|
|
 | | | |
- close
- close
- close
- close
| |||||||||
SUTOR TECHNOLOGY GROUP DEF 14A 2009 SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by
the Registrant x
Filed by
a Party other than the Registrant ¨
Check the
appropriate box:
SUTOR TECHNOLOGY GROUP
LIMITED
(Name of
Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment
of Filing Fee (Check the appropriate box):
¨
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.
 SUTOR
TECHNOLOGY GROUP LIMITED
No
8, Huaye Road, Dongbang Industrial Park
Changshu,
China 215534
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
To
Be Held June 16, 2009
Dear
Shareholders:
You are
cordially invited to attend our 2009 Annual Meeting of Shareholders to be held
on Tuesday, June 16, 2009 at 9:00 a.m. local time at Marriott New York Marquis,
1535 Broadway, New York, NY, 10036.
We are
holding the meeting to:
If you
owned our common stock at the close of business on April 17, 2009, you may
attend and vote at the meeting. A list of shareholders eligible to vote at the
meeting will be available for review at the meeting or during our regular
business hours at our headquarters in Changshu, China for the ten days prior to
the meeting for any purpose related to the meeting.
A Proxy
Statement describing the matters to be considered at the Meeting is attached to
this Notice. Our 2008 Annual Report accompanies this Notice, but it is not
deemed to be part of the Proxy Statement.
If you
plan to attend the meeting, please mark the accompanying proxy card in the space
provided and return it to us, or notify us of your intention via the internet as
directed on the proxy card. This will assist us with meeting preparations. If
your shares are not registered in your own name and you would like to attend the
Meeting, please ask the broker, trust, bank, or other nominee that holds your
shares to provide you with evidence of your share ownership. This will enable
you to gain admission to the Meeting.
Your
vote is important. Whether or not you plan to attend the meeting, I hope that
you will vote as soon as possible. You may vote your shares by either
completing, signing and returning the accompanying proxy card or casting your
vote via a toll-free telephone number or over the Internet. 1
You
do not need to affix postage to the enclosed reply envelope if you mail it
within the United States. Any shareholder attending the meeting may
vote in person, even if you have already returned a proxy card or voting
instruction card.
2
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING
TO BE HELD ON JUNE 16,
2009
This
Notice and Proxy Statement and our 2008 Annual Report are available online at
the website provided on your proxy card. 1
SUTOR
TECHNOLOGY GROUP LIMITED
No.
8 Huaye Road, Dongbang Industrial Park,
Changshu, China,
215534>
PROXY
STATEMENT
This
Proxy Statement and the accompanying proxy are being furnished with respect to
the solicitation of proxies by the Board of Directors of Sutor Technology Group
Limited, a Nevada corporation (the “Company,” “Sutor” or “we”), for the 2009
Annual Meeting of Shareholders (the “Meeting”). The
Meeting is to be held at will be held on Tuesday, June 16, 2009, at 9:00 a.m.,
local time, at Marriott New York Marquis, 1535 Broadway, New York, NY,
10036.
The
approximate date on which the Proxy Statement and proxy card are intended to be
sent or given to shareholders is May 15, 2009.
The
purposes of the Meeting are to seek shareholder approval of three proposals: (i)
electing five (5) directors to the board of directors of the Company (the “Board”), (ii)
ratifying the appointment of Hansen Barnett & Maxwell, P.C., Certified
Public Accountants (“Hansen”) as our
independent registered public accounting firm for the fiscal year 2009, and
(iii) approving the Sutor Technology Group Limited 2009 Equity Incentive Plan
(the “2009
Plan”).
Only
shareholders of record of our common stock, $0.001 par value (the “Common Stock”), as of
the close of business on April 17, 2009 (the “Record Date”) are
entitled to notice and to vote at the Meeting and any adjournment or
adjournments thereof.
A list of
shareholders entitled to vote at the Meeting will be available at the Meeting,
and will also be available for ten days prior to the Meeting, during office
hours, at the executive offices of the Company at No 8, Huaye Road, Dongbang
Industrial Park, Changshu, China 215534, by contacting the Secretary of the
Company.
The
presence at the Meeting of a majority of the outstanding shares of Common Stock
as of the Record Date, in person or by proxy, is required for a
quorum. Should you submit a proxy, even though you abstain as to one
or more proposals, or you are present in person at the Meeting, your shares
shall be counted for the purpose of determining if a quorum is
present.
Broker
“non-votes” are included for the purposes of determining whether a quorum of
shares is present at the Meeting. A broker “non-vote” occurs when a
nominee holder, such as a brokerage firm, bank or trust company, holding shares
of record for a beneficial owner does not vote on a particular proposal because
the nominee holder does not have discretionary voting power with respect to that
item and has not received voting instructions from the beneficial
owner.
Each
holder of Common Stock on the Record Date is entitled to one vote for each share
then held on all matters to be voted at the Meeting. No other class
of voting securities was then outstanding.
You may vote by one of the following
methods:
Voting by
telephone is not available to persons outside of the United
States. Complete instructions for voting by any of the above methods
are included on the proxy card. If your shares are held through a
broker, trust, bank or other nominee, you should refer to information forwarded
to you by such holder of record for your voting options.
The shares represented by any proxy
duly given will be voted at the Meeting in accordance with the instructions of
the shareholder. If no specific instructions are given, the shares will be voted
FOR the election of
the nominees for director set forth herein, FOR the ratification of Hansen
as the Company’s independent registered public accounting firm and FOR the
approval of the 2009 Plan. In addition, if other matters come before the
Meeting, the persons named in the accompanying proxy card will vote in
accordance with their best judgment with respect to such matters.
Under Proposal 1 (Election of
Directors), the five candidates for election as directors at the Meeting are
uncontested. In uncontested elections, directors are elected by
plurality of the votes cast at the meeting. Proposal 2 (Ratification
of Independent Auditors) requires the vote of a majority of the shares present
in person or by proxy at the Meeting for approval. Proposal 3
(Approval of the 2009 Plan) requires the vote of a majority of the shares
present in person or by proxy at the Meeting for approval.
Shares which abstain from voting as to
a particular matter, and shares held in “street name” by brokers or nominees who
indicate on their proxies that they do not have discretionary authority to vote
such shares as to a particular matter, will not be counted as votes in favor of
such matter, and will also not be counted as shares voting on such
matter. Accordingly, abstentions and “broker non-votes” will have no
effect on the voting on matters (such as the election of directors, the
ratification of the selection of the independent registered public accounting
firm, and the approval of the 2009 Plan) that require the affirmative vote of a
plurality or a majority of the votes cast or the shares voting on the
matter.
