SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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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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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Rule 14a-12
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RECON TECHNOLOGY, LTD
(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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RECON TECHNOLOGY, LTD
Room 1902, Building C, King Long International
Mansion
No. 9 Fulin Road, Beijing 100107
People’s Republic of China
Notice of 2015 Annual Meeting of Stockholders
To Be Held on June
30, 2016
To the Stockholders:
Recon Technology,
Ltd. (the “Company,” or “we”) will hold the 2015 annual meeting of stockholders (the “Annual
Meeting”) on June 30, 2016 at 9:00 a.m., Beijing Time, at Room 1902, King Long International Mansion, 9 Fulin Road,
Beijing, China, for the following purposes:
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To elect two Class III members of the board of directors, to serve a term expiring at the Annual
Meeting following the fiscal year ending June 30, 2018, or until his successor is duly elected and qualified;
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To ratify the appointment of
Friedman LLP as the Company’s independent registered public accounting firm for
the fiscal year ending June 30, 2016;
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To conduct a non-binding vote
on the Company’s 2015 executive compensation; and
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To transact any other business
as may properly come before the meeting.
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The foregoing
items of business are more completely described in the proxy statement accompanying this notice. The board of directors
unanimously recommends that the stockholders vote “FOR” the election of two Class III directors, vote
“FOR” the ratification of the appointment of Friedman LLP and vote “FOR” the approval of the
Company’s 2015 executive compensation.
The board of directors
has established the close of business on May 27, 2016 as the “record date” that will determine the stockholders who
are entitled to receive notice of, and to vote at, the Annual Meeting or at any adjournment or postponement of the Annual Meeting.
The notice of the Annual Meeting, this proxy statement, the proxy card and a copy of our 2015 Annual Report on Form 10-K will
be first sent or made available to stockholders on or before June 8, 2016.
Attendance at the Annual
Meeting is limited to the Company’s stockholders, their proxies and invited guests of the Company.
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By order of the Board of Directors,
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/s/ Yin Shenping
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Yin Shenping,
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Chairman and Chief Executive Officer
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Table of Contents
QUESTIONS
AND ANSWERS ABOUT THE ANNUAL MEETING
The following
questions and answers are intended to address briefly some commonly asked questions regarding the Annual Meeting. These questions
and answers may not address all of the questions that may be important to you as a stockholder. To better understand these matters
you should carefully read this entire proxy statement.
Q: Why am I receiving this proxy statement?
A:
The
Company is holding its Annual Meeting to elect two Class III directors, ratify the appointment of the Company’s auditors,
and to transact any business that may properly come before the meeting.
We have included in this proxy statement
important information about the Annual Meeting. You should read this information carefully and in its entirety. The enclosed voting
materials allow you to vote your shares without attending the applicable stockholder meeting. Your vote is very important and
we encourage you to submit your proxy as soon as possible.
Q: What proposals are the stockholders being asked to consider?
A:
The stockholders are being asked
to:
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1.
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elect two Class III members of the board of directors, to serve a term expiring at the Annual Meeting
of Shareholders following the fiscal year ending June 30, 2018, or until his successor is duly elected and qualified;
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2.
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ratify the appointment of Friedman
LLP as the Company’s independent registered public accounting firm for the fiscal
year ending June 30, 2016;
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approve our executive compensation for the period ended June 30, 2015 as part of a non-binding advisory
vote; and
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transact any other business
properly coming before the meeting.
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Q: What are the recommendations of the boards
of directors?
A: THE BOARD OF DIRECTORS HAS DETERMINED
THAT THE ELECTION OF TWO CLASS III MEMBERS OF THE BOARD OF DIRECTORS AND THE RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S
FIRM AUDITORS ARE ADVISABLE AND IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND HAS UNANIMOUSLY APPROVED THE PROPOSALS
DESCRIBED HEREIN. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF DIRECTORS,
“FOR” THE RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S AUDITORS AND “FOR” THE APPROVAL OF THE
COMPANY’S EXECUTIVE COMPENSATION.
Q: When and where will the Annual Meeting be held?
A:
The Annual Meeting of stockholders
will be held June 30, 2016 at 9:00 a.m., Beijing Time, at Room 1902, King Long International Mansion, 9 Fulin Road, Beijing, China.
Q: Who is entitled to vote at the Annual Meeting?
A:
The record date for the Annual
Meeting is May 27, 2016. Only holders of ordinary shares of the Company as of the close of business on the record date are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. As of the record date there
were 5,804,005 ordinary shares outstanding.
Q: What constitutes a quorum for the Annual Meeting?
A:
At the Annual Meeting, the presence in person or by proxy
of one-third (1/3) of our outstanding ordinary shares as of the record date will constitute a quorum at such Annual Meeting. Abstentions
and broker non-votes will be counted for purposes of establishing a quorum at the meeting.
Q: How many votes are required to approve the proposals?
A:
Nomination of Class III Directors
:
The nominees receiving the highest number of “For” votes will be elected as a directors. This number is called a plurality.
Shares not voted will have no impact on the election of directors. The proxy given will be voted “For” the nominee
for director unless a properly executed proxy card is marked “Withhold” as to the nominee for director.
Ratification of Appointment of Auditors
:
The ratification of the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the
fiscal year ending June 30, 2016 requires that a majority of the votes cast at the meeting be voted “For” the proposal.
A properly executed proxy card marked “Abstain” with respect to this proposal will not be voted.
Approval, on a non-binding basis, of our
executive compensation
:
The approval, on a non-binding basis, of the compensation of the Company’s named executive officers requires that a majority
of the votes cast at the meeting be voted “For” the proposal. A properly executed proxy card marked “Abstain”
with respect to this proposal will not be voted.
Q: Is cumulative voting permitted for the
election of directors?
A:
No. You may not cumulate your votes
for the election of directors.
Q: How do the stockholders vote?
A:
The stockholders have four voting options. You may vote
using one of the following methods:
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Internet
. You can
vote over the Internet by accessing the website at
www.proxyvote.com
and following
the instructions on the website. Internet voting is available 24 hours a day. If you
vote over the Internet, do not return your proxy card.
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Telephone
. If you hold shares directly in your own name and are the holder of record, you
can vote by telephone by calling the toll-free number 1-800-690-6903 in the United States, Canada or Puerto Rico on a touch-tone
phone. You will then be prompted to enter the control number printed on your proxy card and to follow the subsequent instructions.
Telephone voting is available 24 hours a day. If, however, you hold the shares through a broker (“street name”) and
not in your own name, then follow the specific instructions included in your proxy materials, including the specific phone number
to use, to vote your shares by phone.
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Mail
. You can vote by mail by simply completing, signing, dating and mailing your proxy
card in the postage-paid envelope included with this proxy statement.
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In Person
. You may also come to the Annual Meeting and cast your vote there. The board
of directors recommends that you vote by proxy even if you plan to attend the meeting. If your shares are held in a stock
brokerage account or through a bank, broker or other nominee, or, in other words, in street name, and you wish to vote in
person at the meeting, you must bring a letter from your bank, broker or nominee identifying you as the beneficial owner of
the shares and authorizing you to vote such shares at the meeting.
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Q: How can I attend the meeting?
A:
The meeting is open to all holders
of the Company’s ordinary shares as of the record date. You may attend the meeting in person or at the Internet location
listed on your proxy card. In addition, you may call in to the conference call for the meeting. The dial-in number in the United
States is 1-866-620-9467, and the dial-in number in China is 010-95057. The password for the meeting is 97399962. Shareholders
living in other countries are welcome to attend the conference call by contacting our Company at info@recon.cn.
Q: May stockholders ask questions at the meeting?
A:
Yes. Representatives of the Company
will answer questions of general interest at the end of the meeting. In addition, a representative of Friedman LLP, our independent
registered public accounting firm, is expected to be present at the Annual Meeting and will be allowed the opportunity to make
a statement if desired and respond to appropriate questions.
Q: If my shares are held in “street
name” by a broker or other nominee, will my broker or nominee vote my shares for me?
