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 a Party
other than the Registrant ☐
Check the
appropriate box:
☐
Preliminary Proxy Statement
☐
Confidential, For Use of the Commission Only (As Permitted by Rule
14a-6(e)(2))
☒
Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material under Rule 14a-12
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ACM Research, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment of Filing
Fee (Check the appropriate box):
☒ No
fee required
☐ Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title
of each class of securities to which transaction
applies:
(2) Aggregate
number of securities to which transaction applies:
(3) Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule
0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed
maximum aggregate value of transaction:
(5) Total
fee paid:
☐ Fee
paid previously with preliminary materials.
☐ Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.
(1) Amount
Previously Paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
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2018 ANNUAL MEETING
OF STOCKHOLDERS
and
PROXY STATEMENT
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2018 Annual
Meeting
Thursday,
June 14, 2018
10:00
a.m., Eastern daylight saving time
Virtual-only
meetingWebcast access at
investorcalendar.com/event/28590
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Inside
CEO’s letter to
stockholders
Information on four voting
proposals:
2. Advisory vote on 2017 executive
compensation3
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42307
Osgood Rd, Unit I
Fremont,
California 94539
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May 4,
2018
Dear
Fellow Stockholder:
It is
my pleasure to invite you to attend the Annual Meeting of
Stockholders of ACM Research, Inc. to be held on Thursday, June 14,
2018, at 10:00 a.m., Eastern daylight saving time. We are pleased
to announce that the Annual Meeting will be a “virtual
meeting.” Each holder of Class A or Class B common stock as
of 5 p.m. EDST on the record date of April 30, 2018, will be able
to participate in the Annual Meeting – including casting
votes – by accessing a live webcast at
investorcalendar.com/event/28590
and
entering the control number included on the stockholder’s
Notice of Internet Availability of Proxy Materials.
During
the Annual Meeting, stockholders will be asked to elect the entire
board of directors and to ratify the appointment of BDO China Shu
Lun Pan Certified Public Accountants LLP as our independent auditor
for 2018. We also will be asking stockholders for an approval, by
an advisory vote, of our 2017 executive compensation as disclosed
in the Proxy Statement for the Annual Meeting (a
“
say-on-pay
”
vote) as well as of the board’s recommendation to submit our
executive compensation to an advisory vote every three years (a
“
say-on-frequency
” vote). All of
these matters are important, and we urge you to vote in favor of
the election of each of the director nominees, the ratification of
the appointment of our independent auditor, the approval of our
2017 executive compensation, and the submission of our executive
compensation to an advisory vote every three years.
We are
furnishing proxy materials to our stockholders over the Internet.
This process expedites the delivery of proxy materials to our
stockholders, lowers our costs and reduces the environmental impact
of the Annual Meeting. Today we are sending to each of our
stockholders a Notice of Internet Availability of Proxy Materials
containing instructions on how to access our Proxy Statement for
the Annual Meeting and our 2017 Annual Report to Stockholders, as
well as how to vote via proxy either by telephone or over the
Internet.
It is
important that you vote your shares of Class A and Class B common
stock in person or by proxy, regardless of the number of shares you
own. You will find the instructions for voting on your Notice of
Internet Availability of Proxy Materials. We appreciate your prompt
attention.
The
board invites you to participate in the Annual Meeting so that
management can listen to your suggestions, answer your questions,
and discuss business developments and trends with you. Thank you
for your support, and we look forward to joining you at ACM’s
first stockholder meeting as a public company.
Sincerely,
David
H. Wang
Chief Executive Officer and President
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NOTICE OF
2018 ANNUAL MEETING OF STOCKHOLDERS
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To Stockholders of ACM Research, Inc.:
The
board of directors is soliciting proxies for use at the ACM
Research, Inc. 2018 Annual Meeting. You are receiving the enclosed
proxy statement because you were a holder of Class A or Class
B common stock as of 5 p.m. EDST on the record date of April
30, 2018 and therefore are entitled to vote at the Annual Meeting.
You may participate in the Annual Meeting, including casting votes,
by accessing a live webcast at
investorcalendar.com/event/28590
. The
Annual Meeting will be held to consider and vote upon:
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When
Thursday, June 14, 2018
10:00 a.m., Eastern daylight saving time
Where
Webcast only
Access at
investorcalendar.com/event/28590
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1. Election of six
directors.
2. Advisory vote on 2017 compensation of named
executive officers
3. Advisory vote on frequency of future advisory
votes on executive compensation
4. Ratification of appointment of independent
auditor for 2018
In addition, any other business properly presented
may be acted upon at the Annual Meeting. Each share of Class A
common stock is entitled to one vote, and each share of Class B
common stock is entitled to twenty votes, for each director
position and other proposal.
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 14,
2018:
The Notice of 2018 Annual Meeting of Stockholders, the Proxy
Statement, the 2017 Annual Report to Stockholders and instructions
for voting via the Internet can be accessed at:
iproxydirect.com/ACMR
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In accordance
with Securities and Exchange Commission rules, we are providing
stockholders with access to proxy materials on the Internet instead
of mailing printed copies. We are mailing to stockholders,
commencing on or about May 4, 2018, a Notice of Internet
Availability of Proxy Materials to provide:
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How to Vote in
Advance
Your vote is important.
Please vote as soon as possible by one of the methods shown below.
Your Notice of Internet Availability, proxy card or voting
instruction form should be readily available.
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●
directions for accessing and reviewing the
proxy materials on the Internet and submitting a proxy over the
Internet or by telephone;
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Via Internet (Any Web-Enabled
Device).
Vote online at
iproxydirect.com/ACMR
iproxydirect.com/ACMR
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instructions for requesting copies of proxy
materials in printed form or by email, at no charge;
and
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a control number for use in submitting proxies
and accessing the Annual Meeting webcast.
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By Order of the
Board,
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Via
Internet (Smartphone or Tablet)
Vote online by scanning the QR
code
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Robert
Arthur
Secretary
May 4, 2018
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By Telephone (U.S. or Canada
only)
Vote toll-free by
calling +1.866.752.8683
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By
Mail (Pur
s
uant to Printed
Materials)
Vote by mailing a signed, completed proxy card in the pre-addressed envelopeo |
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42307 Osgood Rd, Unit I
Fremont, California 94539
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Proxy Statement dated May 4, 2018
2018 Annual Meeting of Stockholders
ACM Research, Inc., a Delaware
corporation, is furnishing this Proxy Statement and related proxy
materials in connection with the solicitation by its board of
directors of proxies to be voted at its 2018 Annual Meeting of
Stockholders and any adjournments. ACM Research, Inc. is providing
these materials to the holders of record of its Class A common
stock, $0.0001 par value per share, and Class B common stock,
$0.0001 par value per share, as of 5 p.m., Eastern daylight
saving time, on the record date of April 30, 2018 and is first
making available or mailing the materials on or about May 4,
2018.