Even if
you execute a proxy, you retain the right to revoke it and to change your vote
by notifying us at any time before your proxy is voted. Mere
attendance at the meeting will not revoke a proxy. Such revocation
may be effected by calling the toll-free telephone number listed above (within
the United States only), by accessing the Internet website provided on your
proxy card or in writing by execution of a subsequently dated proxy, or by a
written notice of revocation, sent to the attention of the Secretary at the
address of our principal office set forth above in the Notice to this Proxy
Statement or your attendance and voting in person at the
Meeting. Unless so revoked, the shares represented by proxies, if
received in time, will be voted in accordance with the directions given
therein.
If the
Meeting is postponed or adjourned for any reason, at any subsequent reconvening
of the Meeting, all proxies will be voted in the same manner as the proxies
would have been voted at the original convening of the Meeting (except for any
proxies that have at that time effectively been revoked or withdrawn), even if
the proxies had been effectively voted on the same or any other matter at a
previous Meeting. 2
Solicitation
of Proxies
The expenses of solicitation of proxies
will be paid by the Company. We may solicit proxies by mail, and the officers
and employees of the Company, who will receive no extra compensation therefore,
may solicit proxies personally or by telephone. The Company will
reimburse brokerage houses and other nominees for their expenses incurred in
sending proxies and proxy materials to the beneficial owners of shares held by
them.
Delivery
of Proxy Materials to Households
The SEC
has adopted rules that allow a company to deliver a single proxy statement or
annual report to an address shared by two or more of its stockholders. This
method of delivery, known as “householding,” permits us to realize significant
cost savings, reduces the amount of duplicate information stockholders receive,
and reduces the environmental impact of printing and mailing documents to you.
Under this process, certain stockholders of record who do not participate in
electronic delivery of proxy materials will receive only one copy of our Notice
of Internet Availability of Proxy Materials or, if applicable, our proxy
materials and, as applicable, any additional proxy materials that are delivered
until such time as one or more of these stockholders notifies us that they want
to receive separate copies. Any stockholders who object to or wish to begin
householding may contact our Corporate Secretary, orally or in writing at the
telephone number or address, as applicable, at Sutor Technology Group Limited,
No 8, Huaye Road, Dongbang Industrial Park, Changshu, China 215534, telephone
number (+86) 512-52680988. We will send an individual copy of the proxy
statement to any stockholder who revokes their consent to householding within 30
days of our receipt of such revocation.
Management
and directors of the Company have an interest in matters that will be acted upon
at the Annual Meeting because (a) officers and directors will be eligible to
receive awards under the 2009 Plan if the adoption of this plan is approved by
shareholders and (b) the directors are named as nominees for election to the
Board.
CORPORATE
GOVERNANCE AND BOARD OF DIRECTORS MATTER
Sutor’s
current corporate governance practices and policies are designed to promote
shareholder value and Sutor is committed to the highest standards of corporate
ethics and diligent compliance with financial accounting and reporting rules.
Our Board provides independent leadership in the exercise of its
responsibilities. Our management oversees a system of internal controls and
compliance with corporate policies and applicable laws and regulations, and our
employees operate in a climate of responsibility, candor and
integrity.
Corporate
Governance Guidelines
We and
our Board are committed to high standards of corporate governance as an
important component in building and maintaining shareholder value. To this end,
we regularly review our corporate governance policies and practices to ensure
that they are consistent with the high standards of other companies. We also
closely monitor guidance issued or proposed by the SEC, the rules of the Nasdaq
Stock Market, and the provisions of the Sarbanes-Oxley Act, as well as the
emerging best practices of other companies. 3
The
Board and Committees of the Board
The
Company is governed by the Board that currently consists of four members: Lifang
Chen, A. Carl Mudd, Guoyou Shao and Xinchuang Li. Since February
2008, the Board has established three Committees: the Audit Committee, the
Compensation Committee, and the Governance and Nominating Committee. Each of the
Audit Committee, Compensation Committee and Governance and Nominating Committee
are comprised entirely of independent directors. From time to time, the Board
may establish other committees. The Board has adopted a written
charter for each of the committees which is available on the Company’s website
www.sutorcn.com.
Printed copies of these charters may be obtained, without charge, by contacting
the Corporate Secretary at the address above.
Independence
of Directors
In
considering and making decisions as to the independence of each of the directors
of the Company, the Board considered transactions and relationships between the
Company (and its subsidiaries) and each director (and each member of such
director’s immediate family and any entity with which the director or family
member has an affiliation such that the director or family member may have a
material indirect interest in a transaction or relationship with such entity).
The Board has determined that the following members of the Board are independent
as defined in applicable SEC and NASDAQ rules and regulations, and that each
constitutes an “Independent Director” as defined in NASD Marketplace Rule 4200,
and that such members constitute a majority of the entire Board: A. Carl Mudd,
Guoyou Shao and Xinchuang Li.
Board,
Committee and Annual Meeting Attendance
During
2008, the Board held 2 meetings and acted by written consent 1 time. Our
Audit Committee, the Compensation Committee and the Governance and Nominating
committee held 2, 0 and 0 meetings, respectively. Each director
attended at least 75% of all Board and applicable committee
meetings.
Our
directors are expected to attend board meetings as frequently as necessary to
properly discharge their responsibilities and to spend the time needed to
prepare for each such meeting. We encourage our directors to attend
annual shareholder meetings, but we do not have a formal policy requiring them
to do so.
Audit
Committee
Our Audit
Committee consisted of three members: A. Carl Mudd, Guoyou Shao and Xinchuang
Li. Each member of the Audit Committee meets the independence criteria
prescribed by applicable regulation and the rules of the SEC for audit committee
membership and is an ‘‘independent director’’ within the meaning of applicable
NASDAQ listing standards. Each Audit Committee member meets NASDAQ’s financial
literacy requirements, and the Board has further determined that Mr. A. Carl
Mudd (i) is ‘‘audit committee financial expert’’ as such term is defined in Item
407(d) of Regulation S-K promulgated by the SEC (“Reg S-K”), and (ii)
also meet NASDAQ’s financial sophistication requirements. The Audit Committee
acts pursuant to a written charter, which complies with the applicable
provisions of the Sarbanes-Oxley Act of 2002 and related rules of the SEC and
NASDAQ, a copy of which can be found on our website at www.sutorcn.com/English/IR.php.
