UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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SCHEDULE
14A
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Proxy
Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934 (Amendment No.
)
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Filed
by the Registrant x
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Filed
by a Party other than the Registrant o
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Check
the appropriate box:
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x
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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o
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Definitive
Proxy Statement
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o
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Definitive
Additional Materials
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o
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Soliciting
Material Pursuant to §240.14a-12
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ADVANCED
BATTERY TECHNOLOGIES, INC.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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x
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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o
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Fee
paid previously with preliminary materials.
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o
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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.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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Advanced
Battery Technologies, Inc.
21
West 39th Street,
Suite 2A
New
York, NY 10018
May 26,
2009
Dear
Shareholders:
It is my
pleasure to invite you to the 2009 Annual Meeting of the Shareholders of
Advanced Battery Technologies, Inc. The meeting will be held at 10:00 a.m.,
Eastern Daylight Time, on Thursday, June 25, 2009, at New York’s Hotel
Pennsylvania, 401 7th Avenue
(at 33rd
Street), New York, New York. In addition to the business to be
transacted at the meeting, members of management will present information about
the Company’s operations and will be available to respond to your
questions.
At our
meeting, we will vote on proposals (1) to elect eleven directors,
(2) to amend our Certificate of Incorporation to increase the number of
authorized shares of common stock, (3) to approve the Advanced Battery
Technologies, Inc. 2009 Equity Incentive Plan, and (4) to transact such
other business as may properly come before the meeting. The accompanying
Notice of Annual Meeting of Shareholders and proxy statement contain information
that you should consider when you vote your shares.
It is
important that you vote your shares whether or not you plan to attend the
meeting. Please complete, sign, date and return the enclosed proxy card in the
accompanying envelope as soon as possible. If you plan to attend the meeting and
wish to vote in person, you may revoke your proxy and vote in person at that
time. I look forward to seeing you at the meeting. On behalf of the
management and directors of Advanced Battery Technologies, Inc., I want to thank
you for your continued support and confidence.
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Sincerely,
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/s/ Zhiguo
Fu
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Zhiguo
Fu
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Chairman
of the Board,
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Chief
Executive Officer
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Important
Notice Regarding the Availability of Proxy Materials
for
the Shareholder Meeting to be Held on June 25, 2009
The proxy
statement and Annual Report on Form 10-K are available at
www.cstproxy.com/abat/2009
Advanced
Battery Technologies, Inc.
21
West 39th Street,
Suite 2A
New
York, NY 10018
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON JUNE 25, 2009
Notice is
hereby given that the Annual Meeting of the Shareholders (the “Annual Meeting”)
of Advanced Battery Technologies, Inc., a Delaware corporation (the “Company”),
will be held at New York’s Hotel Pennsylvania, 401 7th Avenue
(at 33rd
Streeet), New York, New York on Thursday, June 25, 2009, at 10:00 a.m.,
Eastern Daylight Time, for the following purposes:
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1.
To vote for the election of a board of eleven
directors;
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2.
To approve an amendment to the Certificate of Incorporation to
increase the number of shares of common stock authorized for
issuance;
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3.
To approve the Advanced Battery Technologies, Inc. 2009 Equity
Incentive Plan;
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4.
To transact such other business as may properly come before the
Annual Meeting or any adjournment
thereof.
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The
record date for determining shareholders entitled to receive notice of and to
vote at the Annual Meeting is June 25, 2009. You are urged to read
carefully the attached Proxy Statement for additional information concerning the
matters to be considered at the Annual Meeting.
If you do
not expect to be present in person at the Annual Meeting, please complete, sign
and date the enclosed proxy and return it promptly in the enclosed postage-paid
envelope that has been provided for your convenience. The prompt return of
proxies will help ensure the presence of a quorum and save the Company the
expense of further solicitation.
You are
cordially invited and encouraged to attend the Annual Meeting in
person.
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/s/Yuhsia
Lai
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Yuhsia
Lai
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Secretary
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New York,
New York
May 26,
2009
IMPORTANT
WHETHER
OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE SUBMIT YOUR PROXY
AS SOON AS POSSIBLE. IF YOU DO ATTEND THE ANNUAL MEETING, YOU
MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
TABLE
OF CONTENTS
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Page
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Proxy
Statement
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Solicitation
of Proxies
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1
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Voting
Securities and Record Date
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2
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Quorum;
Voting
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2
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Attending
the Annual Meeting
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2
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Proposal
1:
Election of Directors
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3
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Corporate
Governance, the Board, Board Committees and
Meetings
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4
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Shareholder
Communications to the Board of Directors
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7
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Compensation
Committee Interlocks and Insider Participation
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7
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Director
Compensation
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7
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Security
Ownership of Certain Beneficial Owners and
Management
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8
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Executive
Officers
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8
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Report
of the Compensation Committee
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9
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Compensation
Discussion and Analysis
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9
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Executive
Compensation
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11
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Outstanding
Equity Awards at Fiscal Year-End 2008
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12
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Equity
Compensation Plan Information
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12
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Certain
Relationships - Related Person Transactions
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12
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Report
of the Audit Committee
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13
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Audit
and Other Fees Paid to Our Registered
Public Accounting Firms
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14
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Proposal
2:
Approval of an amendment to the Certificate of Incorporation to increase
the number of authorized shares of Common Stock
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15
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Proposal
3:
Approval of the Advanced Battery Technologies, Inc. 2009 Equity Incentive
Plan
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16
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Shareholder
Proposals
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19
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Section 16(a) Beneficial
Ownership Reporting Compliance
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20
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Other
Matters
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20
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Householding
of Materials
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20
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Appendix
A: Advanced Battery Technologies, Inc. 2009 Equity Incentive
Plan
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A-1
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ADVANCED
BATTERY TECHNOLOGIES, INC.
21 West 39th Street,
Suite 2A
New
York, NY 10018
FOR
ANNUAL
MEETING OF SHAREHOLDERS
June
25, 2009
The
accompanying proxy is solicited by the Board of Directors of Advanced Battery
Technologies, Inc. (the “Company”) for use at its Annual Meeting of Shareholders
(the “Annual Meeting”) to be held at New York’s Pennsylvania Hotel, 401 7th Avenue
(at 33rd
Street), New York, New York on Thursday, June 25, 2009, at 10:00 a.m., Eastern
Daylight Time, and at any adjournment thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. A proxy may be revoked by
filing a written notice of revocation or an executed proxy bearing a later date
with the Secretary of our Company any time before exercise of the proxy or by
attending the Annual Meeting and voting in person. The proxy statements and form
of proxy cards are to be distributed to shareholders on or about May 26,
2009.
If you
complete and submit your proxy, the persons named as proxies will vote the
shares represented by your proxy in accordance with your instructions. If you
submit a proxy card but do not fill out the voting instructions on the proxy
card, the persons named as proxies will vote the shares represented by your
proxy as follows:
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FOR the
election of the eleven Director nominees as set forth in Proposal
1.
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FOR the
proposal to approve an amendment to the Certificate of Incorporation to
increase the number of authorized common shares as set forth in Proposal
2.
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FOR the
proposal to approve the Advanced Battery Technologies, Inc. 2009 Equity
Incentive Plan as set forth in Proposal
3.
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In
addition, if other matters are properly presented for voting at the Annual
Meeting, the persons named as proxies will vote on such matters in accordance
with their judgment. We have not received notice of other matters that may
properly be presented for voting at the Annual Meeting. Your vote is important.
If you do not vote your shares, you will not have a say in the important issues
to be voted upon at the Annual Meeting. To pass, Proposal 1 and Proposal 3
included in this year’s proxy statement require an affirmative vote of a
majority of the votes cast at the Annual Meeting. To pass, Proposal 2 included
in this year’s proxy statement requires an affirmative vote by the holders of a
majority of the outstanding common stock. To ensure that your vote is
recorded promptly, please submit your proxy as soon as possible, even if you
plan to attend the Annual Meeting in person.
The
Annual Report to Shareholders for the year ended December 31, 2008, including
financial statements, is enclosed. It does not form any part of the material
provided for the solicitation of proxies.
The cost
of solicitation of proxies will be borne by the Company. In addition to
solicitation by mail, officers and employees of the Company may solicit the
return of proxies by telephone and personal interview, or hire an outside proxy
solicitor. Forms of proxy and proxy materials may also be distributed through
brokers, custodians and like parties to beneficial owners of our common shares,
par value $.001 per share (the “Common Stock”), for which we will, upon request,
reimburse the forwarding expense.
VOTING
SECURITIES AND RECORD DATE
The close
of business on May 20, 2009, is the record date for determination of
shareholders entitled to notice of, and to vote at, the Annual Meeting. As of
May 20, 2009, there were 57,821,577 shares of Common Stock issued and
outstanding, each entitled to one vote per share.
The
presence in person of two or more persons, representing throughout the Annual
Meeting, in person or by proxy, at least a majority of the issued shares of
Common Stock entitled to vote is necessary to constitute a quorum at the Annual
Meeting. Abstentions and broker non-votes are counted for purposes of
determining whether a quorum is present. Broker non-votes are shares held by a
broker or nominee that are represented at the Annual Meeting, but with respect
to which such broker or nominee is not empowered to vote on a particular
proposal. If a quorum is present, the eleven nominees for Directors receiving a
majority of the votes cast at the Annual Meeting in person or by proxy shall be
elected. The affirmative vote of the holders of a majority of the outstanding
common stock shall be required for approval of Proposal 2. The
affirmative vote of the majority of the votes cast at the Annual Meeting in
person or by proxy shall be the act of the shareholders with respect to Proposal
3. Abstentions and broker non-votes are not counted in determining the total
number of votes cast and will have no effect with respect to Proposals 1 through
3. If within half an hour from the time appointed for the Annual Meeting a
quorum is not present in person or by proxy, the Annual Meeting shall stand
adjourned to the same day one week later, at the same time and place or to such
other day, time or place the Board of Directors may determine, provided that at
least two persons are present at such adjourned meeting, representing throughout
the meeting, in person or by proxy, at least a majority of the issued shares of
Common Stock entitled to vote. At any such adjourned meeting at which a quorum
is present or represented, any business may be transacted that might have been
transacted at the Annual Meeting as originally called.
Shareholders
may hold their shares either as a “shareholder of record” or as a “street name”
holder. If your shares are registered directly in your name with our
transfer agent, you are considered the shareholder of record with respect to
those shares and this proxy statement is being sent directly to you by the
Company. If your shares are held in a brokerage account or by another
nominee, you are considered to be the beneficial owner of shares held in street
name, and these proxy materials, together with a voting instruction card, are
being forwarded to you by your broker, trustee or other nominee. As the
beneficial owner of the shares, you have the right to direct your broker,
trustee or other nominee how to vote.
ATTENDING
THE ANNUAL MEETING
A person
is entitled to attend the Annual Meeting only if that person was a shareholder
or joint shareholder as of the close of business on the record date or that
person holds a valid proxy for the Annual Meeting. If you hold your shares
in street name and desire to vote your shares at the Annual Meeting, you must
provide a signed proxy directly from the holder of record giving you the right
to vote the shares or a letter from the broker or nominee appointing you as
their proxy. The proxy
card enclosed with this proxy statement is not sufficient to satisfy this
requirement. You must also provide proof of beneficial ownership on
the record date, such as your most recent account statement prior to the record
date or other similar evidence of ownership. If you hold your shares in
street name and desire to attend the Annual Meeting without voting your shares,
you must provide proof of beneficial ownership on the record date and present
photo identification. If you are the shareholder of record or hold a valid
proxy for the Annual Meeting, your name or the name of the person on whose
behalf you are proxy must be verified against the list of shareholders of record
on the record date as shown on the list of shareholders of the Company prior to
being admitted to and prior to voting at the Annual Meeting. All
shareholders must present photo identification for admittance. If you do
not provide photo identification or comply with the other procedures outlined
above upon request, you will not be admitted to the Annual Meeting and/or will
not be permitted to vote, as applicable.
PROPOSAL
1: ELECTION OF DIRECTORS
The
by-laws of the Company state that the number of our Directors shall be
established by the shareholders or by the directors from time to time but shall
not be less than one. Presently, the number of director positions remains
set at eleven. Accordingly, the Nominating and Corporate Governance
Committee has nominated eleven candidates for election to the Board of
Directors.