A:
Your broker or other nominee does
not have authority to vote on non-routine matters. All of the proposals presented at the Annual meeting are considered non-routine
matters. Your broker or other nominee will vote your shares held by it in “street name” with respect to these matters
only if you provide instructions to it on how to vote. You should follow the directions your broker or other nominee provides.
Q: What if I do not vote on the matters relating to the proposals?
A:
If you fail to vote or fail to instruct
your broker or other nominee how to vote on any of the proposals, it will have no effect on such proposals. It will be treated
as a “non-vote” and not count toward a quorum.
Q: May I change my vote after I have delivered
my proxy or voting instruction card?
A:
Yes. You may change your vote at
any time before your proxy is voted at the Annual meeting. You may do this in one of four ways:
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by sending a notice of revocation to the corporate secretary of the Company, dated as of a later
date than the date of the proxy and received prior to the Annual Meeting;
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by sending a completed proxy card bearing a later date than your original proxy card and mailing
it so that it is received prior to the Annual Meeting;
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by logging on to the Internet
website specified on your proxy card in the same manner you would submit your proxy electronically
or by calling the telephone number specified on your proxy card, in each case if you
are eligible to do so and following the instructions on the proxy card; or
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by attending your annual or Annual Meeting, as applicable, and voting in person.
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Your attendance alone
will not revoke any proxy.
If your shares are held in an account at a broker or other nominee,
you should contact your broker or other nominee to change your vote.
Q: Do I have appraisal rights?
A:
The stockholders do not have appraisal rights with respect to the matters to be voted upon at the Annual Meeting.
Q: Whom should I call if I have questions about the proxy materials
or voting procedures?
A:
If you have questions about
the proposals, or if you need assistance in submitting your proxy or voting your shares or need additional copies of this
proxy statement or the enclosed proxy card, you should contact Recon Technology Ltd., Room 1902, Building C, King Long
International Mansion, No. 9 Fulin Road, Beijing 100107, People’s Republic of China. If your shares are held in a stock
brokerage account or by a bank or other nominee, you should contact your broker, bank or other nominee for additional
information.
Q: What do I need to do now?
A:
After carefully reading and considering
the information contained in this proxy statement, including the annexes, please vote your shares as soon as possible so that your
shares will be represented at the Annual Meeting. Please follow the instructions set forth on the proxy card or on the voting instruction
form provided by the record holder if your shares are held in the name of your broker or other nominee.
Q: Who is paying for the expenses involved
in preparing and mailing this proxy statement?
A:
All of the expenses involved in
preparing, assembling and mailing these proxy materials and all costs of soliciting proxies will be paid for by the
Company. In addition to the solicitation by mail, proxies may be solicited by our officers and other employees by
telephone or in person. Such persons will receive no compensation for their services other than their regular
salaries. Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to
forward solicitation materials to the beneficial owners of the shares held of record by such persons, and we may reimburse
such persons for reasonable out of pocket expenses incurred by them in so doing.
Q: What
Interest Do Officers and Directors Have in Matters to Be Acted Upon?
A:
Members of the board of directors and executive officers of the Company do not have any interest in any other proposal that
is not shared by all other stockholders of the Company, other than Proposal 1, the election to our board of the two nominees
set forth herein.
PROPOSAL 1
ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY CARD)
Director Biographies
A brief biography of each director in each Class
follows. You are asked to vote for two nominees to serve as Class III members of the board of directors. The candidates for the
board of directors have consented to serve if elected. The terms of the Class II members of the board of directors continue until
the Annual Meeting of Stockholders following the fiscal year ending June 30, 2017 and the terms of the Class I member of the board
of directors continues until the Annual Meeting of Stockholders following the fiscal year ending June 30, 2016.
Nominees for election as Class III members of the board of directors
to serve for three-year terms, whose terms continue until the Annual Meeting of Stockholders following the fiscal year ending June
30, 2018:
Yin Shenping
Chief Executive Officer and Director Nominee
Age – 46
Director since 2007
In 2003, Mr. Yin founded
Nanjing Recon, a Chinese company that provides services to automate and enhance the extraction of petroleum in the PRC, and
has been the Chief Executive Officer since that time. Prior to founding Nanjing Recon, Mr. Yin served as a sales manager
for Fujian Haitian Network Company from 1992 through 1994. Mr. Yin has founded and operated a number of companies:
Xiamen Hengda Haitian Computer Network Co., Ltd. (1994), Baotou Hengda Haitian Computer Network Co., Ltd. (1997) and
Beijing Jingke Haitian Electronic Technology Development Co., Ltd. (1999), and Jingsu Huasheng Information Technology Co.,
Ltd. (2000). In 2000, Mr. Yin merged the former Nanjing Kingsley Software Engineering Co., Ltd. into Nanjing
Recon. Mr. Yin received his bachelor’s degree in 1991 from Nanjing Agricultural University in information
systems. Mr. Yin was chosen as a director, and serves as Chairman of the board, because he is one of the founders of our
company and we believe his knowledge of our company and years of experience in our industry give him the ability to guide our
company as a director.
Chen Guangqiang
Chief Technology Officer and Director Nominee
Age – 52
Director since 2007
Mr. Chen has served as our Chief Technology
Officer since 2003. Mr. Chen was a geological engineer for the Fourth Oil Extraction Plant of Huabei Oil Field from 1985 through
1993. From 1993 through 1999, Mr. Chen was a chief engineer for Xinda Company, CNPC Development Bureau. From 1999 through 2003,
Mr. Chen served as the general manager of Beijing Adar. From 2011 to March 2013, Mr. Chen was a founder and majority shareholder
of Qinghai Hua You Downhole Technology Co., Ltd. (“QHHY”). From March 2013 to December 2014, Mr. Chen remained a 40%
shareholder of QHHY but was no longer involved QHHY’s day to day operations. Mr. Chen received his bachelor’s degree
in 1985 from Southwest Petroleum Institute. Mr. Chen was chosen as a director because he is one of the founders of our company
and we believe we can benefit from his years of engineering and management experience in the oil extraction industry.
Class II members of the board of directors, whose terms continue
until the Annual Meeting of Stockholders following the fiscal year ending June 30, 2017:
Hu Jijun
Independent Director
Age – 50
Director since 2008
Mr. Hu joined our Board of Directors
in 2008. From 1988 to 2003, Mr. Hu served in a variety of positions at our No. 2 test-drill plant, including
technician of installation, assets equipment work, electrical installation, control room production dispatcher, Deputy Chief
Engineer of the Technology Battalion and Deputy Director of Production. From 2003 to 2005, Mr. Hu served as Head of the
Integrated Battalion and he is currently the Head of the Transport Battalion, Senior Electric Engineer. Mr. Hu graduated
as an automated professional from the China University of Petroleum in 1988. Mr. Hu was chosen as a director
because we believe his years of experience and knowledge gained while working at our No. 2 test-drill plant will prove
beneficial to the guidance of our company.
Nelson N.S. Wong
Independent Director
Age – 53
Director since 2008
Mr. Wong joined our board of directors
in 2008. In 1990 Mr. Wong joined the Vigers Group, a real estate company that provides services in valuation, corporate property
services, investment advisory services, general practice surveying, building surveying, commercial, retail and industrial agency,
and property and facilities management. Mr. Wong became the Vice Chairman and CEO of the Vigers Group in 1993. In 1995 Mr. Wong
established the ACN Group, a business consulting firm, where he has worked continuously and continues to serve as the Chairman
and Managing Partner. Mr. Wong received a bachelor’s degree in arts from the PLA Institute of International Relations
in Nanjing in 1983. Mr. Wong was chosen as a director because we believe we can benefit from his leadership skills and
management experience.
Class I member of the board of directors, whose term continues
until to the Annual Meeting of Stockholders following the fiscal year ending June 30, 2016:
Zhao Shudong
Independent Director
Age – 69
Before retiring in 2006, Mr. Zhao spent
over 30 years working in the oilfield industry. From 1970 to 1976, Mr. Zhao worked as a technician in the Daqing oilfield.
From 1976 to 1982, Mr. Zhao served as the vice director of the Hubei Oilfield Generalized Geologic Technical Research Institute.