The Audit
Committee oversees our accounting and financial reporting processes and the
audits of the financial statements of our Company. The Audit
Committee is responsible for, among other things:
4
The Report of the Audit Committee
regarding the audited financials statements of the Company for the fiscal year
ended June 30, 2008 is located on Exhibit A to this Proxy
Statement.
Compensation
Committee
Our
Compensation Committee consisted of three directors, A. Carl Mudd, Guoyou Shao
and Xinchuang Li. The members of the Compensation Committee are all
independent directors within the meaning of applicable NASDAQ listing standards.
The Compensation Committee acts pursuant to a written charter, a copy of which
can be found on our website at www.sutorcn.com/English/IR.php.
Our
Compensation Committee assists the Board in reviewing and approving the
compensation structure of our directors and executive officers, including all
forms of compensation to be provided to our directors and executive
officers. Our chief executive officer may not be present at any
Committee meeting during which his compensation is deliberated. The
Compensation Committee is permitted to delegate its authority in accordance with
Nevada law unless prohibited by the Company’s by-laws or the Compensation
Committee charter. The Compensation Committee is responsible for,
among other things:
Compensation
Committee Interlocks and Insider Participation
All
current members of the Compensation Committee are independent directors, and all
past members were independent directors at all times during their service on
such Committee. None of the past or present members of our
Compensation Committee are present or past employees or officers of ours or any
of our subsidiaries. No member of the Compensation Committee has had any
relationship with us requiring disclosure under Item 404 of Regulation
S-K. None of our executive officers serves on the board of directors
or compensation committee of a company that has an executive officer that serves
on our Board or compensation committee. 5
Governance
and Nominating Committee
Our
Governance and Nominating Committee consisted of three directors A. Carl Mudd,
Guoyou Shao and Xinchuang Li. The members of our Governance and
Nominating Committee are all independent directors within the meaning of
applicable NASDAQ listing standards. The Governance and Nominating Committee
acts pursuant to a written charter, a copy of which can be found on our website
at www.sutorcn.com/English/IR.php.
The
Governance and Nominating Committee assists the Board in identifying individuals
qualified to become our directors and in determining the composition of the
Board and its committees. The Governance and Nominating Committee is responsible
for, among other things:
Director
Recommendations and Nominations
It is the
Governance and Nominating Committee’s policy to consider properly submitted
shareholder recommendations (as opposed to a formal nomination) for candidates
for membership on the Board. A shareholder may submit a recommendation for a
candidate for membership on the Board by submitting in writing the name and
background of such candidate to the Governance and Nominating Committee,
c/o Secretary, Sutor Technology Group Limited, No. 8 Huaye Road, Dongbang
Industrial Park, Changshu, China 215534. The Governance and Nominating Committee
will consider a recommendation only if (1) appropriate biographical and
background information on the candidate is provided, (2) the recommended
candidate has consented in writing to a nomination and public disclosure of the
candidate’s name and biographical information, and (3) the recommending
shareholder has consented in writing to public disclosure of such shareholder’s
name. Required biographical and background information include: (A) the
name, age, business address and residence of such person, (B) the principal
occupation and employment of such person, and (C) biographical information
on the recommended candidate that the recommending shareholder believes supports
such candidacy (keeping in mind the criteria discussed below that the Governance
and Nominating Committee considers in making recommendations for nomination to
the Board).
The
Governance and Nominating Committee uses a variety of methods for identifying
candidates for nomination to the Board. Although candidates for nomination to
the Board typically are suggested by existing directors or by our executive
officers, candidates may come to the attention of the Committee through
professional search firms, shareholders or other persons. The process by which
candidates for nomination to the Board are evaluated includes review of
biographical information and background material on potential candidates by
Committee members, meetings of Committee members from time to time to evaluate
and discuss potential candidates, and interviews of selected candidates by
members of the Committee. Candidates recommended by shareholders (and properly
submitted, as discussed below) are evaluated by the Governance and Nominating
Committee using the same criteria as other candidates. Although the Governance
and Nominating Committee does not have specific minimum qualifications that must
be met before recommending a candidate for election to the Board, the Committee
does review numerous criteria before recommending a candidate. Such criteria
include: character, integrity, judgment, diversity, independence, skills,
education, expertise, business acumen, business experience, length of service,
understanding of our business, other commitments and the like. 6
Communications
with the Board
The Company has a process for
shareholders who wish to communicate with the Board. Shareholders who
wish to communicate with the Board may contact our Board, or specific members of
our Board, by writing to: Stockholder Communications, No 8, Huaye Road, Dongbang
Industrial Park, Changshu, China 215534. These communications will be
reviewed by one or more employees of the Company designated by the Board, who
will determine whether they should be presented to the Board. The
purpose of this screening is to allow the Board to avoid having to consider
irrelevant or inappropriate communications.
Code
of Business Conduct and Ethics
On January 31, 2007, we adopted a new
code of business conduct and ethics relating to the conduct of our business by
our employees, officers and directors. We intend to maintain the highest
standards of ethical business practices and compliance with all laws and
regulations applicable to our business, including those relating to doing
business outside the United States. Our Code of Ethics applies to all
directors, officers and employees of the Company, including the Company’s
principal executive officer and principal financial officer. This Code is
designed to deter wrongdoing and to promote all of the following:
Current
versions of the Code of Ethics is maintained on the Company’s website at www.sutorcn.com. During
the fiscal year ended June 30, 2008, there were no waivers of our Code of
Ethics. 7
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The following table sets forth
information concerning all compensation awarded to, earned by or paid to our
Chief Executive Officer for services during the last two fiscal years in all
capacities to us, our subsidiaries and predecessors. No other executive officer
received compensation of $100,000 or more for the year ended June 30,
2008.
* Mr. Guo
resigned as our CEO in May 2008 and Ms. Chen was appointed as a replacement to
Mr. Guo.
Sutor did not have an equity incentive
plan and made no grant of equity awards in 2008.
Employment
Contracts
Currently,
we do not have an employment agreement with our CEO, Ms. Lifang
Chen.
Retirement
Benefits
Currently,
we do not provide any employees, including our named executive officers any
company sponsored retirement benefits other than a state pension scheme in which
all of our employees in China participate.
Payment
Upon Termination or Change-in Control
The
Company does not have change-in-control arrangements with any of its executive
officers, and the Company is not obligated to pay severance or other enhanced
benefits to executive officers upon termination of their
employment.
Director
Compensation - 2008
The
following table sets forth information concerning all compensation paid to our
non-employee directors for services rendered in all capacities for the year
ended June 30, 2008.
