (a “broker non-vote”). Under current rules, your broker will
not have discretionary authority to vote your shares at the Annual Meeting on
the election of directors,. We encourage you to provide instructions to your
bank, broker or nominee by carefully following the instructions provided. This
will ensure that your shares are voted at the Annual Meeting as you
direct.
How
do I vote by proxy?
Whether
you plan to attend the Annual Meeting or not, we urge you to complete, sign and
date the enclosed proxy card and return it promptly in the envelope
provided. Returning the proxy card will not affect your right to
attend the Annual Meeting and vote in person.
You can
vote your proxy on the Internet as instructed in the Notice of Internet
Availability of Proxy Materials, the proxy card or the voting instruction form.
The Internet procedures are designed to authenticate a shareholder’s identity,
to allow shareholders to vote their shares and to confirm that their
instructions have been properly recorded.
If you
properly fill in your proxy card and send it to us in time to vote, your proxy
(one of the individuals named on your proxy card) will vote your shares as you
have directed. If you sign the proxy card but do not make specific
choices, your proxy will vote your shares as recommended by the Board as
follows:
|
1.
|
FOR
the election of the director
nominees
|
|
2.
|
FOR
the ratification of the appointment of Jewett, Schwartz, Wolfe &
Associates
|
If any
other matters are presented, your proxy will vote in accordance with his best
judgment. At the time this proxy statement was printed, we knew of no
matters that needed to be acted on at the Annual Meeting other than those
discussed in this proxy statement.
How
do I vote in person?
If you
plan to attend and vote in person at the Annual Meeting or at a later date if
the meeting is adjourned or postponed, we will give you a ballot when you
arrive. However, if your shares are held in the name of your broker,
bank or other nominee, you must bring a power of attorney executed by the
broker, bank or other nominee that owns the shares of record for your benefit
and authorizing you to vote the shares.
What
is the difference between a stockholder of record and a stockholder who holds
stock in street name?
If your
shares are registered in your name, you are a stockholder of record with respect
to those shares. If your shares are registered in the name of your
broker or bank, your shares are held in street name and you are considered the
“beneficial owner” of the shares. As the beneficial owner of those shares, you
have the right to direct your broker or bank how to vote your shares, and you
will receive separate instructions from your broker or bank describing how to
vote your shares.
May
I revoke my proxy?
If you
give a proxy, you may revoke it at any time before it is
exercised. You may revoke your proxy in three ways:
|
1.
|
You
may send in another proxy with a later
date.
|
|
2.
|
You
may notify us in writing (or if the stockholder is a corporation, under
its corporate seal, by an officer or attorney of the corporation) at our
principal executive offices before the Annual Meeting that you are
revoking your proxy.
|
|
3.
|
You
may vote in person at the Annual
Meeting.
|
What
vote is required to take action?
Proposal 1 – Election of Directors. The
election of directors nominated in Proposal 1 requires the vote of a majority of
the votes of all shares of common stock present in person or represented by
proxy and entitled to vote at the Annual Meeting. A “majority” of the
votes cast means that the number of votes cast “for” a director nominee must
exceed the votes cast “against” that nominee. In the context of the election of
four directors at the Annual Meeting, it will mean that each of the director
nominees will be required to receive more votes “for” than “against” to be
elected. Abstentions and broker non-votes will have no effect on the outcome of
the proposal.
Proposal 2 – Ratification of Appointment of the
Company’s Auditors. The affirmative vote of a majority of the
votes of all shares of common stock present in person or represented by proxy
and entitled to vote at the Annual Meeting is required to ratify the appointment
of our independent auditors. Abstentions and broker non-votes will have no
effect on the outcome of the Proposal 2.
Shares
that are entitled to be voted by a shareholder who is present, in person or by
proxy, at the annual meeting but who abstains from voting or withholds a vote,
will be treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. “Broker non-votes” are also treated as
shares that are present for purposes of determining the presence of a quorum. A
broker non-vote occurs when a broker is present at the meeting or returns a
proxy but does not have discretionary voting power to vote on a specific matter
(such as non-routine proposals) and has not received timely voting instructions
from the beneficial owner with respect to such matter. Many brokers are subject
to rules which prohibit them from “discretionary” voting on certain proposals
unless they receive specific instruction from the beneficial owner to vote on
such matters. Such rules prohibit the brokers to vote with respect to proposals
related to contested director elections and equity compensation, absent such
instruction, but such rules currently do not prohibit the brokers to vote on
proposals related to ratification of accountants in the absence of such
instructions if and as they choose.
Who
is making this solicitation?
We are
soliciting your vote through the use of the mail and will bear the cost of this
solicitation. We will not employ third party solicitors, but our
directors, officers, employees, and consultants may solicit proxies by mail,
telephone, personal contact, or through online methods. We will
reimburse their expenses for doing this. We will also reimburse
brokers, fiduciaries, and custodians for their costs in forwarding proxy
materials to beneficial owners of our stock. Other proxy solicitation
expenses include those for preparation, mailing, returning, and tabulating the
proxies.
Are
there any dissenters’ rights of appraisal?
The Board
is not proposing any action for which the laws of the State of Delaware, our
Certificate of Incorporation or our Bylaws, as amended from time to time,
provide a right of a shareholder to obtain appraisal of or payment for such
shareholder’s shares.
Where
are the principal executive offices of Andatee?
Our
principal executive offices are located at Unit C, No. 68 West Binhai Road,
Xigang District Dalian, People’s Republic of China and our telephone number is
011 (86411) 8360 4683.
How
can I obtain additional information about Andatee?
Copies of
our Annual Report on Form 10-K for the fiscal year ended December 31, 2009 as
filed with the Securities and Exchange Commission are being sent to all
shareholders along with this proxy statement. Additional copies will be
furnished without charge to shareholders upon written request. Exhibits to the
Annual Report will be provided upon written request. All written requests should
be directed to: Andatee, c/o Chief Financial Officer, Unit C, No. 68
West Binhai Road, Xigang District Dalian, People’s Republic of
China.
We are
subject to the informational requirements of the Securities Exchange Act of
1934, as amended, which requires that we file reports, proxy statements and
other information with the SEC. The SEC maintains a website that
contains reports, proxy and information statements and other information
regarding companies, including Andatee, that file electronically with the
SEC. The SEC’s website address is http://www.sec.gov. In
addition, our filings may be inspected and copied at the public reference
facilities of the SEC located at 100 F Street, N.E. Washington, DC 20549; and at
the SEC’s regional offices at 233 Broadway, New York, NY 10279 and Citicorp
Center, 500 West Madison Street, Room 1400, Chicago, IL 60661. Copies
of the material may also be obtained upon request and payment of the appropriate
fee from the Public Reference Section of the SEC located at 100 F Street, N.E.,
Washington, DC 20549.
YOUR
VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE ANNUAL
MEETING, WE ENCOURAGE YOU TO COMPLETE AND RETURN THE ENCLOSED PROXY CARD TO
ENSURE THAT YOUR SHARES ARE REPRESENTED AND VOTED. THIS BENEFITS THE
COMPANY BY REDUCING THE EXPENSES OF ADDITIONAL PROXY
SOLICITATION.
Security
Ownership of Certain Beneficial Owners and Management
Our
common stock constitutes our only voting securities. The table below provides
beneficial ownership of our securities, as of the Record Date and to the best of
our knowledge, by (i) each person known to us that beneficially owns more than
5% of our outstanding shares of common stock; (ii) each of our directors; (iii)
each of our named executive officers; and (iv) all of our current directors and
executive officers as a group. As of the record date, August 30, 2010, there
were 9,610,159 shares of our common stock issued and outstanding.
Name of Beneficial Owner
|
|
Amount and Nature of
Beneficial
Ownership(1)
|
|
|
Percent of Class (6)
|
|
An
Fengbin
|
|
|
5,442,397 |
(2)
|
|
|
55.8 |
% |
Wen
Tong
|
|
|
60,000 |
(3)
|
|
|
* |
|
Francis
Leong
|
|
|
5,625 |
(4)
|
|
|
* |
|
Wen
Jiang
|
|
|
3,750 |
(4)
|
|
|
* |
|
Yu
Bing
|
|
|
3,750 |
(4)(5)
|
|
|
* |
|
Star
Blessing Enterprises Ltd
|
|
|
5,442,397 |
(2)
|
|
|
55.8 |
% |
Directors
and executive officers as a group of 5 persons
|
|
|
5,515,522 |
(7)
|
|
|
57 |
% |
*Less
than 1%
(1) For
purposes of determining the amount of securities beneficially owned, share
amounts include all common stock owned outright plus all shares of common stock
issuable upon conversion of convertible notes, or the exercise of options or
warrants currently exercisable, or exercisable within 60 days of the record
date. The Percent of Class is based on the number of shares of the Company’s
common stock outstanding as of the record date. Shares of common stock issuable
upon conversion of convertible notes, or the exercise of options or warrants
currently exercisable, or exercisable within 60 days of the record date, are
deemed outstanding for the purpose of computing the percentage ownership of the
person holding such options or warrants, but are not deemed outstanding for
computing the percentage ownership of any other owners. The address of all
persons named in this table is: c/o Andatee, Unit C, No. 68 West Binhai Road,
Xigang District Dalian, People’s Republic of China.
(2) Mr.