Mr. Zhao then spent 11 years as a director and section chief at the Scientific and Technological Development Department of
the Huabei Petroleum Administrative Bureau. He was subsequently appointed Chief Geologist of the bureau, a position he held from
1993 to 1999. From 1999 to 2006, Mr. Zhao served as the General Manager of the Huabei Oilfield Company of CNPC. Mr. Zhao
studied at the Northeast Petroleum Institute from 1965 to 1970. Mr. Zhao was chosen as a director because of
his extensive experience in the oilfield industry.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors
or executive officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has
been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final
order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or
a finding of any violation of federal or state securities or commodities laws, any laws respecting financial institutions or insurance
companies, any law or regulation prohibiting mail or wire fraud in connection with any business entity or been subject to any disciplinary
sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization, except for matters
that were dismissed without sanction or settlement. None of our directors, director nominees or executive officers has been involved
in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed
pursuant to the rules and regulations of the SEC.
Family Relationships
There are no family relationships among any
of our directors or executive officers.
Leadership Structure of the Board of Directors
Mr. Yin Shenping currently holds both the
positions of Chief Executive Officer and Chairman of the board of directors. The board of directors believes that Mr. Yin’s
service as both Chief Executive Officer and Chairman of the board of directors is in the best interests of the Company and its
shareholders. Mr. Yin possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company
and its business and is thus best positioned to develop agendas that ensure that the board’s time and attention are focused
on the most critical matters. His combined role enables decisive leadership, ensures clear accountability, and enhances the Company’s
ability to communicate its message and strategy clearly and consistently to the Company’s stockholders, employees, customers
and suppliers.
We do not have a lead independent director
because of the foregoing reasons and also because we believe our independent directors are encouraged to freely voice their
opinions on our relatively small company board. We believe this leadership structure is appropriate because we are a smaller
reporting company that recently became listed on a public exchange; as such, we deem it appropriate to be able to benefit
from the guidance of Mr. Yin as both our Chief Executive Officer and Chairman of the board of directors.
Risk Oversight
Our board of directors plays a significant role
in our risk oversight. The board of directors makes all relevant Company decisions. As such, it is important for us to have our
Chief Executive Officer serve on the board as he plays a key role in the risk oversight of the Company. As a smaller reporting
company with a small board of directors, we believe it is appropriate to have the involvement and input of all of our directors
in risk oversight matters.
There
are no material proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficial
owner of more than 5% of the Company’s shares of common stock, or any associate of such persons is a party adverse to
Company or has a material interest adverse to the Company.
WE RECOMMEND THAT YOU VOTE FOR THE ELECTION
OF THE
CLASS III NOMINEES TO THE BOARD OF DIRECTORS.
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
INFORMATION
What if a nominee is unwilling or unable to serve?
The two nominees listed in the Proxy
Statement have agreed to serve as directors, if elected. If for some unforeseen reason either nominee becomes unwilling or
unable to serve, proxies will be voted for a substitute nominee selected by the board of directors.
How are directors compensated?
All directors hold office until the
expiration of their respective terms and until their successors have been duly elected and qualified. There are no family
relationships among our directors or executive officers. Officers are elected by and serve at the discretion of the board of
directors. Employee directors and non-voting observers do not receive any compensation for their services. Non-employee
directors are entitled to receive $2,000 per each board of directors meeting attended. In addition, non-employee directors
are entitled to receive compensation for their actual travel expenses for each board of directors meeting attended.
Summary Director Compensation Table
Name(1)
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Fees earned
or
paid in cash
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Option
Awards
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Total(2)
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Nelson N.S. Wong
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$
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8,000
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$
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5,728
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$
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13,728
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Hu Jijun
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$
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8,000
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$
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5,728
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$
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13,728
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Zhao Shudong
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$
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8,000
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$
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4,124
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$
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12,124
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(1)
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Compensation for our directors Yin Shenping and Chen Guangqiang, who
also serve as executive officers, is fully disclosed in the executive compensation discussion on pages 15-16 of
this Proxy
Statement.
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None of the directors received any ordinary share awards, nonqualified deferred compensation earnings or non-equity incentive plan compensation in fiscal year 2015.
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On January 31, 2015, the Company granted 25,000 options to Mr. Nelson N.S. Wong, which options vest over a period of three years, one third of which vest on January 31 of each year beginning in 2016. The grant date fair value of such options was $1.65.
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On January 31, 2015, the Company granted 25,000 options to Mr. Hu Jijun, which options vest over a period of three years, one third of which vest on January 31 of each year beginning in 2016. The grant date fair value of such options was $1.65.
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On January 31, 2015, the Company granted 18,000 options to Zhao Shudong, which options vest over a period of three years, one third of which vest on January 31 of each year beginning in 2016. The grant date fair value of such options was $1.65.
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How does the Board of Directors determine which directors are
independent?
The board of directors reviews the independence
of each director yearly. During this review, the board of directors considers transactions and relationships between each director
(and his or her immediate family and affiliates) and the Company and its management to determine whether any such relationships
or transactions are inconsistent with a determination that the director is independent in light of applicable law, listing standards
and the Company’s director independence standards. The Company believes that it maintains a majority of independent directors
who are deemed to be independent under the definition of independence provided by NASDAQ Listing Rule 5605(a)(2).
What role does the Nominating Committee play in selecting nominees
to the board of directors?
Two of the primary purposes of the Nominating
Committee of the board of directors are (i) to develop and implement policies and procedures that are intended to ensure that the
board of directors will be appropriately constituted and organized to meet its fiduciary obligations to the Company and its shareholders
and (ii) to identify individuals qualified to become members of the board of directors and to recommend to the board of directors
the director nominees for the annual meeting of shareholders. The Nominating Committee is also responsible for considering candidates
for membership on the board of directors submitted by eligible shareholders. The Nominating Committee’s charter is available
on the Company’s website at www.recon.cn under Investor Relations and in print upon request. The Nominating Committee of
the Company’s board of directors was the only entity or person to nominate and/or recommend any of the director nominees.
Are the members of the Nominating Committee independent?
Yes. All members of the Nominating Committee
have been determined to be independent by the board of directors.
How does the Nominating Committee identify and evaluate nominees
for director?
The Nominating Committee considers candidates
for nomination to the board of directors from a number of sources. Current members of the board of directors are considered for
re-election unless they have notified the Company that they do not wish to stand for re-election. The Nominating Committee also
considers candidates recommended by current members of the board of directors, members of management or eligible shareholders.
From time to time the Board may engage a firm to assist in identifying potential candidates, although the Company did not engage
such a firm to identify any of the nominees for director proposed for election at the meeting.
The Nominating Committee evaluates all candidates
for director, regardless of the person or firm recommending such candidate, on the basis of the length and quality of their business
experience, the applicability of such candidate’s experience to the Company and its business, the skills and perspectives
such candidate would bring to the board of directors and the personality or “fit” of such candidate with existing members
of the board of directors and management. The nominating committee does not have a specific policy in place with regard to the
consideration of diversity when identifying director nominees, however, the nominating committee does consider diversity of opinion
and experience when nominating directors.
What are the Nominating Committee’s policies and procedures
for considering director candidates recommended by stockholders?
The Nominating Committee will consider all candidates
recommended by stockholders. A shareholder wishing to recommend a candidate must submit the following documents to the Secretary
of the Company at Recon Technology, Ltd, Room 1902, Building C, King Long International Mansion, 9 Fulin Road, Beijing 100107 China:
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a recommendation that identifies the name and address of the shareholder and the person to be nominated;
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the written consent of the candidate to serve as a director of the Company, if elected;
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·
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a description of all arrangements between the stockholders and such nominee pursuant to which the nomination is to be made; and
|
|
·
|
such other information regarding the nominee as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC.
|
If the candidate is to be evaluated by the Nominating
Committee, the Secretary will request a detailed resume, an autobiographical statement explaining the candidate’s interest
in serving as a director of the Company, a completed statement regarding conflicts of interest, and a waiver of liability for a
background check from the candidate.
