UNITED STATES
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 [ ]
Filed by a Party other
than the Registrant [ ]
Check the appropriate box:
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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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[X]
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under Rule 14a-12
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CHINA ADVANCED CONSTRUCTION MATERIALS GROUP,
INC.
(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):
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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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which transaction applies:
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transaction applies:
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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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Proposed maximum aggregate value of
transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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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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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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China Advanced Construction Materials Group, Inc.
9
North West Fourth Ring Road
Yingu Mansion Suite 1708
Haidian District,
Beijing
Peoples Republic of China 100190
+(86) (10) 825 25361
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 29, 2012
Dear Stockholder:
Notice is hereby given that the Annual Meeting of Stockholders
(the Meeting) of China Advanced Construction Materials Group, Inc., a Delaware
corporation (the Company), will be held on June 29, 2012, at 11:00 a.m., local
time, at the principal office of the Company located at 9 North West Fourth Ring
Road, Yingu Mansion Suite 1708, Haidian District, Beijing, Peoples Republic of
China, 100190, for the following purposes:
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1.
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To elect five persons to the Board of Directors of the
Company, each to serve until the next annual meeting of stockholders of
the Company or until such person shall resign, be removed or otherwise
leave office;
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2.
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To ratify the selection by the Audit Committee of
Friedman LLP as the Companys independent registered public accounting
firm for the fiscal year ending June 30, 2012; and
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3.
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To transact such other business as may properly come
before the Meeting or any adjournment thereof.
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If you owned our common stock at the close of business on April
30, 2012, you may attend and vote at the meeting.
A Proxy Statement describing the matters to be considered at
the Meeting is attached to this Notice. Our 2011 Annual Report accompanies this
Notice, but it is not deemed to be part of the Proxy Statement.
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.
Sincerely,
Xianfu Han
Chairman
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE STOCKHOLDER
MEETING TO BE HELD ON JUNE 29, 2012
This Notice and Proxy Statement and our 2011 Annual Report are
available online at https://proofs.to.newsfilecorp.com/ChinaAdvanced/.
China Advanced Construction Materials Group, Inc.
9
North West Fourth Ring Road
Yingu Mansion Suite 1708
Haidian District,
Beijing
Peoples Republic of China 100190
+(86) (10) 825 25361
_____________________________
PROXY STATEMENT
_____________________________
The Board of Directors of China Advanced Construction Materials
Group, Inc., a Delaware corporation (the Company, China ACM or we) is
furnishing this Proxy Statement and the accompanying proxy to you to solicit
your proxy for the 2012 Annual Meeting of Stockholders (the Meeting). The
Meeting will be held on June 29, 2012, at 11:00 a.m., local time, at the
principal office of the Company located at 9 North West Fourth Ring Road, Yingu
Mansion Suite 1708, Haidian District, Beijing, Peoples Republic of China,
100190.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
What is this proxy statement?
You have received this proxy statement and our annual report
because our Board of Directors is soliciting your proxy to vote your shares at
the annual meeting. This proxy statement includes information that we are
required to provide to you under the rules of the Securities and Exchange
Commission (SEC) and that is designed to assist you in voting your shares.
What is the purpose of the annual meeting?
At the annual meeting, our stockholders will act upon the
matters described in this proxy statement. These actions include the election of
directors and the ratification of the appointment of the independent registered
public accounting firm (which we sometimes refer to as the independent
auditors). An additional purpose of the annual meeting is to transact any other
business that may properly come before the annual meeting and any and all
adjournments or postponements of the annual meeting.
Who can attend the annual meeting?
All stockholders of record at the close of business on April
30, 2012, the record date, or their duly appointed proxies, may attend the
annual meeting.
What proposals will be voted on at the annual
meeting?
Stockholders will vote on two proposals at the annual
meeting:
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the election of directors; and
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the ratification of Friedman LLP as the
Companys independent auditors for the fiscal year ending June 30, 2012.
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What are the Boards recommendations?
Our Board recommends that you vote:
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FOR
election of the nominated directors; and
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FOR
ratification of Friedman LLP as the Companys independent auditors
for the fiscal year ending June 30, 2012.
Will there be any other business on the agenda?
The Board knows of no other matters that are likely to be brought before the annual meeting. If any other matters properly come before the annual meeting, however, the persons named in the enclosed proxy, or their duly appointed substitute acting at
the annual meeting, will be authorized to vote or otherwise act on those matters in accordance with their judgment.
Who is entitled to vote?
Only stockholders of record at the close of business on April 30, 2012, which we refer to as the record date, are entitled to notice of, and to vote at, the annual meeting. As of the record date, there were 17,829,464 shares of our common stock
outstanding. Holders of common stock as of the record date are entitled to one vote for each share held for each of the proposals.
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
Stockholder of Record.
If your shares are registered directly in your name with our transfer agent, Action Stock Transfer Corp., you are considered, with respect to those shares, the “stockholder of record.” This proxy and our
Annual Report have been sent directly to you by us.
Beneficial Owner.
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in street name. This proxy and the Annual Report have been forwarded to
you by your broker, bank or nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or nominee how to vote your shares by using the voting
instructions included with your proxy materials.
How do I vote my shares?
Stockholders can vote in person at the annual meeting or by proxy. There are three ways to vote by proxy:
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By Telephone — Stockholders located in the United States can vote by telephone by calling the number listed on your proxy materials and following the instructions;
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By Internet — You can vote over the Internet going to the link provided on your proxy materials and following the instructions; or
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By Mail — You can vote by mail by signing, dating and mailing the enclosed proxy card.
Telephone and Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (EST) on June 27, 2012.
If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and
Internet voting also will be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you plan to vote your shares in person at the annual meeting, you should contact your broker
or agent to obtain a legal proxy or broker’s proxy card and bring it to the annual meeting in order to vote.
If you vote by proxy, the individuals named on the proxy card (your “proxies”) will vote your shares in the manner you indicate. You may specify how your shares should be voted for each of the proposals. If you grant a proxy without
indicating your instructions, your shares will be voted as follows:
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FOR the election of the five nominees for director;
and
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FOR the ratification of Friedman LLP as the
Companys independent auditors for the fiscal year ending June 30, 2012.
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You may revoke or change your proxy at any time before it is exercised by (1) delivering to us a signed proxy card with a date later than your previously delivered proxy, (2) voting in person at the Annual Meeting, (3) granting a subsequent proxy
through the Internet or telephone, or (4) sending a written revocation to the Corporate Secretary. Your most current proxy card or telephone or Internet proxy is the one that is counted.
Each share of common stock is entitled to one vote. The record date for determining stockholders entitled to notice of and to vote at the annual meeting is April 30, 2012. As of that date, there were 17,829,464 shares of our common stock
outstanding.
What constitutes a quorum?
A quorum is the presence, in person or by proxy, of the holders of a majority of the shares of the common stock entitled to vote. Under Delaware law, an abstaining vote and a broker “non-vote” are counted as present and are, therefore,
included for purposes of determining whether a quorum of shares is present at the annual meeting.
What is a broker “non-vote” and what is its effect on voting?
If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that
holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization
that holds your shares does not have the authority to vote on the matter with respect to those shares. This is generally referred to as a “broker non-vote.”
Proposal 2 (ratification of auditors) involves a matter that we believe will be considered routine. All other proposals involve matters that we believe will be considered non-routine. We encourage you to provide voting instructions to the
organization that holds your shares by carefully following the instructions provided on your proxy card.
What is required to approve each item?