The
eleven persons named below are the nominees for election as Directors. Each
nominee has consented to serve as a Director if elected. Zhiguo Fu, Guohua
Wan, Hongjun Si, Guopeng Gao and Liqui Bai are employees of the
Company. The Nominating and Corporate Governance Committee has
determined that the remaining six candidates, John McFadden, Yulin Hao, Ning Li,
Shaoqiu Xia, Shiyan Yang and Cosimo Patti, are independent directors as defined
in the applicable rules for companies traded on the NASDAQ Stock Market LLC
(“NASDAQ”). Therefore, the majority of persons nominated to serve on our
Board of Directors are independent as so defined. Each Director elected
shall serve as a Director until the next Annual Meeting of Shareholders, or
until his or her successor is elected and qualified.
Set forth
below are descriptions of the business experience and other information
regarding the nominees for election to our Board of Directors:
Zhiguo Fu, age
59. Mr. Fu organized our subsidiary, ZQ Power-Tech, in 2002, and has
served as its Chairman since then. He has been a director of the
Company since 2004. In 1993 Mr. Fu founded Heilongjiang Guangsha
Group, and he served as its Chairman until 2000. During that period
Heilongjiang Guangsha Group had over 3,000 employees and was engaged in several
hundred construction projects. Heilongjiang Guangsha Group was sold
in 2000, at which time it had annual revenue in excess of $25
million. Previously Mr. Fu had twenty years’ experience in
construction management.
Guohua Wan, age 56. Ms. Wan has been
a director of the Company since 2004. Since 2003 Ms. Wan has been the
General Manager of our subsidiary, ZQ Power-Tech. From 2005 until
2007, Ms. Wan also served as Chief Financial Officer of Advanced Battery
Technologies, Inc. In March 2009 she was re-appointed to that
position. From 1999 until 2003 Ms. Wan was Vice President and Chief
Financial Officer of Harbin Ridaxing Science and Technology Co.,
Ltd.
Guopeng Gao, age 35. Mr. Gao has
been a director of the Company since 2005. Since 2002 Mr. Gao has
served as Vice President and General Manager of our subsidiary, ZQ
Power-Tech. From 2000 until 2002, Mr. Gao was Technical Manager for
Heilongjiang Shuangtai Electric Co. Ltd.
Hongjun Si, age 33. Mr. Si has been a
director of the Company since 2005. Since 2002 Mr. Si has served as
Chief Technology Officer of our subsidiary, ZQ Power-Tech. Prior to
joining ZQ Power-Tech, Mr. Si was employed as an engineer in the Battery
Division of Weiyou Chemical Company, Inc.
Liqui Bai, age
39. Ms. Bai has been a director of the Company since
2005. Since 2003 Ms. Bai has been the Vice General Manager for our
subsidiary, ZQ Power-Tech. During the three years that preceded her
employment by ZQ Power-Tech, Ms. Bai was employed as Manager of the
Administrative Department of Heilongjiang Weiyou Chemicals Corp.,
Ltd.
John J. McFadden, age
65. Mr. McFadden has been a director of the Company since
2007. Since 1998 Mr. McFadden has been self-employed as a consultant,
providing consultation to his clients regarding both investment banking and
energy matters. From 1996 until 1998 Mr. McFadden was employed as the
Senior Managing Director of Cambridge Holding and Cambridge Partners, LLC, a
private investment company. From 1968 until 1996 Mr. McFadden was
employed by The First Boston Corporation with a variety of responsibilities in
corporate finance and public finance, including service as Vice President and
Treasurer. In 1967 Mr. McFadden was awarded a B.A. degree by St.
Bonaventure University.
Yulin Hao, age
64. Mr. Hao has been a director of the Company since
2007. Since 2002 Mr. Hao has been employed as Vice General Manager by
the Heilongjiang Jinli Accounting Firm, a firm of accountants in China’s
Heilongjiang province. From 1998 to 2002 Mr. Hao was employed by the
East Asian Energy Transportation Company as General Manager, with
responsibilities for capital management. From 1994 until 1997 Mr. Hao
was employed as Vice President by the Guotai Securities
Corporation. In 1964 Mr. Hao was awarded a Certificate in finance by
the Heilongjiang Finance College.
Ning Li, age 55. Doctor Li has
been a director of the Company since 2007. Since 1990 Doctor Li has
been employed as a Professor by the Harbin Industrial University, where she
engages in teaching and research. In 1990 she was awarded a Doctoral
Degree in Science by the Harbin Industrial University.
Shaoqiu Xia, age 62. Mr. Xia has been
a director of the Company since 2007. Since 1993 Mr. Xia has been
employed as Deputy Secretary in the Government of the City of Harbin,
China. During the eight years immediately preceding his entry into
government service, Mr. Xia was employed as President of Harbin Electrical and
Mechanical Production Company. Mr. Xia was awarded a Bachelors Degree
in Science in 1967 by the Shenyang Industrial University.
Shiyan Yang, age 46. Doctor Yang has
been a director of the Company since 2007. Since 1998 Doctor Yang has
been employed as a Professor by the Harbin Industrial University, where he
engages in teaching and research. In 1998 he was awarded a Doctoral
Degree in Science by the Harbin Industrial University.
Cosimo J. Patti, age
59. Mr. Patti has been a director of the Company since
2007. Mr. Patti has over 35 years of managerial experience in the
financial services industry. Since 1999 Mr. Patti has been employed
as President of Technology Integration Group, Inc. d/b/a FSI Advisors
Group. FSI Advisors Group is an international consortium of financial
services boutiques. Mr. Patti has been responsible for procuring
business opportunities for the member firms. During the period from
2002 to 2004 Mr. Patti was also employed by iCi/ADP as Senior Director
Applications Planning, with responsibility for managing the applications
planning area of the fixed income software subsidiary of ADP. Mr.
Patti serves as an Industry Arbitrator for both the NASD and the New York Stock
Exchange.
The
nominees receiving a majority of the votes cast at the Annual Meeting will be
elected as Directors.
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” EACH OF THE
ELEVEN NOMINEES NAMED ABOVE.
CORPORATE
GOVERNANCE, THE BOARD, BOARD COMMITTEES AND MEETINGS
Corporate
Governance. Corporate governance is typically defined as the system that
allocates duties and authority among a company’s shareholders, Board of
Directors and management. The shareholders elect the Board and vote on
extraordinary matters.
Our
Company believes that it is in compliance with the corporate governance
requirements of the NASDAQ listing standards. The principal elements of
these governance requirements as implemented by our Company are:
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affirmative determination by the Board of Directors that a majority
of the Directors are independent;
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regularly scheduled executive sessions of independent
Directors;
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Audit Committee, Nominating and Corporate Governance Committee, and
Compensation Committee comprised of independent Directors and having the
purposes and charters described below under the separate committee
headings; and
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specific Audit Committee authority and procedures outlined in the
charter of the Audit Committee.
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Independence.
The Board of Directors has determined that the following six Directors
nominated for election at the Annual Meeting are independent Directors as
defined in the NASDAQ listing standards: John McFadden, Yulin Hao, Ning Li,
Shaoqiu Xia, Shiyan Yang and Cosimo Patti. Therefore, a majority of the
persons nominated to serve on our Company’s Board of Directors are independent
as so defined. The foregoing independence determination of our Board of
Directors included the determination that each of these six nominated Board
members, if elected and appointed to the Audit Committee, Nominating and
Corporate Governance Committee, or Compensation Committee as discussed above,
respectively, is:
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·
independent for purposes of membership on the Audit Committee under
Rule 4350(d) of the NASDAQ listing standards, that includes the
independence requirements of Rule 4200 and additional independence
requirements under SEC
Rule 10A-3(b);
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independent under the NASDAQ listing standards for purposes of
membership on the Nominating and Corporate Governance Committee;
and
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independent under the NASDAQ listing standards for purposes of
membership on the Compensation Committee, as a “non-employee director”
under SEC Rule 16b-3 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and an “outside director” as defined in
regulations under Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”).
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Our Board
and its committees meet throughout the year, and hold special meetings and act
by written consent from time to time as appropriate. Independent Directors
regularly meet without management present. Board members have access to
all of our employees outside of Board meetings. Our Board of Directors has
three committees: the Audit Committee, the Nominating and Corporate Governance
Committee and the Compensation Committee. The following table shows
the composition of these committees and the number of meetings held during the
2008 fiscal year:
Director
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Audit
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Compensation
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Nominating
and
Corporate
Governance
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John
McFadden
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Chair
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Member
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Cosimo
Patti
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Member
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Chair
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Yulin
Hao
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Member
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Chair
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Shaoqui
Xia
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Member
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Shiyan
Yang
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Member
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Ning
Li
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Member
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Number
of Meetings in 2008
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3
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1
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1
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M =
Current Member during 2008
Audit
Committee. Our Audit Committee is established in accordance with
Section 3(a)(58)(A) of the Exchange Act. The primary purposes of
this committee are to oversee, on behalf of the Company’s Board of Directors:
(1) the accounting and financial reporting processes and integrity of our
Company’s financial statements, (2) the audits of our Company’s financial
statements and appointment, compensation, qualifications, independence and
performance of our independent registered public accounting firm, (3) our
compliance with legal and regulatory requirements, and (4) the staffing and
ongoing operation of our internal audit function. The Audit Committee
meets periodically with our Chief Financial Officer and other appropriate
officers in the discharge of its duties. The Audit Committee also reviews
the content and enforcement of the Company’s Employee Code of Business Conduct
and Ethics, consults with our legal counsel on various legal compliance matters
and on other legal matters if those matters could materially affect our
financial statements.
The Board
of Directors has determined that each of the members of the Audit Committee are
independent as previously described. In addition, the Board of Directors
determined that Mr. McFadden qualifies as an “audit committee financial
expert” as defined by the SEC in Item 407(d)(5) of Regulation S-K
promulgated by the SEC. The Board of Directors also determined that all of the
members of the Audit Committee meet the requirement of the NASDAQ listing
standards that each member be able to read and understand fundamental financial
statements, including a company’s balance sheet, income statement, and cash flow
statement.
Nominating and
Corporate Governance Committee. The primary purposes of the
committee are to (1) recommend to our Board of Directors individuals
qualified to serve on our Board of Directors for election by shareholders at
each Annual Meeting of shareholders and to fill vacancies on the Board of
Directors, (2) implement the Board’s criteria for selecting new directors,
(3) develop, recommend to the Board, and assess our corporate governance
policies, and (4) oversee the evaluation of our Board. The Nominating
and Corporate Governance Committee receives recommendations from its members or
other members of the Board of Directors for candidates to be appointed to the
Board or committee positions, reviews and evaluates such candidates and makes
recommendations to the Board of Directors for nominations to fill Board and
committee positions.
The
committee’s current process for identifying and evaluating nominees for Director
consists of general periodic evaluations of the size and composition of the
Board of Directors, applicable listing standards and laws, and other appropriate
factors with a goal of maintaining continuity of appropriate industry expertise
and knowledge of our Company. The committee looks for a number of personal
attributes in selecting candidates including: sound reputation and ethical
conduct; business and professional activities that are complementary to those of
the Company; the availability of time and a willingness to carry out their
duties and responsibilities effectively; an active awareness of changes in the
social, political and economic landscape; an absence of any conflicts of
interest; limited service on other boards; and a commitment to contribute to the
Company’s overall performance, placing it above personal interests.
The
Nominating and Corporate Governance Committee will consider candidates
recommended by shareholders. Any candidate recommended by shareholders must meet
the same general requirements outlined in the previous paragraph to be
considered for election. Any shareholder who intends to present a director
nomination proposal for consideration at the 2010 Annual Meeting of shareholders
and intends to have that proposal included in the proxy statement and related
materials for the 2010 Annual Meeting, must deliver a written copy of the
proposal to our Company’s principal executive offices no later than the
deadline, and in accordance with the notice procedures specified under
“Shareholder Proposals” in this proxy statement and in accordance with the
applicable requirements of SEC Rule 14a-8.
If a
shareholder does not comply with the Rule 14a-8 procedures, the Company
would not be required to include the nomination proposal as a proposal in the
proxy statement and proxy card mailed to shareholders. For a shareholder’s
nominee to be considered for nomination as a Director, the shareholder should
give timely notice of their nomination in writing to the Secretary of our
Company. To be timely, written suggestions for candidates, accompanied by
a written consent of the proposed candidate to serve as a director if nominated
and elected, a description of his or her qualifications and other relevant
biographical information, should be delivered for consideration by the
Nominating and Corporate Governance Committee prior to the next Annual Meeting
to the Secretary of the Company, 21 West 39th Street,
Suite 2A, New York, NY 10018 not less than 90 days nor more than 120 days prior
to the first anniversary of the preceding year’s Annual Meeting. In the
event that the date of the Annual Meeting is advanced by more than 30 days or
delayed by more than 60 days from such anniversary date, notice by the
shareholder to be timely should be so delivered not earlier than the 120th day
prior to such Annual Meeting and not later than the close of business on the
later of the 90th day prior to such Annual Meeting or the 10th day following the
day on which public announcement of the date of such meeting is first
made. The Nominating and Corporate Governance Committee may request that
the shareholder submitting the proposed nominee furnish additional information
to determine the eligibility and qualifications of such candidate.