What are the minimum qualifications required to serve on the
Company’s board of directors?
All members of the board of directors must possess
the following minimum qualifications as determined by the Nominating Committee:
|
·
|
A director must demonstrate integrity, accountability, informed judgment, financial literacy, creativity and vision;
|
|
·
|
A director must be prepared to represent the best interests of all Company shareholders, and not just one particular constituency;
|
|
·
|
A director must have a record of professional accomplishment in his or her chosen field; and
|
|
·
|
A director must be prepared and able to participate fully in board activities, including membership on committees.
|
What other considerations does the Nominating Committee consider?
The Nominating Committee believes it is important
to have directors from various backgrounds and professions in order to ensure that the board of directors has a wealth of experiences
to inform its decisions. Consistent with this philosophy, in addition to the minimum standards set forth above, business and managerial
experience and an understanding of financial statements and financial matters are very important.
How may stockholders communicate with the members of the board
of directors?
Stockholders and others who are interested in
communicating directly with members of the board of directors, including communication of concerns relating to accounting, internal
accounting controls or audit matters, or fraud or unethical behavior, may do so by writing to the directors at the following address:
Name of Director or Directors
c/o Secretary
Recon Technology, Ltd.
Room 1902, Building C
King Long International Mansion
9 Fulin Road
Beijing 100107 China
Does the Company have a Code of Business Ethics and Conduct?
The Company has adopted a Code of Business Ethics
and Conduct, which is applicable to all directors, officers and associates of the Company, including the principal executive officer
and the principal financial and accounting officer. The complete text of the Code of Business Ethics and Conduct is available on
the Company’s web site at www.recon.cn and is also available in print upon request. The Company intends to post any amendments
to or waivers from its Code of Business Ethics and Conduct (to the extent applicable to the Company’s principal executive
officer and principal financial and accounting officer) at this location on its web site.
How often did the board of directors meet in fiscal
2015?
The board of directors met a total of five
times during fiscal 2015. The Compensation Committee, the Audit Committee and the Nominating Committee each met five times during
fiscal 2015. The board of directors invites, but does not require, directors to attend the Annual Meeting of stockholders. All
of our directors attended the Company’s last Annual Meeting of stockholders.
What are the committees of the board of directors?
During fiscal 2015, the board
of directors had standing Audit, Nominating, and Compensation Committees. The members of each of the Committees as of April
25, 2016, their principal functions and the number of meetings held during the fiscal year ended June 30, 2015,
are shown below.
Compensation Committee
The members of the Compensation Committee are:
Hu Jijun, Chairman
Nelson N.S. Wong
Zhao Shudong
The Compensation Committee held five meetings
during the fiscal year ended June 30, 2015. The Compensation Committee’s charter is available on the Company’s website
at www.recon.cn under Investor Relations and in print upon request. The Compensation Committee’s principal responsibilities
include:
|
·
|
Making recommendations to the board of directors concerning executive management organization matters generally;
|
|
·
|
In the area of compensation and benefits, making recommendations to the board of directors concerning employees who are also directors of the Company, consult with the CEO on matters relating to other executive officers, and make recommendations to the board of directors concerning policies and procedures relating to executive officers;
|
|
·
|
Making recommendations to the board of directors regarding all contracts of the Company with any officer for remuneration and benefits after termination of regular employment of such officer;
|
|
·
|
Making recommendations to the board of directors concerning policy matters relating to employee benefits and employee benefit plans, including incentive compensation plans and equity based plans; and
|
|
·
|
Administering the Company’s formal incentive compensation programs, including equity based plans.
|
The Compensation Committee may not delegate
its authority to other persons. Similarly, the Compensation Committee has not engaged a compensation consultant to assist in the
determination of executive compensation issues. While the Company’s executives will communicate with the Compensation Committee
regarding executive compensation issues, the Company’s executive officers do not participate in any executive compensation
decisions.
Audit Committee
The members of the Audit Committee are:
Nelson N.S. Wong, Chairman
Zhao Shudong
Hu Jijun
The Audit Committee held five meetings during
the fiscal year ended June 30, 2015. The primary responsibility of the Audit Committee is to assist the board of directors in monitoring
the integrity of the Company’s financial statements and the independence of its external auditors. The Company believes that
each of the members of the Audit Committee is “independent” and that Mr. Wong qualifies as an “audit committee
financial expert” in accordance with applicable NASDAQ Capital Market listing standards. In carrying out its responsibility,
the Audit Committee undertakes to:
|
·
|
Review and recommend to the directors the independent auditors to be selected to audit the financial statements of the Company;
|
|
·
|
Meet with the independent auditors and management of the Company to review the scope of the proposed audit for the current year and the audit procedures to be utilized, and at the conclusion thereof review such audit, including any comments or recommendations of the independent auditors;
|
|
·
|
Review with the independent auditors and financial and accounting personnel the adequacy
and effectiveness of the accounting and financial controls of the Company. The Audit Committee elicits recommendations for
the improvement of internal control procedures or particular areas where new or more detailed controls or procedures are
desirable. The Audit Committee emphasizes developing and maintaining the adequacy of such internal controls to expose any
payments, transactions or procedures that might be deemed illegal or otherwise improper;
|
|
·
|
Review the internal accounting functions of the Company, the proposed audit plans for the coming year and the coordination of such plans with the Company’s independent auditors;
|
|
·
|
Review the financial statements contained in the annual report to stockholders with management and the independent auditors to determine that the independent auditors are satisfied with the disclosure and contents of the financial statements to be presented to the stockholders;
|
|
·
|
Provide sufficient opportunity for the independent auditors to meet with the members of the Audit Committee without members of management present. Among the items discussed in these meetings are the independent auditors’ evaluation of the Company’s financial, accounting, and auditing personnel, and the cooperation that the independent auditors received during the course of the audit;
|
|
·
|
Review accounting and financial human resources and succession planning within the Company;
|
|
·
|
Submit the minutes of all meetings of the Audit Committee to, or discuss the matters discussed at each committee meeting with, the Board of Directors; and
|
|
·
|
Investigate any matter brought to its attention within the scope of its duties, with the power to retain outside counsel for this purpose, if, in its judgment, that is appropriate.
|
The Audit Committee has established procedures
for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls and auditing matters,
including procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing
matters.
Nominating Committee
The members of the Nominating Committee are:
Zhao Shudong, Chairman
Nelson N.S. Wong
Hu Jijun
The Nominating Committee had five meetings during
the fiscal year ended June 30, 2015. All members of the Nominating Committee are independent, as such term is defined by the NASDAQ
Capital Market listing standards. The Nominating Committee undertakes to:
|
·
|
Identify individuals qualified to become members of the board of directors and to make recommendations to the board of directors with respect to candidates for nomination for election at the next annual meeting of shareholders or at such other times when candidates surface and, in connection therewith, consider suggestions submitted by shareholders of the Company;
|
|
·
|
Determine and make recommendations to the board of directors with respect to the criteria to be used for selecting new members of the Board of Directors;
|
|
·
|
Oversee the process of evaluation of the performance of the Company’s board of directors and committees;
|
|
·
|
Make recommendations to the board of directors concerning the membership of committees of the board and the chairpersons of the respective committees;
|
|
·
|
Make recommendations to the board of directors with respect to the remuneration paid and benefits provided to members of the board in connection with their service on the board or on its committees; and
|
|
·
|
Evaluate board and committee tenure policies as well as policies covering the retirement or resignation of incumbent directors.
|
The board of directors has determined to provide
a process by which stockholders may communicate with the Board as a whole, a board committee or individual director. Stockholders
wishing to communicate with the board as a whole, a board committee or an individual member may do so by sending a written communication
addressed to the board of directors of the Company or to the committee or to an individual director, c/o Secretary, Recon Technology
Ltd, Room 1902, Building C, King Long International Mansion, 9 Fulin Road, Beijing 100107 China. All communications will be compiled
by the Secretary of the Company and submitted to the board of directors or the addressee not later than the next regular board
meeting.