The Annual Meeting is scheduled to be held exclusively by webcast
as follows:
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Date
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Thursday, June 14, 2018
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Time
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10:00 a.m., Eastern daylight saving time
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Meeting Webcast Address
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investorcalendar.com/event/28590
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Your vote is important.
Please see the
detailed information that follows in the Proxy
Statement.
Contents
Page
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2018 Proxy Summary
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1
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Questions and Answers about the Annual Meeting
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4
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Vote Required for Election or Approval
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8
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Corporate Governance
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10
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Board
of Directors Overview
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10
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Independence
of Directors
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11
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Director
Nomination Rights
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11
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Code
of Business Conduct
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12
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Board
Oversight of Risk
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12
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Board
Leadership Structure
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13
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Audit
Committee
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13
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Nominating
and Governance Committee
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14
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Compensation
Committee
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15
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Compensation
Committee Interlocks and Insider Participation
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15
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Certain Relationships and Related-Person Transactions
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16
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Director Compensation
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18
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Proposal 1. Election of Directors
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19
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Director
Qualifications
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19
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Identifying
and Evaluating Nominees for Directors
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19
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Information
Concerning Nominees for Election as Directors
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20
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Section 16(a) Beneficial Ownership Reporting
Compliance
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23
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Executive Officers
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25
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Executive Compensation
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26
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Summary
Compensation Table
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26
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Narrative
Explanation of the Summary Compensation Table
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26
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Grants
of Plan-Based Awards
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27
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Outstanding
Equity Awards at 2017 Fiscal Year-End
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27
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Executive
Retention Agreement
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27
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Payments
Upon Termination or Change in Control
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27
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Section
162(m) Considerations
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28
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Equity
Compensation Plan Information
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28
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Proposal 2. Advisory Vote on 2017 Executive
Compensation
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30
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Proposal 3. Advisory Vote on Frequency of Future Advisory Votes
on
Executive
Compensation
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31
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Proposal 4. Ratification of Appointment of Independent Auditor for
2018
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32
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Accounting Matters
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33
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Principal
Independent Auditor Fees
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33
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Audit
Committee Pre-Approval Policies and Procedures
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33
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Report
of Audit Committee
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33
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Stockholder Proposals for 2019 Annual Meeting
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35
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Delivery of Documents to Security Holders Sharing an
Address
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35
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Other Matters
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35
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Standards For
Director
Independence
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Annex A
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Policy
and Procedure for Stockholder Nominations to the
Board
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Annex B
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Qualifications for
Nomination to the
Board
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Annex C
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2018 Proxy Summary
This summary highlights information contained elsewhere in this
Proxy Statement. This summary does not contain all of the
information that you should consider, and you should read the
entire Proxy Statement carefully before voting. References in this
Proxy Statement to “ACM,” and to “we,”
“us,” “our” and similar terms, refer to ACM
Research, Inc.
Annual Meeting of Stockholders
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Time and Date
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10:00
a.m., Eastern daylight saving time, on June 14, 2018.
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Meeting
Webcast Address
|
investorcalendar.com/event/28590
.
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Record
Date
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5 p.m.,
Eastern daylight saving time, on April 30, 2018.
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Voting
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Stockholders will
be entitled to one vote for each outstanding share of Class A
common stock they hold of record as of the record date and twenty
votes for each outstanding share of Class B common stock they hold
of record as of the record date.
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Total
Votes Per Proposal
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48,726,451 votes,
based on 13,541,147 shares of Class A Common Stock and 2,299,000
shares of Class B Common Stock outstanding as of the record
date.
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Annual Meeting Agenda
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Proposal
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Board
Recommendation
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Election of
directors
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FOR
each nominee
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Advisory vote on
2017 executive compensation
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FOR
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Advisory
vote on frequency of future advisory votes on executive
compensation
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TRIENNIAL
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Ratification
of appointment of independent auditor for 2018
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FOR
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How to Cast Your Vote
You can
vote by any of the following methods:
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Until 11:59 p.m., EDST, on June 13, 2018
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At the Annual Meeting on June 14, 2018
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●
Internet:
●
From any
web-enabled device:
iproxydirect.com/ACMR
●
Scan QR code from
any smartphone or tablet:
●
Telephone:
+1-866-752-8683
●
Completed, signed and returned
proxy
card
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●
Internet:
J
oining the Annual Meeting at
investorcalendar.com/event/28590
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1
1
Election of Directors
As the first proposal, we are asking stockholders to elect the
following six director nominees. Each of the nominees currently
serves as a member of the board of directors.
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Director
Since
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Experience/
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Independent
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Committee
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Name
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Age
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Occupation
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Qualifications
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Yes
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No
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Memberships
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Other Boards
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David
H. Wang
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56
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1998
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Founder,
CEO and President of ACM Research
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Industry
Innovation
Leadership
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✓
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Haiping
Dun
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68
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2003
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Retired
Senior Director of Intel Corporation
President
of Champion Microelectronic Corp.
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Industry
Global
Leadership
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✓
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Compensation
Nominating and
Governance
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Champion Microelectronic
Corp.
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Chenming
C. Hu
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70
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2017
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Professor
of Engineering and Computer Sciences, University of California,
Berkeley
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Innovation
Industry
Education
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✓
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Audit
Compensation
Nominating and
Governance
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Ambrella, Inc.
Inphi Corporation
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Tracy
Liu
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53
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2016
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Founder
of H&M Financial Consulting
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Finance
Leadership
Global
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✓
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Audit
Compensation
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Yinan
Xiang
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43
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2017
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Vice
President of Shanghai S&T Venture Capital (Group) Co.
Ltd.
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Investor
designee
Finance
Industry
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✓
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Audit
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Zhengfan
Yang
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37
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2018
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Director
of Direct investment Division III, Sino IC Capital Co.,
Ltd.
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Investor designee
Industry
Finance
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✓
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Nominating
and
Governance
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2
2
Advisory Vote on 2017 Executive Compensation
As the
second proposal, we are asking for stockholder approval, on an
advisory basis in accordance with rules of the Securities and
Exchange Commission (a “say-on-pay” vote), of the 2017
compensation of our “named executive officers” as set
forth in the compensation tables, related narrative discussion and
other disclosures under “Executive Compensation” in
this Proxy Statement.
The
following table provides information concerning the compensation
paid for 2017 and 2016 to our named executive officers during
2017:
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Name and Principal Position
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Year
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Salary($)(1)
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Bonus($)
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Option Awards($)
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All Other Compensation($)
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Total($)
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David
H. Wang
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2017
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$
174,656
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—
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—
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$
14,066
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$
188,722
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Chief Executive Officer and President
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2016
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171,364
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$
7,837
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$
760,000
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10,840
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950,041
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Min Xu
(1)
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2017
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144,472
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25,000
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—
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34,463
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203,935
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Chief Financial Officer and Treasurer
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2016
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19,696
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—
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228,000
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13,555
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261,251
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Fufa
Chen
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2017
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156,554
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—
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—
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40,238
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196,792
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Vice President, Sales of ACM Shanghai
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2016
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153,600
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7,516
|
—
|
10,840
|
171,956
|
(1)
Mr. Xu
was appointed in November 2016, and his employment ended in
January 2018.