An Fengbin has the power to vote and dispose of all of the securities of
Oriental Excel Enterprises Limited, a British Virgin Islands company (“OEEL”)
pursuant to the August 2009 amendment to the March 26, 2009 agreement (the
‘‘Original Agreement’’) by and between Ms. Lai WaiChi, a citizen of Hong Kong,
who holds 100% equity interest in OEEL (which entity, in turn, holds 100% equity
interest in Star Blessing Enterprises Limited) and Mr. An Fengbin. Under the
terms of the amendment to the Original Agreement, the parties agreed to (i)
terminate Article 2 of the Original Agreement which set forth certain conditions
of disbursement of Ms. Lai’s holdings of all of her holdings of the OEED
securities (the ‘‘Transfer Shares’’), and (ii) replace Article 2 with an
agreement that An Fengbin will be entitled to the Transfer Shares, in exchange
for no consideration, in the event net income reported in the consolidated
interim financial statements of Goodwill for the six month period ended June 30,
2009 is not less than $1.5 million. OEEL is the sole owner of the securities of
Star Blessing Enterprises Limited, also a British Virgin Islands company, which,
in turn, holds 89.4% ownership in the Company. The requirement for net income of
not less that $1.5 million for the six month period ended June 30, 2009 was met,
and therefore An Fengbin is now entitled to receive the Transfer Shares at such
time as permitted under PRC laws and regulations, as such laws and regulations
permit. Specifically, Mr. An will be permitted to receive such shares when he
completes his registration application with the State Administration of Foreign
Exchange (SAFE). An Fengbin’s right to receive the Transfer Shares
for no consideration reflects the fact that Goodwill paid no consideration to
Xingyuan or its stockholders for entering into the agreements under which
Xingyuan became a VIE of the Company. In July 2010, Ms. Lai WaiChi
agreed to transfer her interest in OEEL to Ms. Wang Jing, Mr. An’s spouse.
In addition, Mr. An’s beneficial ownership includes 100,000 options to
purchase shares of common stock granted to him, of which 40,000 options vested
immediately upon grant date, July 14, 2010, and the remaining 60,000 options
will vest in two equal installments on July 14, 2011 and July 14,
2012.
(3) Represents
60,000 options to purchase shares of common stock, of which 20,000 options
vested immediately upon grant date, July 14, 2010, and the remaining 40,000
options vest in two equal installments on July 14, 2011 and July 14,
2012.
(4) Represents
director options to purchase shares of common stock of the Company.
(5) Effective
as of September 1, 2010, Yu Bing, resigned as (i) a Board member, and (ii) a
member of the standing committees of the Board, as discussed in detail below. Yu
Bing’s resignation was not for cause or due to any disagreements with the
Company. She resigned for personal reasons, including to address the time
demands from other business opportunities and commitments.
(6) Reflects
the 1-for-1.333334 reverse stock split effected in October 2009.
(7) On
September 13, 2010, the Board appointed Yudong Hou to the Board and its standing
committees, as an “independent” director to the
Board. Yudong Hou does not beneficially own any securities of the Company
as of the date of this filing. For more details relating to this
appointment, see the discussion below.
Section
16(a) Beneficial Ownership Compliance during 2009
Section
16(a) of the Exchange Act requires our officers, directors and persons who own
more than 10% of a registered class of our equity securities within specified
time periods to file certain reports of ownership and changes in ownership with
the SEC.
Andatee
became subject to the reporting requirements, including Section 16(a) beneficial
ownership reporting, under the Exchange Act in February
2010. Therefore, neither the Company nor any of its reporting persons
had any reports to be filed during 2009. Since February 2010 through the date of
this proxy statement and based solely upon a review of Forms 3, 4 and 5
furnished to the Company pursuant to Rule 16a-3, the Company believes that all
such forms required to be filed pursuant to Section 16(a) were timely filed as
necessary by the executive officers, directors and security holders required to
file.
Proposal
1
To
elect directors, each to serve until the next annual meeting of shareholders or
until
each
successor is duly elected and qualified
Our Board
has concluded that the re-election of all of our current directors (the
“Director Nominees”) to the Board is in our best interests and recommends
approval of their re-election. Our Board currently consists of five
directors: An Fengbin, Wen Tong, Yudong Hou, Francis N.S. Leong and Wen
Jiang. The Nominating and Governance Committee of the Board nominated and
the Board at large approved and recommended all of the current members of our
Board for re-election at the Annual Meeting.
In case
any of the nominees becomes unavailable for election to the Board the persons
named as proxies will have full discretion and authority to vote or refrain from
voting for any other nominees in accordance with their judgment. The
Board nominees, if elected, will serve until the next annual meeting of
shareholders or until each successor is duly elected and qualified. All nominees
have consented to being named herein and have indicated their intention to serve
as our directors, if elected. Unless authority to do so is withheld,
the persons named as proxies will vote the shares represented by such proxies
for the election of the named director nominees. If a nominee becomes
unable or unwilling to accept nomination or election, the Board may either
select a substitute nominee or reduce the size of the Board. If you have
submitted a proxy and a substitute nominee is selected, your shares will be
voted for the election of the substitute nominee. Alternatively, if the Board
does not select a substitute nominee, the proxies may vote only for the
remaining nominees, leaving a vacancy that may be filled at a later date by the
Board. The Board has no reason to believe that any nominee would be
unable or unwilling to serve if elected..
Biographical
information with respect to the current Board members who are also the Director
Nominees, including such members’ particular qualifications and skills that led
the Board to conclude that each such member should continue to serve as a Board
member, is provided in the Directors and Executive Officers of
Andatee section of this proxy statement appearing on page
11.
Vote
Required for Approval of Proposal 1; Board recommendation
The
election of directors nominated in Proposal 1 requires the vote of a majority of
the votes of all shares of common stock present in person or represented by
proxy and entitled to vote at the Annual Meeting. A “majority” of the votes cast
means that the number of votes cast “for” a director nominee must exceed the
votes cast “against” that nominee. In the context of the election of five
directors at the Annual Meeting, it will mean that each of the five director
nominees will be required to receive more votes “for” than “against” to be
elected.
The Board
recommends a vote FOR
the election of all the Director Nominees named above.
Proposal
2
To ratify the appointment of Jewett,
Schwartz, Wolfe & Associates as independent auditors
of
the
Company for the fiscal year ending December 31, 2010
The
Company has selected the firm of Jewett, Schwartz, Wolfe & Associates
(“JSW”) to audit the financial statements for the fiscal year ending December
31, 2010, and seeks shareholder ratification of said appointment. The
Audit Committee, which has selected JSW to serve as our independent auditors,
believes that JSW has the personnel, professional qualifications and
independence necessary to act as the Company’s independent
auditors. A representative of JSW will be in attendance at the Annual
Meeting either in person or by telephone. The representative will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions from shareholders.
The
ratification by our shareholders of the Audit Committee’s selection of
independent public accountants is not mandated by Delaware law, our bylaws or
other legal requirements. However, the Audit Committee is submitting its
selection of JSW to our shareholders for ratification this year. If the
selection of JSW is ratified by our shareholders at the Annual Meeting, the
Audit Committee, in its discretion, nevertheless may select and appoint a
different independent accounting firm at any time. If the
shareholders do not ratify the selection of JSW, the Audit Committee will
reconsider the retention of that firm, but the Audit Committee would not be
required to select another firm as independent public accountants and may
nonetheless retain JSW. If the Audit Committee does select another
firm to serve as the Company’s independent public accountants, whether or not
the shareholders have ratified the selection of JSW, the Audit Committee would
not be required to call a special meeting of the shareholders to seek
ratification of the selection, and in all likelihood would not call a special
meeting for that purpose. In all cases, the Audit Committee will make
any determination as to the selection of the Company’s independent public
accountants in light of the best interests of the Company and its
shareholders.
Overview
and Audit Fees
In
February 27, 2010, the Company, upon the Audit Committee’s review and approval,
engaged JSW as its independent registered public accounting firm to audit the
Company’s financial statements and to perform reviews of interim financial
statements. Prior to engaging JSW, there has been no consultation with JSW
regarding the application of accounting principles to a specific completed or
proposed transaction or the type of audit opinion that might be rendered on the
Company’s financial statements. Prior to engaging JSW, there has been
no written report or oral advice provided by JSW that was an important factor
considered by the Company in reaching a decision as to any accounting, auditing
or financial reporting issue.
The
following table represents the fees for professional services rendered by JSW
for the fiscal years 2009 and 2008:
Services
Performed
|
|
2009
|
|
|
2008
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Audit
Fees (1)
|
|
$ |
122,774 |
|
|
$ |
137,344 |
|
Audit-Related
Fees (2)
|
|
|
- |
|
|
|
- |
|
Tax
Fees (3)
|
|
|
- |
|
|
|
- |
|
All
Other Fees (4)
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
Total
Fees
|
|
$ |
122,774 |
|
|
$ |
137,344 |
|
|
|
|
|
|
|
|
|
|
(1) Audit
fees represent the aggregate fees billed for professional services rendered by
JSW for the audit of our annual financial statements, review of financial
statements included in our quarterly reports, review of registration statements
or services that are normally provided in connection with statutory and
regulatory filings or engagements for those fiscal years.
(2) Audit-related
fees represent the aggregate fees billed for assurance and related services that
are reasonably related to the performance of the audit or review of our
financial statements and are not reported under Audit Fees. There were no such
fees in fiscal 2008 and 2009.
(3) Tax
fees represent the aggregate fees billed for professional services rendered by
our principal accountants for tax compliance, tax advice, and tax planning for
such years. There were no such fees in 2008 and 2009.