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For Proposal No. 1 (election of directors), each director must be elected by a majority of votes cast with respect to such director (i.e., the number of shares voted “for” a director nominee must exceed the number of votes
“withheld” from that nominee). Abstentions and broker non-votes are not counted for purposes of the election of directors.
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For Proposal No. 2 (ratification of independent auditors), the affirmative vote of the holders of a majority of the stockholders’ shares present in person or represented by proxy at the meeting and entitled to vote, is required.
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For any other matters on which stockholders are entitled to vote, the affirmative vote of the holders of a majority of the stockholders’ shares present in person or represented by proxy at the meeting and entitled to vote, is required.
For the purpose of determining whether the stockholders have approved matters other than the election of directors, abstentions are treated as shares present or represented and voting, so abstaining has the same effect as a negative vote. If
stockholders hold their shares through a broker, bank or other nominee and do not instruct them how to vote, the broker may have authority to vote the shares for routine matters.
Stockholders may not cumulate votes in the election of directors, which means that each stockholder may vote no more than the number of shares he or she owns for a single director candidate.
Our bylaws require that, in uncontested elections, each director be elected by the majority of votes cast with respect to such director. This means that the number of shares voted “for” a director nominee must exceed the number of votes
“withheld” from that nominee in order for that nominee to be elected. Only votes “for” or “withheld” are counted as votes cast with respect to a director. Abstentions and broker non-votes will have no effect.
How will shares of common stock represented by properly executed proxies be voted?
All shares of common stock represented by proper proxies will, unless such proxies have previously been revoked, be voted in accordance with the instructions indicated in such proxies. If you do not provide voting instructions, your shares will be
voted in
accordance with the Board’s recommendations as set forth herein. In addition, if any other matters properly come before the annual meeting, the persons named in the enclosed proxy, or their duly appointed substitute acting at the annual
meeting, will be authorized to vote or otherwise act on those matters in accordance with their judgment.
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Can I change my vote or revoke my proxy?
Any stockholder executing a proxy has the power to revoke such proxy at any time prior to its exercise. You may revoke your proxy prior to exercise by:
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filing with us a written notice of revocation of your proxy,
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submitting a properly signed proxy card bearing a later date,
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voting over the Internet or by telephone, or
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voting in person at the annual meeting.
What does it mean if I receive more than one Proxy?
If your shares are registered under different names or are in more than one account, you may receive more than one set of proxy materials. To ensure that all your shares are voted, please vote by telephone, through the Internet using each personal
identification number you are provided, or complete, sign and date the multiple proxy cards relating to your multiple accounts. We encourage you whenever possible to have all accounts registered in the same name and address. You can accomplish this
by contacting our transfer agent, Action Stock Transfer Corp., at (801) 274-1088.
Who paid for this proxy solicitation?
The cost of preparing, printing, assembling and mailing this proxy statement and other material furnished to stockholders in connection with the solicitation of proxies is borne by us.
How do I learn the results of the voting at the annual meeting?
Preliminary results will be announced at the annual meeting. Final results will be published in a Current Report on Form 8-K filed with the SEC within four business days of the annual meeting.
How are proxies solicited?
In addition to the mail solicitation of proxies, our officers, directors, employees and agents may solicit proxies by written communication, telephone or personal call. These persons will receive no special compensation for any solicitation
activities. We will reimburse banks, brokers and other persons holding common stock for their expenses in forwarding proxy solicitation materials to beneficial owners of our common stock.
What is “householding?”
“Householding” means that we deliver a single set of proxy materials when requested to households with multiple stockholders, provided certain conditions are met. Householding reduces our printing and mailing costs.
If you or another stockholder of record sharing your address would like to receive an additional copy of the proxy materials, we will promptly deliver it to you upon your request in one of the following manners:
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by sending a written request by mail to:
China Advanced Construction Materials Group, Inc.
9 North West Fourth Ring Road
Yingu Mansion Suite 1708
Haidian District, Beijing
People’s Republic of China 100190
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Attention: Corporate Secretary
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by calling our Corporate Secretary, at +(86) (10) 825 25361.
If you would like to opt out of householding in future mailings, or if you are currently receiving multiple mailings at one address and would like to request householded mailings, you may do so by contacting our Corporate Secretary as indicated
above.
Can I receive future stockholder communications electronically through the Internet?
Yes. You may elect to receive future notices of meetings, proxy materials and annual reports electronically through the Internet. To consent to electronic delivery, vote your shares using the Internet. At the end of the Internet voting procedure,
the on-screen Internet voting instructions will tell you how to request future stockholder communications be sent to you electronically.
Once you consent to electronic delivery, you must vote your shares using the Internet and your consent will remain in effect until withdrawn. You may withdraw this consent at any time during the voting process and resume receiving stockholder
communications in print form.
Whom may I contact for further assistance?
If you have any questions about giving your proxy or require any assistance, please contact our Corporate Secretary:
China Advanced Construction Materials Group, Inc.
9 North West Fourth Ring Road
Yingu Mansion Suite 1708
Haidian District, Beijing
People’s Republic of China 100190
Attention: Corporate Secretary
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by telephone, at +(86) (10) 825 25361.
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Directors and Executive Officers
Set forth below are the names of our current directors,
officers and significant employees, 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.
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Position with the
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Term as Director of
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Name
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Age
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Company
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Company
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Xianfu Han
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51
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Chairman, Chief
Executive Officer and Director
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April 2008
Present
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Weili He
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53
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Chief Operating Officer, Vice
Chairman and Director
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April 2008 Present
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Yanwei He
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38
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Interim Chief
Financial Officer
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November 2011
Present
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Tao Jin
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43
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Director
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May 2011 Present
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Xinyong Gao
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39
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Director
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June 2012
Present
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Ken Ren
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Director
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June 2012 Present
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Name
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Position with the Company and
Principal Occupations
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Xianfu Han
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Mr. Han became our Chairman and Chief Executive Officer
on April 29, 2008. From January 2003 to the present, Mr. Han has served as
chairman of the board of directors of the Companys subsidiary Beijing Xin
Ao Concrete Group, or Xin Ao. His main responsibilities include daily
board leadership and strategy initiatives. Since November 2002, Mr. Han
has been chairman at Beijing Tsinghua University Management Schools
Weilun Club. His responsibilities involve daily management work. From
January 2001 to March 2007, Mr. Han acted as executive vice chairman of
the Beijing Concrete Association. His primary functions involved public
relations and communication with various governmental agencies. Mr. Han is
a senior engineer with over 25 years of management experience in the
building material industry. He contributed to the draft of the "Local
Standard of Mineral Admixtures" regulations and was responsible for the
"Research and Application of Green High Performance Concrete" published by
the Ministry of Construction. Mr. Han has not held any other public
company directorships during the past five years.
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Mr. Han graduated in 1995 from the Tsinghua University
executive MBA program. Mr. Han received his Bachelor degree in engineering
management in 1992 from Northern China University of Technology.
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Weili He
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Mr. He became our Vice-Chairman and Chief Operating
Officer on April 29, 2008. From August 2007 to present, Mr. He has worked
as vice chairman of the board of directors of Xin Ao. His primary
responsibility is large client development. From January 2003 to August
2007, Mr. He worked as chairman of the board of directors of Beijing
Xinhang Construction Materials Co., Ltd. His primary responsibilities
included strategic planning. Since 2007, Mr. He has served as a vice
chairman of the Beijing Concrete Associations. His primary functions
include market research. Mr. He has extensive construction and concrete
engineering experience in China and Japan on numerous high profile
projects. His primary expertise is plant management and operations. Mr. He
received a bachelors degree in law from Party School of the Central
Committee of C.P.C. Mr. He has not held any other public company
directorships during the past five years.