3
Advisory Vote on Frequency of Future Advisory Votes on Executive
Compensation
We are
asking stockholders for an advisory vote (a
“say-on-frequency” vote) on how frequently they would
like to cast an advisory vote on the compensation of our named
executive officers. The board of directors recommends that advisory
votes on executive compensation be conducted every three years.
Securities and Exchange Commission rules require that we submit
this "say-on-frequency" vote to stockholders every six
years.
4
Ratification of Appointment of Independent Auditor for
2018
We are
asking stockholders to ratify the audit committee’s retention
of BDO China Shu Lun Pan Certified Public Accountants LLP, an
independent registered public accounting firm, as our independent
auditor to examine and report on our consolidated financial
statements for the fiscal year ending December 31,
2018.
3
Questions and Answers about the Annual Meeting
Q:
When and where will the Annual Meeting be held?
A:
This year the
Annual Meeting of Stockholders of ACM Research, Inc., which we
refer to as the Annual Meeting, will be held exclusively by webcast
at
investorcalendar.com/event/28590
,
beginning at 10:00 a.m., Eastern daylight saving time, on Thursday,
June 14, 2018.
Q:
What materials have been prepared for stockholders in connection
with the Annual Meeting?
A:
We are furnishing
you and other stockholders of record with the following proxy
materials:
●
our 2017 Annual
Report to Stockholders, which we refer to as the 2017 Annual Report
and which includes our Annual Report on Form 10-K for the fiscal
year ended December 31, 2017 (including our audited
consolidated financial statements for 2016 and 2017);
●
this Proxy
Statement for the 2018 Annual Meeting, which we refer to as this
Proxy Statement and which also includes a letter from our President
and Chief Executive Officer to stockholders, and a Notice of 2018
Annual Meeting of Stockholders; and
●
a Notice of
Internet Availability of Proxy Materials, which we refer to as the
Notice of Internet Availability, which includes a control number
for use in submitting proxies and accessing the Annual Meeting
webcast.
These
materials were first mailed to stockholders and made available on
the Internet on or about May 4, 2018.
If, in
accordance with the instructions provided in the Notice of Internet
Availability, you request a printed set of proxy materials, you
will receive by mail, at no charge, printed copies of the 2017
Annual Report, this Proxy Statement, a proxy card for the Annual
Meeting and a pre-addressed envelope to be used to return the
completed proxy card. Your proxy card will include a control number
for use in accessing the Annual Meeting webcast.
If, in
accordance with the instructions provided in the Notice of Internet
Availability, you request that a set of proxy materials be emailed
to you, you will receive by email, at no charge, electronic copies
of the 2017 Annual Report and this Proxy Statement.
Q:
Why was I mailed a Notice of Internet Availability rather than a
printed set of proxy materials?
A:
In accordance with
rules adopted by the Securities and Exchange Commission or SEC, we
are furnishing the proxy materials to stockholders by providing
access via the Internet, instead of mailing printed copies. This
process expedites the delivery of proxy materials to our
stockholders, lowers our costs and reduces the environmental impact
of the Annual Meeting. The Notice of Internet Availability tells
you how to access and review the proxy materials on the Internet
and how to vote on the Internet. It also provides instructions you
may follow to request paper or emailed copies of the proxy
materials.
Q:
Are the proxy materials available via the Internet?
A:
You can access and
review the proxy materials for the Annual Meeting at
our website
or
iproxydirect.com/ACMR
.
In order to submit your proxies or access the Annual Meeting
webcast, however, you will need to refer to the Notice of Internet
Availability sent to you with this Proxy Statement or a proxy card
mailed to you upon your request to obtain your control number and
other personal information needed to vote by proxy or in
person.
4
Q:
What is a proxy?
A:
The term
“proxy,” when used with respect to stockholder, refers
to either a person or persons legally authorized to act on the
stockholder’s behalf or a format that allows the stockholder
to vote without being physically present at the Annual
Meeting.
Because
it is important that as many stockholders as possible be
represented at the Annual Meeting, the board of directors is asking
that you review this Proxy Statement carefully and then vote by
following the instructions set forth on the Notice of Internet
Availability or the proxy card. In voting prior to the Annual
Meeting, you will deliver your proxy to the Proxy Committee, which
means you will authorize the Proxy Committee to vote your shares at
the Annual Meeting in the way you instruct. The Proxy Committee
consists of David H. Wang and Tracy Liu. All shares represented by
valid proxies will be voted in accordance with the
stockholder’s specific instructions.
Q:
What matters will the stockholders vote on at the Annual
Meeting?
A:
Proposal 1 Election of the following six
director nominees:
|
●
David
H. Wang
|
●
Chenming
C. Hu
|
●
Yinan
Xiang
|
|
●
Haiping
Dun
|
●
Tracy
Liu
|
●
Zhengfan
Yang
|
Proposal 2
Approval, as an
advisory vote, of 2017 executive compensation as disclosed in this
Proxy Statement.
Proposal 3
Approval, as an
advisory vote, of the frequency of future advisory votes on
executive compensation.
Proposal 4
Ratification of appointment
of our independent auditor for 2018.
Q:
Who can vote at the Annual Meeting?
A:
Stockholders of
record of Class A and Class B common stock at 5 p.m. EDST on April
30, 2018, the record date, will be entitled to vote at the Annual
Meeting. As of the record date, there were outstanding a total of
13,541,147 shares of Class A common stock, each of which will be
entitled to one vote on each proposal, and 2,299,000 shares of
Class B common stock, each of which will be entitled to twenty
votes on each proposal. As a result, up to a total of 48,726,451
votes can be cast on each proposal.
Q:
What is a stockholder of record?
A:
A stockholder of
record is a stockholder whose ownership of our common stock is
reflected directly on the books and records of our transfer agent,
Computershare Trust Company, N.A.
Q:
What does it mean for a broker or other nominee to hold shares in
“street name”?
A:
If you beneficially
own shares held in an account with a broker, bank or similar
organization, that organization is the stockholder of record and is
considered to hold those shares in “street name.” An
organization that holds your beneficially owned shares in street
name will vote in accordance with the instructions you provide. If
you do not provide the organization with specific voting
instructions with respect to a proposal, the organization’s
authority to vote your shares will, under the rules of the Nasdaq
Global Market or NASDAQ, depend upon whether the proposal is
considered a “routine” or a non-routine
matter.
●
The organization
generally may vote your beneficially owned shares on routine items
for which you have not provided voting instructions to the
organization. The only routine matter expected to be voted on at
the Annual Meeting is the ratification of the appointment of our
independent auditor for 2018 (Proposal 4).