(4) All
other fees represent the aggregate fees billed for products and services other
than the services reported in the other categories. There were no such fees in
fiscal 2008 and 2009.
Audit
Committee Pre-Approval Policies and Procedures
The Audit
Committee on an annual basis reviews audit and non-audit services performed by
the independent auditors. All audit and non-audit services are pre-approved by
the Audit Committee, which considers, among other things, the possible effect of
the performance of such services on the auditors’ independence. Our
Audit Committee has the sole authority to pre-approve all audit and non-audit
services provided by our independent accountants. The Audit Committee
has adopted policies and procedures for the pre-approval of services provided by
the independent accountants. The Audit Committee on an annual basis
reviews audit and non-audit services performed by the independent
accountants. All audit and non-audit services are pre-approved by the
Audit Committee, which considers, among other things, the possible effect of the
performance of such services on the accountants’ independence. As
permitted under the Sarbanes-Oxley Act of 2002, the Audit Committee may delegate
pre-approval authority to one or more of its members. Any service
pre-approved by a delegate must be reported to the Audit Committee at the next
scheduled quarterly meeting. The Audit Committee considered whether
the provision of the auditors’ services, other than for the annual audit and
quarterly reviews, is compatible with its independence and concluded that it is
compatible. In 2009 and 2008, all such services were pre-approved by
the Audit Committee.
Vote
Required for Approval of Proposal 2; Board recommendation
The
affirmative vote of a majority of the shares present, either by proxy or in
person, and entitled to vote is required to approve this proposal.
The Board
recommends a vote FOR
this Proposal 2.
Directors
and Executive Officers of Andatee
The
following table sets forth the names and ages of all Andatee directors and
executive officers as of December 31, 2009.
Name
|
|
Age
|
|
Position(s) with the
Company
|
An
Fengbin
|
|
43
|
|
Chairman
of the Board of Directors, President and Chief Executive
Officer
|
|
|
|
|
|
Wen
Tong
|
|
34
|
|
Chief
Financial Officer
|
|
|
|
|
|
Wen
Jiang
|
|
48
|
|
Independent
Director(1)(2)(3)(4)
|
|
|
|
|
|
Francis
N.S. Leong
|
|
66
|
|
Independent
Director(1)(2)(3)
|
|
|
|
|
|
Yu
Bing
|
|
33
|
|
Independent
Director(1)(2)(3)(6)
|
|
|
|
|
|
Bai
Jinhai
|
|
71
|
|
Chief
Technology Officer
|
|
|
|
|
|
Sun
Xun
|
|
41
|
|
Chief
Operating Officer(5)
|
|
|
|
|
|
Yudong
Hou
|
|
41
|
|
Independent
Director(1)(2)(3)(7)
|
(1) Member
of the Audit Committee.
(2) Member
of the Compensation Committee.
(3) Member
of the Nominating and Governance Committee.
(4) Audit
Committee financial expert.
(5) Appointed
effective June 17, 2010, following Chen Yuqiang’s resignation from the same
office for personal reasons.
(6) Effective
as of September 1, 2010, Yu Bing resigned as (i) a Board member, and (ii) a
member of Audit, Compensation, and Nominating and Corporate Governance
Committees of the Board, respectively. Yu Bing’s resignation was not for cause
or due to any disagreements with the Company. She resigned for personal reasons,
including to address the time demands from other business opportunities and
commitments.
(7) On
September 13, 2010, our Board appointed Yudong Hou to serve on the Board as well
as on the Audit, Compensation and the Nominating & Governance Committees of
the Board. Yudong Hou was appointed to the vacancy on the Board and
its standing committees following Yu Bing’s departure from the Board. The Board
determined that Yudong Hou is an “independent” director as such term is defined
under the Nasdaq Marketplace Rules and the federal securities laws, as described
in more detail below.
Board
of Directors
Our Board
oversees our business affairs and monitors the performance of our
management. Each director and executive officer holds office until
his successor is duly elected and qualified, his resignation or he is removed in
the manner provided by our Bylaws. All officers are appointed and
serve at the discretion of the Board. All of our officers devote their full-time
attention to our business.
Biographical
Information of Directors and Executive Officers
Biographical
information with respect to the Company’s current executive officers and
directors and the Director Nominees is provided below.
An Fengbin has served as our
Chairman, President and Chief Executive Officer since May 2004. From 1985 to
1996, Mr. An worked in the Credit and Loan Department of China Agricultural Bank
where he held the title of Deputy Director of Corporate Department, following
which engagement, he joined Dalian Zhenyuan Oil Blending Co., Ltd. as a General
Manager in 1996 and remained until May 2000. In September 2001, he established a
joint venture with Sinopec Corp. (China Petroleum & Chemical Corporation)
and founded Xingyuan. Mr. An graduated from Dongbei Finance and Economics
University in September 2003 with a degree in Economic Management degree. Mr.
An’s substantial experience in the petrochemical industry and his day to day
leadership as President and Chief Executive Officer of our Company provides him
with intimate knowledge of our business and operations.
Wen Tong has been our Chief
Financial Officer and Director since May 2007. From November 2005 to April 2007,
Mr. Wen has worked at China Industrial Waste Management Co., Inc., an OTC-BB
company with approximately $10 million in revenue in 2007, as a director and a
Deputy Manager. Prior to that, Mr. Wen worked as an auditor at the accounting
firm of Liaoning Tianjin Accounting. Mr. Wen holds a degree in Accounting from
Dongbei Finance and Economics University (September 1998). Wen Tong’s
significant expertise and experience in the public accounting and finance
enables him to effectively address and analyze the challenges and opportunities
facing a US public company with multiple operations in the PRC.
Wen Jiang has served as our
director since July 2009. From 1993 to present, Mr. Jiang has served as Managing
Director of the accounting firm of Wen Jiang & Company, PC in Portland,
Oregon, where he provides services to more than 300 clients in the public and
private sectors. Mr. Jiang has 18 years of experience in accounting, auditing,
tax and international business consulting matters. Wen Jiang is an
independent director on the Board of Directors of China Industrial Waste
Management, Inc., an industrial waste collection company based in Dalian, China
(CIWT - OTC-BB). He is a licensed CPA in the State of Oregon (1993)
and a registered member with PCAOB. Mr. Jiang holds a Bachelor of Science degree
in Accounting from Eastern Oregon University (1989). Wen Jiang’s substantial
experience and expertise in accounting, auditing, tax and international business
consulting matters provide valuable insights to the Board and the Board
committees on which he serves.
Francis N.S. Leong has served
as our director since July 2009. From 2003 to present, Mr. Leong has served as a
Principal at Sungai River, Inc., an international financial consulting firm. Mr.
Leong also holds directorships on the Boards of several public companies,
including Boyuan Construction Group, Inc., a Chinese construction company (BOY -
Toronto Stock Exchange); and China Industrial Waste Management, Inc., an
industrial waste collection company based in Dalian, China (CIWT - OTC-BB). Mr.
Leong holds a Bachelor of Commerce degree from National Chengchi University in
Taipei, Taiwan (1968) and a Master’s degree in Public Administration from
Marriott School of Management, Brigham Young University,
(1975). Francis N.S. Leong brings years of public company and
accounting experience and expertise to his work on the Board and its standing
committee.
Yu Bing has served as our
director since July 2009. From June 2007 to present, Ms. Yu has served as
Executive Director of Brainzoom Investment Holdings Limited, an international
business and financial consulting firm. From October 2009 to present, Ms. Yu
served as Chief Financial Officer of China New Borun Corporation, a
multinational company principally engaged in manufacture and distribution of
edible alcohol and its by-products (NYSE: BORN). From March 2006 to May 2007,
she served as Corporate Financial Director of Cellon International Holdings
Corporation, an electronics component design company. From June 1999 to March
2006, Ms. Yu served as Audit Manager at Arthur Andersen, then, at
PricewaterhouseCoopers LLP (PWC). Ms. Yu holds a Bachelor of Accounting from
Central University of Finance and Economics (1998). Yu Bing resigned
from the Board and from all standing committees thereof, effective as of
September 1, 2010, for personal reasons.
Yudong Hou was appointed as our director
effective as of September 13, 2010. Prior to this appointment, from
July 2007 to present, Mr. Hou has been Managing Director of Eastern Link
Capital, an investment firm that seeks late stage and middle market investment
opportunities in China. Prior to that, from May 2005 to July 2007, he
served as Executive Vice President of GF Securities, Inc. in Beijing, China,
where he, among other things, managed and supervised the firm’s investment
banking, mergers & acquisitions and underwriting activities. From February
2003 to April 2005, he served as Executive Vice President of GF Northern
Securities, Inc. in Dalian, China, where he managed 18 branch offices throughout
China with over 300 employees and approximately RMB 10 billion in assets. From
April 2002 to January 2003, Mr. Hou served as Executive Vice President at the
investment management group of GF Securities, Inc., in Guangzhou, China, where
he, among other things, directed portfolio managers, research analysts and sales
professionals in managing institutions and high net worthy clients’ assets. From
November 2001 to March 2002, Mr. Hou was employed at Edward Jones in Newton, MA,
as an investment representative, where he trained management of retail office,
participation of Edward Jones’ investment banking underwriting business, sales
of securities and compliance with regulators. From June 1999 to
October 2001, Mr. Hou was a financial advisor with Waddell & Reed Financial
in Worcester, MA. Prior to that, from March 1994 to August 1997, he served as
Vice President and Chief Financial Officer of IDG Technology Venture
Investment Company, an asset management company in Beijing,
China. Mr. Hou holds a Bachelor’s degree in Accounting from Economic
Management School, North China University of Technology, Beijing, China (1992)
and a Master’s degree in Finance from Sawyer School of Management Suffolk
University (1999). He also holds FINRA Series 6, 7 and 63 securities
licenses. Yudong Hou brings to the Company, its Board and standing
committees his expertise and substantial experience in the areas of investment
banking, venture capital and capital finance.