8
In
February 2008, we entered into agreements with each of the independent
directors. Under the terms of the agreements, Mr. Mudd is entitled to $65,000,
Mr. Shao is entitled to RMB 120,000 (approximately $17,143) and Mr. Li is
entitled to RMB 120,000 (approximately $17,143) as annual compensation for their
service as independent directors, and as chairpersons of various board
committees, as applicable. Mr. Mudd’s compensation is greater because he has
greater responsibilities as the Audit Committee Chairman. Under the terms of the
agreements, the independent directors are entitled to indemnification for
expenses, judgments, fines, penalties or other amounts actually and reasonably
incurred by the independent directors in connection with any proceeding if the
independent director acted in good faith and in our best interests. The Company
also reimburses our directors for reasonable travel expenses related to
attendance at board and committee meetings.
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires our executive officers and directors and
persons who own more than ten percent of the outstanding Common Stock to file
with the SEC an initial report of ownership on Form 3 and changes in ownership
on Forms 4 and 5. The reporting persons are also required to furnish
us with copies of all forms they file.
Based
solely on our review of copies of Forms 3, 4 and 5 furnished to the Company with
respect to the fiscal year ended June 30, 2008, we have determined that our
directors, officers and greater than 10% beneficial owners complied with all
applicable Section 16 filing requirements except as follows: Mr. Mudd, Mr. Shao
and Mr. Li filed their initial statements of beneficial ownership on Form 3 more
than 10 days after becoming a reporting person.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS,
AND
DIRECTOR INDEPENDENCE
The following includes a summary of
transactions since the beginning of the last fiscal year, or any currently
proposed transaction, in which we were or are to be a participant and the amount
involved exceeded or exceeds $120,000, and in which any related person had or
will have a direct or indirect material interest (other than compensation
described under “Executive Compensation”). We believe the terms
obtained or consideration that we paid or received, as applicable, in connection
with the transactions described below were comparable to terms available or the
amounts that would be paid or received, as applicable, in arm's-length
transactions. For additional information about the transactions, see Note 7,
“Related Parties” to the consolidated financial statements included elsewhere in
this annual report.
9
Except as
set forth in our discussion above, none of our directors, director nominees or
executive officers has been involved in any transactions with us or any of our
directors, executive officers, affiliates or associates which are required to be
disclosed pursuant to the rules and regulations of the SEC.
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth
information regarding beneficial ownership of our common stock as of April 17,
2009 (i) by each person who is known by us to beneficially own more than 5% of
our common stock; (ii) by each of our officers and directors; and (iii) by all
of our officers and directors as a group.
Unless otherwise specified, the
address of each of the persons set forth below is in care of Sutor Technology
Group Limited, No. 8, Huaye Road, Dongbang Industrial Park Changshu, China,
215534. 10
* Less
than 1%
1Beneficial
ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities.
2 A total
of 37,955,602 shares of our common stock are considered to be outstanding
pursuant to SEC Rule 13d-3(d)(1) as of September 26, 2008. For each
beneficial owner above, any options exercisable within 60 days have been
included in the denominator.
3 Includes
19,079,450 shares of common stock owned by Feng Gao, Ms. Chen’s
husband.
4 Includes
11,258,600 shares of common stock owned by Lifang Chen, Mr. Gao’s wife and our
Chairman.
Information
Concerning Executive Officers
Background
information as of April 17, 2009 about each of Sutor’s executive officers who
does not also serve as a director of Sutor is provided below. See “Election of
Directors – Information about Nominees” below for information regarding Sutor’s
other executive officers.
11
PROPOSAL
1
ELECTION
OF DIRECTORS
The Board is responsible for
establishing broad corporate policies and monitoring the overall performance of
the Company. It selects the Company’s executive officers, delegates
authority for the conduct of the Company’s day-to-day operations to those
officers, and monitors their performance. Members of the Board are
kept informed of the Company’s business by participating in Board and committee
meetings, by reviewing analysis and reports, and through discussions with the
Chairman and other officers.
The Fifth Article of our articles of
incorporation provides that the number of our directors shall be determined in
accordance with our bylaws. There are currently four directors
serving on the Board. At the Meeting, five directors will be elected,
each to hold office until the next Annual Meeting of Shareholders or his or her
earlier death or resignation or until his or her successor, if any, is elected
or appointed. The individuals who have been nominated for election to
the Board at the Meeting are listed in the table below.
If, as a result of circumstances not
now known or foreseen, any of the nominees is unavailable to serve as a nominee
for the office of Director at the time of the Meeting, the holders of the
proxies solicited by this Proxy Statement may vote those proxies either
(i) for the election of a substitute nominee who will be designated by the
proxy holders or by the present Board or (ii) for the balance of the
nominees, leaving a vacancy. Alternatively, the size of the Board may be reduced
accordingly. The Board has no reason to believe that any of the
nominees will be unwilling or unable to serve, if elected as a
Director. The five nominees for election as directors are
uncontested. In uncontested elections, directors are elected by majority of the
votes cast at the meeting. Proxies submitted on the accompanying proxy card will be
voted for the election of the nominees listed below, unless the proxy card is
marked otherwise.
Recommendation
of the Board
The Board
unanimously recommends a vote FOR the election of the
nominees listed below.
Information
about Nominees
Set forth
below are the names of the nominees, their ages, all positions and offices that
they hold with us, the period during which they have served as such, and their
business experience during at least the last five years. The directors will
serve until the next annual meeting of the shareholders or until their
successors are elected or appointed and qualified. 12
13
Xinchuang Li>. Mr. Li has
served as our director since February 4, 2008. Since 2008, Mr. Li has
served as the Executive Director of China Metallurgical
Industry Planing & Research Institute (CMIPRI) in Beijing. From
1998 to 2002, Mr. Li served as the Vice-Chief Engineer of CMIPRI, and from 2002
to 2008 served as its Vice Director and Chief Engineer. CMIPRI. Mr.
Li has significant experience in the operations of companies engaged in steel
production with a particular focus and specialization in the
operations, planning and strategic focus of companies operating in the Chinese
steel industry. Mr. Li holds a Master’s degree in Business Administration
from Fordham University and Beijing University.
See
“Corporate Governance and Board of Directors Matters” and “Executive
Compensation — Compensation of Directors” above for additional information
regarding the Board.