Under SEC
Rule 14a-8 (and assuming consent to disclosure is given by the proponents
and nominee), our Company must disclose any nominations for Director made by any
person or group beneficially owning more than 5% of our outstanding Common Stock
by the date that was 120 calendar days before the anniversary of the date on
which its proxy statement was sent to its shareholders in connection with the
previous year’s Annual Meeting. Our Company did not receive any such
nominations for the 2009 Annual Meeting.
Compensation
Committee. The primary purposes of the committee are to (1) evaluate
and approve the corporate goals and objectives set by the Chief Executive
Officer (the “CEO”), (2) evaluate the CEO’s performance in light of those
goals and objectives, (3) make recommendations to the Board of Directors
with respect to non-CEO compensation, incentive compensation plans and
equity-based plans, (4) oversee the administration of our incentive
compensation plans and equity-based plans, and (5) produce an annual report
on executive compensation for inclusion in the Company’s proxy statement.
The Board of Directors has determined that the members of this committee are
independent as previously described. For additional information
regarding the operation and authority of the Compensation Committee, see
“Compensation Discussion and Analysis.”
Meetings of Board
of Directors. The Board of Directors held nine meetings and acted
by unanimous consent on nine occasions during 2008. Each of the directors
attended at least 75% of the meetings. The Company does not expect
the majority of the Board members to attend the Annual Meeting, as the majority
of the Board members reside in the People’s Republic of China (the
“PRC”).
SHAREHOLDER
COMMUNICATIONS TO THE BOARD OF DIRECTORS
Any
record or beneficial owner of our shares of Common Stock who has concerns about
accounting, internal accounting controls, or auditing matters relating to our
Company may contact the Audit Committee directly. Any record or beneficial
owner of our Common Stock who wishes to communicate with the Board of Directors
on any other matter should also contact the Audit Committee. The Audit
Committee has undertaken on behalf of the Board of Directors to be the recipient
of communications from shareholders relating to our Company. If particular
communications are directed to the full Board, independent Directors as a group,
or individual directors, the Audit Committee will route these communications to
the appropriate directors or committees so long as the intended recipients are
clearly stated.
You may
send communications by mail to Advanced Battery Technologies, Inc., 21 West
39th
Street, Suite 2A, New York, New York 10018 USA, Attention: Chairman of the Audit
Committee. Communications may be made anonymously, without name or
address. Communications not intended to be made anonymously may be
made by mail to that address, including whatever identifying or other
information you wish to communicate.
Communications
from employees or agents of our Company will not be treated as communications
from our shareholders unless the employee or agent clearly indicates that the
communication is made solely in the person’s capacity as a
shareholder.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During
2008, no executive officer of the Company served on the compensation committee
(or equivalent), or the board of directors, of another entity whose executive
officer(s) served on the Company’s Compensation Committee or
Board.
The
following table summarizes the total compensation earned by all non-employee
Directors during 2008:
Director Summary
Compensation for 2008
Name
|
Fee
Earned or
Paid in
Cash($)
|
All Other Compensation
($)
|
Total
($)
|
John
McFadden
|
13,000
|
30,000(1)
|
43,000
|
Yulin
Hao
|
1,461
|
--
|
1,461
|
Ning
Li
|
1,461
|
--
|
1,461
|
Shaoqui
Xia
|
1,461
|
--
|
1,461
|
Shiyan
Yang
|
1,461
|
--
|
1,461
|
Cosimo
Patti
|
13,000
|
30,000(1)
|
43,000
|
(1)
|
Represents
the market value of shares of common stock issued, on the date of
issuance.
|
In
addition to the amounts shown above, non-employee Board members received
reimbursement for travel and lodging expenses incurred while attending Board and
committee meetings and Board-related activities, such as visits to Company
locations.
There
were no outstanding options or other equity awards at year-end 2008 for
non-employee Directors.
Director
Stock Ownership and Compensation Guidelines
The
Compensation Committee and the Board of Directors have not yet adopted a policy
regarding stock ownership by members of the Board of Directors. The
Compensation Committee intends to address the subject of director stock
ownership at an appropriate time.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth as of May 20, 2009, the beneficial ownership of
the Common Stock by the Directors and by the Directors and executive officers of
the Company as a group, and each person known to the Company to be the
beneficial owner of more than five percent of the Common Stock:
Name of
Beneficial
Owner
|
Amount
and Nature of
Beneficial
Ownership
|
Percentage of
Class
|
Zhiguo
Fu
|
9,149,730(1)
|
15.7%
|
Guohua
Wan
|
110,000(1)
|
0.2%
|
Guopeng
Gao
|
70,000
|
0.1%
|
Hongjun
Si
|
60,000
|
0.1%
|
Liqui
Bai
|
30,000
|
0.1%
|
John
McFadden
|
28,924
|
0.1%
|
Yulin
Hao
|
(1)
|
--
|
Ning
Li
|
(1)
|
--
|
Shaoqiu
Xia
|
(1)
|
--
|
Shiyan
Yang
|
(1)
|
--
|
Cosimo
J. Patti
|
24,884
|
0.1%
|
All
officers and
directors
(12 persons)
|
9,513,538(1)
|
16.3%
|
|
(1)
Includes shares subject to stock options that are exercisable
within 60 days of May 20, 2009 as
follows:
|
Name
of Beneficial Owner
|
Options
(#)
|
Zhiguo
Fu
|
300,000
|
Guohua
Wan
|
40,000
|
The
executive officers of the Company are Zhiguo Fu, Guohua Wan, Sui Yang Huang and
Dan Chang. Zhiguo Fu and Guohua Wan are also Directors of the Company
and their biographies are included above under “Proposal 1: Election of
Directors.”
Sui Yang Huang, age 48. Dr.. Huang joined
Advanced Battery Technologies in 2008 as Chief Technology
Officer. Prior to joining Advanced Battery Technologies, Dr. Huang
had over 25 years of experience in chemical engineering, including over 15 years
experience in the Chinese battery industry. Most recently, from 2005
to 2007, Dr. Huang was employed as Chief Technology Officer of Shenzhen B&K
Electronics Co., Ltd. From 2002 to 2005 Dr. Huang was employed as
Chief Executive Officer of Apower Electronics Co., Ltd. Since 2002
Dr. Huang has also been employed on a part-time basis as a Professor in polymer
materials and engineering at the South China University of Technology and as a
Joint Project Researcher with the Chinese Academy of Sciences –
GIG. Dr. Huang holds seven U.S. patents and 20 Chinese patents,
primarily relating to the design and manufacture of batteries. He has
authored over 30 studies, published in academic journals in the U.S., Europe and
Asia.
Dan Chang, age
34. Mr. Chang joined Advanced Battery Technologies in 2009 as Senior
Vice President. During the two years prior to joining Advanced
Battery Technologies, Mr. Chang was employed as Senior Vice President of China
Natural Gas, Inc., a natural gas distributor listed on the OTC Bulletin
Board. Prior to joining China Natural Gas, Inc., Mr. Chang was
engaged in pursuing a master’s degree in accountancy. From 2000 to
2004 Mr. Chang was employed with the investment banking groups of two firms
located in Taipei, rising to the position of Associate Manager at the second
location, Taiwan Securities Group. Mr. Chang was awarded a masters
degree in accountancy by Pace University (New York) in 2006. In 1998
Mr. Chang was awarded a masters in business administration by the National
Cheng-Chi University in Taiwan.
REPORT
OF THE COMPENSATION COMMITTEE
The
Compensation Committee of the Board of Directors of the Company (the
“Compensation Committee”) has reviewed and discussed with management the
Compensation Discussion and Analysis for 2008 to be included in the proxy
statement for the Annual Meeting of shareholders filed pursuant to
Section 14(a) of the Exchange Act. Based on its review and
discussion referred to above, the Compensation Committee recommended to the
Board of Directors that the Compensation Discussion and Analysis be included in
the proxy statement for the Company’s Annual Meeting.
|
Members
of the Compensation Committee:
|
|
|
|
Cosimo
Patti, Chairman
|
|
John
McFadden
|
|
Shaoqui
Xia
|
COMPENSATION
DISCUSSION AND ANALYSIS
Throughout
this proxy statement, the following individuals are collectively referred to as
the “named executive officers”:
|
·
Zhiguo Fu, Chairman of the Board of Directors, Chief Executive Officer and
President; and
|
|
·
Guohua Wan, Chief Financial
Officer
|
Oversight
of Our Executive Compensation Program
The
Compensation Committee oversees the compensation of our named executive officers
and is composed entirely of independent Directors as defined under the listing
standards of NASDAQ. The Compensation Committee is responsible for reviewing,
approving and evaluating the Chief Executive Officer’s performance in light of
the goals and objectives of the Company. It also makes compensation
recommendations with respect to our other executive officers, including approval
of awards for incentive compensation and equity-based plans. The Compensation
Committee administers all of our stock-based and other incentive compensation
plans. The committee also assists the Board of Directors in developing
succession planning for our executive officers.
Objectives
of Our Compensation Program
Our
compensation program is designed to attract, motivate and retain key leaders and
to align the long-term interests of the named executive officers with those of
our shareholders. To date, the compensation paid to the named executive officers
has been based on prevailing compensation norms in the PRC. The
Compensation Committee is currently reviewing the Company’s executive
compensation practices with a view to enabling the Company to better attract
qualified executives in the United States.
The
Role of the Chief Executive Officer in Determining Executive
Compensation
The
Compensation Committee, working with the Chief Executive Officer, evaluates and
approves all compensation regarding our named executive officers. Our
named executive officers report directly to our Chief Executive Officer who
supervises the day to day performance of those officers. Accordingly, the
Chief Executive Officer makes recommendations to the Compensation Committee
regarding salaries, bonuses and equity awards for the other named executive
officers and is required to annually review our executive compensation program
for the named executive officers (other than himself). The Compensation
Committee strongly considers the compensation recommendations and the
performance evaluations of the Chief Executive Officer in making its decisions
and any recommendations to the Board of Directors with respect to non-CEO
compensation, incentive compensation plans and equity-based plans that are
required to be submitted to the Board. In deliberations or approvals
regarding the compensation of the other named executive officers, the committee
may elect to invite the Chief Executive Officer to be present but not vote. In
any deliberations or approvals of the committee regarding the Chief Executive
Officer’s compensation, the Chief Executive Officer is not invited to be
present.
Compensation
Consultant
The
Compensation Committee has the authority to hire compensation, accounting, legal
or other advisors. In connection with any such hiring, the committee can
determine the scope of the consultant’s assignments and their fees. While the
Compensation Committee has not, to date, retained an outside compensation
consultant, the committee may retain a consultant in the future to provide the
committee with data regarding compensation trends, to assist the committee in
the preparation of market surveys or tally sheets or to otherwise help it
evaluate compensation decisions.
Our
Compensation Program for Our Chief Executive Officer
The Company has paid to our Chief
Executive Officer cash compensation of $77,500 in each of the past three
years. Effective on January 1, 2009, the Compensation Committee
awarded Mr. Fu a nonqualified option to purchase 300,000 shares of common stock
at the market price on that date. The Company has not delivered any
other compensation or benefits to Mr. Fu during the past three
years.
The Compensation Committee is currently
reviewing the compensation paid to Zhiguo Fu for his services as Chief Executive
Officer. The Committee expects to recommend to the Board that the
compensation paid by the Company to Mr. Fu should more closely approximate the
amount of compensation paid to executives in similar positions with U.S.- based
public companies.
Potential Post-Termination
Benefits for our Chief
Executive Officer
The
Company has not adopted any provisions regarding the payment of post-termination
benefits or severance pay to Zhiguo Fu.
The
Company’s Compensation Program for Named Executive Officers Other Than Our Chief
Executive Officer
Guohua
Wan, the other named executive officer, is not party to an employment agreement.