Bai Jinhai has been our Chief
Technological Officer since March 2005. Mr. Bai holds a Chemical Engineering
degree from Dalian Technological University (DTU) (1963). Following his
graduation, he remained on the DTU faculty and has taught in undergraduate and
graduate programs at the DTU. He has also conducted independent research in the
oil and chemical technology areas.
Sun Xun joined the Company as
new Chief Operating Officer effective as of June 17, 2010. Mr. Sun
brings to Andatee over 20 years of operational experience in the PRC
petrochemical industry. He has been with the Company for over 5 years as
operations manager. Prior to joining Andatee, Mr. Sun was a Sales Manager at a
subsidiary of Heilongjiang Petrochemical Company. Prior to that, he was a Sales
Manager for Dalian Hengda High Technology Co., Ltd. and Wuhan Chang Ning
Engineering Co., Ltd. From 1989 to 2002, he held various positions at
Jiamusi Chemical Co., Ltd. And, during the last 4 years of his tenure at
Jiamushi, he was appointed to the office of the Associate Director in the
company’s sales department.
Director and Officer Involvement in
Certain Legal or Material Proceedings
There
are no material proceedings to which any director, executive officer or
affiliate of the Company, any owner of record or beneficial owner of more than
five percent of any class of voting securities of the Company, or any associate
of any such director, executive officer, affiliate or security holder is a party
adverse to the Company or has a material interest adverse to the Company. There
are no family relationships between any of the Company’s executive officers or
directors and there are no arrangements or understandings between a director and
any other person pursuant to which such person was elected as director. There
were no material changes to the procedures by which shareholders may recommend
nominees to the Board since the Company’s last disclosure of such
policies.
To the
best of our knowledge, none of the following events have occurred during the
past ten years that are material to an evaluation of the ability or integrity of
any director, director nominee or executive officer of the Company:
· any
bankruptcy petition filed by or against, or any appointment of a receiver,
fiscal agent or similar Officer for, the business or property of such person, or
any partnership in which such person was a general partner or any corporation of
which such person was an executive officer either, in each case, at the time of
the filing for bankruptcy or within two years prior to that time;
· any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses);
· being
subject to any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining such person from, or otherwise limiting, the following
activities:
(i) acting
as a futures commission merchant, introducing broker, commodity trading advisor,
commodity pool operator, floor broker, leverage transaction merchant, any other
person regulated by the Commodity Futures Trading Commission, or an associated
person of any of the foregoing, or as an investment adviser, underwriter, broker
or dealer in securities, or as an affiliated person, Director or employee of any
investment company, bank, savings and loan association or insurance company;
or
(ii) engaging
in or continuing any conduct or practice in connection with such
activity;
(iii) engaging
in any type of business practice; or engaging in any activity in connection with
the purchase or sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal commodities
laws.
· being
subject to any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any federal or state authority barring, suspending or otherwise
limiting for more than 60 days the right of such person to act as a futures
commission merchant, introducing broker, commodity trading advisor, commodity
pool operator, floor broker, leverage transaction merchant, any other person
regulated by the Commodity Futures Trading Commission, or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or
dealer in securities, or as an affiliated person, Director or employee of any
investment company, bank, savings and loan association or insurance company, or
engaging in or continuing any conduct or practice in connection with such
activity;
· being
found by a court of competent jurisdiction in a civil action, the SEC or the
Commodity Futures Trading Commission to have violated a federal or state
securities or federal commodities law, and the judgment in such civil action or
finding by the SEC or the Commodity Futures Trading Commission has not been
subsequently reversed, suspended, or vacated;
· being
the subject of, or a party to, any federal or state judicial or administrative
order, judgment, decree or finding, not subsequently reversed, suspended or
vacated, relating to an alleged violation of any federal or state securities or
commodities law or regulation, any law or regulation respecting financial
instructions or insurance companies, including, but not limited to, a temporary
or permanent injunction, order of disgorgement or restitution, civil money
penalty or temporary or permanent cease-and-desist order, or removal or
prohibition order, or any law or regulation prohibiting mail or wire fraud or
fraud in connection with any business entity; or
· being
the subject of, or a party to, any sanction or order, not subsequently reversed,
suspended or vacated, of any self-regulatory organization (as defined in Section
3(a) (26) of the Exchange Act), any registered entity (as defined in Section
1(a) (29) of the Commodity Exchange Act), or any equivalent exchange,
association, entity or organization that has disciplinary authority over its
members or person associated with a member.
Director
and Board Nominee Independence
Our Board
is subject to the independence requirements of the Nasdaq Global Market
(“Nasdaq”). Pursuant to the requirements, the Board undertakes an annual review
of director independence. During this review, the Board considers
transactions and relationships between each director or any member of his
immediate family and Andatee and its affiliates, including those transactions
that are contemplated under Item 404(a) of Regulation S-K. The purpose of this
review is to determine whether any such relationships or transactions exist that
are inconsistent with a determination that the director is
independent. Our Board has determined that all current members of the
Audit Committee, the Compensation Committee and the Nominating and Governance
Committee are ‘‘independent’’ under the standards provided by the Nasdaq and
that the members of the Audit Committee are also “independent” for purposes of
Section 10A-3 of the Exchange Act. An Fengbin and Wen Tong, in addition to
serving on the Board, also serve as our President and Chief Executive Officer,
and Chief Financial Officer, respectively, and neither serves on the Audit,
Nominating and Governance, or Compensation Committees. The majority of the
Board is comprised of independent directors. The Board based these
determinations primarily on a review of the responses of the directors and
executive officers to questions regarding employment and transaction history,
affiliations and family and other relationships and on discussions with the
directors and the fact that no director previously reported a change in
circumstances that could affect his independence. None of our directors engages
in any transaction, relationship, or arrangement contemplated under section
404(a) of Regulation S-K.
Membership,
Meetings and Attendance
Following
our incorporation, our Board established all three standing committee of the
Board in July 2009: Audit Committee, Compensation Committee, and the Nominating
and Governance Committee. During the fiscal year ended December 31,
2009, the Board held three meetings in person or telephonically and acted by
written consent on one occasion. Also during fiscal year 2009, our Audit
Committee met twice (with no action by written consent), with no meetings (or
action by written consent) of either the Compensation or Nominating and
Governance Committee during the same period. Each of our directors attended at
least 75% of the aggregate of the total number of meetings of the Board and the
total number of meetings held by all committees of the Board on which he
served.
The
membership and responsibilities of our current committees are summarized
below. Additional information regarding the responsibilities of each
committee is found in, and is governed by, our Bylaws, as amended, each
committee’s Charter, where applicable, specific directions of the Board, and
certain mandated regulatory requirements. The Charters of the
standing committees of the Board as well as the Code of Conduct and Ethics are
available at our website at http://www.andatee.com. The information on our website is not
a part of this proxy statement. The information is also
available in print to any shareholder who requests it.
Nominating
and Governance Committee
The
Nominating and Governance Committee has the following responsibilities as set
forth in its charter:
· to
review and recommend to the Board with regard to policies for the composition of
the Board;
· to
review any director nominee candidates recommended by any director or executive
officer of the Company, or by any shareholder if submitted
properly;
· to
identify, interview and evaluate director nominee candidates and have sole
authority to retain and terminate any search firm to be used to assist the
Committee in identifying director candidates and approve the search firm’s fees
and other retention terms;
· to
recommend to the Board the slate of director nominees to be presented by the
Board;
· to
recommend director nominees to fill vacancies on the Board, and the members of
each Board committee;
· to
lead the annual review of Board performance and effectiveness and make
recommendations to the Board as appropriate; and
· to
review and recommend corporate governance policies and principles for the
Company, including those relating to the structure and operations of the Board
and its committees.
Shareholders
meeting the following requirements who want to recommend a director candidate
may do so in accordance with our Bylaws and the following procedures established
by the Nomination and Governance Committee. The Board will consider
all director candidates recommended to the Nomination and Governance Committee
by shareholders owning at least 5% of our outstanding shares at all times during
the year preceding the date on which the recommendation is made that meet the
qualifications established by the Board. To make a nomination for
director at an Annual Meeting, a written nomination solicitation notice must be
received by the Nomination and Governance Committee at our principal executive
office not less than 120 days before the anniversary date our proxy statement
was mailed to shareholders in connection with our previous annual
meeting. The written nomination solicitation notice must contain the
following material elements, as well as any other information reasonably
requested by us or the Nomination and Governance Committee:
· the
name and address, as they appear on our books, of the stockholder giving the
notice or of the beneficial owner, if any, on whose behalf the nomination is
made;
· a
representation that the stockholder giving the notice is a holder of record of
our common stock entitled to vote at the annual meeting and intends to appear in
person or by proxy at the annual meeting to nominate the person or persons
specified in the notice;
· complete
biography of the nominee, as well as consents to permit us to complete any due
diligence investigations to confirm the nominee’s background, as we believe to
be appropriate;
· the
disclosure of all special interests and all political and organizational
affiliations of the nominee;
· a
signed, written statement from the director nominee as to why the director
nominee wants to serve on our Board, and why the director nominee believes that
he or she is qualified to serve;
· a
description of all arrangements or understandings between or among any of the
stockholder giving the notice, the beneficial owner, if any, on whose behalf the
notice is given, each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the stockholder giving the notice;
· such
other information regarding each nominee proposed by the stockholder giving the
notice as would be required to be included in a proxy statement filed pursuant
to the proxy rules of the SEC had the nominee been nominated, or
intended to be nominated, by our Board; and
· the
signed consent of each nominee to serve as a director if so
elected.