PROPOSAL
2
RATIFICATION
OF SELECTION OF INDEPENDENT AUDITORS
We are asking our shareholders to
ratify the selection of Hansen Barnett & Maxwell P.C. as our independent
registered public accounting firm. Although ratification is not
required by our bylaws or otherwise, the Board is submitting the selection of
Hansen to our shareholders for ratification as a matter of good corporate
practice. In the event our shareholders fail to ratify the
appointment, the Audit Committee may reconsider this appointment.
The Company has been advised by
Hansen that neither the firm nor any of its associates had any
relationship with the Company. Representatives of Hansen will be
available via teleconference during the Meeting, at which time they may make any
statement they consider appropriate and will respond to appropriate questions
raised at the Meeting.
Independent
Registered Public Accounting Firm’s Fees
The following is a summary of the fees
billed to the Company by Hansen for professional services rendered for the
fiscal years ended June 30, 2008 and 2007:
(in
thousands of U.S. dollars)
Pre-Approval
Policies and Procedures
Under the
Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by our
auditors must be approved in advance by our Board to assure that such services
do not impair the auditors’ independence from us. In accordance with its
policies and procedures, our Board pre-approved the audit service performed by
Hansen Barnett & Maxwell, P.C. for our consolidated financial statements as
of and for the year ended June 30, 2008. 14
Recommendation
of the Board
The Board unanimously recommends a vote
FOR ratification of the
selection of Hansen as the Company’s independent registered public accounting
firm for the fiscal year 2009.
PROPOSAL
3
ADOPTION
OF THE 2009 EQUITY INCENTIVE PLAN
We are
asking our shareholders to vote to adopt the 2009 Plan that will provide
stock-based compensation to our employees, directors and
consultants. The Board approved the 2009 Plan on April 15, 2009,
subject to shareholder approval. The affirmative vote by the holders
of a majority of votes of the shares of Common Stock outstanding and entitled to
vote at the Annual Meeting is required for approval of the 2009
Plan. To date, the Company has not made grants under the 2009
Plan.
The
following summary of the material features of the 2009 Plan is qualified in its
entirety by reference to the 2009 Plan, a copy of which is attached as Appendix
B. Unless otherwise defined, capitalized terms in this summary
have the same meanings as provided in the 2009 Plan.
Summary
of the 2009 Plan
Administration. The 2009 Plan will be
administered by the Board or a committee thereof. The 2009 Plan is currently
being administered by the Compensation Committee. The Compensation
Committee may determine the specific terms and conditions of all Awards granted
under the 2009 Plan, including, without limitation, the number of shares subject
to each Award, the price to be paid for the shares and the vesting criteria, if
any. The Compensation Committee has discretion to administer the 2009 Plan
as it deems necessary or advisable.
15
The 2009
Plan permits the following forms of payment of the exercise price of
Options:
16
The
Compensation Committee determines the number and form of Award, vesting
conditions, the purchase price, if any, and any other terms and conditions of
Restricted Stock and RSU Awards at the time of grant. All
restrictions will lapse and the restriction period will end upon the
satisfaction of vesting conditions. The Compensation Committee may
(i) the time at which restrictions will lapse or (ii) provide for complete
or partial exceptions to an employment condition as it deems
equitable.
During
the restriction period, Service Providers holding Restricted Stock (i) may
exercise full voting rights with respect to those Shares and (ii) will be
entitled to receive all dividends and other distributions paid with respect to
such Shares, unless the Compensation Committee determines otherwise. If any such
dividends or distributions are paid in Shares, the Shares will be subject
to the same restrictions on transferability and forfeitability as the Restricted
Stock with respect to which they were paid.
In the
event of the dissolution or liquidation of the Company, the Compensation
Committee will notify each participant as soon as practicable prior to the
effective date of such transaction. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the dissolution or
liquidation.
In the
event of a merger or Change in Control, the surviving or successor entity may
either assume the Company’s rights and obligations with respect to outstanding
Awards or substitute outstanding Awards for substantially equivalent property
(including, but not limited to comparable equity interests in the surviving or
successor entity) that are subject to vesting requirements and repurchase
restrictions no less favorable to the participant than those in effect prior to
the merger or Change in Control. 17
In the
event that the successor corporation does not assume or provide a substitute for
the Award, all outstanding Awards will vest, all vesting criteria will be
deemed to have been achieved at target levels, and all restrictions
on Awards will lapse. Any Option or SAR that is not assumed or
substituted in the event of a Change in Control will be exercisable for a period
determined by the Compensation Committee in its sole discretion. The
Compensation Committee will provide reasonable notice of the exercise period to
the participant, and the Option or SAR will terminate upon the expiration of
such exercise period.
Incentive Stock Options.
Generally, a participant will not recognize income on the grant or exercise of
an ISO. At exercise, however, the excess of the Fair Market Value of the shares
acquired upon exercise over the exercise price is an item of adjustment in
computing the participant's alternative minimum taxable income. If the
participant holds the stock received upon exercise of an ISO for at least two
years from the grant date and one year from the exercise date, any gain realized
on a sale of the stock is treated as long-term capital gain. If the participant
sells the stock received upon exercise prior to the expiration of such periods
(a “disqualifying disposition”), the participant will recognize ordinary income
in the year of the disqualifying disposition equal to the excess of the Fair
Market Value of such stock on the exercise date over the exercise price (or, if
less, the excess of the amount realized upon the sale over the exercise price).
The excess, if any, of the sale price over the Fair Market Value on the exercise
date will be short-term capital gain.
Our
Company is not entitled to a tax deduction as the result of the grant or
exercise of an ISO. If the participant has ordinary income as a result of a
disqualifying disposition, the Company is entitled to a deduction at the same
time equal to the amount of ordinary income realized by the participant,
assuming the deduction is allowed by Code section 162(m).
Nonqualified Stock Options.
Generally, a participant will not recognize income, and the Company is not
entitled to a deduction, upon a grant of a NSO. On exercise, a participant will
recognize as ordinary income the difference between the exercise price and the
Fair Market Value of the shares on the exercise date, unless the shares are
subject to any restrictions on the participant's ownership or disposition
thereof. At the time the participant recognizes income, the Company is entitled
to a deduction equal to the amount of income recognized by the participant,
assuming the deduction is allowed by Code section 162(m). Upon sale of the
shares, the participant will recognize long-term or short-term capital gain or
loss depending on the sale price and holding period of the
shares. 18
Stock Appreciation Rights.