MANAGEMENT — BUSINESS HISTORY
OF EXECUTIVE OFFICERS
For information as to the business history of
our Chief Executive Officer, Mr. Yin, see the section “Proposal One: Election of Directors” elsewhere in this Proxy
Statement.
Liu Jia
Chief Financial Officer
Age –33
Ms. Liu has served as our Chief Financial
Officer since 2008. Prior to that, Ms. Liu assisted various companies, including Heilongjiang Province Jintian Group, with
financial due diligence, field surveys and data analysis. While in college Ms. Liu served internships in Xinghua Certified
Public Accountants, Ltd.; Beijing Zhongweihuahao Accountants Affairs Office; Tiantong Securities Co., Ltd. and Industrial and
Commercial Bank of China, which internships focused on auditing, accounting and data analysis. Ms. Liu received her bachelor’s
degree in 2006 from Beijing University of Chemical Technology, School of Economics and Management, and her master’s degree
in industrial economics in 2009 from Beijing Wuzi University.
EMPLOYMENT AGREEMENTS
WITH THE COMPANY’S
NAMED EXECUTIVE OFFICERS
We have employment agreements with each of our Chief Executive Officer, Chief Technology Officer and Chief
Financial Officer. With the exception of the employment agreement with our Chief Financial Officer, each of these employment agreements
provides for an indefinite term. Such employment agreements may be terminated (1) if the employee gives written notice of
his or her intention to resign, (2) the employee is absent from three consecutive meetings of the board of directors, without
special leave of absence from the other members of the board of directors, and the board of directors passes a resolution that
such employee has vacated his office, or (3) the death, bankruptcy or mental incapacity of the employee. The employment agreement
for our Chief Financial Officer provides for a one-year term, currently expiring on March 12, 2017. Such employment agreement may
be terminated if Ms. Liu gives thirty days’ written notice of her intention to resign, or if the board of directors determines
she can no longer perform her duties as Chief Financial Officer and provides her with thirty days’ written notice of termination.
Under Chinese law, we may only terminate employment
agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment
agreement is scheduled to expire. If we fail to provide this notice or if we wish to terminate an employment agreement in the absence
of cause, then we are obligated to pay the employee one month’s salary for each year we have employed the employee. We are,
however, permitted to terminate an employee for cause without penalty to our company, where the employee has committed a crime
or the employee’s actions or inactions have resulted in a material adverse effect to us.
EXECUTIVE COMPENSATION
The following table shows the
annual compensation paid by us to Mr. Yin Shenping, our Chief Executive Officer, Mr. Chen Guangqiang, our Chief
Technology Officer, and Ms. Liu, our Chief Financial Officer, for the years ended June 30, 2015 and 2014. No other
employee’s total salary exceeded $100,000.
Name and principal position
|
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Option
Awards
|
|
|
Restricted
Stock
Awards
|
|
|
Total
|
|
Yin Shenping,
Principal Executive Officer
|
|
2015
|
|
$
|
126,347
|
|
|
$
|
10,000
|
|
|
$
|
—
|
|
|
$
|
129,239
|
(1,2)
|
|
$
|
265,586
|
|
|
|
2014
|
|
$
|
125,463
|
|
|
$
|
10,455
|
|
|
$
|
|
|
|
$
|
47,432
|
(1)
|
|
$
|
183,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chen Guangqiang,
Chief Technology Officer
|
|
2015
|
|
$
|
117,343
|
|
|
$
|
10,000
|
|
|
$
|
—
|
|
|
$
|
169,105
|
(1,2)
|
|
$
|
296,448
|
|
|
|
2014
|
|
$
|
113,593
|
|
|
$
|
10,000
|
|
|
$
|
—
|
|
|
$
|
67,365
|
(1)
|
|
$
|
190,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liu Jia
Chief Financial Officer
|
|
2015
|
|
$
|
80,000
|
|
|
$
|
7,390
|
|
|
$
|
—
|
|
|
$
|
7,332
|
(3)
|
|
$
|
94,722
|
|
|
|
2014
|
|
$
|
80,000
|
|
|
$
|
6,500
|
|
|
$
|
|
|
|
$
|
—
|
|
|
$
|
86,500
|
|
(1) On December 13, 2013, the Company granted 95,181 restricted
shares to Mr. Yin Shenping and 135,181 restricted shares to Mr. Chen Guangqiang at an aggregate value of ¥4,207,496 ($688,782),
based on the stock closing price of $2.99 at December 13, 2013. These restricted shares will be vested over three years with one
third of the shares vesting every year from the grant date.
(2) On January 31, 2015, the Company granted 150,000 restricted
shares to Mr. Yin Shenping and 150,000 restricted shares to Mr. Chen Guangqiang at an aggregate value of ¥3,038,558($495,000),
based on the stock closing price of $1.65 at January 31, 2015. These restricted shares will vest over three years with one third
of the shares vesting every year from the grant date.
(3) On January 31, 2015, the Company granted 32,000 options to Ms.
Liu Jia, which options vest over a period of three years, one third of which vest on January 31 of each year beginning in 2016.
The grant date fair value of such options was $1.65.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
|
|
Option
Awards
|
|
Shares
Awards
|
|
Name
|
|
Number
of
securities
underlying
unexercised
options (#)
exercisable
|
|
|
Number
of
securities
underlying
unexercised
options (#)
unexercisable
|
|
|
Weighted
Option
exercise
price
($)
|
|
|
Option
expiration
date
|
|
Number
of shares or units of stock that have not vested
|
|
|
Market
value of shares of units of stock that have not vested ($)
|
|
|
Equity
incentive plan awards: number of unearned shares, units or other rights that have not vested (#)
|
|
|
Equity
incentive plan awards: Market or payout of value of unearned shares, units or other rights that have not vested
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(e)
|
|
|
(f)
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
Yin Shenping
|
|
|
60,000
|
|
|
|
-
|
|
|
|
6.00
|
|
|
July
29, 2019
(2)
|
|
|
31,727
|
|
|
|
94,864
|
|
|
|
31,727
|
|
|
|
94,864
|
(4)
|
Principal Executive Officer
|
|
|
32,000
|
|
|
|
16,000
|
|
|
|
2.96
|
|
|
March
25, 2022
(3)
|
|
|
50,000
|
|
|
|
82,500
|
|
|
|
100,000
|
|
|
|
165,000
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
320,000
|
|
|
|
281,600
|
(6)
|
Total
|
|
|
92,000
|
|
|
|
88,000
|
|
|
|
4.65
|
|
|
|
|
|
81,727
|
|
|
|
177,364
|
|
|
|
451,727
|
|
|
|
541,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chen Guangqiang
|
|
|
50,000
|
|
|
|
-
|
|
|
|
6.00
|
|
|
July
29, 2019
(2)
|
|
|
45,060
|
|
|
|
134,729
|
|
|
|
45,061
|
|
|
|
134,732
|
(4)
|
Chief Technology Officer
|
|
|
20,000
|
|
|
|
10,000
|
|
|
|
2.96
|
|
|
March
25, 2022
(3)
|
|
|
50,000
|
|
|
|
82,500
|
|
|
|
100,000
|
|
|
|
165,000
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
320,000
|
|
|
|
281,600
|
(6)
|
Total
|
|
|
40,000
|
|
|
|
10,000
|
|
|
|
4.86
|
|
|
|
|
|
95,060
|
|
|
|
217,229
|
|
|
|
465,061
|
|
|
|
581,332
|
|
(2)
|
Options granted on July 30, 2009, which vest at a rate of 20% per year on the anniversary of the grant date and which are exercisable for $6.00 per share.
|
(3)
|
Options granted on March 26, 2012, which vest at a rate of 20% per year on the anniversary of the grant date and which are exercisable for $2.96 per share.
|
(4)
|
Based on the share price of Oct. 13, 2013.
|
(5)
|
Based on the share price of Jan 31, 2015.
|
(6)
|
Based on the share price of Oct. 16, 2015.