In
considering director candidates, the Nomination and Governance Committee will
consider such factors as it deems appropriate to assist in developing a Board
and committees that are diverse in nature and comprised of experienced and
seasoned advisors who can bring the benefit of various backgrounds, skills and
insights to the Company and its operations. Each director nominee is evaluated
in the context of the full Board’s qualifications as a whole, with the objective
of establishing a Board that can best perpetuate our success and represent
stockholder interests through the exercise of sound judgment. Each
director nominee will be evaluated considering the relevance to us of the
director nominee’s skills and experience, which must be complimentary to the
skills and experience of the other members of the Board. The
Nominating and Governance Committee does not have a formal policy with regard to
the consideration of diversity in identifying director candidates, but seeks a
diverse group of candidates who possess the background, skills and expertise to
make a significant contribution to the Board, to the Company and its
shareholders.
Board
Leadership Structure and Role in Risk Oversight
An
Fengbin is our Chief Executive Officer and Chairman of our Board. He is also the
founder of Andatee and its largest shareholder. It is An Fengbin’s opinion that
a controlling shareholder who is active in business, as is currently the case,
should hold both roles. The opinion is fully shared by our Board because An
Fengbin is the director most familiar with the Company’s business and industry,
and most capable of effectively identifying strategic priorities and leading the
discussion and execution of strategy. In addition, the Board believes the
combined role of Chairman and Chief Executive Officer, at large, is in the best
interest of shareholders because it provides the appropriate balance between
strategy development and independent oversight of management.
Independent
directors and management have different perspectives and roles in strategy
development. The Company’s independent directors bring experience, oversight and
expertise from outside the company and industry, while the Chief Executive
Officer brings company-specific experience and expertise. The Board believes
that the combined role of Chairman and Chief Executive Officer promotes strategy
development and execution, and facilitates information flow between management
and the Board, which are essential to effective governance. Francis
N.S. Leong, the Chairman of our Audit Committee, is also the Lead Independent
Director of our Board. In these capacities, Mr. Leong, among other things,
presides over meetings of non-management, independent directors and, with input
from other directors, prepares agendas for these meetings and maintain contact
between the Board and the management of the Company. Our Board
believes that this arrangement has and continues to serve the best interests of
the Company’s shareholders. In connection with its annual self-evaluation, the
Board considers whether the current leadership structure continues to be
appropriate for the Company. The Board believes that directors should be
responsive to the Company’s evolving circumstances and objectives and therefore
may in the future modify the Board’s leadership structure when and as
necessary.
The Board
views its role in the Company’s risk oversight process as receiving regular
reports from members of senior management on areas of material risk to the
Company, including strategic, operational, reporting and compliance risks. The
full Board (or the appropriate standing committee of the Board in the case of
risks that are under the purview of a particular committee) is to receive these
reports from the appropriate party within the organization that is responsible
for a particular risk or set of risks to enable it to understand our risk
identification, management and mitigation strategies. The Board has developed an
agenda of risk topics that are presented to the Board or one of its standing
committees on an annual basis. When a committee is to receive such a report, the
Chairman of the committee will discuss the report with the full Board during the
next available Board meeting, holding additional meetings, if and when required.
The Board believes that this practice enables the Board and its committees to
coordinate risk oversight for the Company, particularly regarding the
interrelationship among various risks. During its regular course of its
activities, our Audit Committee discusses our policies with respect to risk
assessment and risk management. The Compensation Committee and the Board each
discuss the relationship between our compensation policies and corporate risk to
assess whether these policies encourage excessive risk-taking by executives and
other employees.
Shareholder
Communications with Directors
We have
no formal written policy regarding communication with the Board. Persons wishing
to write to the Board or to a specified director or committee of the Board
should send correspondence to the Secretary at our principal
offices. Electronic submissions of shareholder correspondence will
not be accepted. The Secretary will forward to the directors all
communications that, in his judgment, are appropriate for consideration by the
directors. Examples of communications that would not be appropriate
for consideration by the directors include commercial solicitations and matters
not relevant to the shareholders, to the functioning of the Board, or to the
affairs of Andatee. Any correspondence received that is addressed
generically to the Board will be forwarded to the Chairman of the
Board. If the Chairman of the Board is not an independent director, a
copy will be sent to the Chairman of the Audit Committee as well.
Board
Member Attendance at Annual Meetings
All
current Board members and all nominees for election to our Board (two of whom,
including two management directors, reside in the PRC) intend to attend our
Annual Meeting unless personal or travel circumstances make such persons’
attendance impracticable or inappropriate.
Audit
Committee
Mr. Leong
currently serves as chairman of the Audit Committee. Yudong Hou and Wen Jiang
are also members of the Audit Committee, with Wen Jiang serving also as an
“audit committee financial expert” as defined by Item 407(d)(5) of Regulation
S-K under the Securities Act. All members of the Audit Committee are
“independent” within the meaning of Item 7(d)(3)(iv) of Schedule 14A under the
Exchange Act. The Board has determined that each member of the Audit Committee
is “independent” as required by the Nasdaq listing requirements and under the
federal securities laws. The purpose of the Audit Committee is to assist the
Board in its general oversight of Andatee’s financial reporting, internal
controls and audit functions. The Audit Committee’s primary
responsibilities are to:
· review
whether or not management has maintained the reliability and integrity of the
accounting policies and financial reporting and disclosure practices of the
Company;
· review whether or not management has
established and maintained processes to ensure that an adequate system of
internal controls is functioning within the Company;
· review
whether or not management has established and maintained processes to ensure
compliance by the Company with legal and regulatory requirements that may impact
its financial reporting and disclosure obligations;
· oversee
the selection and retention of the Company’s independent registered public
accounting firm, their qualifications and independence;
· prepare
a report of the Audit Committee for inclusion in the proxy statement for the
Company’s annual meeting of shareholders;
· review
the scope and cost of the audit, the performance of the independent registered
public accounting firm, and their report on the annual financial statements of
the Company; and
· perform
all other duties as the Board may from time to time designate.
Compensation
Committee
The
duties of the Compensation Committee include establishing any director
compensation plan or any executive compensation plan or other employee benefit
plan which requires shareholder approval; establishing significant long-term
director or executive compensation and director or executive benefits plans
which do not require stockholder approval; determination of any other matter,
such as severance agreements, change in control agreements, or special or
supplemental executive benefits, within the Committee's authority; determining
the overall compensation policy and executive salary plan; and determining the
annual base salary, annual bonus, and annual and long-term equity-based or other
incentives of each corporate officer, including the CEO. Although a
number of aspects of the CEO’s compensation may be fixed by the terms of his
employment contract, the Compensation Committee retains discretion to determine
other aspects of the CEO’s compensation. The CEO reviews the
performance of the executive officers of the Company (other than the CEO) and,
based on that review, the CEO makes recommendations to the Compensation
Committee about the compensation of executive officers (other than the CEO). The
CEO does not participate in any deliberations or approvals by the compensation
committee or the Board with respect to his own compensation. The Compensation
Committee makes recommendations to the Board about all compensation decisions
involving the CEO and the other executive officers of the Company. The Board
reviews and votes to approve all compensation decisions involving the CEO and
the executive officers of the Company. The Compensation Committee and the Board
will use data, showing current and historic elements of compensation, when
reviewing executive officer and CEO compensation. The Committee is
empowered to review all components of executive officer and director
compensation for consistency with the overall policies and philosophies of the
Company relating to compensation issues. The Committee may from time
to time delegate duties and responsibilities to subcommittees or a Committee
member. The Committee may retain and receive advice, in its sole
discretion, from compensation consultants. The Compensation Committee
does not currently employ compensation consultants in determining or
recommending the amount or form of executive and director
compensation. None of the members of our Compensation Committee is
one of our officers or employees. None of our executive officers currently
serves, or in the past year has served, as a member of the board of directors or
compensation committee of any entity that has one or more executive officers
serving on our Board or Compensation Committee. Wen Jiang is the
Chairman of the Compensation Committee; Francis N.S. Leong and Yudong Hou are
the other two members of this committee.
Code
of Conduct and Ethics
Our
Board has adopted a Code of Ethics within the meaning of Item 406 of Regulation
S-K that applies to all of our officers and employees, including our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. Our Code codifies the
business and ethical principles that govern our business. The Code is designed
to deter wrongdoing and to promote: (i) honest and ethical conduct, including
the ethical handling of actual or apparent conflicts of interest between
personal and professional relationships; (ii) full, fair, accurate, timely, and
understandable disclosure in reports and documents that we file with, or submit
to, the SEC and in other public communications made by us; (iii) compliance with
applicable governmental laws, rules and regulations; (iv) the prompt internal
reporting of violations of the ethics code to an appropriate person or persons
identified in the code; and (v) accountability for adherence to the Code. A copy
of this Code is available at the Company’s website at http://www.andatee.com,
and is available at no charge by contacting the Company at its headquarters as
listed on the cover page of this report. Information appearing on our website
is not part of this proxy statement.