Generally, a participant will not recognize income, and the Company is not
entitled to a deduction, upon a grant of a SAR. On exercise, a participant will
recognize as ordinary income the amount of cash or the Fair Market Value of the
shares received. At the time the participant recognizes income, the
Company is entitled to a deduction equal to the amount of income recognized by
the participant, assuming the deduction is allowed by Code section 162(m). Upon
the sale of any shares acquired by exercise of a SAR, the participant will
recognize long-term or short-term capital gain or loss depending on the sale
price and holding period of the shares.
Restricted Stock or RSUs.
Generally, a participant will not recognize income, and the Company is not
entitled to a deduction, upon a grant of Restricted Stock or RSUs. A participant
may elect to be taxed on the difference between the purchase price of Restricted
Stock and the Fair Market Value of the Restricted Stock on the grant date by
filing a Code section 83(b) election. Otherwise, upon the lapse of
restrictions on Restricted Stock, the participant generally recognizes ordinary
compensation income equal to the Fair Market Value of the shares less the
purchase price (if any) paid by the participant. Upon the delivery to the
participant of common shares in respect of Restricted Stock Units, the
participant generally recognizes ordinary income equal to the Fair Market Value
of the shares as of the delivery date less the purchase price (if any) paid by
the participant. At the time the participant recognizes income, the Company is
entitled to a deduction equal to the amount of income recognized by the
participant, assuming the deduction is allowed by Code section 162(m). Upon the
sale of any shares acquired through Restricted Stock or RSUs, the participant
will recognize long-term or short-term capital gain or loss depending on the
sale price and holding period of the shares.
Other Stock-Based
Awards. The tax consequences associated with any other
Stock-Based Award granted under the 2009 Plan will vary depending on the
specific terms of the Award. Among the relevant factors are whether
the Award has a readily ascertainable Fair Market Value, whether or not the
Award is subject to forfeiture provisions or restrictions on transfer, the
nature of the property to be received by the participant and the participant’s
holding period and tax basis for the Award or underlying common
stock.
Withholding. Our Company
generally must collect and pay withholding taxes upon the exercise of a NSO or
SAR, upon the earlier of the filing of a Code section 83(b) election or the date
the restrictions on Restricted Stock lapse, and at the time that Restricted
Stock Units are settled by delivering stock or cash to a
participant. The Compensation Committee may permit a participant to
satisfy tax withholding by (i) paying cash, (ii) electing to have our Company
withhold otherwise deliverable Shares having a Fair Market Value (as of the date
that the taxes should be withheld) equal to the withholding amount, or
(iii) delivering to the Company already-owned Shares having a Fair Market
Value (as of the date that the taxes should be withheld) equal to the
withholding amount.
Limits on Company
Deduction. Subject to certain exceptions, Code section 162(m)
disallows federal income tax deductions for compensation paid by a publicly-held
corporation to certain executives to the extent the amount paid to an executive
exceeds $1 million for the taxable year. The 2009 Plan has been
designed to allow, but not require, grants to qualify for an exception to the
Code section 162(m) deduction limit.
Tax Rules Affecting
Nonqualified Deferred
Compensation Plans. Awards granted under the 2009 Plan may be
subject to Code section 409A. Failure to comply with Code section
409A or to qualify for an exemption from Code section 409A could result in
significant adverse tax results to the grantee of the Award, including immediate
taxation, an additional 20 percent tax on the amount of income so recognized,
plus interest. The 2009 Plan has been designed in accordance with the
Company’s intent to grant awards that qualify for an exemption from Code section
409A. 19
Vote
Required
The
affirmative vote by the holders of a majority of votes of the shares of Common
Stock outstanding and entitled to vote at the Annual Meeting is required for
approval of this proposal.
Recommendation
of the Board
The Board
believes that it is in the Company’s best interests and in the best interests of
the shareholders to adopt the 2009 Plan to help attract, motivate and retain
outstanding employees, directors, and consultants and to align further their
interests with those of shareholders.
The
Board unanimously recommends a vote FOR the approval of the
2009 Plan. 20
GENERAL
INFORMATION
As of the
date of this Proxy Statement, management is not aware of any matters to be
presented for action at the meeting other than those described above. However,
if any other matters should come before the Annual Meeting, it is the intention
of the persons named in the accompanying proxy card to vote such proxy card in
accordance with their judgment on such matters.
SHAREHOLDER
PROPOSALS FOR THE 2009 ANNUAL MEETING
If you
wish to have a proposal included in our proxy statement for next year’s annual
meeting in accordance with Rule 14a-8 under the Exchange Act, your proposal must
be received by the Secretary of the Company at No. 8 Huaye Road, Dongbang
Industrial park, Changshu, China 215534, no later than the close of business on
June 30, 2009. A proposal which is received after that date or which
otherwise fails to meet the requirements for shareholder proposals established
by the SEC will not be included. The submission of a shareholder
proposal does not guarantee that it will be included in the proxy
statement.
ANNUAL
REPORT ON FORM 10-K
We will
provide without charge to each person solicited by this Proxy Statement, on the
written request of such person, a copy of our Annual Report on Form 10-K,
including the financial statements and financial statement schedules, as filed
with the SEC for our most recent fiscal year. Such written requests
should be directed to the Secretary of the Company, at our address listed on the
top of page one of this Proxy Statement. A copy of our Annual Report
on Form 10-K is also made available on our website at http://www.sutorcn.com/
after it is filed with the SEC.
OTHER
MATTERS
As of the
date of this Proxy Statement, the Board has no knowledge of any business which
will be presented for consideration at the Meeting other than the election of
directors, the ratification of the appointment of the accountants of the Company
and the adoption of the 2009 Plan. Should any other matters be
properly presented, it is intended that the enclosed proxy will be voted in
accordance with the best judgment of the persons voting the
proxies.
21
Appendix
A
REPORT
OF THE AUDIT COMMITTEE
FOR
THE FISCAL YEAR ENDED JUNE 30, 2008
The Audit Committee of the Board is
comprised of three non-employee Directors, each of whom has been determined by
the Board to be “independent” under the meaning of Rule 10A-3(b)(1) under the
Exchange Act. Mr. Mudd, the chair of the Audit Committee, is an
“audit committee financial expert” within the meaning of Item 401(h) of SEC
Regulation S-K. The Audit Committee assists the Board’s oversight of
the integrity of the Company’s financial reports, compliance with legal and
regulatory requirements, the qualifications and independence of the Company’s
independent registered public accounting firm, the audit process, and internal
controls. The Audit Committee operates pursuant to a written charter
adopted by the Board. The Audit Committee is responsible for
overseeing the corporate accounting and financing reporting practices,
recommending the selection of the Company’s registered public accounting firm,
reviewing the extent of non-audit services to be performed by the auditors, and
reviewing the disclosures made in the Company’s periodic financial
reports. The Audit Committee also reviews and recommends to the Board
that the audited financial statements be included in the Company’s Annual Report
on Form 10-K.