5
●
The organization
generally may not vote on non-routine matters, including Proposals
1, 2 and 3. Instead, it will inform the inspector of election that
it does not have the authority to vote on those matters. This is
referred to as a “broker non-vote.”
For the
purpose of determining a quorum, we will treat as present at the
Annual Meeting any proxies that are voted on any of the four
proposals to be acted upon by the stockholders, including
abstentions or proxies containing broker non-votes.
Q:
How do I vote my shares if I do not attend the Annual
Meeting?
A:
If you are a
stockholder of record,
you may vote prior to
the Annual Meeting as follows:
●
Via the Internet:
You may vote via the
Internet by going to
iproxydirect.com/ACMR
or scanning the QR code on the Notice of Internet Availability
or the proxy card, in accordance with the voting instructions on
the Notice of Internet Availability and the proxy card. Internet
voting is available 24 hours a day until 11:59 p.m., Eastern
daylight saving time, on June 13, 2018. You will be given the
opportunity to confirm that your instructions have been recorded
properly.
●
By Telephone
: You may vote by calling
+1.866.752.8683 and following the instructions provided on the
telephone line. Telephone voting is available 24 hours a day
until 11:59 p.m., Eastern daylight saving time, on June 13,
2018. Easy-to-follow voice prompts will allow you to vote your
shares and confirm that your instructions have been recorded
properly.
●
By Mail
: If you obtain a proxy card by
mail, you may vote by returning the completed and signed proxy card
in a postage-paid return envelope that will be provided with the
proxy card.
If you hold
shares in street name,
you may vote by following the voting
instructions provided by your bank, broker or other nominee. In
general, you may vote prior to the Annual Meeting as
follows:
●
Via the Internet:
You may vote via the
Internet by going to
iproxydirect.com/ACMR
or scanning the QR code on the Notice of Internet Availability or
the proxy card, in accordance with the voting instructions on the
Notice of Internet Availability and the proxy card. Internet voting
is available 24 hours a day until 11:59 p.m., Eastern daylight
saving time, on June 13, 2018. You will be given the
opportunity to confirm that your instructions have been recorded
properly.
●
By Telephone:
You may vote by calling
+1-800-454-8683 and following the instructions provided on the
telephone line. Telephone voting is available 24 hours a day
until 11:59 p.m., Eastern daylight saving time, on June 13,
2018. Easy-to-follow voice prompts allow you to vote your shares
and confirm that your instructions have been recorded
properly.
For
your information, voting via the Internet is the least expensive to
ACM, followed by telephone voting, with voting by mail being the
most expensive.
Q:
Can I vote at the Annual Meeting?
A:
If you are a
stockholder of record, you may vote in person at the Annual
Meeting, whether or not you previously voted. If your shares are
held in street name, you must obtain a written proxy, executed in
your favor, from the stockholder of record to be able to vote at
the Annual Meeting.
Q:
May I change my vote or revoke my proxy?
A:
If you are a
stockholder of record and previously delivered a proxy, you may
subsequently change or revoke your proxy at any time before it is
exercised by:
●
voting via the
Internet or telephone at a later time;
6
●
submitting a
completed and signed proxy card with a later date; or
●
voting via the
Internet at the Annual Meeting.
If you
are a beneficial owner of shares held in street name, you should
contact your bank, broker or other nominee for instructions as to
whether, and how, you can change or revoke your proxy.
Q:
What happens if I do not give specific voting
instructions?
A:
If you are a
stockholder of record and you return a proxy card without giving
specific voting instructions, the Proxy Committee will vote your
shares in the manner recommended by the board on all four proposals
presented in this Proxy Statement and as the Proxy Committee may
determine in its discretion on any other matters properly presented
for a vote at the Annual Meeting.
If you
are a beneficial owner of shares held in street name and do not
provide specific voting instructions to the broker, bank or other
organization that is the stockholder of record of your shares, the
organization generally may vote on routine, but not non-routine,
matters. The only routine matter expected to be voted on at the
Annual Meeting is the ratification of the appointment of our
independent auditor for 2018 (Proposal 4). If the organization does
not receive instructions from you on how to vote your shares on one
or more of Proposals 1, 2 and 3, your shares will be subject to a
broker non-vote and no vote will be cast on those matters. See
“
Q. What does it mean for a
broker or other nominee to hold shares in ‘street
name’?
” above.”
Q:
What if other matters are presented at the Annual
Meeting?
A:
If a stockholder of
record provides a proxy by voting in any manner described in this
Proxy Statement, the Proxy Committee will have the discretion to
vote on any matters, other than the four proposals presented in
this Proxy Statement, that are properly presented for consideration
at the Annual Meeting. We do not know of any other matters to be
presented for consideration at the Annual Meeting.
7
Vote Required for Election or Approval
Introduction
ACM’s
only voting securities are the outstanding shares of Class A and
Class B common stock, which we refer to collectively as common
stock. As of the record date, which is 5 p.m. EDST on April 30,
2018, there were outstanding 13,541,147 shares of Class A common
stock, each of which will be entitled to one vote on each proposal,
and 2,299,000 shares of Class B common stock, each of which will be
entitled to twenty votes on each proposal. Based on the number of
votes for each share of Class A and Class B common stock, up to a
total of 48,726,451 votes can be cast on each
proposal.
Only
stockholders of record as of the record date will be entitled to
notice of, and to vote at, the Annual Meeting. A majority of the
votes attributable to outstanding shares of common stock present in
person or represented by proxy and entitled to vote on any matters
to be considered at the Annual Meeting will constitute a quorum for
the transaction of business at the Annual Meeting. For the purpose
of determining a quorum, we will treat as present at the Annual
Meeting any proxies that are voted on any matter to be acted upon
by the stockholders, as well as abstentions or any proxies
containing broker non-votes.
1
Election
of Directors
Each
director will be elected by a majority of the votes cast with
respect to that director, with the number of votes
“for” a director exceeding the number of votes
“against” the director. Votes to “abstain”
will not be counted for the purpose of determining whether a
director is elected. Similarly, broker non-votes will not have any
effect on the outcome of the election of directors, since broker
non-votes are not counted as “votes cast.”
Under
our Certificate of Incorporation, our Bylaws and the Delaware
General Corporation Law, a director holds office until a successor
is elected and qualified or until his or her earlier resignation or
removal. Each of the nominees currently serves as one of our
directors. If any of the nominees is not elected at the Annual
Meeting, then the Bylaws provide that the director shall offer to
resign from the board of directors. Pursuant to a Director
Resignation Policy approved by the board in October 2017, the
nominating and governance committee will make a recommendation to
the board whether to accept or reject the resignation, or whether
other action should be taken. The board will consider and act on
the recommendation of the nominating and governance committee and
will promptly, if required, publicly disclose its decision and the
rationale behind it. The director who offers his or her resignation
will not participate in the decision of the nominating and
governance committee or the board. If the board accepts such
resignation, then the board may fill the vacancy resulting from
that resignation or may reduce the number of directors that
constitutes the entire board so that no vacancy
exists.