|
EQUITY COMPENSATION PLAN INFORMATION
Plan category
|
|
(a) Number of
securities to
be
issued upon
exercise of
outstanding
options,
warrants and
rights
|
|
|
(b) Weighted-
average
exercise
price of
outstanding
options,
warrants
and rights
|
|
|
(c) Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a))
|
|
Equity compensation plans approved by security holders
|
|
|
815,600
|
|
|
$
|
3.04
|
|
|
|
-
|
|
Equity compensation plans not approved by security holders
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
Total
|
|
|
815,600
|
|
|
$
|
3.04
|
|
|
|
-
|
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER
MATTERS
The following table sets forth
information with respect to beneficial ownership of our ordinary shares as of the date of this report, for each person known
by us to beneficially own 5% or more of our ordinary shares, and all of our executive officers and directors individually and
as a group. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment
power with respect to the securities. Except as indicated below, and subject to applicable community property laws, the
persons named in the table have sole voting and investment power with respect to all ordinary shares shown as beneficially
owned by them. Percentage of beneficial ownership is based on 6,265,125 Shares, which consists of 5,804,005 Shares
outstanding as of May 25, 2016 and 461,120 shares subject to options that are exercisable within 60 days after May 25,
2016. Such shares subject to options are deemed to be outstanding for the purposes of computing the percentage ownership of
the individual holding such shares, but are not deemed outstanding for purposes of computing the percentage for any other
person shown in the table. Our major shareholders do not possess voting rights that differ from our other shareholders. The
address of each of the below shareholders is c/o Recon Technology Ltd, Room 1902, Building C, King Long International
Mansion, 9 Fulin Road, Beijing 100107 China.
|
|
Amount of
Beneficial
Ownership
|
|
|
Percentage
Ownership
|
|
Yin
Shenping
(1)
|
|
|
857,215
|
|
|
|
13.68
|
%
|
Chen
Guangqiang
(2)
|
|
|
799,881
|
|
|
|
12.77
|
%
|
Hu
Jijun
(3)
|
|
|
15,000
|
|
|
|
*
|
%
|
Nelson
Wong
(4)
|
|
|
18,000
|
|
|
|
*
|
%
|
Zhao
Shudong
(5)
|
|
|
12,000
|
|
|
|
*
|
%
|
Liu
Jia
(6)
|
|
|
50,000
|
|
|
|
*
|
%
|
Liu
Hui
(7)
|
|
|
833,681
|
|
|
|
13.31
|
%
|
Chen
Yiquan
(7)
|
|
|
833,681
|
|
|
|
13.31
|
%
|
Total
|
|
|
2,585,777
|
|
|
|
41.27
|
%
|
Directors and Executive Officers
as a Group (seven members)
|
|
|
1,752,096
|
|
|
|
27.97
|
%
|
(1)
|
Includes 92,000 options
to purchase ordinary shares that were exercisable and 81,727 stock award that were vested and to be vested within 60 days
after May 25, 2016. Does not include 16,000 options that were not exercisable within 60 days after May 25, 2016.
|
(2)
|
Includes 70,000 options to purchase ordinary
shares that were exercisable and 95,060 stock award that were vested and to be vested within 60 days after May 25, 2016. Does
not include 10,000 options that were not exercisable within 60 days after May 25, 2016
|
(3)
|
Includes 23,333 options to purchase ordinary
shares that were exercisable within 60 days after May 25, 2016.
|
(4)
|
Includes 26,333 options to purchase ordinary
shares that were exercisable within 60 days after May 25, 2016.
|
(5)
|
Includes12,000 options that were not exercisable
within 60 days after May 25, 2016.
|
(6)
|
Includes 60,667 options to purchase ordinary
shares that were exercisable within 60 days after May 25, 2016.
|
(7)
|
Includes 458,525 Shares held by Chen Yiquan
and 375,156 Shares held by Liu Hui. According to a jointly filed Schedule 13D dated December 27, 2010 (Accession No. 0001144204-10-068264),
Chen Yiquan and Liu Hui share beneficial ownership of and have joint voting and dispositive power over the aggregate 833,681
Shares.
|
*
|
Less than 1%.
|
Certain Relationships and Related Transactions,
and Director Independence.
Transactions with Related Persons
Because we do
not have access certification to Jidong Oilfield, Nanjing Recon, one of our Domestic Companies conducted transactions with Jidong
Oilfield through Beijing Yabei Nuoda Science and Technology Co. Ltd. (“Yabei Nuoda”), which has access certification
to the oilfield and wherein one of the Founders, Mr. Yin Shenping, was the legal representative of before December 2013 and
Chairman as of September 30, 2014. On October 30, 2014, Mr. Yin resigned from the chairman position and at that point Yabei Nuoda
was no longer a related party of the Company after October 30, 2014. Mr. Yin does not have any equity interest in this company
currently. Below is a summary of trade accounts receivable with related parties as of June 30, 2014 and 2015, respectively.
|
|
June 30, 2014
|
|
|
June 30, 2015
|
|
|
June 30, 2015
|
|
Related Party
|
|
RMB
|
|
|
RMB
|
|
|
U.S. Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beijing Yabei Nuoda Science and Technology Co. Ltd. *
|
|
¥
|
5,441,498
|
|
|
¥
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beijing Langchen Construction Company
|
|
|
726,800
|
|
|
|
726,800
|
|
|
|
119,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Xiamen Huangsheng Hitek Computer Network Co.Ltd.
|
|
|
100,000
|
|
|
|
980,000
|
|
|
|
160,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Xiamen Henda Hitek Computer Network Co. Ltd.
|
|
|
1,211,000
|
|
|
|
3,063,000
|
|
|
|
503,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total - related-parties, net
|
|
¥
|
7,479,298
|
|
|
¥
|
4,769,800
|
|
|
$
|
783,373
|
|
Related Party
|
|
June 30, 2014
|
|
|
June 30, 2015
|
|
|
June 30, 2014
|
|
Non-current portion
|
|
RMB
|
|
|
RMB
|
|
|
U.S. Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beijing Yabei Nuoda Science and Technology Co. Ltd.
|
|
¥
|
16,062,574
|
|
|
¥
|
4,934,072
|
|
|
$
|
810,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for doubtful accounts
|
|
|
(1,606,257
|
)
|
|
|
(493,407
|
)
|
|
|
(81,035
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total - related-parties, net
|
|
¥
|
14,456,317
|
|
|
¥
|
4,440,665
|
|
|
$
|
729,317
|
|
Below is a summary of purchase advances
to related parties as of June 30, 2014 and 2015, respectively
|
|
June 30, 2014
|
|
|
June 30, 2015
|
|
|
June 30, 2015
|
|
Related Party
|
|
RMB
|
|
|
RMB
|
|
|
U.S. Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Xiamen Huangsheng Hitek Computer Network Co. Ltd.
|
|
¥
|
394,034
|
|
|
¥
|
394,034
|
|
|
$
|
64,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
¥
|
394,034
|
|
|
¥
|
394,034
|
|
|
$
|
64,715
|
|
In addition, included
in the Company’s other receivables as of June 30, 2015 were amounts “due from ENI” after ENI ceased to be a VIE
of the Company on December 16, 2010. In January 2012, ENI agreed to repay the loan on a determined payment schedule, and interest
is accrued during the period at an annual rate of 4%. In accordance with the payment schedule, the principal plus accrued interest
was to be repaid over three years on a quarterly basis beginning March 2012. The first four payments are RMB 1.2 million
each. In March, June, September and December of 2012, the Company received RMB 4.8 million. Starting March 2013, installments for
each quarter would be ¥1,777,653. The Company received the payments on time in March and June, 2013. On September 30, 2013,
ENI proposed to extend the payment period and signed a new contract with the Company. According to the new arrangement, the remaining
balance of this loan will be repaid over four years with quarterly installments of ¥699,147. The Company has continued
to receive the payments under the agreement.
Accordingly, the current
and non-current portion of the amount due from ENI at June 30, 2015 is RMB 2,624,071 ($430,967) and RMB 2,729,033 ($448,205), respectively.