During
the fiscal year 2008, the Audit Committee (1) reviewed and discussed the audited
financial statements for the fiscal year ended June 30, 2008 with the Company’s
management; (2) discussed with the independent auditors the matters required to
be discussed by SAS 61 (Codification of Statements on Auditing Standards), as
may be modified or supplemented; and (3) received the written disclosures and
the letter from the independent accountants required by Independence Standards
Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees), as may be modified or supplemented, and has
discussed with the independent accountant its independence.
Based on
the review and discussions referred to above, the Audit Committee had
recommended to the Board of Directors that the audited financial statements be
included in the Company’s Annual Report on Form 10-K for the fiscal year ended
June 30, 2008 for filing with the SEC.
Appendix
B
SUTOR
TECHNOLOGY GROUP LIMITED
2009 EQUITY INCENTIVE
PLAN
If an
Award granted under the Plan lapses, is forfeited, terminated or canceled, or
expires or becomes unexercisable without having been exercised in full, the
unpurchased, forfeited or unissued Shares which were subject to the Award will
become available for future grant or sale under the Plan (unless the Plan has
terminated). Shares that have actually been issued under the Plan
under any Award will not be returned to the Plan and will not become available
for grant or sale under the Plan. With respect to SARs, only Shares
actually issued pursuant to a SAR will cease to be available for future grant or
sale under the Plan (unless the Plan has terminated). Forfeited
Restricted Stock will revert to the Company and will not be available for grant
under the Plan. Shares related to forfeited RSUs will become
available for grant under the Plan. Except with respect to issued
Shares, Shares withheld by the Company to pay the exercise price of an Award or
to satisfy tax withholding obligations with respect to an Award will become
available for future grant or sale under the Plan. To the extent an
Award under the Plan is paid out in cash rather than Shares, such cash payment
will not reduce the number of Shares available for issuance under the
Plan.
The
Company, during the term of this Plan, will at all time reserve and keep
available such number of Shares as will be sufficient to satisfy the
requirements of the Plan.
2
3
4
5
6
7
8
9
For the
purposes of this section, an Award will be considered assumed if, following the
Change in Control, the Award confers the right to purchase or receive, for each
Share subject to the Award immediately prior to the Change in Control, the
consideration (whether stock, cash, or other securities or property) received in
the merger or Change in Control by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares); provided, however, that if such consideration
received in the Change in Control is not solely common stock of the successor
corporation or its parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon
the exercise of an Option or SAR or upon the payout of a Restricted
Stock Unit, for each Share subject to such Award (or in the case of Restricted
Stock Units, the number of implied shares determined by dividing the value of
the Restricted Stock Units by the per share consideration received by holders of
Common Stock in the Change in Control), to be solely common stock of the
successor corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change in
Control.
Notwithstanding
anything in this section to the contrary, an Award that vests, is earned or
paid-out upon the satisfaction of one or more performance goals will not be
considered assumed if the Company or its successor modifies any of such
performance goals without the Participant’s consent; provided, however, a
modification to such performance goals only to reflect the successor
corporation's post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.
10
。
11
12
13
14
。
15
“Administrator” means
the Board or Committee that administers the Plan pursuant to Section
3.
“Affiliate” means any
“parent corporation” or “subsidiary corporation,” as such terms are defined in
Code sections 424(e) and 424(f).
“Applicable Laws”
means the requirements relating to the administration of equity-based awards
under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Shares are listed or
quoted and the applicable laws of any foreign country or jurisdiction where
Awards are, or will be, granted under the Plan.
16
“Award” means an
Option, a SAR, a share of Restricted Stock, a RSU, or an Other Share-Based Award
granted pursuant to the terms of the Plan.
“Award Agreement”
means the written agreement governing Plan Awards. The Award
Agreement is subject to the terms and conditions of the Plan.
“Board” means the
Board of Directors of the Company.
“Change in Control”
means the occurrence of any of the following events:
(i) Any
“person” (as such term is used in sections13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then
outstanding voting securities; provided however, that for purposes of this
subsection, (A) any acquisition of securities directly from the Company shall
not constitute a Change in Control and (B) any change in the beneficial
ownership of the securities of the Company as a result of a private financing of
the Company that is approved by the Board shall not constitute a Change in
Control;
(ii) The
consummation of the sale or disposition by the Company of all or substantially
all of the Company’s assets;
(iii) A
change in the composition of the Board occurring within a two-year period, as a
result of which fewer than a majority of the directors are Incumbent
Directors. “Incumbent Directors” means directors who either (A) are
Directors as of the effective date of the Plan, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but will not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company); or
(iv) The
consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately after
such merger or consolidation.
For the
avoidance of doubt, a transaction shall not constitute a Change in Control if:
(i) its sole purpose is to change the state of the Company’s incorporation or
the Company’s name, or (ii) its sole purpose is to create a holding company that
shall be owned in substantially the same proportions by the persons who held the
Company’s securities immediately before such transaction.
17
“Code” means the
Internal Revenue Code of 1986, as amended. Any reference in the Plan
to a section of the Code will be a reference to any successor or amended section
of the Code.
“Committee” means the
compensation committee, if any, or such similar or successor Committee appointed
by the Board. If the Board has not appointed a Committee, the Board
will function in the place of the Committee.
“Company” means Sutor
Technology Group, Limited, a Nevada corporation, or its successor.
“Consultant” means any
person, including an advisor, if: (1) the consultant or adviser is a natural
person; (2) the consultant or adviser renders bona fide services to the
Company or any Subsidiary; and (3) the services rendered by the consultant or
adviser 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.
“Director” means a
member of the Board.
“Disability” generally means
total and permanent disability as determined by the Administrator in its
discretion in accordance with uniform and non-discriminatory standards adopted
by the Administrator from time to time, but “Disability,” for
purposes of an ISO, means total and permanent disability as defined in Code
section 22(e)(3).
“Employee” means any
person employed by the Company or any Subsidiary of the Company. Neither service
as a Director nor payment of a director’s fee by the Company will be sufficient
to constitute “employment.”