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Yanwei He
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Mr. He became our Interim Chief Financial Officer on
November 14, 2011. Mr. He has over 15 years of finance management
experience. He is the Certified Internal Auditor and Chinese Certified Tax
Agent. Mr. He served as finance manager with Jiangsu Hongtu High
Technology Co. Ltd from March 2000 to July 2004, as finance manager with
Beijing Aceway Telecom Technology Co., Ltd. from August 2004 to September
2006, and as finance manager with Beijing Xinao Concrete Co., Ltd from
September 2006 to April 2009. Mr. He was the financial controller of
Guangdong FAB Group Co., Ltd July 2009 to June 2010. Most recently, from
August 2010 to October 2011, Mr. He was the financial controller with the
Companys subsidiary, Xin Ao. Mr. He has not held any public company
directorships during the past five years.
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Tao Jin
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Mr. Jin became a member of our Board of Directors on May
4, 2011. Mr. Jin is Senior Partner with the Chinese law firm of Jincheng
TongDa & Neal, based in Beijing, where he specializes in M&A,
foreign investments in China and capital market transactions. Mr. Jin
started his legal practice in 1996 at the New York office of Cleary,
Gottlieb, Steen & Hamilton where he represented numerous investment
banks and corporations in a variety of M&A and capital markets
transactions. Mr. Jin joined Sullivan & Cromwells Hong Kong office in
1999 where he continued to focus on M&A transactions. His clients
included major multinational corporations, investment banks, PRC
corporations and private equity funds. Mr. Jin joined JP Morgans legal
department in 2002 as head legal counsel for M&A and capital market
transactions in China. Immediately prior to joining Jincheng TongDa, Mr.
Jin was a partner with Jun He Law Offices from 2005 through 2010. Mr. Jin
has not held any other public company directorships during the past five
years. Mr. Jin received his B.S. from Beijing University and his J.D. from
Columbia University, and is fluent in English and Mandarin. Mr. Jin is
admitted to the New York bar.
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Mr. Jin serves as Chairman of our Compensation Committee
and as a member of our Audit Committee and Nominating and Governance
Committee.
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Xinyong Gao
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Mr. Gao is currently the Operations Director of Capital Holding
(International) Limited, Beijing Capital
Development Holding Group Co., Ltd., a real estate development company
based in China, a position he has held since September 2011. From July
1994 to September 2011, Mr. Gao served in various capacities, most
recently the Deputy General Manager, International Engineering Contracting
Dept., with Beijing Urban Construction Group Co. Ltd., a China-based
construction company which built 41 structures for the 2008 Beijing
Olympics. Mr. Gao received his B.A. from Shandong Normal University and his M.B.A. from
the Open University of Hong Kong.
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Mr. Gao serves as Chairman of the Companys Nominating and Governance
Committee and as a member of our Audit Committee and Compensation
Committee.
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Ken Ren
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Mr. Ren is currently the chief financial officer of China Green
Agriculture Inc., a position he has held since 2010. Previously, Mr. Ren served as a capital market
analyst for the Federal Home Loan Bank of Des Moines, where he analyzed,
priced, and assisted in trading investments and issuing debt, conducted
hedges and performed analytical work for the bank's $20 billion investment
portfolio of mortgage whole loan and mortgage backed securities. Before
this, Mr. Ren served as a senior investment associate at an asset
management subsidiary of Wells Fargo, which provides money management
services to institutional clients. Earlier, Mr. Ren worked at Residential
Capital LLC, a subsidiary of Ally Financial, where he was responsible for
risk analytics and reporting in managing its credit residual portfolio.
Mr. Ren received Ph.D. in operations research in 2006, and M.S. in
computational finance in 2004, both from Purdue University, West
Lafayette.
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Mr. Ren serves as Chairman of the Companys Audit Committee and as a
member of our Compensation Committee and Nominating and Governance
Committee.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires directors, executive
officers and stockholders who own more than ten percent of the outstanding
Common Stock of the Company to file with the SEC and Nasdaq reports of ownership
and changes in ownership of voting securities of the Company and to furnish
copies of such reports to us.
Based solely on a review of the copies of such forms received
by the Company, we believe that with respect to the year ended June 30, 2012,
the Companys directors, officers and more than ten-percent stockholders timely
filed all such required forms except as follows: Our current officers and/or
directors Xianfu Han, Weili He and Yanwei He, our former
officer and director Jeremy Goodwin, and our former directors Larry Goldman,
Denis Slavich, Sean Wang, Jing Liu and Yang Wang were late in filing their Form 3s. Ms. Liu and Mr.
Sean Wang were late in filing one Form 4 each for one reportable transaction
each, Mr. Goodwin was late in filing two Form 4s for a total of five reportable
transactions, Mr. Slavich was late in filing two Form 4s for a total of nine
reportable transactions, and Mr. Goldman was late in filing a Form 4 for two
reportable transactions.
CORPORATE GOVERNANCE
Our current corporate governance practices and policies are
designed to promote stockholder value and we are 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.
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Corporate Governance Guidelines
We and our Board are committed to high standards of corporate governance as an important component in building and maintaining stockholder 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 and the provisions of the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well
as the emerging best practices of other companies. The current corporate governance guidelines are available on the Company’s website
www.China-ACM.com
. Printed copies of our corporate governance guidelines may be obtained, without
charge, by contacting the Corporate Secretary, China Advanced Construction Materials Group, Inc., Yingu Plaza, 9 Beisihuanxi Road, Suite 1708, Haidian District, Beijing 100080 PRC.
The Board and Committees of the Board
The Company is governed by the Board that currently consists of five members as identified above. On August 7, 2009, the Board established three committees: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee.
Each of these committees is 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 may be obtained, without charge, by
contacting the Corporate Secretary, China Advanced Construction Materials Group, Inc., Yingu Plaza, 9 Beisihuanxi Road, Suite 1708, Haidian District, Beijing 100080 PRC or through our website at www.China-ACM.com.
Prior to establishing the committees of the Board of Directors, our entire Board of Directors handled the functions that would otherwise be handled by each of the committees.
During the fiscal year ended June 30, 2011, the Board of Directors held 5 meetings. All directors attended all of the meetings of the Board and each committee upon which the director served during the fiscal year ended June 30, 2011. Three of our
directors attended the 2011 annual meeting of shareholders. We do not have a policy with regard to Board members’ attendance at annual meetings of shareholders.
Governance Structure
Currently, our Chief Executive Officer is also our Chairman. The Board of Directors believes that, at this time, having a combined Chief Executive Officer and Chairman is the appropriate leadership structure for the Company. In making this
determination, the Board of Directors considered, among other matters, the size of the company as well as Mr. Han’s experience and tenure of having been Chairman and Chief Executive Officer since 2008, and felt that his experience, knowledge,
and personality allowed him to serve ably as both Chairman and Chief Executive Officer. Among the benefits of a combined Chief Executive Officer/Chairman considered by the Board of Directors is that such structure promotes clearer leadership and
direction for our Company and allows for a single, focused chain of command to execute our strategic initiatives and business plans. We have not appointed a lead independent director for our Board of Directors.