The Company also had
short-term borrowings from related parties. Below is a summary of the Company’s short-term borrowings due to related parties
as of June 30, 2014 and 2015, respectively.
|
|
June 30, 2014
|
|
|
June 30, 2015
|
|
|
June 30, 2015
|
|
Short-term borrowings due to related parties:
|
|
RMB
|
|
|
RMB
|
|
|
U.S. Dollars
|
|
Short-term borrowing from a Founder, 6.6% annual interest, due on December 25, 2014
|
|
¥
|
5,007,728
|
|
|
¥
|
-
|
|
|
|
-
|
|
Short-term borrowing from a Founder, 7.2% annual interest, due on October 20, 2015
|
|
|
|
|
|
|
6,013,200
|
|
|
|
987,584
|
|
Short-term borrowing from a Founder, 6.0% annual interest, due on October 2, 2015
|
|
|
|
|
|
|
3,403,431
|
|
|
|
558,966
|
|
Short-term borrowing from a Founder, 6.16% annual interest, due on October 12, 2015
|
|
|
|
|
|
|
1,600,274
|
|
|
|
262,822
|
|
Short-term borrowing from a Founder's family member, no interest, due on various dates.
|
|
|
|
|
|
|
5,700,000
|
|
|
|
936,145
|
|
Short-term borrowings from Xiamen Huasheng Haitian Computer Network Co. Ltd., no interest, due on November 14, 2015
|
|
|
200,000
|
|
|
|
200,000
|
|
|
|
32,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total short-term borrowings due to related parties
|
|
¥
|
5,207,728
|
|
|
¥
|
16,916,905
|
|
|
$
|
2,778,364
|
|
Other than as described
herein, no transactions required to be disclosed under Item 404 of Regulation S-K have occurred since the beginning of the
Company’s last fiscal year.
Director Independence
The Board of Directors
maintains a majority of independent directors who are deemed to be independent under the definition of independence provided by
NASDAQ Stock Market Rule 4200(a)(15). Mr. Wong, Mr. Hu and Mr. Zhao are our independent directors.
PROPOSAL 2:
TO RATIFY THE APPOINTMENT OF FRIEDMAN
LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING JUNE 30, 2016
(ITEM 2 ON THE PROXY CARD)
AUDIT COMMITTEE REPORT AND FEES PAID TO
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Who served on the Audit Committee of the board of directors during
fiscal year 2015?
The members of the Audit Committee as of June
30, 2015 were Nelson N.S. Wong, Zhao Shudong and Hu Jijun. Each member of the Audit Committee is independent under the rules of
the SEC and the NASDAQ Capital Market. The board of directors has determined that Mr. Wong, who is an independent director, is
an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K promulgated under
the Exchange Act.
What document governs the activities of the Audit Committee?
The Audit Committee acts under a written charter,
which sets forth its responsibilities and duties, as well as requirements for the Audit Committee’s composition and meetings.
The Audit Committee Charter is available on the Company’s website at www.recon.cn under Investor Relations.
How does the Audit Committee conduct its meetings?
During fiscal 2015, the Audit Committee met
with the senior members of the Company’s financial management team and the Company’s independent registered public
accounting firm. The Audit Committee’s agenda was established by the Chairman. At each meeting, the Audit Committee reviewed
and discussed various financial and regulatory issues. The Audit Committee also had private, separate sessions from time to time
with representatives of the Company’s independent registered public accounting firm, at which meetings candid discussions
of financial management, accounting and internal control issues took place.
Does the Audit Committee review the periodic reports and other
public financial disclosures of the Company?
The Audit Committee reviews each of the Company’s
quarterly and annual reports, including Management’s Discussion of Results of Operations and Financial Condition. As part
of this review, the Audit Committee discusses the reports with the Company’s management and considers the audit and review
reports prepared by the independent registered public accounting firm about the Company’s quarterly and annual reports, as
well as related matters such as the quality (and not just the acceptability) of the Company’s accounting principles, alternative
methods of accounting under generally accepted accounting principles and the preferences of the independent registered public accounting
firm in this regard, the Company’s critical accounting policies and the clarity and completeness of the Company’s financial
and other disclosures.
What is the role of the Audit Committee in connection with the
financial statements and controls of the Company?
Management of the Company has primary responsibility
for the financial statements and internal control over financial reporting. The independent registered public accounting firm has
responsibility for the audit of the Company’s financial statements and internal control over financial reporting. The responsibility
of the Audit Committee is to oversee financial and control matters, among other responsibilities fulfilled by the Audit Committee
under its charter. The Audit Committee meets regularly with the independent registered public accounting firm, without the presence
of management, to ensure candid and constructive discussions about the Company’s compliance with accounting standards and
best practices among public companies comparable in size and scope to the Company. The Audit Committee also regularly reviews with
its outside advisors material developments in the law and accounting literature that may be pertinent to the Company’s financial
reporting practices.
What has the Audit Committee done with regard to the Company’s
audited financial statements for fiscal 2015?
The Audit Committee has:
|
·
|
reviewed and discussed the audited financial statements with the Company’s management; and
|
|
·
|
discussed with Friedman LLP, the Company’s independent registered public accounting firm for the 2015 fiscal year, the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended.
|
Has the Audit Committee considered the independence of the Company’s
auditors?
Friedman LLP has supplied the
Audit Committee with written disclosures and the letter required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees, and the Audit Committee has discussed Friedman LLP’s independence with
Friedman LLP. The Audit Committee has concluded that Friedman LLP is independent from the Company and its management.
Has the Audit Committee made a recommendation regarding the audited
financial statements for fiscal 2015?
Based upon its review and the discussions with
management and the Company’s independent registered public accounting firm, the Audit Committee recommended to the board
of directors that the audited consolidated financial statements for the Company be included in the Company’s Annual Report
on Form 10-K for fiscal 2015.
Has the Audit Committee reviewed the fees paid to the independent
registered public accounting firm during fiscal 2015?
The Audit Committee has reviewed and discussed
the fees paid to Friedman LLP during fiscal 2015 for audit, audit-related, tax and other services, which are set forth below under
“Fees Paid to Independent Registered Public Accounting Firm.” The Audit Committee has determined that the provision
of non-audit services is compatible with Friedman LLP’s independence.
What is the Company’s policy regarding the retention of
the Company’s auditors?
The Audit Committee has adopted a policy regarding
the retention of the independent registered public accounting firm that requires pre-approval of all services by the Audit Committee.
Who prepared this report?
This report has been furnished by the members
of the Audit Committee as of June 30, 2015:
Nelson N.S. Wong, Chairman
Zhao Shudong
Hu Jijun
FEES PAID TO INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Audit Fees
During fiscal 2014 and 2015, Friedman LLP’s
fees for the annual audit of our financial statements and the quarterly reviews of the financial statements included in Forms 10-Q
were $185,000 and $190,000, respectively.
Audit-Related Fees
During fiscal 2014 and 2015, Friedman LLP billed
the Company $0 for audit-related services.
Tax Fees
The Company was not billed by Friedman LLP for
tax services in fiscal 2014 and 2015.
All Other Fees
The Company was not billed by Friedman LLP for
any other services in fiscal 2014 and 2015.
Audit Committee Pre-Approval Policies
Before Friedman LLP was engaged by the Company
to render audit or non-audit services, the engagement was approved by the Company’s audit committee. All services rendered
by Friedman LLP have been so approved.
WE RECOMMEND THAT YOU VOTE FOR THE RATIFICATION OF FRIEDMAN LLP
AS THE COMPANY'S FISCAL 2016 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
PROPOSAL 3:
TO APPROVE, ON A NON-BINDING BASIS, THE
COMPENSATION OF THE COMPANY’S EXECUTIVE OFFICERS FOR THE FISCAL YEAR ENDING JUNE 30, 2015
(ITEM 3 ON THE PROXY CARD)
The Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 requires public companies to provide shareholders with periodic advisory (non-binding) votes on executive
compensation, also referred to as “say-on-pay” proposals. As described under the heading, “Executive Compensation”
in this Proxy Statement, our executive compensation programs are designed to attract, motivate and retain our executive officers,
who are critical to our success. Under these programs, our executive officers are rewarded for the achievement of annual, long-term
and strategic goals, and corporate goals. Please read the “Executive Compensation” section beginning on page 15 for
additional details about our executive compensation programs, including information about the fiscal year 2015 compensation of
our Chief Executive Officer and each of the two other most highly compensated executive officers during 2015 (collectively, the
“Named Executive Officers”).