2
Approval
of 2017 Executive Compensation on an Advisory Basis
The
advisory vote to approve our 2017 executive compensation must be
approved by affirmative votes constituting a majority of the votes
entitled to be voted and present in person or represented by proxy
at the Annual Meeting. Abstentions will count as votes against this
proposal, since shares with respect to which the stockholder
abstains will be deemed present and entitled to vote. Broker
non-votes will have no effect on the outcome of this proposal,
since broker non-votes are not counted as “votes
cast.”
8
3
Advisory
Vote on Frequency of Future Advisory Votes on Executive
Compensation
The
advisory vote on the frequency of future advisory votes on
executive compensation must be approved by affirmative votes
constituting a majority of the votes entitled to be voted and
present in person or represented by proxy at the Annual Meeting. As
a result, any votes not cast, whether by abstention, broker
non-votes or otherwise, will not affect the outcome of this
proposal, except to the extent that the failure to vote for a
particular frequency period may result in another frequency period
receiving a larger proportion of the votes cast
4
Ratification
of Appointment of Independent Auditor for 2018
The
ratification of BDO China Shu Lun Pan Certified Public Accountants
LLP as our independent auditor for the year ending
December 31, 2018 must be approved by affirmative votes
constituting a majority of the votes entitled to be voted and
present in person or represented by proxy at the Annual Meeting.
Abstentions will count as votes against this proposal, since shares
with respect to which the stockholder abstains will be deemed
present and entitled to vote. Because this proposal is considered a
routine matter, discretionary votes by brokers will be
counted.
9
Corporate Governance
Board of Directors Overview
Under
our Bylaws and the Delaware General Corporation Law, our business
and affairs are managed by or under the direction of the board of
directors, which selectively delegates responsibilities to its
standing committees.
The
board has adopted and operates under Governance Guidelines that
reflect our current governance practices in accordance with
applicable statutory and regulatory requirements, including those
of the SEC and Nasdaq. The Governance Guidelines are available on
our website at
media.corporate-ir.net/media_files/IROL/25/254659/acm-gov-guidelines-final.pdf
Under the Governance Guidelines, we expect directors to regularly
attend meetings of the board and of all Committees on which they
serve and to review the materials sent to them in advance of those
meetings. We expect nominees for election at each annual meeting of
stockholders to participate in the Annual Meeting. The Annual
Meeting is our first stockholder meeting since the completion of
our initial public offering on November 7, 2017. We did not hold a
stockholder meeting in 2017.
The
board generally expects to hold four regular meetings per year and
to meet on other occasions when circumstances require. Directors
spend additional time preparing for board and committee meetings,
and we may call upon directors for advice between meetings. We
encourage our directors to attend director education programs. The
board did not meet during the period from November 7, 2017, the
closing date of our initial public offering, through December 31,
2017.
The
Governance Guidelines provide that the board will meet in executive
session at least twice a year without management in attendance. The
Lead Director presides at each executive session.
The
board maintains an audit committee, a compensation committee and
governance committee, and an organization and compensation
committee. The board has adopted charters for each of the
committees, and those charters are to be reviewed annually by the
committees and the board. Our website provides access
to:
●
the audit committee
charter at:
media.corporate-ir.net/media_files/IROL/25/254659/acm-ac-charter-final.pdf
;
●
the compensation
committee charter at:
media.corporate-ir.net/media_files/IROL/25/254659/acm-cc-charter-final.pdf
;
and
●
the nominating and
governance committee charter at:
media.corporate-ir.net/media_files/IROL/25/254659/acm-ngc-charter-final.pdf
.
The
committees have the functions and responsibilities described in the
sections below.
So long
as the outstanding shares of Class B common stock represent a
majority of the combined voting power of Class A and Class B common
stock voting together, all directors will be elected for annual
terms and we will not have a classified board. If outstanding
shares of Class B common stock represent less than a majority of
the combined voting power of common stock at any time, we
thereafter will have a classified board consisting of three classes
of approximately equal size, each serving staggered three-year
terms. Our directors would be allocated by the then-current board
among the three classes.
In
November 2017, the board adopted Communications Policies pursuant
to which our Chief Executive Officer, our Chief Financial Officer
and their designees are the only individuals authorized to
communicate on our behalf with the media, industry and trade
organizations, market professionals and stockholders. The
Communications Policies were designed to (a) limit the persons
whose statements trigger our public disclosure obligations under
Regulation FD of the SEC. By limiting the number of spokespersons,
the Communications Policies help ensure that all communications to
members of the public are made by persons who are fully informed
about both our company and the guidelines and risks applicable to
external communications, and they reduce the risk of inconsistent
statements to the public. We believe these precautions are
particularly appropriate given our status as a newly public and our
executives and directors relatively limited experience in speaking
to the public on behalf of our company.
10
Independence of Directors
The
board of directors must consist of a majority of independent
directors not only under the requirements of Nasdaq but also under
the Governance Guidelines.
Under
Nasdaq rules, independent directors must comprise a majority of a
listed company’s board within twelve months from the date of
listing. In addition, Nasdaq rules require that, subject to
specified exceptions, each member of a listed company’s
audit, compensation, and nominating and governance committees be
independent within twelve months from the date of listing. Audit
committee members must also satisfy additional independence
criteria, including those set forth in Rule 10A-3 under the
Securities Exchange Act, and compensation committee members must
also satisfy additional independence criteria, including those set
forth in Rule 10C-1 of the Securities Exchange Act. Under Nasdaq
rules, a director will qualify as an “independent
director” only if, in the opinion of that company’s
board, that person does not have a relationship that would
interfere with the exercise of independent judgment in carrying out
the responsibilities of a director. In order to be considered
independent for purposes of Rule 10A-3 under the Securities
Exchange Act, a member of an audit committee of a listed company
may not, other than in his or her capacity as a member of the audit
committee, the board or any other board committee: (a) accept,
directly or indirectly, any consulting, advisory or other
compensatory fee from the listed company or any of its
subsidiaries, other than compensation for board service; or (b) be
an affiliated person of the listed company or any of its
subsidiaries.
In
order to be considered independent for purposes of Rule 10C-1 under
the Securities Exchange Act, each member of the compensation
committee must be a member of the board of the listed company and
must otherwise be independent. In determining independence
requirements for members of compensation committees, the national
securities exchanges and national securities associations are to
consider relevant factors, including: (a) the source of
compensation of a member of the board of a listed company,
including any consulting, advisory or other compensatory fee paid
by the listed company to such member; and (b) whether a member of
the board of a listed company is affiliated with the listed
company, a subsidiary of the listed company or an affiliate of a
subsidiary of the listed company.