The Board’s Role in Risk Oversight
The Board oversees that the assets of the Company are properly safeguarded, that the appropriate financial and other controls are maintained, and that the Company’s business is conducted wisely and in compliance with applicable laws and
regulations and proper governance. Included in these responsibilities is the Board of Directors’ oversight of the various risks facing the Company. In this regard, the Board seeks to understand and oversee critical business risks. The Board
does not view risk in isolation. Risks are considered in virtually every business decision and as part of the Company’s business strategy. The Board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, purposeful
and appropriate risk-taking is essential for the Company to be competitive on a global basis and to achieve its objectives.
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While the Board oversees risk management, Company management is charged with managing risk. The Company has internal processes and a strong internal control environment to identify and manage risks and to communicate with the Board. The Board and
the Audit Committee monitor and evaluate the effectiveness of the internal controls and the risk management program at least annually. The Board implements its risk oversight function both as a whole and through Committees. Much of the work is
delegated to
various Committees, which meet regularly and report back to the full Board. All Committees play significant roles in carrying out the risk oversight function. In particular:
-
The Audit Committee oversees risks related to the Company’s financial statements, the financial reporting process, accounting and legal matters. The Audit Committee oversees the internal audit function and the Company’s ethics programs,
including the Codes of Business Conduct. The Audit Committee members meet separately with representatives of the independent auditing firm and the Company’s internal audit group; and
-
The Compensation Committee evaluates the risks and rewards associated with the Company’s compensation philosophy and programs. The Compensation Committee reviews and approves compensation programs with features that mitigate risk without
diminishing the incentive nature of the compensation. Management discusses with the Compensation Committee the procedures that have been put in place to identify and mitigate potential risks in compensation.
Independent Directors
Our Board has determined that the majority of the Board is comprised of “independent directors” within the meaning of applicable Nasdaq listing standards relating to Board composition and Section 301 of the Sarbanes-Oxley Act of 2002.
Our independent directors are Mr. Jin, Mr. Ren and Mr. Gao.
Audit Committee
Our audit committee consists of Mr. Ren, Mr. Jin and Mr. Gao, each of whom is “independent” as that term is defined under the Nasdaq listing standards. The audit committee oversees our accounting and financial reporting processes and
the audits of the financial statements of our company. Mr. Ren serves as our audit committee financial expert as that term is defined by the applicable SEC rules. The audit committee is responsible for, among other things:
-
selecting our independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors;
-
reviewing with our independent auditors any audit problems or difficulties and management’s response;
-
reviewing and approving all proposed related-party transactions, as defined in Item 404 of Regulation S-K under the Securities Act of 1933, as amended;
-
discussing the annual audited financial statements with management and our independent auditors;
-
reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of significant internal control deficiencies;
-
annually reviewing and reassessing the adequacy of our audit committee charter;
-
meeting separately and periodically with management and our internal and independent auditors; and
-
reporting to the full board of directors; and
-
such other matters that are specifically delegated to our audit committee by our board of directors from time to time.
All members of the Audit Committee met by telephone or in person 7 times during the fiscal year ended June 30, 2011.
The Report of the Audit Committee regarding the audited financials statements of the Company for the fiscal year ended June 30, 2011 is located on
Appendix A
to this Proxy Statement.
9
Compensation Committee
Our compensation committee consists of Mr. Jin, Mr. Ren and Mr. Gao, each of whom is “independent” as that term is defined under the Nasdaq listing standards. 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 responsible for, among other things:
-
approving and overseeing the compensation package for our executive officers;
-
reviewing and making recommendations to the board with respect to the compensation of our directors;
-
reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of those goals and objectives, and setting the compensation level
of our chief executive officer based on this evaluation; and
-
reviewing periodically and making recommendations to the board regarding any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.
The compensation committee has sole authority to retain and terminate outside counsel, compensation consultants retained to assist the compensation committee in determining the compensation of the Chief Executive Officer or senior executive
officers, or other experts or consultants, as it deems appropriate, including sole authority to approve the firms' fees and other retention terms. The compensation committee may also form and delegate authority to subcommittees and may delegate
authority to one or more designated members of the compensation committee. The compensation committee may from time to time seek recommendations from the executive officers of the Company regarding matters under the purview of the compensation
committee, though the authority to act on such recommendations rests solely with the compensation committee.
All members of the Compensation Committee met by telephone or in person 2 times during the fiscal year ended June 30, 2011.
Governance and Nominating Committee
Our governance and nominating committee consists of Mr. Gao, Mr. Ren and Mr. Jin, each of whom is “independent” as that term is defined under the Nasdaq listing standards. The governance and nominating committee assists the board of
directors 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:
-
identifying and recommending to the board nominees for election or re-election to the board, or for appointment to fill any vacancy;
-
reviewing annually with the board the current composition of the board in light of the characteristics of independence, age, skills, experience and availability of service to us;
-
identifying and recommending to the board the directors to serve as members of the board’s committees; and
-
monitoring compliance with our code of business conduct and ethics.
All members of the Governance and Nominating Committee met by telephone or in person 3 times during the fiscal year ended June 30, 2011.
Code of Ethics
The Board has adopted a Code of Conduct and Ethics that applies to the Company’s directors, officers and employees. A copy of this policy is available via our website at
www.China-ACM.com
. Printed copies of our Code of Ethics may be
obtained, without charge, by contacting the Corporate Secretary, China Advanced Construction Materials Group, Inc., Yingu Plaza, 9 Beisihuanxi Road, Suite 1708, Haidian District, Beijing 100080 PRC. During the fiscal year ended June 30, 2011, there
were no waivers of our Code of Ethics.
10
Stockholder Communication with the Board of Directors
.
Stockholders may communicate with the Board, including
non-management directors, by sending a letter to our board of directors, c/o
Corporate Secretary, China Advanced Construction Materials Group, Inc., Yingu
Plaza, 9 Beisihuanxi Road, Suite 1708, Haidian District, Beijing 100080 PRC for
submission to the board or committee or to any specific director to whom the
correspondence is directed. Stockholders communicating through this means should
include with the correspondence evidence, such as documentation from a brokerage
firm, that the sender is a current record or beneficial stockholder of the
Company. All communications received as set forth above will be opened by the
Corporate Secretary or his designee for the sole purpose of determining whether
the contents contain a message to one or more of our directors. Any contents
that are not advertising materials, promotions of a product or service, patently
offensive materials or matters deemed, using reasonable judgment, inappropriate
for the Board will be forwarded promptly to the chairman of the Board, the
appropriate committee or the specific director, as applicable.
EXECUTIVE COMPENSATION
Summary Compensation Table Fiscal Years Ended June 30, 2011
and 2010
The following table sets forth information concerning all cash
and non-cash compensation awarded to, earned by or paid to the named persons for
services rendered in all capacities during the noted periods. No other executive
officers received total annual salary and bonus compensation in excess of
$100,000 during the fiscal years ended June 30, 2011 and 2010.