We are asking our shareholders to indicate
their support for our Named Executive Officers’ compensation as described in this Proxy Statement. This proposal gives our
shareholders the opportunity to express their views on our Named Executive Officers’ compensation. This vote is not intended
to address any specific item of compensation, but rather to address the overall compensation of our Named Executive Officers and
the philosophy, policy and practices as described in this Proxy Statement. Accordingly, we will ask our shareholders to vote “FOR”
the following resolution at the 2015 Annual Meeting:
“RESOLVED, that the shareholders
approve, on a non-binding advisory basis, the compensation awarded to the Company’s Named Executive Officers, as disclosed
under SEC rules, including the compensation tables and related narrative disclosures included in this proxy statement.”
Pursuant to the Exchange Act and the rules
promulgated thereunder, this vote will not be binding on the Board or the Compensation Committee and may not be construed as overruling
a decision by the Board or the Compensation Committee, creating or implying any change to the fiduciary duties of the Board or
the Compensation Committee or any additional fiduciary duty by the Board or the Compensation Committee or restricting or limiting
the ability of stockholders to make proposals for inclusion in proxy materials related to executive compensation. The Board and
the Compensation Committee, however, may in their discretion take into account the outcome of the vote when considering future
executive compensation arrangements.
Required Vote
In voting to approve the above resolution,
shareholders may vote for the resolution, against the resolution or abstain from voting. This matter will be decided by the affirmative
vote of a majority of the votes cast at the Meeting. Abstentions and broker non-votes will have no direct effect on the outcome
of this proposal.
THE BOARD RECOMMENDS A VOTE “FOR”
APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
GENERAL
Compensation Committee Interlocks and Insider Participation
None of the members of the board of directors
who served on the Compensation Committee during the fiscal year ended June 30, 2015 were officers or employees of the Company or
any of its subsidiaries or had any relationship with the Company requiring disclosure under SEC regulations.
Compliance with Section 16(a) Beneficial Ownership Reporting
Requirements
Section 16(a) of the Securities Exchange Act
of 1934 requires the Company’s directors and executive officers and persons who own more than ten percent of a registered
class of the Company’s equity securities to file with the Securities and Exchange Commission reports of ownership and changes
in beneficial ownership of the Company’s ordinary shares. Directors, executive officers and greater than ten percent shareholders
are required to furnish the Company with copies of all Section 16(a) forms they file. Based solely on a review of the copies of
these reports furnished to the Company or written representations that no other reports were required, we believe that all reports
were timely made.
Availability of Form 10-K to Stockholders
Rules promulgated by the SEC require us to provide
an Annual Report to Stockholders who receive this Proxy Statement. We will also provide copies of the Annual Report to brokers,
dealers, banks, voting trustees and their nominees for the benefit of their beneficial owners of record. Additional copies of the
Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (without exhibits or documents incorporated by reference), are
available without charge to shareholders upon written request to Secretary, Recon Technology, Ltd, Room 1902, Building C, King
Long International Mansion, 9 Fulin Road, Beijing 100107 China, by calling 010-84945799 or via the Internet at www.recon.cn.
Stockholder Proposals
To be considered for inclusion in next
year’s Proxy Statement or considered at next year’s annual meeting but not included in the Proxy Statement,
stockholder proposals must be submitted in writing by February 9, 2017. All written proposals should be submitted to: Secretary,
Recon Technology, Ltd, Room 1902, Building C, King Long International Mansion, 9 Fulin Road, Beijing 100107 China.
Stockholders Sharing an Address
We
may send a single set of stockholder documents to any household at which two or more stockholders reside. This process is called
“householding.” This reduces the volume of duplicate information received at your household and helps us to reduce
costs. Your materials may be householded based on your prior express or implied consent. If your materials have been householded
and you wish to receive separate copies of these documents, or if you are receiving duplicate copies of these documents and wish
to have the information householded, you may write or call the following address or phone number: Secretary, Recon Technology,
Ltd.,1902 Building C, King Long International Mansion, 9 Fulin Road, Beijing 100107, People’s Republic of China; +86 (10)
8494 5799.
Other Matters to
Come Before the Meeting
The
board of directors is not aware of any other business to be acted upon at the Annual Meeting. Pursuant to the Company’s
bylaws, only the business described in the notice of the Annual Meeting of the stockholders will be conducted at such meeting.
Documents Incorporated By Reference
The
SEC allows us to “incorporate by reference” information into this Proxy Statement. This means that the Company
can disclose important information to you by referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be a part of this Proxy Statement, except for any information that is superseded by
information that is included directly in this Proxy Statement or in any other subsequently filed document that also is incorporated
by reference herein.
This
Proxy Statement incorporates by reference our Annual Report on Form 10-K the fiscal year ended June 30, 2015 filed with the SEC
on September 25, 2015 and certain portions of our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2015
filed with the SEC on November 13, 2015.
Annex A
RECON TECHNOLOGY, LTD.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
FOR THE 2015 ANNUAL MEETING OF STOCKHOLDERS
June 30, 2016 (Beijing Time)
The undersigned hereby appoints Yin
Shenping and Cheng Guangqiang, or either of them, each with the power to appoint his substitute, and hereby authorizes them to
represent and vote, as designated below, all of the ordinary shares of Recon Technoplogy, Ltd. (the “Company”) held
of record by the undersigned at the close of business on May 27, 2016 at the Annual Meeting of Stockholders to be held at the
offices of the Recon Technology, Ltd., Room 1902, Building C, King Long International Mansion, No. 9 Fulin Road, Beijing 100107,
People’s Republic of China on June 30, 2016, at 9:00 a.m., Beijing Time, or any adjournment or postponement thereof (the
“Meeting”) and authorizes and instructs said proxies to vote in the manner directed below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL
BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES
LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS AND FOR EACH PROPOSAL.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE
CONTINUED AND TO BE
SIGNED ON THE REVERSE SIDE
THIS PROXY CARD IS VALID ONLY WHEN SIGNED
AND DATED.
RECON TECHNOLOGY, LTD.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
ITEMS 1, 2 and 3.
Proposal No. 1
Election of two class III directors to serve a terms
expiring at the Annual Meeting of stockholders following the fiscal year ending June 30, 2016.
Nominees:
|
For
|
|
Withhold
|
|
|
|
|
Yin Shenping
|
¨
|
|
¨
|
|
|
|
|
Chen Guangqiang
|
¨
|
|
¨
|
Proposal No. 2
To ratify the appointment of Friedman LLP as our independent
registered public accounting firm for the fiscal year ending June 30, 2016.
|
|
For
¨
|
Against
¨
|
Abstain
¨
|
Proposal No. 3
To approve, by a non-binding vote, the compensation of the Company’s named executive officers.
|
|
For
¨
|
Against
¨
|
Abstain
¨
|
The shares represented by this proxy, when properly executed,
will be voted in the manner directed herein by the undersigned Shareholder(s).
If no direction is made, this proxy will
be voted FOR each of the nominees on proposal No. 1 and FOR proposal No. 2.
Please sign your name exactly as it appears hereon. When
signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants,
all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized
officer.
|
|
|
|
|
|
|
Signature (Please Sign Within Box)
|
|
Date
|
|
Signature (Joint Owners)
|
|
Date
|
PROXY VOTING INSTRUCTIONS
Please have your 11 digit control number
ready when voting by Internet or Telephone
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your
voting instructions and for electronic delivery
of information up until 11:59 p.m.
Eastern Time the day before the cut-off date
or meeting date. Have your proxy
card in hand when you access the web site
and follow the instructions to
obtain your records and to create an electronic
voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to
transmit your voting instructions up until
11:59 p.m. Eastern Time the day
before the cut-off date or meeting date.
Have your proxy card in hand when
you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy
card and return it to in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes
Way, Edgewood, NY 11717.
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