Compensation
of Directors and Executive Officers
Summary
Compensation Table
The
following table sets forth information concerning the compensation for the
fiscal years ended December 31, 2009, 2008 and 2007, respectively, of our (i)
Chief Executive Officer, (ii) Chief Financial Officer, and (iii) all other
executive officers (collectively, the ‘‘named executive
officers’’):
• An Fengbin - President and Chief
Executive Officer (Principal Executive Officer)
• Wen Tong – Chief Financial Officer
(Principal Financial Officer)
Name and Principal Position
|
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
All Other
Compensation
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
$ |
71,883 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
71,883 |
|
|
|
2008
|
|
$ |
64,000 |
|
|
$ |
20,000 |
|
|
$ |
0 |
|
|
$ |
84,000 |
|
An
Fengbin, CEO (1)
|
|
2007
|
|
$ |
60,000 |
|
|
$ |
15,000 |
|
|
$ |
0 |
|
|
$ |
75,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
$ |
13,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
13,000 |
|
|
|
2008
|
|
$ |
13,000 |
|
|
$ |
5,000 |
|
|
$ |
0 |
|
|
$ |
18,000 |
|
Wen
Tong, CFO (2)
|
|
2007
|
|
$ |
0 |
|
|
$ |
5,000 |
|
|
$ |
0 |
|
|
$ |
5,000 |
|
(1)
|
The
material terms and provisions of Mr. An’s Employment Agreement are
disclosed below. There were no option grants, option exercises, options
outstanding or stock vested in 2008 or 2009. We do not offer any pension
benefit plans to our employees. On July 14, 2010, our Board,
following the review and recommendation of the Compensation Committee,
approved the following changes to An Fengbin’s compensation: (i) to
increase his base annual base salary, as set forth in the Employment
Agreement, from USD$125,000 to $150,000, effective as of January 1, 2010;
(ii) consistent with the terms and provisions of the Employment Agreement,
to award him a one-time short term variable incentive pay in the amount of
USD$125,000, which represents approximately 1.4% of the Company’s net
income before taxes for the fiscal year ended December 31, 2009, and (iii)
to grant him 100,000 stock options, with 40,000 options vesting on the
date of the grant, 30,000 options – on the 1st
anniversary of the grant and the remaining 30,000 options – on the 2nd
anniversary of the grant, with an exercise price of $4.27 per share, which
was the closing price of the Company’s stock on July 14,
2010.
|
(2)
|
On
July 14, 2010, our Board, following the review and recommendation of the
Compensation Committee, approved the following changes to Wen Tong’s
compensation: (i) to increase his annual base salary from
USD$13,000 to $50,000, effective as of January 1, 2010; and (ii) to grant
him 60,000 stock options, vesting in 3 equal annual installments, with
20,000 options vesting on the date of the grant, 20,000 options – on the
1st
anniversary of the grant and the remaining 20,000 options – on the 2nd
anniversary of the grant, with an exercise price of $4.27 per share, which
was the closing price of the Company’s stock on July 14,
2010.
|
Except as
described below, we currently have no employment agreements with any of our
executive officers, nor any compensatory plans or arrangements resulting from
the resignation, retirement or any other termination of any of our executive
officers, from a change-in-control, or from a change in any executive officer’s
responsibilities following a change-in-control.
An
Fengbin Employment Agreement
In
November 2009, we entered into an Employment Agreement with Mr. An Fengbin, our
President and Chief Executive Officer. Under the terms of the Employment
Agreement, he will serve as our President and Chief Executive Officer for a term
of 5 years. Mr. An is to receive an initial annual salary in the amount of
$120,000, with an annual increase of the prior year’s salary thereafter during
the term. Additionally, at the discretion of our Compensation Committee, Mr. An
is eligible to receive an annual bonus which amount, if any, and payment will be
determined by the Committee. Mr. An is entitled to medical, disability, vacation
and life insurance benefits, and reimbursement of all reasonable or authorized
business expenses. In the event the Employment Agreement terminates, during its
term, upon Mr. An’s death, the Company is obligated to pay Mr. An’s estate his
base salary amount through the first anniversary of his death (or the expiration
of the Employment Agreement if earlier than the anniversary date), as well as
pro rata allocation of any bonus based on the days of service during the year of
death, and all amounts owing to Mr. An at the time of termination, including
previously accrued but unpaid bonuses, expense reimbursements and accrued but
unused vacation pay. If Mr. An is unable to perform his obligations under the
Employment Agreement for over 180 consecutive days during any consecutive 12
months period, we may terminate the Employment Agreement by written notice to
Mr. An delivered prior to the date that he resumes his duties. Upon receipt of
such written notice, Mr. An is permitted to request a medical examination under
which if he is certified to be incapable of performing his obligations for over
2 additional months, the Employment Agreement would be terminated.
We may
terminate the Employment Agreement for Cause, upon notice if at any time Mr. An,
among other things: (a) refuses in bad faith to carry out specific written
directions of our Board; (b) intentionally takes fraudulent or dishonest action
in his relations with us; (c) is convicted of a crime involving an act of
significant moral turpitude; or (d) knowingly commits an act or omitted to act
in violation of our written policies, the Employment Agreement or any agreements
that we may have with third parties and that is materially damaging to our
business or reputation. On the other hand, Mr. An may terminate the Employment
Agreement upon written notice if, among other things: (a) there is a material
adverse change in the nature of his title, duties or obligations; (b) we
materially breach the Employment Agreement; or (c) we fail to make any payment
to Mr. An (excepting any payment which was not material and which we were
contesting in good faith). If Mr. An were to terminate the Employment Agreement
for any one of these reasons, or if we terminated the Employment Agreement
without Cause, we would be obligated to pay to Mr. An (or in the case of his/her
death, his estate), his base salary and any bonus, without any offset, as well
as all amounts owing to Mr. An at the time of termination, including previously
accrued but unpaid bonuses, expense reimbursements and accrued but unused
vacation pay. In the event of a consolidation, merger, transfer of assets or
similar transaction, the employment agreement will inure to the benefit of and
be assumed by resulting or surviving transferee corporation or entity and will
continue in full force and effect and will entitle Mr. An to exactly the same
compensation, benefits, perquisites, payments and other rights as would have
been their entitlement had such extraordinary corporate transaction not
occurred.
The
Employment Agreement contains restrictive covenants: (i) preventing the use
and/or disclosure of confidential information during or at any time after
termination; and (ii) preventing competition with the Company during his
employment and for a period of 3 years after termination (including contact with
or solicitation of our customers, employees or suppliers). The Employment
Agreement also contains other terms and provisions customary for agreements of
this nature. Lastly, we indemnify Mr. An for any claims made against him in his
capacity as our Chief Executive Officer.
Outstanding
Equity Awards at December 31, 2009
There
were no outstanding equity awards to the named executive officers at December
31, 2009.
Compensation
of Directors
For
service during 2009, each non-employee director was entitled to and received
options to purchase 30,000 shares of the Company’s common stock and, in
addition, the Presiding Director and Acting Chairman of the Board and each
committee chair was entitled to and received options to purchase 10,000 shares
of our common stock.
All of
our directors were appointed to the Board and various committees in July 2009.
The following table represents Board compensation in 2009:
Name
|
|
Fees Earned or
Paid in Cash
|
|
|
Option
Awards
|
|
|
All Other
Compensation(3)
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Francis
N. S. Leong
|
|
$ |
6,000 |
(1) |
|
$ |
0 |
(2) |
|
$ |
0 |
|
|
$ |
6,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wen
Jiang
|
|
$ |
5,000 |
(1) |
|
$ |
0 |
(2) |
|
$ |
0 |
|
|
$ |
5,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yu
Bing(5)
|
|
$ |
5,000 |
(1) |
|
$ |
0 |
(2) |
|
$ |
0 |
|
|
$ |
5,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
An
Fengbin(4)
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wen
Tong(4)
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yudong
Hou(6)
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
(1) For
the services on the Board and standing committees thereof, our non-management
directors receive the following cash compensation: Mr. Leong - $12,000 per
annum, payable in equal quarterly installments of $3,000; Mr. Jiang and Ms. Yu -
each $10,000 per annum, payable in equal quarterly installments of $2,500. This
compensation covers the member services in connection with, among other things,
attending director meetings, whether in person or by telephone conference
call. On July 14, 2010, our Board, following the review and
recommendation of the Compensation Committee, approved the following changes to
director compensation: (i) to increase the base retainer fee from USD$12,000 to
$15,000 for the Chair of the Audit Committee and from USD$10,000 to $12,000 for
the Chair of the Compensation Committee and the Nominating Committees,
respectively; and (ii) to increase the annual stock option award to the Chair of
the Audit Committee from 11,250 to 15,000 stock options and from 7,500 to 12,000
stock options for the Chair of the Compensation Committee and the Nominating
Committees, respectively. The Board determined that such changes and grants,
including the exercise price of such options) to be effective as of the first
business day following the date of the 2010 annual meeting of the Company’s
shareholders.