Name and
|
|
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Stock
|
|
|
Option
|
|
|
Non-Equity
|
|
|
Non-
|
|
|
All Other
|
|
|
Total
|
|
Principal
|
|
Ended
|
|
|
($)
|
|
|
($)
|
|
|
Awards
|
|
|
Awards
|
|
|
Incentive
Plan
|
|
|
Qualified
|
|
|
Compensation
|
|
|
($)
|
|
Position
|
|
June 30
|
|
|
|
|
|
|
|
|
($)
|
|
|
($)
|
|
|
Compensation
|
|
|
Deferred
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
|
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($)
|
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($)
|
|
|
|
|
|
|
|
Xianfu Han
|
|
2011
|
|
|
140,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140,000
|
|
Chairman and CEO
|
|
2010
|
|
|
140,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
140,000
|
|
Weili He,
|
|
2011
|
|
|
109,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
109,169
|
|
Vice Chairman and
COO
|
|
2010
|
|
|
109,342
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
109,342
|
|
Jeremy Goodwin
|
|
2011
|
|
|
180,000
|
|
|
|
|
|
123,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
303,912
|
|
President and CFO
|
|
2010
|
|
|
90,000*
|
|
|
|
|
|
119,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
209,496
|
|
*
Equivalent to half a fiscal year January June 2010
Employment Agreements
In connection with the reverse acquisition of BVI-ACM on April
29, 2008, Mr. Han was elected as our Chairman and Chief Executive Officer
effective immediately. On May 1, 2008, we entered into a three year Employment
Agreement with Mr. Han pursuant to which he will receive an annual salary of
$140,000 for service as our Chief Executive Officer.
Upon termination of Mr. Hans employment because of death,
disability or for cause, the Company will pay or provide to Mr. Han or his
estate, as the case may be (i) any unpaid base salary and any accrued vacation
through the date of termination; (ii) any unpaid annual bonus accrued with
respect to the fiscal year ending on or preceding the date of termination; (iii)
reimbursement for any unreimbursed expenses properly incurred through the date
of termination; and (iv) all other payments or benefits to which Mr. Han may be
entitled under the terms of any applicable employee benefit plan, program or
arrangement.
Upon the termination of Mr. Hans employment by the Company
without cause, the Company will pay or provide to Mr. Han (i) all amounts due as
if Mr. Hans employment were terminated because of death, disability or for
cause, and (ii) subject to Mr. Hans execution (and non-revocation) of a general
release of claims against the Company and its affiliates in a form reasonably
requested by the Company, (a) continued payment of his base salary for two
months after termination, payable in accordance with the regular
payroll practices of the Company, but off the payroll; and (b) payment of his cost of continued medical coverage for two (2) months after termination (subject to his co-payment of the costs in the same proportion as such costs were shared
immediately prior to the date of termination). Payments provided under this Section 6(d) shall be in lieu of any termination or severance payments or benefits for which Mr. Han may be eligible under any of the plans, policies or programs of the
Company.
11
Outstanding Equity Awards at Fiscal Year End
None.
Director Compensation
On October 3, 2008, we entered into a one year director agreement with Mr. Goodwin in connection with his service as a member of our board of directors. The agreement provides for a monthly fee of $3,500 and stock options to purchase an
aggregate of 50,000 shares of our common stock at an exercise price of $2.90 per share. The options vest in equal quarterly installments over the first twelve months of the agreement.
On February 7, 2010, we entered into a director agreement with our former
director Jing Liu pursuant to which she received, annually, a fee of $25,000 in cash and 10,000 restricted shares of the Company’s common stock, which vested in four equal
quarterly installments. Ms. Liu resigned as a director effective as of June 9,
2012.
On May 4, 2011, we entered into a director agreement with Tao Jin pursuant to which he will receive, annually, a fee of $25,000 in cash and 10,000 restricted shares of the Company’s common stock, which shall vest in four equal quarterly
installments.
On May 25, 2011, we entered into a director agreement with our former director Yang Wang pursuant to which she received, annually, a fee of $25,000 in cash and 10,000 restricted shares of the Company's common stock, which vested in four equal quarterly
installments. Ms. Wang resigned as a director effective as of June 9, 2012.
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 under the Securities Exchange Act of 1934, as
amended. 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.
Indemnification of Directors and Executive Officers and Limitation of Liability
The General Corporation Law of Delaware, Section 102(b)(7) provides that directors, officers, employees or agents of Delaware corporations are entitled, under certain circumstances, to be indemnified against expenses (including attorneys’
fees) and other liabilities actually and reasonably incurred by them in connection with any suit brought against them in their capacity as a director, officer, employee or agent, if they acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. This statute provides that directors, officers, employees
and agents may also be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by them in connection with a derivative suit brought against them in their capacity as a director, if they acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made without court approval if such person was adjudged liable to the corporation.
On July 26 2011, the Company issued a press release announcing that its board of directors received a preliminary, non-binding offer from its Chairman and Chief Executive Officer, Mr. Xianfu Han, and its Vice Chairman and Chief Operating Officer,
Mr. Weili He, to acquire all of the outstanding shares of the Company's common stock not currently owned by them in a going private transaction at a proposed price of $2.65 per share in cash (“Proposed Transaction”).
As previously reported, since July 29, 2011, multiple class action complaints
(the Stockholder Actions) have been filed against the Company and our Board of
Directors in the Court of Chancery of the State of Delaware, generally alleging
that the Company and all of our directors breached their fiduciary duties in
connection with the receipt by the Company of a preliminary, non-binding offer
to consummate the Proposed Transaction. The Stockholder Actions have been
consolidated under the caption In re China Advanced Construction Materials Group
Litigation, Consolidated C.A. No. 6729-CS. The Stockholder Actions seek, among
other things, to declare that the Proposed Transaction is unfair, unjust and
inequitable, to enjoin the Company from taking any steps necessary to accomplish
or implement the Proposed Transaction, and damages in the event the Proposed
Transaction is consummated.
12
Changes in Control
There are currently no arrangements which may result in a
change in control of the Company.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of June 12, 2012, certain
information with respect to the beneficial ownership of our common shares by
each shareholder known by us to be the beneficial owner of more than 5% of our
common shares, as well as by each of our current directors and executive
officers as a group. Each person has sole voting and investment power with
respect to the shares of common stock, except as otherwise indicated. Beneficial
ownership is determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934 and does not necessarily bear on the economic incidents of
ownership or the rights to transfer the shares described below. Unless otherwise
indicated, (a) each stockholder has sole voting power and dispositive power with
respect to the indicated shares and (b) the address of each stockholder who is a
director or executive officer is c/o Yingu Plaza, #1708, 9 Beisihuanxi Road,
Haidian District, Beijing 100080, China.
Name & Address of
|
|
Office, If Any
|
|
|
Amount and Nature of
|
|
|
Percent of
|
|
Beneficial Owner
|
|
|
|
|
Beneficial Ownership
|
|
|
Class
(1) (2)
|
|
Officers and
Directors
|
|
Xianfu Han (3)
|
|
Chairman and CEO
|
|
|
5,785,750
|
|
|
32.45%
|
|
Weile He (4)
|
|
Vice Chairman
and COO
|
|
|
3,023,833
|
|
|
16.96%
|
|
Yanwei He
|
|
Interim CFO
|
|
|
-
|
|
|
*
|
|
Sean Wang
|
|
Director
|
|
|
10,000
|
|
|
*
|
|
Ken Ren
|
|
Director
|
|
|
-
|
|
|
*
|
|
Tao Jin
|
|
Director
|
|
|
2,500
|
|
|
*
|
|
Xinyong Gao
|
|
Director
|
|
|
-
|
|
|
*
|
|
All officers and directors as a
group
(7 persons named above)
|
|
|
|
|
8,822,333
|
|
|
49.48%
|
|
5% Security Holders
|
|
Xianfu Han (3)
|
|
Chairman and
CEO
|
|
|
5,785,750
|
|
|
32.45%
|
|
Weile He (4)
|
|
Vice Chairman and COO
|
|
|
3,023,833
|
|
|
16.96%
|
|
*Less than 1%
(1)
|
As of the close of business on June 12, 2012, there were
17,829,464 shares of our common stock outstanding.