As a result, her compensation is reviewed and determined by the Compensation
Committee on an annual basis. The Compensation
Committee may also review an executive officer’s compensation if that executive
officer is promoted or experiences a change in responsibilities.
Ms. Wan
reports directly to our Chief Executive Officer who supervises her day to day
performance. Our Chief Executive Officer annually reviews our
executive compensation program (other than for himself) and makes compensation
recommendations to the Compensation Committee. The Compensation Committee
strongly considers the recommendations of the Chief Executive Officer in making
its decisions and any recommendations to the Board of Directors with respect to
non-CEO compensation, incentive compensation plans and equity-based plans that
are required to be submitted to the Board.
To date, the compensation paid to
Guohua Wan has been based on prevailing compensation norms in the PRC. The
Compensation Committee is currently reviewing the appropriateness of this
compensation arrangement, and expects to recommend to the Board that the
compensation paid by the Company to Ms. Wan should more closely approximate the
amount of compensation paid to executives in similar positions with U.S.- based
public companies.
Equity
Compensation
The
Company’s 2006 Equity Incentive Plan (the “2006 Plan”) is administered by the
Compensation Committee as a long-term component of the Company’s compensation
package. The number of equity awards granted to each eligible named executive
officer is made on a discretionary rather than formula basis by the Compensation
Committee with the recommendation of the Chief Executive Officer.
The
maximum number of shares that remain available to be issued by the Compensation
Committee under the 2006 Plan is 1,180,000 shares. In addition,
shares available for grant as a result of cancellation or termination of
previously granted awards will also be available for grant. For a more detailed
discussion of the material terms of the 1998 Plan, see “Executive Compensation –
Equity Compensation Plan Information - 2006 Plan.”
On May 7,
2009, the Board of Directors approved, subject to shareholder approval at the
Annual Meeting, the Advanced Battery Technologies, Inc. 2009 Equity Incentive
Plan. If approved by the Company’s shareholders at the Annual Meeting, the total
amount available for awards under the 2009 plan would be 5,000,000 shares of
Common Stock. All of our executive officers, as well as employees and
qualified consultants, will be eligible to receive awards under the 2009 Equity
Incentive Plan. For a more detailed discussion of the material terms of the 2009
Equity Incentive Plan, see “Proposal 3: Approval of the Advanced Battery
Technologies, Inc. 2009 Equity Incentive Plan.”
Tax
Implications of Executive Compensation
Section 162(m) of
the Code places a limit of $1,000,000 on the amount of compensation that a
company may deduct in any one year with respect to its principal executive
officer and each of its other three most highly paid executive officers. There
is an exception to the $1,000,000 limitation for performance-based compensation
that meets certain requirements. Annual cash incentive compensation and stock
option awards are generally forms of performance-based compensation that meet
those requirements and, as such, are fully deductible.
Grants of
stock options to our named executive officers under our 2006 Plan have not
exceeded the $1,000,000 threshold. Therefore, we expect to deduct
compensation of our named executive officers related to compensation under the
2006 Plan.
The
Compensation Committee has considered and will continue to consider tax
deductibility in structuring compensation arrangements. However, the
Compensation Committee retains discretion to establish executive compensation
arrangements that it believes are consistent with the principles described
earlier and in the best interests of our Company and its shareholders, even if
those arrangements may not be fully deductible under
Section 162(m).
The
following table sets forth the summary of compensation earned during 2006
through 2008 by the Company’s Chief Executive Officer. There were no
other executive officers whose total salary and bonus for the fiscal year ended
December 31, 2008 exceeded $100,000.
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Other
Compensation
|
Zhiguo
Fu
|
2008
|
$77,500
|
--
|
--
|
--
|
--
|
|
2007
|
$77,500
|
--
|
--
|
--
|
--
|
|
2006
|
$77,500
|
--
|
--
|
--
|
--
|
Employment
Agreements
All of the executive officers of the
Company are employed on an at-will basis.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END 2008
There
were no stock options or other equity awards outstanding at December 31, 2008
with respect to our named executive officers.
EQUITY
COMPENSATION PLAN INFORMATION
2006
Equity Incentive Plan
The
2006 Plan was
adopted by the Board of Directors. It was not considered or approved
by the Company’s shareholders. The purpose of the 2006 Plan is
(1) to offer selected employees of the Company or its subsidiaries an
equity ownership interest in the financial success of the Company, (2) to
provide the Company an opportunity to attract and retain the best available
personnel for positions of substantial responsibility and (3) to encourage
equity participation in the Company by eligible participants. As of
May 26, 2009, 1,180,000 shares remain available for issuance under the 1998
Plan.
The
Compensation Committee administers the 2006 Plan. Under the 2006 Plan, the
Compensation Committee may grant incentive stock options, non-qualified options
and restricted stock to our named executive officers and to other
employees. The number and the nature of equity awards granted to each
eligible employee is made on a discretionary rather than formula basis by the
Compensation Committee with the recommendation of the Chief Executive
Officer. The exercise price for any option granted under the 2006 Plan is
at a price that the committee may determine, but cannot be less than the average
of the highest and lowest sale price of our Common Stock on NASDAQ on the date
of the grant. Any award granted under the 2006 Plan is exercisable or
vests at such times, under such conditions and in such amounts and during such
period or periods as the Compensation Committee determines on the date the award
is granted.
Recipients
of stock option awards may exercise their options at any time after they vest
and before they expire, except that no awards may be exercised after ten years
from the date of grant. Awards are generally not transferable by the recipient
during the recipient’s life. Awards granted under the plan are evidenced
by either an agreement that is signed by us and the recipient or a confirming
memorandum issued by us to the recipient setting forth the terms and conditions
of the awards. Award recipients and beneficiaries of award recipients have no
right, title or interest in or to any shares subject to any award or to any
rights as a shareholder, unless and until shares are actually issued to the
recipient.
CERTAIN
RELATIONSHIPS - RELATED PERSON TRANSACTIONS
Procedures
for the Approval of Related Person Transactions
The Audit
Committee Charter provides that the Audit Committee has the authority to
establish, and communicate to the full board and management, policies that
restrict the Company and its affiliates from entering into related person
transactions without the Audit Committee’s prior review and approval. In
accordance with these policies, the Audit Committee on a timely basis reviews
and, if appropriate, approves all related person transactions.
At any
time in which an executive officer, Director or nominee for Director becomes
aware of any contemplated or existing transaction that, in that person’s
judgment may be a related person transaction, the executive officer, director or
nominee for Director is expected to notify the Chairman of the Audit Committee
of the transaction. Generally, the Chairman of the Audit Committee reviews
any reported transaction and may consult with outside legal counsel regarding
whether the transaction is, in fact, a related person transaction requiring
approval by the Audit Committee. If the transaction is considered to be a
related person transaction, then the Audit Committee will review the transaction
at its next scheduled meeting or at a special meeting of the
committee.
Related
Person Transactions
During 2007 and the early portion of
2008, our Chairman, Zhiguo Fu, loaned money to the Company, primarily to fund
the operations of the New York Office. The loans did not bear
interest and were due on demand. The maximum amount of the loan,
which was recorded as of September 30, 2008, was $1,217,986. During
the 4th quarter
of 2008, all but $17,236 of the loan was repaid to Mr. Fu.
REPORT
OF THE AUDIT COMMITTEE
Composition.
The Audit Committee of the Board of Directors of the Company
(the “Audit Committee”) is composed of three directors, John McFadden, Cosimo
Patti and Yulin Hao. Each member of the Audit Committee meets the independence
and financial experience requirements under both SEC and NASDAQ rules. In
addition, the Board has determined that John McFadden is an “audit committee
financial expert” as defined by SEC rules.
Responsibilities.
The Audit Committee operates under a written charter that has been
adopted by the Board. The charter is reviewed annually for changes, as
appropriate.
The Audit
Committee is responsible for oversight, on behalf of the Board of Directors,
of:
|
·
The Company’s auditing, accounting and financial reporting
processes, and the integrity of its financial
statements;
|
|
·
The audits of the Company’s financial statements and the
appointment, compensation, qualifications, independence and performance of
the Company’s auditor and independent registered public accounting
firm;
|
|
·
The Company’s compliance with legal and regulatory requirements;
and
|
|
·
The staffing and ongoing operation of the Company’s internal audit
function.
|
The
Company’s management is responsible for: (a) maintaining the Company’s
books of account and preparing periodic financial statements based thereon; and
(b) maintaining the system of internal controls. The independent registered
public accounting firm is responsible for auditing the Company’s consolidated
annual financial statements.
The Audit
Committee’s function is one of oversight only and does not relieve management of
its responsibilities for preparing financial statements that accurately and
fairly present the Company’s financial results and condition, nor the
independent registered public accounting firm of their responsibilities relating
to the audit or review of the financial statements.
In
accordance with Audit Committee policy and the requirements of law, the Audit
Committee pre-approves all services to be provided by the Company’s auditor and
independent registered public accounting firm. Pre-approved services include
audit services, audit-related services, tax services and other services. To
avoid potential conflicts of interest, the law prohibits a publicly traded
company from obtaining certain non-audit services from its independent
registered public accounting firm. The Company obtains these services from other
service providers as needed.
Review with Management and
Independent Registered Public Accounting Firm. In this
context, the Audit Committee hereby reports as follows:
|
1.
The Audit Committee has reviewed and discussed with management and
the independent registered public accounting firm the Company’s audited
consolidated financial statements contained in the Company’s Annual Report
on Form 10-K for the 2008 fiscal
year.
|
|
2. The Audit Committee
has discussed with the auditor and independent registered public
accounting firm matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit
Committees).
|
|
3. The Audit Committee
has received from the auditor and independent registered public accounting
firm the written disclosures and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and the Audit Committee has held such discussions regarding
independence with its auditor and independent registered public accounting
firm.
|
|
4. The Audit Committee
has considered whether the provision of services covered by fees paid to
the independent registered public accounting firm are compatible with
maintaining the independence of that
firm.
|
Based on
the review and discussions referred to in paragraphs 1-4 above, the Audit
Committee recommended to the Board, and the Board has approved, that the audited
consolidated financial statements be included in the Company’s Annual Report on
Form 10-K for fiscal 2008 for filing with the SEC.
|
Members
of the Audit Committee:
|
|
|
|
John
McFadden (Chairman)
|
|
Cosimo
Patti
|
|
Yulin
Hao
|
The
foregoing report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as amended, or the
Exchange Act, as amended, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
AUDIT
AND OTHER FEES PAID TO OUR INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
Audit Fees
Bagell, Josephs, Levine & Company,
LLC billed $120,000 to the Company for professional services rendered for the
audit of fiscal 2008 financial statements and review of the financial statements
included in fiscal 2008 10-QSB filings. Bagell, Josephs, Levine &
Company, LLC billed $65,000 to the Company for professional services rendered
for the audit of fiscal 2007 financial statements.
Audit-Related Fees
Bagell, Josephs, Levine & Company,
LLC billed $0 to the Company during 2008 for assurance and related services that
are reasonably related to the performance of the 2008 audit or review of the
quarterly financial statements. Bagell, Josephs, Levine &
Company, LLC billed $0 to the Company during 2007 for assurance and related
services that are reasonably related to the performance of the 2007 audit or
review of the quarterly financial statements.
Tax Fees
Bagell, Josephs, Levine & Company,
LLC billed $0 to the Company during 2008 for professional services rendered for
tax compliance, tax advice and tax planning. Bagell, Josephs, Levine
& Company, LLC billed $0 to the Company during 2007 for professional
services rendered for tax compliance, tax advice and tax planning.
All Other Fees
Bagell, Josephs, Levine & Company,
LLC billed $0 to the Company in 2008 and $0 in 2007 for services not described
above.
It is the policy of the Company
that all services other than audit, review or attest services must be
pre-approved by the Board of Directors. No such services have been
performed by Bagell, Josephs, Levine & Company, LLC.
PROPOSAL
2: APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
On May 7, 2009, Advanced Battery
Technologies’ Board of Directors approved an amendment to Advanced Battery
Technologies’ Certificate of Incorporation, subject to approval of the amendment
by the Company’s shareholders. On that date, 57,821,577 of the
currently authorized 60,000,000 common shares were issued and are outstanding,
leaving only 2,178,423 available for issuance. The effect of the
amendment will be to increase the number of authorized shares of common stock,
$0.001 par value, from 60,000,000 to 150,000,000.