The
board annually reviews the independence of all non-employee
directors. In April 2018 the board established categorical
standards consistent with the corporate governance standards of
Nasdaq to assist the board in making determinations of the
independence of board members. We have attached a copy of our
Standards for Director Independence to this Proxy Statement as
Annex A
and also
posted a copy on our website at
media.corporate-ir.net/media_files/IROL/25/254659/acm-bd-independence.pdf
.
These categorical standards require that, to be independent, a
director may not have a material relationship with ACM. Even if a
director meets all categorical standards for independence, the
board reviews other relationships with ACM in order to conclude
that each independent director has no material relationship with
ACM either directly or indirectly.
In
conjunction with its adoption of the Standards for Director
Independence to this Proxy Statement in April 2018, the board
undertook a review of its composition and that of its committees,
as well as the independence of each director. Based upon
information requested from and provided by each director concerning
the director’s background, employment and affiliations,
including family relationships, the board determined that each of
Haiping Dun, Tracy Liu, Yinan Xiang and Zhengfan Yang qualify as
independent directors in accordance with the rules of Nasdaq and
Rules 10C-1 and 10A-3 under the Securities Exchange Act. The
independent members of the board will hold separate regularly
scheduled executive session meetings at which only independent
directors are present.
Director Nomination Rights
In
connection with our sale and issuance of capital stock in 2017, we,
and certain other stockholders, have entered into a voting
agreement with Shanghai S&T Venture Capital (Group) Co. Ltd.,
or SSTVC, and a nomination and voting agreement with Xinxin
(Hongkong) Capital Co., Limited, or XinXin.
11
Pursuant
to our voting agreement with SSTVC, SSTVC has the right to
designate one individual for nomination to the board of directors.
The rights and obligations of the parties under the voting
agreement will be in effect as long as SSTVC continues to
beneficially own all of the 1,666,170 shares of Class A common
stock that have been issued to SSTVC. Yinan Xiang was initially
designated by SSTVC and was appointed as a member of the board
effective upon the completion of our initial public offering in
November 2017. Ms. Xiang is the designee of SSTVC, and has been
nominated by the board, for re-election at the Annual
Meeting.
Pursuant
to our nomination and voting agreement with Xinxin, Xinxin has the
right to designate one individual for nomination to the board. In
addition, holders who will have 53.8% of the voting power of Class
A and Class B common stock, voting together, as of the record date
of the Annual Meeting, including David H. Wang, our Chair of the
Board, Chief Executive Officer and President, and Haiping Dun, our
Lead Director, have agreed to vote their shares of common stock for
the election of the nominee designated by Xinxin. The rights and
obligations of the parties under the nomination and voting
agreement with Xinxin will be in effect as long as Xinxin and its
affiliates continue to hold at least 625,000 shares of Class A
common stock that have been issued to Xinxin. Zhengfan Yang was
initially designated by XinXin and was appointed as a member of the
board in January 2018. Mr. Yang is the designee of Xinxin, and has
been nominated by the board, for re-election at the Annual
Meeting.
Code of Business Conduct
We have
a Code of Business Conduct applicable to all directors, officers
and employees of ACM Research and its subsidiaries. We have posted
the Code of Business Conduct on our website at
media.corporate-ir.net/media_files/IROL/25/254659/acm-code-of-business-conduct-final.pdf
.
We will post any amendments to the Code of Business Conduct on our
website. In accordance with the requirements of the SEC and Nasdaq,
we will also post waivers applicable to any of our officers or
directors from provisions of the Code of Business Conduct on our
website. We have not granted any such waivers to date.
We have
implemented whistleblower procedures, which establish format
protocols for receiving and handling complaints from employees. Any
concerns regarding accounting or auditing matters reported under
these procedures are to be communicated promptly to the audit
committee of the board of directors.
Board Oversight of Risk
The
board of directors has responsibility for the oversight of our risk
management processes and, either as a whole or through its
committees, regularly discusses with management our major risk
exposures, their potential impact on our business and the steps we
take to manage them. The risk oversight process includes receiving
regular reports from board committees and members of senior
management to enable the board to understand our risk
identification, risk management and risk mitigation strategies with
respect to areas of potential material risk, including operations,
finance, legal, regulatory, strategic and reputational
risk.
The
audit committee of the board reviews information regarding
liquidity and operations, and oversees our management of financial
risks. Periodically, the audit committee reviews our policies with
respect to risk assessment, risk management, loss prevention and
regulatory compliance. Oversight by the audit committee includes
direct communication with our external auditors, and discussions
with management regarding significant risk exposures and the
actions management has taken to limit, monitor or control such
exposures. The compensation committee is responsible for assessing
whether any of our compensation policies or programs has the
potential to encourage excessive risk-taking. The nominating and
governance committee of the board manages risks associated with the
independence of the board, corporate disclosure practices and
potential conflicts of interest. While each committee is
responsible for evaluating certain risks and overseeing the
management of such risks, the entire board is regularly informed
through committee reports about such risks.
Matters
of significant strategic risk are considered by the board as a
whole.
12
Board Leadership Structure
The
board of directors recognizes that it is important to determine an
optimal board leadership structure to ensure the independent
oversight of management as the company continues to grow. We do not
have a policy on whether the offices of Chair of the Board and
Chief Executive Officer should be separate and, if they are to be
separate, whether the Chair of the Board should be selected from
among the independent directors or should be an employee. Our board
has determined that it is in our best interests to have both a
Chair of the Board and a Lead Director. Our board has appointed
David H. Wang, our Chief Executive Officer and President, to serve
as Chair of the Board and Haiping Dun, an independent director, to
serve as Lead Director. Among other things, the Chair of the Board
shall prepare agendas for, and preside over, meetings of the board
and the Lead Director shall assist the Chair of the Board in
preparing agendas and shall serve as the principal liaison between
the Chair of the Board and the other directors. Our board believes
that this is the appropriate leadership structure for us at this
time and will allow the board to fulfill its role with appropriate
independence.
The
board has concluded that our current leadership structure is
appropriate at this time. However, the board will continue to
periodically review our leadership structure and may make such
changes in the future as it deems appropriate.
Audit Committee
The
principal responsibilities of the audit committee are to assist the
board of directors in fulfilling the board’s responsibilities
for monitoring and overseeing:
●
appointing,
approving the compensation of, and assessing the independence of
our registered public accounting firm;
●
overseeing the work
of our registered public accounting firm, including through the
receipt and consideration of reports from such firm;
●
reviewing and
discussing with management and the registered public accounting
firm our annual and quarterly financial statements and related
disclosures;
●
monitoring our
internal control over financial reporting and our disclosure
controls and procedures;
●
meeting
independently with our registered public accounting firm and
management;
●
furnishing the
audit committee report required by SEC rules;
●
reviewing and
reassessing the adequacy of our conflict of interest policy;
and
●
overseeing our risk
assessment and risk management policies.