|
|
|
(2)
|
In determining beneficial ownership of the common stock,
the number of shares shown includes shares which the beneficial owner may
acquire within 60 days of August 20, 2010 upon exercise of convertible
securities, warrants or options. In accordance with Rule 13d-3 in
determining the percentage of common stock owned by a person on August 20,
2010 (a) the numerator is the number of shares of the class beneficially
owned by such person, including shares which the beneficial owner may
acquire within 60 days upon conversion or exercise of the warrants and
other convertible securities, and (b) the denominator is the sum of (i)
the total shares of that class outstanding on August 20, 2010, and (ii)
the total number of shares that the beneficial owner may acquire upon
conversion or exercise of other securities. Unless otherwise stated, each
beneficial owner has sole power to vote and dispose of the
shares.
|
|
|
(3)
|
On June 11, 2008, Mr. Han entered into a Securities
Escrow Agreement by and among the investors to the private placement that
closed on June 11, 2008 and American Stock Transfer & Trust Company,
or AST, whereby 3,500,000 shares of the Companys common stock owned by Mr. Han were placed into escrow,
with AST appointed as the escrow agent. The 3,500,000 shares were
thereafter transferred into the name of AST and are to be held in escrow
and released to Mr. Han if the Company does, or to the investors if the
Company does not, meet certain performance milestones described in the
Securities Escrow Agreement. Mr. Han maintains voting power over all
3,500,000 shares until such time as any such shares are transferred to the
investors, at which time, such transferred shares will be beneficially
owned by such investors.
|
13
(4)
|
On June 11, 2008, Mr. He entered into a Securities Escrow
Agreement by and among the investors to the private placement that closed
on June 11, 2008 and American Stock Transfer & Trust Company, or AST,
whereby 2,000,000 shares of the Companys common stock owned by Mr. He
were placed into escrow, with AST appointed as the escrow agent. The
2,000,000 shares were thereafter transferred into the name of AST and are
to be held in escrow and released to Mr. He if the Company does, or to the
investors if the Company does not, meet certain performance milestones
described in the Securities Escrow Agreement. Mr. He maintains voting
power over all 2,000,000 shares until such time as any such shares are
transferred to the investors, at which time, such transferred shares will
be beneficially owned by such investors.
|
TRANSACTIONS WITH RELATED PERSONS,
PROMOTERS AND
CERTAIN CONTROL PERSONS
Transactions with Related Persons
Except as discussed below, since the beginning of the last
fiscal year, there have not been any transaction, nor is there 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).
Mr. He Weili, the Companys Chief Operating Officer, leased
office space to the Company at approximately the current fair market value from
July 2009 to June 2011 with annual payments of approximately $176,000. For the
years ended June 30, 2011 and 2010, the Company recorded rent expense to the
shareholder in the amount of approximately $176,000 for fiscal 2011 and $173,000
for fiscal 2010. As of June 30, 2011 and 2010, approximately $40,000 and
$22,000, respectively, remained unpaid.
Policies and Procedures for Review, Approval or Ratification
of Transactions with Related Persons
We are in the process of finalizing a written related-person
transactions policy that sets forth our policies and procedures regarding the
identification, review, consideration and approval or ratification of
related-persons transactions. For purposes of our policy only, a
related-person transaction will be a transaction, arrangement or relationship
(or any series of similar transactions, arrangements or relationships) in which
we and any related person are participants involving an amount that exceeds
$50,000. Transactions involving compensation for services provided to us as an
employee, director, consultant or similar capacity by a related person will not
be covered by this policy. A related person will be any executive officer,
director or a holder of more than five percent of our common stock, including
any of their immediate family members and any entity owned or controlled by such
persons.
Under the policy, we expect that where a transaction has been
identified as a related-person transaction, management must present information
regarding the proposed related-person transaction to our audit committee (or,
where approval by our audit committee would be inappropriate, to another
independent body of our board of directors) for consideration and approval or
ratification. The presentation will be expected to include a description of,
among other things, the material facts, and the direct and indirect interests of
the related persons, the benefits of the transaction to us and whether any
alternative transactions are available. To identify related-person transactions
in advance, we will rely on information supplied by our executive officers,
directors and certain significant stockholders. In considering related-person
transactions, our audit committee will take into account the relevant available
facts and circumstances including, but not limited to:
-
the risks, costs and benefits to us;
-
the impact on a directors independence in the
event the related person is a director, immediate family member of a
director or an entity with which a director is affiliated;
-
the terms of the transaction;
-
the availability of other sources for
comparable services or products; and
-
the terms available to or from, as the case may
be, unrelated third parties or to or from our employees generally.
14
In the event a director has an interest in the proposed transaction, the director must excuse himself or herself form the deliberations and approval. Our policy will require that, in determining whether to approve, ratify or reject a related-person
transaction, our audit committee must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the best interests of our company and our stockholders, as our audit committee determines in the good faith
exercise of its discretion. We did not previously have a formal policy concerning transactions with related persons.
Promoters and Certain Control Persons
We did not have any promoters at any time during the past five fiscal years.
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.
15
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors 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 keep themselves informed of the Company’s business by participating in Board and Committee meetings, by reviewing analyses and reports, and through
discussions with the Chairman and other officers.
See “Governance and Nominating Committee” above for a discussion of the process for selecting directors.
There are currently five directors serving on the Board. At the Meeting, five directors will be elected. The individuals who have been nominated for election to the Board at the Meeting are listed in the table below. Each of the nominees is a
current director of the Company.
If, as a result of circumstances not now known or foreseen, any of the nominees is unavailable to serve as a nominee for 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 plurality 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
.
Director Selection
There have been no material changes to the procedures by which stockholders may recommend nominees to our board of directors since such procedures were last disclosed. As provided in its Charter, the Governance and
Nominating Committee of the Company’s Board is responsible for identifying individuals qualified to become Board members and recommending to the Board nominees for election as directors. The Governance and Nominating Committee considers
recommendations for director nominees, including those submitted by the Company’s stockholders, on the bases described below. Stockholders may recommend nominees by writing to the Governance and Nominating Committee c/o the Corporate
Secretary, China Advanced Construction Materials Group, Inc., Yingu Plaza, 9 Beisihuanxi Road, Suite 1708, Haidian District, Beijing 100080 PRC. Stockholder recommendations will be promptly provided to the chairman of the Governance and Nominating
Committee. To be considered by the Governance and Nominating Committee for inclusion in the proxy for the 2013 annual meeting, recommendations must be received by the Secretary of the Company not later than the close of business on December 31, 2012
or, if the date of the 2013 annual meeting has been changed by more than 30 days from the date of this year’s meeting, by no later than 30 days prior to the date of printing and mailing our material for the annual meeting.
In identifying and evaluating nominees, the Governance and Nominating Committee may consult with the other Board members, management, consultants, and other individuals likely to possess an understanding of the
Company’s business and knowledge of suitable candidates. In making its recommendations, the Governance and Nominating Committee assesses the requisite skills and qualifications of nominees and the composition of the Board as a whole in the
context of the Board's criteria and needs. In evaluating the suitability of individual Board members, the Governance and Nominating Committee may take into account many factors, including general understanding of marketing, finance and other
disciplines relevant to the success of a publicly traded company in today’s business environment; understanding of the Company’s business and technology; the nature of the Company’s operations; educational and professional
background; and personal accomplishment. The Governance and Nominating Committee evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of the Company’s
business and represent stockholder interests through the exercise of sound judgment, using its diversity of experience. The Governance and Nominating Committee also ensures that a majority of nominees would be “independent directors” as
defined under the applicable rules of the SEC and Nasdaq. For a description of the qualifications that the Nominating and Corporate Governance Committee seeks in potential nominees, please see “Nominees – Qualifications for All
Directors” below.