The
Board of Directors has approved the increase in authorized common stock in order
to provide Advanced Battery Technologies with flexibility in pursuing its
long-term business objectives. The primary long-term reasons for the
increase are:
|
·
|
Management
expects that in the future it will pursue opportunities to obtain the
capital Advanced Battery Technologies needs in order to fully implement
its business plan. A reserve of both common and preferred
shares available for issuance from time-to-time will enable Advanced
Battery Technologies to entertain a broad variety of financing
proposals.
|
|
·
|
Management
may utilize the additional shares in connection with corporate
acquisitions, joint venture arrangements, or for other corporate purposes,
including the solicitation and compensation of key
personnel. Advanced Battery Technologies is not, at this time,
engaged in negotiating or effecting any acquisitions or similar
transactions.
|
At present, Advanced Battery
Technologies has no contractual or other obligation to issue any of its common
stock, except upon exercise of either (a) outstanding stock options issued to
employees pursuant to the 2006 Equity Incentive Plan or (b) warrants issued in
August 2008 in a private placement of securities. The following table
shows the derivative securities currently outstanding:
|
Exercise
|
Shares
|
Derivative
Security
|
Price
|
Issuable
|
Employee
Stock Options
|
$2.66
|
380,000
|
Warrants
|
$5.51
|
2,652,945
|
|
|
3,032,945
|
All of the foregoing derivative
securities are currently exercisable. In the event that the foregoing
derivative securities were exercised for more than 2,178,423 shares, Advanced
Battery Technologies would not be able to issue the requisite common stock, and
would be in default, unless the number of authorized common shares is
increased.
The amendment of the Certificate of
Incorporation will increase the number of common shares available for issuance
by the Board of Directors from 2,178,423 to 92,178,423. The Board of
Directors will be authorized to issue the additional common shares without
having to obtain the approval of Advanced Battery Technologies’
shareholders. Delaware law requires that the Board use its reasonable
business judgment to assure that Advanced Battery Technologies obtains “fair
value” when it issues shares. Nevertheless, the issuance of the
additional shares would dilute the proportionate interest of current
shareholders in Advanced Battery Technologies. The issuance of the
additional shares could also result in the dilution of the value of shares now
outstanding, if the terms on which the shares were issued were less favorable
than the current market value of Advanced Battery Technologies common
stock.
The
amendment of the Certificate of Incorporation is not being done for the purpose
of impeding any takeover attempt, and Management is not aware of any person who
is acquiring or plans to acquire control of Advanced Battery
Technologies. Nevertheless, the power of the Board of Directors to
provide for the issuance of shares of common stock without shareholder approval
has potential utility as a device to discourage or impede a takeover of Advanced
Battery Technologies. In the event that a non-negotiated takeover
were attempted, the private placement of stock into “friendly” hands, for
example, could make Advanced Battery Technologies unattractive to the party
seeking control of Advanced Battery Technologies. This would have a
detrimental effect on the interests of any stockholder who wanted to tender his
or her shares to the party seeking control or who would favor a change in
control.
Vote
Required for Approval and Recommendation
The
affirmative vote by the holders of a majority of the outstanding shares of
common stock is required to approve the amendment of the Certificate
of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE “FOR” THIS
PROPOSAL
PROPOSAL
3: APPROVAL OF THE ADVANCED BATTERY TECHNOLOGIES, INC. 2009 EQUITY INCENTIVE
PLAN
On May 7,
2009, the Company’s Board of Directors adopted, subject to approval by the
Company’s shareholders, the Advanced Battery Technologies, Inc. 2009 Equity
Incentive Plan (the “2009 Plan”) and reserved 5,000,000 shares of Common Stock
for awards under the plan. The text of the 2009 Plan is attached hereto as
Appendix A. The material features of the 2009 Plan are discussed below, but the
description is subject to, and is qualified in its entirety by, the full text of
the 2009 Plan.
The
purpose of the 2009 Plan is to (i) aid the Company and its subsidiaries and
affiliates in attracting, securing and retaining employees of outstanding
ability, (ii) attract consultants to provide services to the Company and
its subsidiaries and affiliates, as needed, and (iii) motivate such persons
to exert their best efforts on behalf of the Company and its subsidiaries and
its affiliates by providing incentives through the granting of awards under the
plan. The Company expects that it will benefit from the added interest,
which such persons will have in the welfare of the Company as a result of their
proprietary interest in the Company’s success. Equity-based compensation
and ownership will also give the recipients of equity awards under the 2009 Plan
a continuing stake in the long-term success of the Company, and the delayed
vesting of equity awards will help to encourage retention. The
Compensation Committee and the Board of Directors believe that the efforts of
these individuals contributed significantly to the sustained growth since 2004
in sales, earnings and earnings per share. The Compensation Committee and
the Board of Directors believe that the executive officers and employees of the
Company should be rewarded for earnings performance that may result from their
efforts and believes this is best accomplished by awarding equity compensation
to these individuals.
General
The 2009
Plan permits the granting of any or all of the following types of
awards:
|
·
|
incentive
stock options (“ISOs”);
|
|
·
|
non-qualified stock options; and
|
The 2009
Plan currently provides that the maximum number of shares of Common Stock with
respect to which awards may be granted is 5,000,000 shares (subject to
adjustment in accordance with the provisions under the caption “Adjustments Upon
Certain Events” below), whether pursuant to ISOs or otherwise.
Eligibility
Employees
of the Company and its subsidiaries, and consultants to the Company and its
subsidiaries (provided that the nature of their services is such that the grant
can be made pursuant to a Form S-8 registration statement), are eligible to
participate in the 2009 Plan. As of May 26, 2009, the Company, its subsidiaries
and affiliates, had approximately 909 employees that are eligible to receive
awards under the 2009 Plan.
Administration
The 2009
Plan is administered by the Compensation Committee of the Board of Directors.
The Compensation Committee has the authority to, among other things, select
employees or consultants to whom awards are to be granted, to determine the
number of options or shares to be granted to such employees or consultants and
to establish the terms and conditions of such awards. The Compensation Committee
has the authority to interpret the 2009 Plan, to establish, amend and rescind
any rules and regulations relating to the 2009 Plan, and to otherwise make
any determination that it deems necessary or desirable for the administration of
the 2009 Plan. If necessary to satisfy the requirements of Rule 16b-3 of
the Exchange Act and/or Section 162(m) of the Code, members of the
Compensation
Committee must be “non-employee directors” within the meaning of Rule 16b-3
of the Exchange Act and “outside directors” within the meaning of
Section 162(m) of the Code.
Adjustments
Upon Certain Events
Subject
to any required action by the shareholders of the Company, the number and type
of shares covered by each outstanding award, and the number and type of shares
which have been authorized for issuance under the 2009 Plan but as to which no
awards have yet been granted or which have been returned to the 2009 Plan upon
cancellation, expiration or forfeiture of an award, as well as the exercise or
purchase price, will be proportionately adjusted for any increase or decrease in
the number of issued shares resulting from a stock split, reverse stock split or
combination or the payment of a stock dividend (but only on the Common Stock) or
reclassification of the Common Stock or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company. Except as expressly provided in the 2009
Plan, no issuance by the Company of shares of stock of any class or securities
convertible into shares of stock of any class, will affect, and no adjustment by
reason thereof will be made with respect to, the number or price of shares
subject to the 2009 Plan or an award.
In the
event of the dissolution or liquidation of the Company, any option or restricted
stock unit granted under the 2009 Plan will terminate immediately prior to the
date of dissolution or liquidation.
In the
event of any reorganization, recapitalization, merger, consolidation,
combination or exchange of stock or other corporate exchange, then, unless
assumed by the surviving entity, all options or restricted shares will vest
prior to the effective date of the transaction, and will terminate on the
effective date of the transaction unless previously exercised.
Stock
Options
The 2009
Plan provides that the option price pursuant to which Common Stock may be
purchased will be determined by the Compensation Committee, but will not be less
than the fair market value of the Common Stock on the date the option is granted
(110% of the fair market value if the option is granted to an individual who
holds 10% or more of the Company’s outstanding shares). The
Compensation Committee will determine the term of each option, but no option
will be exercisable more than 10 years after the date of grant (5 years in the
case of a 10% shareholder). Payment of the purchase price will be in cash, or,
at the discretion of the Board, in shares of Common Stock held for at least six
months.
If a
participant’s service terminates by reason of death, to the extent the
participant was entitled to exercise the option on the date of death, the option
may be exercised within eighteen months after the date of death. If a
participant’s service terminates by reason of Disability (as defined in the 2009
Plan), to the extent the participant was entitled to exercise the option on the
date of Disability, the option may be exercised within one year after the date
of Disability. If a participant’s service with the Company terminates for Cause
(as defined in the 2009 Plan), each option then held by the participant will
terminate immediately. If a participant’s service with the Company
terminates for any other reason, each option then held by the participant may be
exercised within 3 months after the date of such termination, but only to the
extent such option was exercisable at the time of termination of
service.
Restricted
Stock
The 2009
Plan provides for certain terms and conditions pursuant to which restricted
stock may be granted under the 2009 Plan. Each grant of restricted stock must be
evidenced by an award agreement in a form approved by the Compensation
Committee. The vesting of a restricted stock award granted under the 2009 Plan
may be conditioned upon the completion of a specified period of employment with
the Company or a subsidiary, upon attainment of specified performance goals,
and/or upon such other criteria as the Compensation Committee may determine in
its sole discretion. If a participant’s service is terminated for any reason,
the participant will only be entitled to the restricted stock vested at the time
of such termination of service. The participant’s unvested restricted stock will
be forfeited. Notwithstanding the foregoing, the Compensation Committee may
accelerate the vesting of unvested restricted stock held by a participant if the
participant is terminated without “cause” (as determined by the Compensation
Committee) by the Company. Except as provided in the applicable award agreement,
no shares of restricted stock may be assigned, transferred or otherwise
encumbered or disposed of by the participant until such shares have vested in
accordance with the terms of such award agreement. A participant will have the
right to vote and receive dividends on the shares of restricted stock granted to
him or her under the 2009 Plan.
Transferability
Options
and restricted shares awarded under the 2009 Plan are not transferable otherwise
than by will or by the laws of descent or distribution, except that the
Compensation Committee may authorize stock options (other than ISOs) to be
granted on terms which permit transfer.
Federal
Income Tax Consequences
The
following is a discussion of certain U.S. federal income tax consequences
relevant to participants in the 2009 Plan who are subject to federal income tax
and the Company. It is not intended to be a complete description of all possible
tax consequences with respect to awards granted under the 2009 Plan and does not
address state, local or foreign tax consequences.
A
participant who is granted a non-qualified stock option will not recognize
income at the time the option is granted. Upon the exercise of the option,
however, the excess, if any, of the market value of the stock on the date of
exercise over the option exercise price will be treated as ordinary income to
the participant, and the Company will generally be entitled to an income tax
deduction in the same year in an amount measured by the amount of ordinary
income taxable to the participant. The participant will be entitled to a cost
basis for the stock for income tax purposes equal to the amount paid for the
stock plus the amount of ordinary income taxable at the time of exercise. Upon a
subsequent sale of such stock, the participant will recognize short-term or
long-term capital gain or loss, depending upon his or her holding period for
such stock.
A
participant who is granted an ISO satisfying the requirements of the Code will
not recognize income at the time the option is granted or exercised. The excess
of the fair market value of the stock on the date of exercise over the option
exercise price is, however, included as an adjustment in determining the
participant’s alternative minimum tax for the year in which the exercise occurs.
If the participant does not dispose of shares received upon exercise of the
option for one year after exercise and two years after grant of the option (the
“Holding Period”), upon the disposition of such shares the participant will
recognize long-term capital gain or loss based on the difference between the
option exercise price and the fair market value of shares on the date of
disposition. In such event, the Company is not entitled to a deduction for
income tax purposes in connection with the exercise of the option. If the
participant disposes of the shares received upon exercise of the ISO without
satisfying the Holding Period requirement, the participant must generally
recognize ordinary income equal to the lesser of (i) the fair market value
of the shares at the date of exercise of the option over the exercise price or
(ii) the amount realized upon the disposition of such shares over the
exercise price. Any further appreciation is taxed as short-term or long-term
capital gain, depending on the participant’s holding period. In such event, the
Company would be entitled to an income tax deduction in the same year in an
amount measured by the amount of ordinary income taxable to the
participant.
Generally,
a participant will not recognize any income at the time an award of restricted
stock is granted, nor will the Company be entitled to a deduction at that time.