“Employer” means the
entity that employs the Employee.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“Fair Market Value”
means, as of any date, the value of Shares determined as follows:
(i) If
the Shares are listed on any established stock exchange or a national market
system, including without limitation any division or subdivision of the NASDAQ
Stock Market, its Fair Market Value will be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such exchange
or system on the day of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; or
18
(ii) If
the Shares are regularly quoted by a recognized securities dealer but selling
prices are not reported, including without limitation quotation through the
Over-The-Counter Bulletin Board quotation service administered by the Financial
Industry Regulatory Authority, the Fair Market Value of a Share will be the mean
between the high bid and low asked prices for the Shares on the day of
determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; or
(iii) In
the absence of an established market for the Shares, the Fair Market Value will
be determined in good faith by the Administrator, and to the extent Section 14
applies (a) with respect to ISOs, the Fair Market Value will be determined in a
manner consistent with Code section 422 or (b) with respect to NSOs or SARs, the
Fair Market Value will be determined in a manner consistent with Code section
409A.
“Fiscal Year” means
the fiscal year of the Company.
“Grant Date” means the
date on which the Administrator grants an Award, or such other later date as is
determined by the Administrator, provided that the Administrator cannot grant an
Award prior to the date the material terms of the Award are
established. The Administrator may not grant an Award with a Grant
Date that is effective prior to the date the Administrator takes action to
approve such Award.
“Incentive Stock
Option” or “ISO” means an Option
intended to qualify as an incentive stock option within the meaning of Code
section 422 and its regulations.
“Nonstatutory
Stock
Option” or “NSO” means an Option
that by is not intended to qualify as an ISO.
“Officer” means a
person who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and its rules and regulations.
“Option” means a stock
option granted pursuant to the Plan.
“Optionee” means the
holder of an Option granted pursuant to the Plan.
“Other Share-Based
Awards” will mean awards of Shares or other rights in accordance with
Section 8.
“Participant” means
the holder of an Award granted pursuant to the Plan.
“Performance Period”
means one or more time periods, which may be of varying and overlapping
durations, over which the attainment of the performance goals or other vesting
conditions will be measured for the purpose of determining a Participant’s right
to payment.
19
“Period of
Restriction” means the period during which Restricted Stock and
RSUs are subject to forfeiture or restrictions on transfer pursuant
to Section 7.
“Plan” means this 2009
Equity Incentive Plan.
“Related Entity” means
the corporation or other entity, other than the Company, to which the Service
Provider provides services on the Grant Date, and any corporation or other
entity, other than the Company, in an unbroken chain of corporations or other
entities beginning with the Company in which each corporation or other entity
has a controlling interest in another corporation or other entity in the chain,
and ending with the corporation or other entity that has a controlling
interest in the corporation or other entity to which the Service Provider
provides services on the Grant Date. For a corporation, a controlling
interest means ownership of stock possessing at least fifty (50%) percent of
total combined voting power of all classes of stock, or at least fifty
(50%) percent of the total value of all classes of stock. For a
partnership or limited liability company, a controlling interest means ownership
of at least fifty (50%) percent of the profits interest or capital interest of
the entity. In determining ownership, the rules of Treasury
Regulation sections 1.414(c)-3 and 1.414(c)-4 apply.
“Restricted Stock”
means Shares awarded to a Participant that are subject to forfeiture and
restrictions on transferability in accordance with Section 7.
“Restricted Stock
Unit” or “RSU” means the right
to receive one Share at the end of a specified period of time that is subject to
forfeiture in accordance with Section 7 of the Plan.
“Rule 16b-3” means
Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3.
“Section 16(b)” means
Section 16(b) of the Exchange Act.
“Service Provider”
means an Employee, Director or Consultant.
“Share” means a share
of Company common stock, as adjusted in accordance with Section 12.
“Stock Appreciation
Right” or “SAR” means the right
to receive payment from the Company in an amount no greater than the excess of
the Fair Market Value of a Share at the date the SAR is exercised over a
specified price fixed by the Administrator in the Award Agreement that is not
less than the Fair Market Value of a Share on the Grant Date.
“Subsidiary” means a
“subsidiary corporation” as defined in Code section 424(f).
“Ten Percent Owner”
means any Service Provider who is, on the Grant Date of an ISO, the owner of
more than 10% of the total combined voting power of all classes of stock of the
Company or any Affiliate (determined with application of ownership attribution
rules of Code section 424(d)).
Adopted
by the Board of Directors on 15, April, 2009
20
SUTOR
TECHNOLOGY GROUP LIMITED
ANNUAL
MEETING OF SHAREHOLDERS
TO
BE HELD ON JUNE 16, 2009
This
Proxy is Solicited on Behalf of the Board of Directors
The
undersigned shareholder of Sutor Technology Group Limited, a Nevada corporation
(the “Company”), acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, dated May 13, 2009, and hereby constitutes and
appoints Lifang Chen and Yongfei Jiang, or either of them acting singly in the
absence of the other, with full power of substitution in either of them, the
proxies of the undersigned to vote with the same force and effect as the
undersigned all shares of the Company’s Common Stock which the undersigned is
entitled to vote at the 2009 Annual Meeting of Shareholders to be held on June
16, 2009, and at any adjournment thereof, hereby revoking any proxy or proxies
heretofore given and ratifying and confirming all that said proxies may do or
cause to be done by virtue thereof with respect to the following
matters:
The
undersigned hereby instructs said proxies or their substitutes:
Lifang Chen
Yongfei Jiang
A. Carl Mudd
Guoyou Shao
Xinchuang Li
Withhold authority for the
following:
o Lifang
Chen
o Yongfei
Jiang
o A.
Carl Mudd
o Guoyou
Shao
o Xinchuang
Li
THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED; IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES, FOR THE RATIFICATION
OF THE SELECTION OF HANSEN AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS, AND FOR THE APPROVAL OF
THE ADOPTION OF THE COMPANY’S 2009 EQUITY INCENTIVE PLAN. IN THEIR DIRECTION,
THE PROXIES ARE ALSO AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING, INCLUDING THE ELECTION OF ANY PERSON TO THE BOARD OF
DIRECTORS WHERE A NOMINEE NAMED IN THE PROXY STATEMENT DATED MAY 13, 2009 IS
UNABLE TO SERVE OR, FOR GOOD CAUSE, WILL NOT SERVE.
I
(we) acknowledge receipt of the Notice of Annual Meeting of Shareholders
and the Proxy Statement dated May 13, 2009, and the 2008 Annual
Report to Shareholders and ratify all that the proxies, or either of them, or
their substitutes may lawfully do or cause to be done by virtue hereof and
revoke all former proxies.
Please
sign, date and mail this proxy immediately in the enclosed
envelope.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||