The Board of Directors recommends a vote FOR the election of the nominees listed below.
16
NOMINEES
The names, the positions with the Company and the ages as of
the Record Date of the individuals who are our nominees for election as
directors are:
|
|
|
|
Position with the
|
|
Term as Director of
|
Name
|
|
Age
|
|
Company
|
|
Company
|
Xianfu Han
|
|
51
|
|
Chairman, Chief
Executive Officer and Director
|
|
April 2008
Present
|
Weili He
|
|
53
|
|
Chief Operating Officer, Vice
Chairman and Director
|
|
April 2008 Present
|
Tao Jin
|
|
43
|
|
Director
|
|
May 2011 Present
|
Xinyong Gao
|
|
39
|
|
Director
|
|
June 2012 Present
|
Ken Ren
|
|
36
|
|
Director
|
|
June 2012
Present
|
Director Qualifications - General
Directors are responsible for overseeing the Companys business
consistent with their fiduciary duty to shareowners. This significant
responsibility requires highly-skilled individuals with various qualities,
attributes and professional experience. The Board believes that there are
general requirements for service on the Companys Board of Directors that are
applicable to all directors and that there are other skills and experience that
should be represented on the Board as a whole but not necessarily by each
director. The Board and the Governance and Nominating Committee of the Board
consider the qualifications of directors and director candidates individually
and in the broader context of the Boards overall composition and the Companys
current and future needs.
Qualifications for All Directors
In its assessment of each potential candidate, including those
recommended by shareowners, the Governance and Nominating Committee considers
the nominees judgment, integrity, experience, independence, understanding of
the Companys business or other related industries and such other factors the
Governance and Nominating Committee determines are pertinent in light of the
current needs of the Board. The Governance and Nominating Committee also takes
into account the ability of a director to devote the time and effort necessary
to fulfill his or her responsibilities to the Company.
The Board and the Governance and Nominating Committee require
that each director be a recognized person of high integrity with a proven record
of success in his or her field. Each director must demonstrate innovative
thinking, familiarity with and respect for corporate governance requirements and
practices, an appreciation of multiple cultures and a commitment to
sustainability and to dealing responsibly with social issues. In addition to the
qualifications required of all directors, the Board assesses intangible
qualities including the individuals ability to ask difficult questions and,
simultaneously, to work collegially.
The Board does not have a specific diversity policy, but
considers diversity of race, ethnicity, gender, age, cultural background and
professional experiences in evaluating candidates for Board membership.
Diversity is important because a variety of points of view contribute to a more
effective decision-making process.
Qualifications, Attributes, Skills and Experience to be
Represented on the Board as a Whole
The Board has identified particular qualifications, attributes,
skills and experience that are important to be represented on the Board as a
whole, in light of the Companys current needs and business priorities. The
Companys services are performed in areas of future growth located outside of
the United States. Accordingly, the Board believes that international experience
or specific knowledge of key geographic growth areas and diversity of
professional experiences should be represented on the Board. In addition, the
Companys business is multifaceted and involves complex financial transactions.
Therefore, the Board believes that the Board should include some directors with
a high level of financial literacy and some directors who possess relevant
business experience as a Chief Executive Officer or President. Our business
involves complex technologies in a highly specialized industry. Therefore, the
Board believes that extensive knowledge of the Companys business and industry
should be represented on the Board. The Companys business also requires
compliance with a variety of regulatory requirements and relationships with
various governmental entities. Therefore, the Board believes that governmental,
political or diplomatic expertise should be represented on the Board.
17
Summary of Qualifications of Nominees for Director
Set forth below is a summary of some of the specific qualifications, attributes, skills and experiences of our directors which we believe qualify them to serve on our Board. For more detailed information, please refer to the biographical information
for each director set forth above.
Xianfu Han
. Mr. Han has extensive senior management experience in the industry in which we operate, having served as our Chief Executive Officer and Chairman since September 2008 and as the Chairman of Xin Ao since 2003. Mr Han has over 25
years of management experience in the building material industry, and has worked extensively with various governmental agencies on behalf of our industry in Beijing.
Weili He
. Mr. He has extensive experience in the concrete and
construction industry, and has specific expertise in strategic planning and
plant management and operation.
Tao Jin
. Mr. Jin brings to the Board extensive legal and transactional capital markets experience and has worked extensively with both U.S. and PRC based companies, and has a high level of both legal and financial literacy and sophistication.
Xinyong Gao
. Mr. Gao brings to the Board extensive experience in the
construction industry, both within China and internationally, and years of
service in various senior management positions.
Ken Ren
. Mr. Ren brings to the Board extensive experience in finance and
banking and has a high level of financial literacy and sophistication.
General Information
For information as to the shares of the Common Stock held by each nominee, see “Security Ownership of Certain Beneficial Owners and Management,” above.
See “Directors and Executive Officers” above for biographical summaries for each of our director nominees.
All directors will hold office for the terms indicated, or until their earlier death, resignation, removal or disqualification, and until their respective successors are duly elected and qualified. There are no arrangements or understandings between
any of the nominees, directors or executive officers and any other person pursuant to which any of our nominees, directors or executive officers have been selected for their respective positions. No nominee, member of the Board of Directors or
executive officer is related to any other nominee, member of the Board of Directors or executive officer.
18
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Audit Committee has selected Friedman LLP (“Friedman”) to serve as the independent registered public accounting firm of the Company for the fiscal year ending June 30, 2012. As discussed below, Friedman was appointed as the
Company’s independent registered public accounting firm on December 27, 2010.
We are asking our stockholders to ratify the selection of Friedman as our independent registered public accounting firm. Although ratification is not required by our bylaws or otherwise, the Board is submitting the selection of Friedman to our
stockholders for ratification as a matter of good corporate practice. In the event our stockholders fail to ratify the appointment, the Audit Committee may reconsider this appointment.
Representatives of Friedman 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.
Dismissal of Previous Independent Registered Public Accounting Firm
On December 27, 2010, our Board of Directors approved the dismissal of Frazer Frost, LLP (“Frazer Frost”) as the Company’s independent auditor, effective immediately.
Frazer Frost’s report on the Company’s financial statements as of and for the year ended June 30, 2010 did not contain an adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or
accounting principles. The report of Moore Stephens Wurth Frazer and Torbet, LLP (“MSWFT”), the predecessor entity to Frazer Frost, on the Company’s consolidated financial statements for the year ended June 30, 2009 also did not
contain an adverse opinion or disclaimer of opinion, and its report was not qualified or modified as to uncertainty, audit scope, or accounting principles. Prior to January 1, 2010, MSWFT was engaged to audit the Company's consolidated financial
statements. On January 6, 2010, the Company was notified that, effective January 1, 2010, certain partners of MSWFT and Frost, PLLC (“Frost”) formed Frazer Frost, a new partnership. Pursuant to the terms of a combination agreement by and
among MSWFT, Frazer Frost and Frost, each of MSWFT and Frost contributed all of their assets and certain of their liabilities to Frazer Frost, resulting in Frazer Frost assuming MSWFT’s engagement letter with the Company and becoming the
Company’s independent accounting firm on January 1, 2010.