In the year in which restrictions on shares of restricted stock lapse, the
participant will recognize ordinary income in an amount equal to the excess of
the fair market value of the shares on the date of vesting over the amount, if
any, the participant paid for the shares. A participant may, however, elect
within 30 days after receiving an award of restricted stock to recognize
ordinary income in the year of receipt, instead of the year of vesting, equal to
the excess of the fair market value of the shares on the date of receipt over
the amount, if any, the participant paid for the shares.
The
Compensation Committee will require payment of any amount it may determine to be
necessary to withhold for federal, state, local or other taxes as a result of
the grant, vesting or the exercise of an award. In compliance with the American
Jobs Creation Act of 2004, the maximum federal withholding rate will be used for
supplemental wage payments in excess of $1,000,000 during any taxable
year.
Section 162(m) of
the Code
Section 162(m) of
the Code generally disallows a federal income tax deduction to any publicly held
corporation for compensation paid in excess of $1,000,000 in any taxable year to
the chief executive officer or any named executive officer by the corporation on
the last day of the taxable year, but exempts from this limitation
“performance-based” compensation the material terms of which are disclosed and
approved by shareholders.
Tax
Summary
The
foregoing discussion is intended only as a summary of certain federal income tax
consequences and does not purport to be a complete discussion of all the tax
consequences of participation in the 2009 Plan. Accordingly, holders of awards
granted under the 2009 Plan should consult their own tax advisers for specific
advice with respect to all federal, state or local tax effects before exercising
any options, and before disposing of any shares of stock acquired pursuant to an
award. Moreover, the Company does not represent that the foregoing tax
consequences apply to any particular award holder’s specific circumstances or
will continue to apply in the future and makes no undertaking to maintain the
tax status (e.g., as an
ISO) of any award.
The 2009
Plan is not subject to any provision of ERISA, nor is it a qualified employee
benefit plan under Section 401(a) of the Code.
Vote
Required for Approval and Recommendation
The
affirmative vote of the majority of the votes cast at the Annual Meeting is
required to approve the Advanced Battery Technologies, Inc. 2009 Equity
Incentive Plan.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THIS
PROPOSAL.
Shareholders
intending to present proposals at the 2010 Annual Meeting of shareholders and
desiring to have those proposals included in the Company’s proxy statement and
form of proxy relating to that meeting must submit such proposals, in compliance
with Rule 14a-8 of the Exchange Act, to be received at the executive
offices of the Company no later than January 26, 2010. For proposals that
shareholders intend to present at the 2010 Annual Meeting of shareholders
outside the processes of Rule 14a-8 of the Exchange Act, unless the
shareholder notifies the Company of such intent by April 23, 2009, any
proxy solicited by the Company for that Annual Meeting will confer on the holder
of the proxy discretionary authority to vote on the proposal so long as such
proposal is properly presented at the meeting.
SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of
the Exchange Act requires the Company’s Directors and executive officers, and
persons who own more than 10% of a registered class of the Company’s equity
securities, to file with the SEC initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Directors, executive officers and greater than 10% shareholders are required by
SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Except as
noted below, to the Company’s knowledge, based solely on review of the copies of
such reports furnished to the Company, during fiscal 2008, all
Section 16(a) filing requirements applicable to the Directors,
executive officers and greater than 10% shareholders were satisfied, except that
none of the members of the Board of Directors other than Zhiguo Fu and John
McFadden have filed initial reports on Form 3.
Except as
described in this proxy statement, the Board of Directors knows of no other
matters to be presented at the Annual Meeting. If other matters properly come
before the Annual Meeting or any adjournment thereof, the holders of the proxies
are authorized to vote on these matters in accordance with management’s
discretion.
HOUSEHOLDING
OF MATERIALS
Some
banks, brokers, and other nominee record holders may be participating in the
practice of “householding” proxy statements and annual reports. This means that
only one copy of the Company’s proxy statement or annual report may have been
sent to multiple shareholders in the same household. The Company will promptly
deliver a separate copy of either document to any shareholder upon request by
writing the Company at the following address: Advanced Battery
Technologies, Inc., 21 West 39th Street,
Suite 2A, New York, New York 10018, Attention: Investor Relations; or by calling
the Company at the following phone number: (212) 391-2752. Any shareholder who
wants to receive separate copies of the annual report and proxy statement in the
future, or who is currently receiving multiple copies and would like to receive
only one copy for his or her household, should contact his or her bank, broker,
or other nominee record holder, or contact the Company at the above address and
phone number.
YOUR
VOTE IS IMPORTANT.
ADVANCED BATTERY TECHNOLOGIES,
INC.
2009 Equity Incentive
Plan
1.
PURPOSES.
(a) Eligible Equity Award
Recipients. Subject to the terms of this Plan, the persons eligible to
receive Equity Awards are the Employees, Directors and Consultants of the
Company and its Affiliates.
(b) Available Equity Awards.
The purpose of this Plan is to provide a means by which eligible
recipients of Equity Awards may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of the following
Equity Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, and
(iii) Stock Grants.
(c) General Purpose.
The Company, by means of
this Plan, seeks to retain
the services of the group of persons eligible to receive Equity Awards, to
secure and retain the services of new members of this group and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its
Affiliates.
2.
DEFINITIONS.
(a) “Affiliate” means any
“parent corporation” or “subsidiary corporation” of the Company, whether now or
hereafter existing, as those terms are defined in Sections 424(e) and (f),
respectively, of the Code.
(b) “Board” means the Board of
Directors of the Company.
(c) “Code” means the Internal
Revenue Code of 1986, as amended.
(d) “Committee” means a
committee of one or more members of the Board appointed by the Board in
accordance with Section 3(c) of this Plan.
(e) “Common Stock” means the
common capital stock of the Company.
(f) “Company” means Advanced
Battery Technologies, Inc., a Delaware corporation.
(g) “Consultant” means a
natural person, including an advisor, (i) who is engaged by the Company or an
Affiliate to render bona fide consulting or advisory services which are not in
connection with the offer or sale of securities in a capital-raising transaction
and do not directly or indirectly promote or maintain a market for the Company’s
securities, and (ii) who is compensated for such services or (iii) who is a
member of the Board of Directors of an Affiliate. However, the term
“Consultant” shall not include either Directors who are not compensated by the
Company for their services as Directors or Directors who are merely paid a
director’s fee by the Company for their services as Directors.
(h) “Continuous Service” means
that the Participant’s service with the Company or an Affiliate, whether as an
Employee, Director or Consultant, is not interrupted or
terminated. The Participant’s Continuous Service shall not be deemed
to have terminated merely because of a change in the capacity in which the
Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the Participant’s service with the Company or an Affiliate. For
example, a change in status from an Employee of the Company to a Consultant of
an Affiliate or a Director will not constitute an interruption of Continuous
Service. The Board, in its sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any Company
approved leave of absence, including sick leave, military leave or any other
personal leave.
(i) “Corporate Transaction”
means the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events:
(i) a
sale, lease, license or other disposition of all or substantially all of the
consolidated assets of the Company and its subsidiaries;
(ii) a
sale or other disposition of at least ninety percent (90%) of the outstanding
securities of the Company;
(iii) a
merger, consolidation or similar transaction following which the Company is not
the surviving corporation; or
(iv) a
merger, consolidation or similar transaction following which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or
exchanged by virtue of the merger, consolidation or similar transaction into
other property, whether in the form of securities, cash or
otherwise.
(j) “Covered Employee” means
the chief executive officer and the four (4) other highest compensated officers
of the Company for whom total compensation is required to be reported to Company
stockholders under the Exchange Act, as determined for purposes of Section
162(m) of the Code.
(k) “Director” means a member
of the Board of Directors of the Company.
(l) “Disability” or “Disabled” means, with respect
to any Participant, the Participant is unable to perform his or her normal
employment functions or other service functions due to any medically
determinable physical or mental disability which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. A Participant shall not be
considered to be “Disabled” or suffering from a “Disability” unless he furnishes
proof of the existence thereof in such form and manner, and at such times, as
the Board shall determine.
(m) “Employee” means any
person employed by the Company or an Affiliate. Mere service as a
Director or payment of a director’s fee by the Company or an Affiliate shall not
be sufficient to constitute “employment” by the Company or an
Affiliate.
(n) “Equity Award” means any
right granted under this Plan, including an Option and a Stock
Grant.
(o) “Exchange Act” means the
Securities Exchange Act of 1934, as amended.
(p) “Fair Market Value” means,
as of any date, the value of the Common Stock determined as
follows:
(i) If
the Common Stock is listed on any established stock exchange or traded on the
Nasdaq Stock Market, the Fair Market Value of a share of Common Stock shall be
the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or market with
the greatest volume of trading in the Common Stock) on the last market trading
day prior to the day of determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable.
(ii) In
the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.
(q) “Incentive Stock Option”
means an Option intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code and the regulations promulgated
thereunder.
(r) “Non-Employee Director”
means a Director who either (i) is not a current Employee or Officer of
the Company or its parent or a subsidiary, does not receive compensation
(directly or indirectly) from the Company or its parent or a subsidiary for
services rendered as a consultant or in any capacity other than as a Director
(except for an amount as to which disclosure would not be required under Item
404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation
S-K”)), does not possess an interest in any other transaction as to which
disclosure would be required under Item 404(a) of Regulation S-K and is not
engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
“non-employee director” for purposes of Rule 16b-3.
(s) “Nonstatutory Stock
Option” means an Option not intended to qualify as an Incentive Stock
Option.
(t) “Officer” means a person
who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.
(u) “Option” means an
Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to this
Plan.
(v) “Option Agreement”
means a written agreement between the Company and an Optionholder evidencing the
terms and conditions of an individual Option grant. Each Option
Agreement shall be subject to the terms and conditions of this
Plan.
(w) “Optionholder” means a
person to whom an Option is granted pursuant to this Plan or, if applicable,
such other person who holds an outstanding Option.
(x) “Outside Director” means a
Director who either (i) is not a current employee of the Company or an
“affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an
“affiliated corporation” receiving compensation for prior services (other than
benefits under a tax qualified pension plan), was not an officer of the Company
or an “affiliated corporation” at any time and is not currently receiving direct
or indirect remuneration from the Company or an “affiliated corporation” for
services in any capacity other than as a Director or (ii) is otherwise
considered an “outside director” for purposes of Section 162(m) of the
Code.
(y) “Participant” means a
person to whom an Equity Award is granted pursuant to this Plan or, if
applicable, such other person who holds an outstanding Equity
Award.
(z) “Plan” means this Advanced
Battery Technologies, Inc. 2009 Equity Incentive Plan.
(aa) “Rule 16b-3” means Rule
16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in
effect from time to time.
(bb) “Securities Act” means
the Securities Act of 1933, as amended.
(cc) “Stock Grant” means any
award of Common Stock pursuant to Section 7 of this Plan.
(dd) “Stock Award Agreement”
means a written agreement between the Company and a holder of an Equity Award
evidencing the terms and conditions of an individual Equity Award
grant. Each Equity Award Agreement shall be subject to the terms and
conditions of this Plan.
(ee) “Ten Percent
Stockholder” means a person
who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the
Company or of any Affiliates.
3.
ADMINISTRATION.
(a) Administration by
Board. The Board shall administer the Plan unless and until
the Board delegates administration to a Committee, as provided in Section 3(c)
this Plan.
(b) Powers of Board. The Board
shall have the power, subject to, and within the limitations of, the express
provisions of this Plan:
(i) To
determine from time to time which of the persons eligible under this Plan shall
be granted an Equity Award; when and how each Equity Award shall be granted;
what type or combination of types of Equity Award shall be granted; the terms
and provisions of each Equity Award granted (which need not be identical),
including, without limitation, the time or times when a person shall be
permitted to receive Common Stock pursuant to an Equity Award, the exercise,
base or purchase price of an Equity Award (if any), the time or times at which
an Equity Award will become vested, exercisable or payable, the performance
goals and other conditions of an Equity Award, the duration of an Equity Award
and all other terms of an Equity Award; and the number of shares of Common Stock
with respect to which an Equity Award shall be granted to each such
person.
(ii) To
construe and interpret this Plan and Equity Awards granted under it, and to
establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct
any defect, omission or inconsistency in this Plan or in any Equity Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to
make this Plan fully effective.
(iii) To
amend this Plan or any Equity Award as provided in Section 12 of this
Plan.
(iv) To
terminate or suspend this Plan as provided in Section 13 of this
Plan.
(v)
Generally, to exercise such powers and to perform such acts as the Board deems
necessary or expedient to promote the best interests of the Company which are
not in conflict with the provisions of this Plan.
(c)
Delegation to Committee.