(2) No
stock options were awarded to the members of the Board during 2009. Upon the
effectiveness of the registration statement filed in connection with
the initial public offering of the Company’s securities in January 2010, the
Company issued 3,750 stock options to each Mr. Jiang and Ms. Yu, and 5,625 stock
options to Mr. Leong. All such options have an exercise price of $6.30 per share
which was the price of the Company’s initial public offering, will vest
immediately and will be exercisable for three years. In accordance with the
requirements of FASB Accounting Standards Codification Section 718 (previously
SFAS No. 123(R)), the Company will charge the fair value of these options to
expense in the first quarter of 2010. Under the Board’s equity compensation
policies, non-management directors will subsequently each receive annual grants
of options to purchase shares of our common stock at an exercise price equal to
the fair market value of the shares on the date of grant in the amounts to be
determined by the Board and the Compensation Committee.
(3) All
directors will be reimbursed for their reasonable out of pocket expenses
associated with attending meetings. There were no such expenses in
2009.
(4) Management
member of the Board who is not compensated for his Board service.
(5) Resigned
as a Board member for personal reasons effective as of September 1,
2010.
(6) Appointed
effective as of September 13, 2010.
Long
Term Incentive Plan
2009
Equity Incentive Plan
In July
2009, our Board adopted, subject to the shareholder approval, the 2009 Equity
Incentive Plan (the “Plan”) for our officers, directors, employees and outside
consultants and advisors. We have developed this Plan to align the interests of
(i) employees, (ii) non-employee Board members, and (iii) consultants and key
advisors with the interests of our shareholders and to provide incentives for
these persons to exert maximum efforts for our success and to encourage them to
contribute materially to our growth. On September 27, 2009, our stockholders
approved the Plan. As of the date hereof, we have issued 173,125 options
pursuant to the Plan.
The Plan
is not subject to the provisions of the Employment Retirement Income Security
Act and is not a ‘‘qualified plan’’ within the meaning of Section 401 of the
Internal Revenue Code, as amended (the “Code”). The Plan is administered by our
Compensation Committee which has exclusive discretion to select the participants
who will receive awards under the Plan and to determine the type, size and terms
of each award.
Shares Subject to the Plan.
We may issue up to 5,000,000 shares under the Plan, subject to adjustment to
prevent dilution from stock dividends, stock splits, recapitalization or similar
transactions. Certain grants may be made in cash, in our stock, or in a
combination of the two, as determined by the Compensation
Committee.
Awards under the Plan. Under
the Plan, the Compensation Committee may grant awards in the form of incentive
stock options, as defined in Section 422 of the Code, as well as options which
do not so qualify, stock units, stock awards, stock appreciation rights and
other stock-based awards.
Options. The duration of any
option shall be within the sole discretion of the Compensation Committee;
provided, however, that any incentive stock option granted to a 10% or less
stockholder or any nonqualified stock option shall, by its terms, be exercised
within 10 years after the date the option is granted and any incentive stock
option granted to a greater than 10% stockholder shall, by its terms, be
exercised within five years after the date the option is granted. The exercise
price of all options will be determined by the Compensation Committee; provided,
however, that the exercise price of an option (including incentive stock options
or nonqualified stock options) will be equal to, or greater than, the fair
market value of a share of our stock on the date the option is granted and
further provided that incentive stock options may not be granted to an employee
who, at the time of grant, owns stock possessing more than 10% of the total
combined voting power of all classes of our stock or any parent or subsidiary,
as defined in section 424 of the Code, unless the price per share is not less
than 110% of the fair market value of our stock on the date of
grant.
Stock Units. The Compensation
Committee may grant stock to an employee, consultant or non-employee director,
on such terms and conditions as the Compensation Committee deems appropriate
under the Plan. Each stock shall represent the right of the participant to
receive a share of our stock or an amount based on the value of a share of our
stock.
Stock Awards. The
Compensation Committee may issue shares of our stock to an employee, consultant
or non-employee director under a stock award, upon such terms and conditions as
the Committee deems appropriate under the Plan. Shares of our stock issued
pursuant to stock awards may be issued for cash consideration or for no cash
consideration, and subject to restrictions or no restrictions.
Compensation Committee. The
Compensation Committee may establish conditions under which restrictions on
stock awards shall lapse over a period of time or according to such other
criteria as the Compensation Committee deems appropriate, including restrictions
based upon the achievement of specific performance goals.
SARs and Other Stock-Based
Awards. SARs may be granted to an employee, non-employee director or
consultant separately or in tandem with an option. SARs may be granted in tandem
either at the time the option is granted or at any time thereafter while the
option remains outstanding. Upon the exercise of SARs, the related option will
terminate to the extent of an equal number of shares of our stock. The stock
appreciation for a SAR is the amount by which the fair market value of the
underlying stock on the date of exercise of the SAR exceeds the base amount of
the SAR. The Compensation Committee will determine whether the stock
appreciation for a SAR is to be paid in the form of shares of stock, cash or a
combination of the two.
Other Awards. Other awards
may be granted that are based on or measured by our stock to employees,
consultants and non-employee directors, on such terms and conditions as the
Compensation Committee deems appropriate. Other stock-based awards may be
granted subject to achievement of performance goals or other conditions and may
be payable in our stock or cash, or in a combination of the two.
Qualified Performance-Based
Compensation. The Compensation Committee may determine that stock units,
stock awards, SARs or other stock-based awards granted to an employee will be
considered ‘‘qualified performance-based compensation’’ under section 162(m) of
the Code.
Termination of Employment. If
the employment or service of a participant is terminated for cause, the options
of such participant, both accrued and future, will terminate immediately. If the
employment or service is terminated by either the participant or us for any
reason other than for cause, death, or for disability, as defined in Section
22(e)(3) of the Code, the options of the participant then outstanding shall be
exercisable by the participant at any time prior to the expiration of the
options or within three months after the date of such termination, whichever is
shorter, but only to the extent of the vested right to exercise the options at
the date of the termination. In the case of a participant who becomes disabled,
the rights of the participant under any then outstanding options are exercisable
by the participant at any time prior to the expiration of the options or within
one year after the date of termination of employment or service due to
disability, whichever is shorter, but only to the extent of the vested right to
exercise the options at the date of such termination. In the event of the death
of a participant, the rights of the participant under any then outstanding
options are exercisable by the person or persons to whom these rights pass by
will or by the laws of descent and distribution, at any time prior to the
expiration of the options or within one year after the date of death, whichever
is shorter, but only to the extent of the vested right to exercise the options,
if any, at the date of death. The terms and conditions regarding any other
awards under the Plan will be determined by the Compensation
Committee.
Termination or Amendment of the
Plan. Our Board of Directors may at any time terminate the Plan or make
such amendments thereto as it deems advisable, without action on the part of our
shareholders unless their approval is required under the law. However, no
termination or amendment will, without the consent of the individual to whom any
option has been granted, affect or impair the rights of such individual. Under
Section 422(b)(2) of the Code, no incentive stock option may be granted under
the Plan more than ten years from the date the Plan is adopted or the date the
Plan is approved by our shareholders, whichever is earlier.
Securities
Authorized for Issuance under Equity Compensation Plans
As
discussed above, our incentive plan authorizes awards representing up to
5,000,000 shares of common stock.
Equity
Compensation Plan Information as of December 31, 2009
|
|
Number of
Securities to
Be Issued
Upon
Exercise of
Outstanding
Options,
Warrants,
and Rights
(a)
|
|
|
Weighted
Average
Exercise Price of
Outstanding
Options,
Warrants, and
Rights
(b)
|
|
|
Number of Securities
Remaining Available
for
Future Issuance
(c)
|
|
Equity
compensation plans approved by security holders
|
|
|
13,125 |
|
|
$ |
6.30 |
|
|
|
4,986,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans not
approved by security holders(1)
|
|
|
n/a |
|
|
$ |
n/a |
|
|
|
n/a |
|
TOTAL
|
|
|
13,125 |
|
|
$ |
6.30 |
|
|
|
4,986,875 |
|
Report
of the Audit Committee
The Audit
Committee has reviewed and discussed with Andatee’s management and Jewett,
Schwartz, Wolfe & Associates (“JSW”), the Company’s independent registered
public accounting firm for the fiscal year ended December 31, 2009, together and
separately, the audited financial statements contained in Andatee’s Annual
Report on Form 10-K for the 2009 fiscal year.
The Audit
Committee has also discussed with JSW the matters required to be discussed by
Statement on Auditing Standards No. 61, as amended (Communication with Audit
Committees) which includes, among other items, matters related to the conduct of
the audit of Andatee’s financial statements.
The Audit
Committee also received and reviewed the written disclosures and the letter from
JSW required by SFAS No. 61, as amended and adopted by the Public Company
Accounting Oversight Board (“PCAOB”) and has discussed with JSW its independence
from Andatee.
Based on
the review and discussions referred to above, the Audit Committee recommended to
the Board of Directors, and the Board has approved, that the audited financial
statements be included in Andatee’s Annual Report on Form 10-K for the year
ended December 31, 2009, for filing with the Securities and Exchange
Commission.
Submitted
by the Audit Committee.
September 10, 2010
By:
|
/s/ |
Francis N.S. Leong,
|
Chairman |
|
|
/s/ |
Wen Jiang
|
|
|
Notwithstanding
anything to the contrary set forth in any of our previous filings under the
Securities Act or the Exchange Act that incorporate future filings, including
this Proxy Statement, in whole or in part, the foregoing Audit Committee Report
shall not be deemed to be filed with the SEC or incorporated by reference into
any filing under the Securities Act or the Exchange Act, except to the extent
that we specifically incorporate it by reference.