Our
independent auditor is ultimately accountable to the audit
committee. The audit committee has the ultimate authority and
responsibility to select, evaluate, approve terms of retention and
compensation of, and, where appropriate, replace the independent
auditor.
The
current members of the audit committee are Tracy Liu, who serves as
chair, Chenming Hu and Yinan Xiang. All three members are standing
for re-election at the Annual Meeting. The board has determined
that each of the audit committee members is financially literate
and is a “non-employee director” as defined in Rule
16b-3 promulgated under the Securities Exchange Act. The board also
determined that each of Ms. Liu and Ms. Xiang is independent, as
defined in the listing standards of Nasdaq, and is an
“outside director” as that term is defined in Internal
Revenue Code Section 162(m). The board has also determined that Ms.
Liu is an audit committee financial expert in accordance with the
standards of the SEC.
13
The
board has determined that Dr. Hu is not independent under the
requirements contemplated by Rule 10A-3 of the Securities Exchange
Act or the listing standards of Nasdaq. See “Certain
Relationships and Related-Person Transactions—Advisory Board
Agreement.” Dr. Hu may serve as a member of the audit
committee until November 7, 2018, the first anniversary of the
closing of our initial public offering, in accordance with the
phase-in provisions of the Nasdaq listing standards and the
Securities Exchange Act. The board believes that relying on these
provisions will not materially adversely affect the ability of the
audit committee to act independently, to perform its duties, and to
fulfill its obligations to ACM and its stockholders.
The
audit committee held two meeting between November 7, 2017, the
closing date of our initial public offering, and December 31, 2017.
Each then-serving member participated in both of the meetings of
the audit committee during that period.
Nominating and Governance Committee
The
principal responsibilities of the nominating and governance
committee are to:
●
identifying,
evaluating, and making recommendations to the board of directors
and our stockholders concerning nominees for election to the board,
to each of the board’s committees and as committee
chairs;
●
annually reviewing
the performance and effectiveness of the board and developing and
overseeing a performance evaluation process;
●
annually evaluating
the performance of management, the board and each board committee
against their duties and responsibilities relating to corporate
governance;
●
annually evaluating
adequacy of our corporate governance structure, policies and
procedures; and
●
providing reports
to the board regarding the committee’s nominations for
election to the board and its committees.
The
current members of the nominating and governance committee are
Chenming Hu, who serves as chair, Haiping Dun and Zhengfan Yang.
All three members are standing for re-election at the Annual
Meeting. The board has determined that each of Dr. Dun and Mr. Yang
is independent, as defined in the listing standards of
Nasdaq.
The
board has determined that Dr. Hu is not independent under the
requirements contemplated by the Securities Exchange Act or the
listing standards of Nasdaq. See “Certain Relationships and
Related-Person Transactions—Advisory Board Agreement.”
Dr. Hu may serve as a member of the nominating and governance
committee until November 7, 2018, the first anniversary of the
closing of our initial public offering, in accordance with the
phase-in provisions of the Nasdaq listing standards and the
Securities Exchange Act. The board believes that relying on these
provisions will not materially adversely affect the ability of the
nominating and governance committee to act independently, to
perform its duties, and to fulfill its obligations to ACM and its
stockholders.
The
nominating and governance committee has the sole authority to
retain, oversee and terminate any consulting or search firm to be
used to identify director candidates or assist in evaluating
director compensation and to approve any such firm’s fees and
retention terms. The nominating and governance committee did not
meet between November 7, 2017, the closing date of our initial
public offering, and December 31, 2017.
The
nominating and governance committee will consider director nominees
recommended by our stockholders in accordance with our Policy and
Procedure for Stockholder Nominations to the Board adopted by the
nominating and governance committee and approved by the board in
April 2018, a copy of which is attached to this Proxy Statement as
Annex B
and posted on
our website at
media.corporate-ir.net/media_files/IROL/25/254659/acm-bd-shnominations.pdf
.
Recommendations should be submitted to our Corporate Secretary in
writing at ACM Research, Inc., 42307 Osgood Road, Unit I, Fremont,
California 94539, along with additional required information about
the nominee and the stockholder making the recommendation.
Information on qualifications for nominations to the board and
procedures for stockholder nominations to the board is included
below under “Proposal 1. Election of Directors—Director
Qualifications” and “—Identifying and Evaluating
Nominees for Directors.”
14
Compensation Committee
The
principal responsibilities of the compensation committee are to
assist the board of directors in fulfilling its responsibilities
relating to:
●
evaluating the
performance of our chief executive officer and determining the
chief executive officer’s salary and contingent compensation
based on his or her performance and other relevant
criteria;
●
identifying the
corporate and individual objectives governing the chief executive
officer’s compensation;
●
approving the
compensation of our other executive officers;
●
making
recommendations to the board with respect to director
compensation;
●
reviewing and
approving the terms of certain material agreements;
●
overseeing and
administering our equity incentive plans and employee benefit
plans;
●
preparing the
annual compensation committee report required by SEC rules;
and
●
conducting a review
of executive officer succession planning, as necessary, reporting
its findings and recommendations to the board, and working with the
board in evaluating potential successors to executive officer
positions.
The
current members of the compensation committee are Haiping Dun, who
serves as chair, Chenming Hu and Tracy Liu. All three members are
standing for re-election at the Annual Meeting. The board has
determined that each of Dr. Dun and Ms. Liu is independent, as
defined in the listing standards of Nasdaq, is a
“non-employee director” as defined in Rule 16b-3
promulgated under the Securities Exchange Act and is an
“outside director” as that term is defined in Internal
Revenue Code Section 162(m).
The
board has determined that Dr. Hu is not independent under the
requirements contemplated by the Securities Exchange Act or the
listing standards of Nasdaq. See “Certain Relationships and
Related-Person Transactions—Advisory Board Agreement.”
Dr. Hu may serve as a member of the compensation committee until
November 7, 2018, the first anniversary of the closing of our
initial public offering, in accordance with the phase-in provisions
of the Nasdaq listing standards and the Securities Exchange Act.
The board believes that relying on these provisions will not
materially adversely affect the ability of the compensation
committee to act independently, to perform its duties, and to
fulfill its obligations to ACM and its stockholders.
The
compensation committee did not meet between November 7, 2017, the
closing date of our initial public offering, and December 31, 2017.
The compensation committee has the sole authority to retain,
oversee and terminate any compensation consultant to be used to
assist in the evaluation of executive compensation and to approve
the consultant’s fees and retention terms.
Compensation Committee Interlocks and Insider
Participation
During
2017 none of the members of the compensation committee was an
officer or employee of our company or our subsidiaries and none of
our executive officers served as a member of the board of directors
or compensation committee of any entity that has one or more
executive officers serving on the board or compensation
committee.