(i) General. The
Board may delegate administration of this Plan to a Committee or Committees of
one (1) or more members of the Board, and the term “Committee” shall apply to
any person or persons to whom such authority has been delegated. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of this Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of this Plan, as may be adopted from time to time by the
Board. The Board may abolish the Committee at any time and revest in
the Board the administration of the Plan.
(ii)
Committee Composition
when Common Stock is Publicly Traded. At such time as the Common Stock is
publicly traded, in the discretion of the Board, a Committee may consist solely
of two or more Outside Directors, in accordance with Section 162(m) of the Code,
and/or solely of two or more Non-Employee Directors, in accordance with Rule
16b-3. Within the scope of such authority, the Board or the Committee
may (1) delegate to a committee of one or more members of the Board who are not
Outside Directors the authority to grant Equity Awards to eligible persons who
are either (a) not then Covered Employees and are not expected to be Covered
Employees at the time of recognition of income resulting from such Equity Award
or (b) not persons with respect to whom the Company wishes to comply with
Section 162(m)(4)(C) of the Code, and/or (2) delegate to a committee of one or
more members of the Board who are not Non-Employee Directors the authority to
grant Equity Awards to eligible persons who are not then subject to Section 16
of the Exchange Act.
(d) Effect of
Board’s Decision.
With respect to this Plan
or any Equity Award, all
determinations, interpretations and constructions made by the Board in good faith shall not
be subject to review by any person and shall be final, binding and conclusive on
all persons.
4.
SHARES SUBJECT TO THE PLAN.
(a) Share Reserve. Subject to
the provisions of Section 11 of this Plan relating to adjustments upon changes
in Common Stock, the Common Stock that may be issued pursuant to Equity Awards
shall not exceed in the aggregate five million (5,000,000) shares of Common
Stock.
(b) Reversion of Shares to the Share
Reserve. If any Equity Award shall for any reason expire or
otherwise terminate, in whole or in part, without having been exercised in full,
the shares of Common Stock not acquired under such Equity Award shall revert to
and again become available for issuance under this Plan.
(c) Source
of
Shares. The shares of
Common Stock subject to this Plan may be unissued shares or reacquired shares,
bought on the market or otherwise.
5.
ELIGIBILITY.
(a) Eligibility for Specific Equity
Awards. Incentive Stock Options may be granted only to
Employees. Equity Awards other than Incentive Stock Options may be
granted to Employees, Directors and Consultants.
(b) Ten Percent Stockholders.
A Ten
Percent Stockholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least one hundred ten percent (110%) of the
Fair Market Value of the Common Stock at the date of grant and the Option is not
exercisable after the expiration of five (5) years from the date of
grant.
(c) Consultants. A Consultant shall not be
eligible for the grant of
an Equity Award if, at the time of grant, a Form S-8 Registration Statement
under the Securities Act (“Form S-8”) is not available to register either
the offer or the sale of the Company’s securities to such Consultant because
of the nature of the services that the Consultant
is providing to the Company, or because the Consultant is not a natural person,
or as otherwise provided by the rules governing the use of Form S-8, unless the
Company determines both (i) that such grant (A) shall be registered in another manner under the
Securities Act (e.g., on a Form S-3 Registration Statement)
or (B) does not require registration under the Securities Act in order to comply
with the requirements of the Securities Act, if applicable, and (ii) that
such grant complies with
the securities laws of all other relevant jurisdictions.
6.
OPTION PROVISIONS.
Each
Option shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
will be issued for shares of Common Stock purchased on exercise of each type of
Option. The provisions of separate Options need not be identical, but
each Option shall include (through incorporation of provisions hereof by
reference in the Option or otherwise) the substance of each of the following
provisions:
(a) Term. Subject to the
provisions of Section 5(b) regarding Ten Percent Stockholders, no Incentive
Stock Option shall be exercisable after the expiration of ten (10) years from
the date it was granted.
(b) Exercise Price of an
Option. Subject to the provisions of Section 5(b) regarding Ten Percent
Stockholders, the exercise price of each Incentive Stock Option and Nonstatutory
Stock Option shall be not less than one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Option on the date the Option is
granted.
(c) Exercise; Consideration.
Subject to the terms and conditions of this Plan and the applicable Option
Agreement, vested Options may be exercised in whole or in part by giving written
notice of exercise to the Company, specifying the number shares to be purchased,
accompanied by payment of the applicable exercise or purchase
price. The exercise or purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in cash at the time the Option is exercised
or (ii) at the discretion of the Board determined at the time of the grant of
the Option (1) by delivery to the Company of other Common Stock, (2) according
to a deferred payment or other similar arrangement with the Optionholder, or (3)
in any other form of legal consideration that may be acceptable to the
Board. Unless otherwise specifically provided in the Option
Agreement, the exercise or purchase price of Common Stock acquired pursuant to
an Option that is paid by delivery to the Company of other Common Stock
acquired, directly or indirectly from the Company, shall be paid only by shares
of the Common Stock of the Company that have been held for more than six (6)
months (or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes).
In the
case of any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the minimum rate of interest necessary to avoid
the treatment as interest, under any applicable provisions of the Code, of any
amounts other than amounts stated to be interest under the deferred payment
arrangement.
(d) Transferability of an Incentive
Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Optionholder only by the
Optionholder. Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form satisfactory to the Company,
designate a third party who, in the event of the death of the Optionholder,
shall thereafter be entitled to exercise the Option.
(e) Transferability of a Nonstatutory
Stock Option. A Nonstatutory Stock Option shall be transferable to the
extent provided in the Option Agreement. If the Option Agreement
pertaining to the Nonstatutory Stock Option does not provide for
transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the
Optionholder. Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form satisfactory to the Company,
designate a third party who, in the event of the death of the Optionholder,
shall thereafter be entitled to exercise the Option.
(f) Vesting
Generally. The total number of shares of Common Stock subject
to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option
may be subject to such other terms and conditions on the time or times when it
may be exercised (which may be based on performance or other criteria) as the
Board may deem appropriate. The vesting provisions of individual
Options may vary and shall be determined by the Board.
(g) Termination of Continuous
Service. In the event an Optionholder’s Continuous Service terminates
(other than for Cause and other than upon the Optionholder’s death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination (i.e., to
the extent that such Option is vested)) but only within such period of time
ending on the earlier of (i) the date three (3) months following the termination
of the Optionholder’s Continuous Service (or such longer or shorter period
specified in the Option Agreement), or (ii) the expiration of the term of the
vested Option as set forth in the Option Agreement. If, after
termination, the Optionholder does not exercise his or her vested Option(s) (if
any) within the time specified in the Option Agreement, the vested Option(s)
shall terminate.
(h) Extension of Termination
Date. An Optionholder’s Option Agreement may also provide that
if the exercise of the vested Option following the termination of the
Optionholder’s Continuous Service (other than for Cause and other than upon the
Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the vested Option shall terminate on
the earlier of (i) the expiration of the term of the vested Option set forth in
Section 6(a) or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder’s Continuous Service during which the exercise
of the vested Option would not be in violation of such registration
requirements.
(i) Disability of
Optionholder. In the event that an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination (i.e., to the extent that such
Option is vested)), but only within such period of time ending on the earlier of
(i) the date twelve (12) months following such termination (or such longer or
shorter period specified in the Option Agreement) or (ii) the expiration of the
term of the vested Option as set forth in the Option Agreement. If,
after termination, the Optionholder does not exercise his or her vested
Option(s) (if any) within the time specified herein, the vested Option(s) shall
terminate.
(j) Death of Optionholder. In
the event (i) an Optionholder’s Continuous Service terminates as a result of the
Optionholder’s death or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholder’s
Continuous Service for a reason other than death or for Cause, then the Option
may be exercised (to the extent the Optionholder was entitled to exercise such
Option as of the date of death (i.e., to the extent that such
Option is vested)) by the Optionholder’s estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionholder’s death pursuant to Section 6(d) or
6(e), but only within the period ending on the earlier of (1) the date eighteen
(18) months following the date of death (or such longer or shorter period
specified in the Option Agreement) or (2) the expiration of the term of such
Option as set forth in the Option Agreement. If, after death, the
vested Option(s) (if any) is not exercised within the time specified herein, the
vested Option(s) shall terminate.
(k) Termination of
Continuous Service for Cause. Except as otherwise provided in the
Option Agreement, in the
event that an Optionholder’s Continuous Service terminates for
Cause (which determination shall be made in the sole discretion of the Board),
any and all outstanding Options (whether vested or not vested at such time) held
by such Optionholder shall immediately terminate and be forfeited to the
Company upon the relevant date of termination of Continuous Service for Cause,
as determined by the Board.
For
purposes of this Plan, “Cause” shall, subject to the following sentence, mean a
determination by the Board that an Optionholder (i) has been convicted of, or
entered into a plea of nolo contendere to, a crime that constitutes a felony
under Federal or state law, (ii) has engaged in willful gross misconduct in the
performance of the Optionholder’s duties to the Company or any Affiliate, or
(iii) has committed a material breach of any written agreement with the Company
or any Affiliate with respect to confidentiality, noncompetition,
nonsolicitation or similar restrictive covenant. In the event that
the Optionholder is a party to an employment agreement with the Company or any
Affiliate that defined a termination on account of “Cause” (or a term having a
similar meaning), such definition shall apply as the definition of a termination
on account of “Cause” for purposes hereof.
(l) Options
not Vested at Termination. Any and all
Options held by the Participant which are not vested on or before the effective
date of termination of Continuous Service of the Optionholder shall immediately
be forfeited to the Company (and shall once again become available for grant
under this Plan).
7.
PROVISIONS OF STOCK GRANTS.
(a) Stock Grants. Subject to
the terms and provisions of this Plan, the Board, at any time and from time to
time, may make Stock Grants to persons in such amounts and upon such terms and
conditions as the Board shall determine.
(i) Stock Award
Agreement. The Board may require, as a condition to a Stock
Grant, that a recipient of a Stock Grant enter into a Stock Award Agreement,
setting forth the terms and conditions of the Stock Grant. In lieu of
a Stock Award Agreement, the Board may provide the terms and conditions of a
Stock Grant in a notice to the Participant of the Stock Grant, on the Stock
certificate representing the Stock Grant, in the resolution approving the Stock
Grant, or in such other manner as it deems appropriate.
(ii) Transferability. Except
as otherwise provided in this Section 7, the Common Stock granted pursuant to
the Stock Grant may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Restriction Period (as
hereinafter defined), if any. For purposes of this Plan, “Restriction
Period” means the applicable period during which the Common Stock granted
pursuant to the Stock Grant are subject to any restrictions or conditions
established by the Board. Except as otherwise provided in this
Section 7, shares of Common Stock covered by each Stock Grant made under this
Plan shall become freely transferable by the Participant after the last day of
the Restriction Period, if any, and completion of all conditions to vesting, if
any.
(iii) Other
Restrictions. The Board may impose such other conditions
and/or restrictions on any shares of Common Stock granted pursuant to a Stock
Grant under this Plan as it may deem advisable including, without limitation, a
requirement that Participants pay a stipulated purchase price for each share of
Common Stock granted and/or restrictions under applicable Federal or state
securities laws; and may legend the certificates representing the Common Stock
to give appropriate notice of such restrictions.
The
Company shall also have the right to retain the certificates representing shares
of Stock Grants in the Company’s possession until such time as all conditions
and/or restrictions applicable to such shares have been satisfied.
(iv)
Termination of
Participant’s Continuous Service. In the event a Participant’s Continuous
Service terminates, the Company may reacquire any or all of the shares of Common
Stock held by the Participant which have not vested as of the date of
termination under the terms of the Stock Grant.
(v) Voting Rights, Dividends and
Other Distributions. During the Restriction Period (if any), Participants
holding shares of Common Stock granted pursuant to Stock Grants may exercise
full voting rights and shall receive all regular cash dividends paid with
respect to such shares.
8.
COVENANTS OF THE COMPANY.
(a) Availability of
Shares. During the terms of the Equity Awards, the Company
shall keep available at all times the number of shares of Common Stock required
to satisfy such Equity Awards.
(b) Securities Law
Compliance. The
Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over this Plan such authority as may be required to grant
Equity Awards and to issue and sell shares of Common Stock upon exercise of the
Equity Awards; provided, however, that this undertaking shall not require the
Company to register under the Securities Act this Plan, any Equity Award or any Common Stock issued
or issuable pursuant to any such Equity Award. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of
Common Stock under this Plan, the Company shall be relieved from any liability
for failure to issue and sell Common Stock upon exercise of such Equity Awards
unless and until such authority is obtained.