Transactions
with Related Persons
Except as
described below, during the 2009 fiscal year, we were not involved in any
related party transactions subject to Item 404 of Regulation
S-K. Pursuant to written Board policies, our executive officers and
directors, and principal stockholders, including their immediate family members
and affiliates, are not permitted to enter into a related party transaction
without the prior consent of the Board. Any request for such related party
transaction with an executive officer, director, principal shareholder, or any
of such persons’ immediate family members or affiliates, in which the amount
involved exceeds $120,000 must first be presented to the Audit Committee and the
Board for review, consideration and approval. All of our directors, executive
officers and employees are required to report to the Board any such related
party transaction. In approving or rejecting the proposed agreement, the Board
will consider the relevant facts and circumstances available and deemed relevant
to the Board which will approve only those agreements that, in light of known
circumstances, are in, or are not inconsistent with, our best interests, as the
Board determines in the good faith exercise of its discretion.
Dalian
Dongfangzheng Industrial Co., Ltd., (DFZ) which holds 85% equity interest in
Dalian Xingyuan, was established by An Fengbin and his wife, Wang Jing, in
September 2006. In September 2008, DFZ borrowed $5,436,942 from Donggang
Xingyuan for the purpose of short-term funding for its business operations. The
borrowing was non-interest bearing. As of September 30, 2009 the balance was
paid in full in three separate payments; $4.38 million during February 2009,
$120,000 during April 2009, and the remaining balance was paid on August 8,
2009. All material related party transactions will be made or entered into on
terms that are no less favorable to use than can be obtained from unaffiliated
third parties. Related party transactions that we have previously entered into
were not approved by independent directors, as we had no independent directors
at that time.
In
November 2009, Xingyuan advanced $122,667 to Donggang Aquatic Product Trading
Center and Donggang Xingyuan Ship Repair Yard, two companies that are under the
control of Mr. An Fengbin. These companies are using these funds, together with
approximately $700,000 invested by Mr. An Fengbin through December 31, 2009, to
construct facilities in the Donggang port area that would provide marine
services that compliment the services offered there by the Company. Mr. An
Fengbin is liable to the Company for these advances and is at risk for any
losses incurred by these entities, and the Company has no obligations to or on
behalf of Donggang Aquatic Product Trading Center and Donggang Xingyuan Ship
Repair Yard. The Audit Committee consisting solely of independent and
disinterested directors of the Board has reviewed, approved and ratified the
terms of the foregoing transaction.
Interest
of Certain Persons in Matters to be Acted Upon
Management
is not aware of any substantial interest, direct or indirect, by securities
holdings or otherwise of any officer, director, nominee for director, or
associate of the foregoing persons in any matter to be acted on, as described
herein.
Shareholder
Proposals and Submissions for Inclusion in the Proxy Statement
for
the 2011 Annual Meeting of Shareholders
We
presently intend to hold our next annual meeting of shareholders in October
2011. A proxy statement and notice of the 2010 Annual Meeting will be
mailed to all shareholders approximately one month prior to that
date. Shareholder proposals must be received at our principal
executive offices located in Dalian, PRC, no later than 120 days prior to the
first anniversary of the date of this Proxy Statement; provided, however, that
in the event that the date of the next annual meeting is advanced by more than
30 days from the anniversary date of the 2010 Annual Meeting, notice by the
shareholder must be received no later than the close of business on the 10th day
following the earlier of the date on which notice of the date of the meeting was
mailed or public disclosure was made. All shareholder proposals
received after the deadline will be considered untimely and will not be included
in the proxy statement for the next annual meeting. The SEC rules establish a
different deadline for submission of shareholder proposals that are not intended
to be included in our proxy statement with respect to regularly scheduled annual
meetings. The rules set forth standards as to what shareholder
proposals are required to be included in a proxy statement. Also, the
notice must meet the other requirements contained in our Bylaws. A
copy of the relevant Bylaw provisions containing the requirements for making
shareholder proposals may be obtained free of charge by contacting our Corporate
Secretary at our executive offices at Andatee.
Other
Matters
The Board
knows of no other matters which will come before the
meeting. However, if any matters other than those set forth in the
notice should be properly presented for action, the persons named in the proxy
intend to take such action as will be in harmony with the policies of the
Company and will use their discretion.
House
holding of Proxy Materials
Each year
in connection with the annual meeting of shareholders, we are required to send
to each shareholder of record a proxy statement, annual report and notice of
internet availability of proxy materials, and to arrange for such documents to
be sent to each beneficial shareholder whose shares are held by or in the name
of a broker, bank, trust or other nominee. Because some shareholders hold shares
of our common stock in multiple accounts, this process results in duplicate
mailings of such documents to shareholders who share the same address.
Shareholders may avoid receiving duplicate mailings and save us the cost of
producing and mailing duplicate documents as follows:
Shareholders of Record. If
your shares are registered in your own name and you are interested in consenting
to the delivery of a single proxy statement, annual report and notice of
internet availability of proxy materials, you may contact the Corporate
Secretary of the Company by calling, emailing or writing at: (tel) 86-411-8360
4683, info@andatee.com, or
Andatee China Marine Fuel Services Corporation, c/o Chief Financial Officer,
Villa C Dalian International Finance Conference Center, No. 68 West
Binhai Road, Xigang District, Dalian, People’s Republic of China.
Beneficial Shareholders. If
your shares are not registered in your own name, your broker, bank, trust or
other nominee that holds your shares may have asked you to consent to the
delivery of a single proxy statement, annual report and notice of internet
availability of proxy materials if there are other shareholders who share an
address with you. If you currently receive more than one copy of such documents
at your household and would like to receive only one copy of each in the future,
you should contact your nominee.
Right to Request Separate
Copies. If you consent to the delivery of a single proxy statement,
annual report and notice of internet availability of proxy materials but later
decide that you would prefer to receive a separate copy of each document, as
applicable, for each shareholder sharing your address, then please notify us or
your nominee, as applicable, and we or they will promptly deliver such
additional documents. If you wish to receive a separate copy of such documents
for each shareholder sharing your address in the future, you may contact the
Corporate Secretary at the address above.
Copies of
the exhibits filed with the Company’s Annual Report of Form 10-K for fiscal year
ended December 31, 2009 will be sent to shareholders by first class mail,
without charge, within one day of the Company’s receipt of a written or oral
request for said exhibits. To request exhibits, please send your
written request to: Andatee China Marine Fuel Services Corporation, c/o Chief
Financial Officer, Unit C, No. 68 West Binhai Road, Xigang District Dalian,
People’s Republic of China; our facsimile is (86 0411) 8360 4683.
ANDATEE
CHINA MARINE FUEL SERVICES CORPORATION
ANNUAL
MEETING OF SHAREHOLDERS
October
22, 2010
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ANDATEE
CHINA MARINE FUEL SERVICES CORPORATION
The
undersigned hereby appoints An Fengbin and Wen Tong proxies with power of
substitution and hereby authorizes them to represent and to vote, as designated
below, all of the shares of common stock of the Company held of record by the
undersigned on August 30, 2010 at the Annual Meeting of Shareholders to be held
on October 22, 2010, at the offices of Cozen O’Connor at 277 Park Avenue, 20th
Floor, New York, NY 10172 at 10 a.m. EST, and at all adjournments thereof, with
all powers the undersigned would possess if personally present. In their
discretion, the proxies are authorized to vote upon such other business as may
properly come before the Annual Meeting.
1.
|
To
elect directors, each to serve until the next annual meeting of
shareholders or until each successor is duly elected and
qualified:
|
¨ FOR
all nominees
¨ WITHHOLD
AUTHORITY
¨ FOR
all nominees except as noted below: Nominee exception(s)
○ An
Fengbin ○
Francis N.S.
Leong ○
Wen
Tong
○ Wen
Jiang
○ Yudong Hou
2.
|
To
ratify the appointment of Jewett, Schwartz, Wolfe & Associates as
independent registered public accounting firm of the Company for the
fiscal year ending December 31,
2010.
|
¨ FOR
|
¨ AGAINST
|
¨ ABSTAIN
|
3.
|
To
transact such other business as may properly come before the Annual
Meeting and any adjournments or postponements
thereof.
|
¨ FOR
|
¨ AGAINST
|
¨ ABSTAIN
|
This
proxy, when properly executed, will be voted in the manner directed by the
undersigned shareholder. If no direction is made, this proxy will be
voted “FOR” proposals 1 and 2. The undersigned hereby acknowledges
receipt of the notice of Annual Meeting and proxy statement furnished in
connection therewith.
DATED:
|
(Signature)
|
|
|
|
|
|
(Signature
if jointly held)
|
|
|
|
|
|
(Printed
name(s))
|
|
Please
sign exactly as name appears herein. When shares are held by Joint
Tenants, both should sign, and for signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If held by a
corporation, please sign in the full corporate name by the president or other
authorized officer. If held by a partnership, please sign in the
partnership name by an authorized person.
PLEASE
MARK, SIGN, DATE AND RETURN IN THE ENCLOSED ENVELOPE. THANK
YOU.
IMPORTANT
NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE 2010 ANNUAL
MEETING OF SHAREHOLDERS
Electronic
copies of this proxy statement and proxy card for the 2010 Annual Meeting of
Shareholders and are available to you at http://www.cstproxy.com/andatee/2010.
Requests for additional copies of the proxy materials should be addressed to
Shareholder Relations, Andatee China Marine Fuel Services Corporation. This
material will be furnished without charge to any shareholder requesting
it.