During the year ended June 30, 2010, and through Frazer Frost’s dismissal on December 27, 2010, there were (1) no disagreements with Frazer Frost or MSWFT on any matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Frazer Frost or MSWFT, would have caused Frazer Frost to make reference to the subject matter of the disagreements in connection with its report, and (2) no
reportable events within the meaning set forth in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions, or a reportable event within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.
Engagement of New Independent Registered Public Accounting Firm
Concurrent with the decision to dismiss
Frazer Frost as the Company’s independent auditor, our Audit Committee appointed Friedman as the Company’s independent auditor.
During the years ended June 30, 2010 and 2009, and through the date hereof, neither the Company nor anyone acting on its behalf consulted Friedman
with respect to (i) the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided to the Company or oral advice was provided that Friedman concluded was an important
factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement or reportable events set forth in Item 304(a)(1)(iv) and (v),
respectively, of Regulation S-K.
Independent Registered Public Accounting Firm’s Fees
The following are the fees billed to us by our auditors during fiscal years ended June 30, 2011 and 2010:
19
|
|
Years Ended
|
|
|
|
June 30, 2011
|
|
|
June 30, 2010
|
|
Audit Fees
|
$
|
122,000
|
|
$
|
100,000
|
|
Interim Financial Review Fees
|
|
60,000
|
|
|
60,000
|
|
Tax Fees
|
|
13,000
|
|
|
11,000
|
|
All Other Fees
|
|
0
|
|
|
61,090
|
|
Total
|
$
|
195,000
|
|
$
|
232,090
|
|
Audit Fees
consist of the aggregate fees billed for
professional services rendered for the audit of our annual financial statements
and the reviews of the financial statements included in our Forms 10-Q and for
any other services that were normally provided by our independent auditor,
respectively, in connection with our statutory and regulatory filings or
engagements.
Audit Related Fees
consist of the aggregate fees billed
for professional services rendered for assurance and related services that were
reasonably related to the performance of the audit or review of our financial
statements and were not otherwise included in Audit Fees.
Tax Fees
consist of the aggregate fees billed for
professional services rendered for tax compliance, tax advice and tax planning.
Included in such Tax Fees were fees for preparation of our tax returns and
consultancy and advice on other tax planning matters.
All Other Fees
consist of the aggregate fees billed for
products and services provided by our independent and not otherwise included in
Audit Fees, Audit Related Fees or Tax Fees. Included in such Other Fees were
fees for services rendered by our independent auditor in connection with our
private and public offerings conducted during such periods.
Our Audit Committee has considered whether the provision of the
non-audit services described above is compatible with maintaining auditor
independence and determined that such services are appropriate. Before auditors
are engaged to provide us audit or non-audit services, such engagement is
(without exception, required to be) approved by the Audit Committee of our Board
of Directors.
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 Friedman for our consolidated financial statements as of
and for the year ended June 30, 2012.
The Board of Directors recommends a vote FOR ratification of
the selection of Friedman LLP as the Companys independent registered public
accounting firm for the fiscal year ending June 30, 2012.
20
STOCKHOLDER PROPOSALS FOR THE 2013 ANNUAL MEETING
If you wish to have a proposal included in our proxy statement
for next years annual meeting in accordance with Rule 14a-8 under the Exchange
Act, your proposal must be received by the Corporate Secretary of China Advanced
Construction Materials Group, Inc. at Yingu Plaza, 9 Beisihuanxi Road, Suite
1708, Haidian District, Beijing 100080 PRC, no later than the close of business
on December 31, 2012. A proposal which is received after that date or which
otherwise fails to meet the requirements for stockholder proposals established
by the SEC will not be included. The submission of a stockholder 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 China Advanced Construction Materials Group,
Inc., c/o Corporate Secretary, Yingu Plaza, 9 Beisihuanxi Road, Suite 1708,
Haidian District, Beijing 100080 PRC. A copy of our Annual Report on Form 10-K
is also made available on our website after it is filed with the SEC.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors
has no knowledge of any business which will be presented for consideration at
the Meeting other than the election of directors and the ratification of the
appointment of the accountants of the Company. Should any other matters be
properly presented, it is intended that the enclosed proxy card will be voted in
accordance with the best judgment of the persons voting the proxies.
June 13, 2012
|
By Order of the Board of Directors
|
|
|
|
/s/ Xianfu
Han
|
|
Xianfu Han
|
|
Chairman
|
21
APPENDIX A
REPORT OF THE AUDIT COMMITTEE
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. The
Board has determined, based upon an interview of Yang Wang and a review of Ms.
Wangs responses to a questionnaire designed to elicit information regarding her
experience in accounting and financial matters, that Ms. Wang shall be
designated as an Audit Committee financial expert within the meaning of Item
401(e) of SEC Regulation S-K, as Mr. Wang has past employment experience in
finance or accounting, requisite professional certification in accounting, or
any other comparable experience or background which results in his financial
sophistication.
The Audit Committee assists the Boards oversight of the
integrity of the Companys financial reports, compliance with legal and
regulatory requirements, the qualifications and independence of the Companys
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
Companys registered public accounting firm, reviewing the extent of non-audit
services to be performed by the auditors, and reviewing the disclosures made in
the Companys periodic financial reports. The Audit Committee also reviews and
recommends to the Board that the audited financial statements be included in the
Companys Annual Report on Form 10-K.
Following the end of the fiscal year ended June 30, 2011, the
Audit Committee (1) reviewed and discussed the audited financial statements for
the fiscal year ended June 30, 2011 with Company 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 Companys Annual Report on Form 10-K for
the fiscal year ended June 30, 2011 for filing with the SEC.
/s/ The Audit
Committee
Yang Wang
Tao Jin
Jing Liu
CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 29, 2012
This Proxy is Solicited on Behalf of the Board of
Directors
The undersigned stockholder of China Advanced Construction
Materials Group, Inc., a Delaware corporation (the Company), acknowledges
receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement,
dated June 13, 2012, and hereby constitutes and appoints Xianfu Han and Weili
He, 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 Companys Common
Stock which the undersigned is entitled to vote at the 2012 Annual Meeting of
Stockholders to be held on June 29, 2012, and at any adjournment or adjournments
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:
|
1.
|
Elect as Directors the nominees listed below: [ ]
|
Xianfu Han
Weili He
Tao Jin
Xinyong
Gao
Ken Ren
Withhold authority for the following:
[ ]
|
Xianfu Han
|
[ ]
|
Weili He
|
[ ]
|
Tao Jin
|
[ ]
|
Xinyong
Gao
|
[ ]
|
Ken Ren
|
|
2.
|
Approve the ratification of Friedman LLP as the Companys
accountant for fiscal year ending June 30,
2012.
|
|
FOR
[ ]
|
AGAINST
[
]
|
ABSTAIN
[
]
|
|
3.
|
In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the Meeting, and any
adjournment or adjournments thereof.
|
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 FRIEDMAN LLP, AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS. 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 JUNE 13, 2012 IS UNABLE TO SERVE OR WILL NOT SERVE.
I (we) acknowledge receipt of the Notice of Annual Meeting of
Stockholders and the Proxy Statement dated June 13, 2012, and the 2011 Annual
Report to Stockholders 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.
|
Name
|
|
Name
(if joint)
|
|
|
|
Date _____________, 2012
|
|
Please sign your name exactly as it appears hereon. When
signing as attorney, executor, administrator, trustee or guardian, please
give your full title as it appears hereon. When signing as joint tenants,
all parties in the joint tenancy must sign. When a proxy is given by a
corporation, it should be signed by an authorized officer and the
corporate seal affixed. No postage is required if returned in the enclosed
envelope.
|
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