9.
USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of Common Stock
pursuant to Equity Awards shall constitute general funds of the
Company.
10.
MISCELLANEOUS
(a) Stockholder Rights. No
Optionholder shall be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any shares of Common Stock subject to the Option
unless and until such Participant has satisfied all requirements for exercise
of, and has exercised, the Option pursuant to its terms.
(b) No Employment or other Service
Rights. Nothing in this Plan or any instrument executed or Equity Award
granted pursuant thereto shall confer upon any Participant any right to continue
to serve the Company or an Affiliate in the capacity in effect at the time the
Equity Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice
and with or without cause, (ii) the service of a Consultant pursuant to the
terms of such Consultant’s agreement with the Company or an Affiliate or (iii)
the service of a Director pursuant to the bylaws of the Company or an Affiliate,
and any applicable provisions of the corporate law of the state in which the
Company or the Affiliate is incorporated, as the case may be. No
Employee, Consultant or Director shall have the right to be selected as a
participant in this Plan, or having been so selected, to be selected again as a
Participant in this Plan.
(c) Incentive Stock Option $100,000
Limitation. To the extent that the aggregate Fair Market Value
(determined at the time of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by any Optionholder
during any calendar year (under all plans of the Company and its Affiliates)
exceeds one hundred thousand dollars ($100,000), the Options or portions thereof
which exceed such limit (according to the order in which they were granted)
shall be treated as Nonstatutory Stock Options.
(d) Investment Assurances. The
Company may require a Participant, as a condition of exercising or acquiring
Common Stock under any Equity Award, (i) to give written assurances satisfactory
to the Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of exercising
the Equity Award; and (ii) to give written assurances satisfactory to the
Company stating that the Participant is acquiring Common Stock subject to the
Equity Award for the Participant’s own account and not with any present
intention of selling or otherwise distributing the Common Stock. The
foregoing requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (1) the issuance of the shares of Common Stock upon the
exercise or acquisition of Common Stock under the Equity Award has been
registered under a then currently effective registration statement under the
Securities Act or (2) as to any particular requirement, a determination is made
by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company
may, upon advice of counsel to the Company, place legends on stock certificates
issued under this Plan as such counsel deems necessary or appropriate in order
to comply with applicable securities laws, including, but not limited to,
legends restricting the transfer of the Common Stock.
(e) Withholding
Obligations.
(i) Payment by
Participant. Each Participant shall, no later than the date as of which
the value of an Equity Award or other amounts received thereunder first becomes
includable in the gross income of the Participant for Federal income tax
purposes, pay to the Company, or make arrangements satisfactory to the Board
regarding payment of, any federal, state, or local taxes of any kind required by
law to be withheld with respect to such income. The Company and any Affiliate
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Participant.
(ii)
Payment in
Stock. Subject to approval by the Board, a Participant may elect to have
the minimum required tax withholding obligation satisfied, in whole or in part,
by (i) authorizing the Company to withhold from shares of Common Stock to be
issued pursuant to any Equity Award a number of shares with an aggregate Fair
Market Value (as of the date the withholding is effected) that would satisfy
such minimum withholding amount due, or (ii) transferring to the Company shares
of Common Stock owned by the Participant with an aggregate Fair Market Value (as
of the date the withholding is effected) that would satisfy such minimum
withholding amount due.
(f) Compliance with Laws and
Regulations. Notwithstanding anything in this Plan to the
contrary, the Board, in its sole discretion, may bifurcate this Plan so as to
restrict, limit or condition the use of any provision of this Plan to
Participants who are officers or Directors subject to Section 16 of the Exchange
Act without so restricting, limiting or conditioning this Plan with respect to
other Participants. Additionally, in interpreting and applying the provisions of
this Plan, any Option granted as an Incentive Stock Option pursuant to this Plan
shall, to the extent permitted by law, be construed as an “incentive stock
option” within the meaning of Section 422 of the Code.
(g) Severability. If
any provision of this Plan or any Equity Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify this Plan or any Equity Award under any law deemed applicable by the
Board, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Board’s determination, materially altering the intent of this Plan or the
Equity Award, such provision shall be stricken as to such jurisdiction, person
or Equity Award, and the remainder of this Plan and any such Equity Award shall
remain in full force and effect.
(h) Headings. Any
section, subsection, paragraph or other subdivision headings contained herein
are for purpose of convenience only and are not intended to expand, limit or
otherwise define the content of such subdivisions.
(i) Requirement of Notification of
Election under Section 83(b) of the Code. If any Participant
shall, in connection with the acquisition of shares of Common Stock under this
Plan, make the election permitted under section 83(b) of the Code (i.e., an election to include
in gross income in the year of transfer the amounts specified in Section 83(b)
of the Code), such Participant shall notify the Company of such election within
ten (10) days of filing notice of the election with the Internal Revenue
Service, in addition to any filing and notification required pursuant to
regulations issued under the authority of Code Section 83(b).
(j) Requirement of
Notification Upon Disqualifying Disposition. In order to
obtain certain tax benefits afforded to Incentive Stock Options under Section
422 of the Code, the Participant must hold the shares acquired upon the exercise
of an Incentive Stock Option for two (2) years after the applicable grant date
and one (1) year after the applicable date of exercise. The Participant shall
give the Company prompt notice of any disposition of shares acquired on the
exercise of an Incentive Stock Option prior to the expiration of such holding
periods.
11.
ADJUSTMENTS UPON CHANGES IN STOCK.
(a) Capitalization
Adjustments. If any change is made in, or other event occurs with respect
to, the Common Stock subject to this Plan, or subject to any Equity Award,
without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject to this Plan pursuant to Section 4(a), and the
outstanding Equity Awards will be appropriately adjusted in the class(es) and
number of securities and price per share of Common Stock subject to such
outstanding Equity Awards. The Board shall make such adjustments, and
its determination shall be final, binding and conclusive. The
conversion of any convertible securities of the Company shall not be treated as
a transaction “without receipt of consideration” by the Company.
(b) Dissolution or
Liquidation. In the event of a dissolution or liquidation of
the Company, then all outstanding Equity Awards shall terminate immediately
prior to the completion of such dissolution or liquidation.
(c) Corporate
Transaction. In the event
of a Corporate Transaction, any surviving corporation or acquiring
corporation may assume any or all Equity Awards outstanding under the Plan or
may substitute similar stock awards for Equity Awards outstanding under the Plan
(it being understood that similar stock awards include awards to acquire the same consideration paid to
the stockholders or the Company, as the case may be, pursuant to the Corporate
Transaction). In the event any surviving corporation or acquiring corporation
does not assume any or all such outstanding Equity Awards or substitute similar stock awards for
such outstanding Equity Awards, then with respect to Equity Awards that have
been neither assumed nor substituted and that are held by Participants whose
Continuous Service has not terminated prior to the effective time of the Corporate Transaction, the
vesting of such Equity Awards (and, if applicable, the time at which such Equity
Awards may be exercised) shall (contingent upon consummation of such Corporate
Transaction) be accelerated in full to a date prior to the consummation of such Corporate Transaction
as the Board shall determine (or, if the Board shall not determine such a date,
to the date that is five (5) days prior to the consummation of the Corporate
Transaction), and the Equity Awards shall terminate if not exercised (if applicable) at or prior
to such event effective time. With respect to any other Equity Awards
outstanding under the Plan, that have been neither assumed nor substituted, the
vesting of such Equity Awards (and, if applicable, the time at which such Equity Award may be exercised)
shall not be accelerated unless otherwise provided in a written agreement
between the Company or any Affiliate and the holder of such Equity Award, and
such Equity Awards shall terminate if not exercised (if applicable) prior to the effective time of the
Corporate Transaction.
12.
AMENDMENT OF THE PLAN AND EQUITY AWARDS.
(a) Amendment of
Plan. The Board at any time, and from time to time, may amend
this Plan. However, except as provided in Section 11 relating to
adjustments upon changes in Common Stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary to satisfy the requirements of Section 422 of the
Code.
(b) Stockholder
Approval. The Board may, in its sole discretion, submit any
other amendment to this Plan for stockholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.
(c) Contemplated
Amendments. It is expressly contemplated that the Board may
amend this Plan in any respect the Board deems necessary or advisable to provide
eligible Employees with the maximum benefits provided or to be provided under
the provisions of the Code and the regulations promulgated thereunder relating
to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock
Options granted under it into compliance therewith.
(d) No Impairment of
Rights. Rights under any Equity Award granted before amendment
of this Plan shall not be materially impaired by any amendment of this Plan
unless (i) the Company requests the consent of the Participant and (ii) the
Participant consents in writing.
(e) Amendment of
Equity Awards. The Board at any time, and
from time to time, may amend the terms of any one or more Equity Awards; provided, however, that
the rights under any Equity Award shall not be materially impaired by any such
amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.
(f) Code Section
409A. Any action of the Board that in any way
alters or affects the tax treatment of any Equity Award or that in the sole
discretion of the Board is necessary to prevent an Equity Award from being
subject to tax under Code Section 409A shall not be considered to materially impair any rights of
any Participant. Any modification or amendment of this Plan or any
Equity Award in a manner that would cause this Plan or any Equity Award to be
subject to tax under Section 409A shall be deemed null and
void.
13.
TERMINATION OR SUSPENSION OF THE PLAN.
(a) Plan Term. The Board may
suspend or terminate this Plan at any time. Unless sooner terminated,
this Plan shall terminate on the day before the tenth (10th) anniversary of the
date this Plan is adopted by the Board or approved by the stockholders of the
Company, whichever is earlier. No Equity Awards may be granted under
this Plan while the Plan is suspended or after it is terminated.
(b) No Impairment of
Rights. Suspension or termination of
this Plan shall not impair
rights and obligations under any Equity Award granted while this Plan is in
effect except with the written consent of the
Participant.
14.
CHOICE OF LAW.
The law of the State of Delaware shall govern all questions concerning
the construction, validity
and interpretation of this Plan, without regard to such state’s conflict of laws
rules.
* * * * *
ADVANCED
BATTERY TECHNOLOGIES, INC.
ANNUAL
MEETING OF SHAREHOLDERS
PROXY
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby authorizes each of Zhiguo Fu and Dan Chang as Proxy with
power of substitution, to represent the undersigned at the Annual Meeting of
Shareholders of Advanced Battery Technologies, Inc. (the “Company”) to be held
on Thursday, June 25, 2009, at 10:00 a.m., Eastern Daylight Time, at New
York’s Hotel Pennsylvania, 401 7th Avenue
(at 33rd
Street), New York, New York, and any adjournment thereof, and to vote all the
common shares of the Company that the undersigned is entitled to vote on the
following matters:
1. To
elect a board of eleven directors:
FOR
ALL NOMINEES LISTED BELOW
(except
as marked to the contrary below) o
WITHHOLD
AUTHORITY
to vote
for all nominees below o
INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, STRIKE A LINE THROUGH THE
NOMINEE’S NAME ON THE LIST BELOW
Zhiguo
Fu
|
Liqui
Bai
|
Shaoqui
Xia
|
Guohua
Wan
|
John
McFadden
|
Shiyan
Yang
|
Guopeng
Gao
|
Yulin
Hao
|
Cosimo
Patti
|
Hongjun
Si
|
Ning
Li
|
|
|
2.
To approve the filing of an amendment to the Certificate of Incorporation
to increase the number of authorized shares of common
stock.
|
For o Against o Abstain
o
|
3.
To approve the Advanced Battery Technologies, Inc. 2009 Equity Incentive
Plan
|
For o Against o Abstain
o
This
proxy, when properly executed, will be voted in the manner directed herein by
the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 THROUGH 3.
THIS
PROXY ALSO GRANTS AUTHORITY TO VOTE SUCH SHARES AS TO ANY OTHER MATTER WHICH
MAY BE BROUGHT BEFORE THE MEETING IN THE SOLE DISCRETION OF THE HOLDERS OF
THIS PROXY.
IMPORTANT:
Please date this proxy and sign exactly as your name or names appear hereon. If
shares are held jointly, signature should include both names. Executors,
administrators, trustees, guardians, and others signing in the representative
capacity, please so indicate when signing.
DATE:
|
|
,
2009
|
|
|
SIGNATURE:
|
|
|
|
SECOND
SIGNATURE, IF HELD JOINTLY:
|
|
PLEASE
SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ACCOMPANYING
ENVELOPE.