15
Certain Relationships and Related-Person Transactions
In
October 2017 the board of directors adopted a Conflict of Interest
Policy applicable to all directors, officers and employees of our
company and our subsidiaries. We have posted the Conflict of
Interest Policy on our website at
media.corporate-ir.net/media_files/IROL/25/254659/acm-coi-policy-final.pdf
.
We will post any amendments to the Conflict of Interest Policy on
our website.
The
Conflict of Interest Policy requires each director and executive
officer, including their immediate family members, to provide
written notice of any potential related-party transaction, defined
by the policy to mirror the definition of Item 404 of Regulation
S-K of the SEC (with the exception that the policy includes a
monetary threshold of $100,000 as opposed to the threshold of
$120,000 set by Item 404 of Regulation S-K) to the Chair of the
Board (or to the Chief Executive Officer if such transaction
involves the Chair of the Board, or to the Chief Financial Officer
if such transaction involves the Chief Executive Officer),
including all information that the Chair of the Board, the Chief
Executive Officer or the Chief Financial Officer may request. Upon
receiving all relevant information, the board may approve the
transaction if it determines that the transaction is in the best
interests of, and fair to, us, may require modifications to the
transaction to make it acceptable for approval, or may reject it.
The board may also establish guidelines for ongoing management of a
specific related-party transaction. The policy requires that
continuing related-party transactions are reviewed on at least an
annual basis. Additionally, the policy requires that all directors
and executive officers complete a directors and officers
questionnaire in connection with each of our annual proxy
statements, in which they are asked to disclose family
relationships and other related-party transactions.
The
following is a description of transactions since January 1, 2017 to
which we have been a party, in which the amount involved exceeded
or will exceed $120,000, and in which any of our directors,
executive officers or beneficial owners of more than 5% of any
series or class of our preferred or common stock, or an affiliate
or immediate family member thereof, had or will have a direct or
indirect material interest, other than compensation, termination
and change-in-control arrangements. The transactions set forth
below were approved by a majority of the board, including a
majority of the independent and disinterested members of the board.
We believe we have executed all of the transactions set forth below
on terms no less favorable to us than we could have obtained from
unaffiliated third parties. It is our intention to ensure that all
future transactions between us and our officers, directors and
principal stockholders and their affiliates are approved by the
audit committee and a majority of the members of the board,
including a majority of the independent and disinterested members
of the board, and are on terms no less favorable to us than those
that we could obtain from unaffiliated third parties.
Issuance and Exercise of Warrant
In
December 2016 Shengxin (Shanghai) Management Consulting Limited
Partnership, or SMC, paid 20,123,500 RMB (approximately $3.0
million as of the date of funding) to ACM Shanghai for potential
investment pursuant to terms to be subsequently negotiated. SMC is
a PRC limited partnership owned by Jian Wang and other employees of
our subsidiary ACM Shanghai. Jian Wang, who is the general partner
of SMC, is our Vice President, Research and Development and the
brother of our Chief Executive Officer and President David H.
Wang.
In
March 2017 we issued to SMC a warrant exercisable to purchase
397,502 shares of Class A common stock at a price of $7.50 per
share, for a total exercise price of approximately $3.0 million.
The warrant was exercisable for cash or on a cashless basis, at the
option of SMC, at any time on or before May 17, 2023 to acquire
all, but not less than all, of the shares of Class A common stock
subject to the warrant.
In
March 2018 we entered into a warrant exercise agreement with ACM
Shanghai and SMC pursuant to which SMC exercised the SMC warrant in
full by issuance to us of a senior secured promissory note in the
principal amount of approximately $3.0 million. We transferred the
SMC note to ACM Shanghai, in exchange for an intercompany
promissory note issued by ACM Shanghai to us in the principal
amount of approximately $3.0 million. Each of the two notes bears
interest at a rate of 3.01% per annum and matures on August 17,
2023. As security for its performance of its obligations under its
note, SMC granted to ACM Shanghai a security interest in the
397,502 shares of Class A common stock issued to SMC upon its
exercise of the warrant.
16
Advisory Board Agreement
In May
2016 we entered into an Advisory Board Agreement with one of our
directors, Chenming Hu, under which Dr. Hu agreed to serve as a
member of our advisory board and to use commercially reasonable
efforts to provide us with various advisory services for a term
extending until May 2020. In return for these services, we agreed
to pay to Dr. Hu consulting fees of $25,000 per calendar quarter
during the terms of the agreement and we granted to Dr. Hu in May
2016 an option to purchase up to 83,333 shares of common stock at
$3.00 per share, which vest over the term of the
agreement.
Director and Executive Compensation and Indemnification
Agreements
Please
see “Director Compensation” and “Executive
Compensation” for a discussion regarding the compensation of
our non-employee directors and our executive officers.
In
April 2017 we entered enter into indemnification agreements with
our directors and executive officers. Under these agreements, we
agree to indemnify, to the fullest extent permitted by Delaware law
(subject to certain limitations), each of our directors and
executive officers against any and all expenses incurred by the
director or officer in connection with proceedings because of his
or her status as one of our directors or executive officers. In
addition, these indemnification agreements provide that, to the
fullest extent permitted by Delaware law, we will pay for all
expenses incurred by our directors and executive officers in
connection with a legal proceeding arising out of their service to
us.
17
Director Compensation
Our
director compensation program is intended to enhance our ability to
attract, retain and motivate non-employee directors of exceptional
ability and to promote the common interest of directors and
stockholders in enhancing the value of the common stock. The board
of directors reviews director compensation at least annually based
on recommendations by the nominating and governance committee. The
nominating and governance committee has the sole authority to
engage a consulting firm to evaluate director
compensation.
In
October 2017 we adopted a policy with respect to the compensation
payable to certain of our non-employee directors, which became
effective upon the completion of our initial public offering on
November 7, 2017. Under this policy, each qualifying non-employee
director is eligible to receive compensation for board and
committee service consisting of annual cash retainers and equity
awards. Our qualifying non-employee directors receive the following
annual cash retainers for their service:
DIRECTOR ANNUAL CASH RETAINERS
|
Position
|
Retainer
|
|
Lead
Director
|
$
20,000
|
|
Other
Directors
|
15,000
|
|
Audit Committee
Chair
|
4,000
|
|
Other Audit
Committee Members
|
3,000
|
|
Compensation
Committee Chair
|
4,000
|
|
Other Compensation
Committee Members
|
3,000
|
|
Nominating and
Governance Committee Chair
|
4,000
|
|
Other Nominating
and Governance Committee Members
|
3,000
|
Equity
awards for qualifying non-employee directors will consist of (a) an
initial equity award with a value of $75,000, upon initial election
to the board, subject to vesting and to continued service on the
board, and (b) annual equity awards with a value of $35,000,
subject to vesting and continued service on the board.
Directors
may be reimbursed for reasonable out-of-pocket expenses incurred in
attending board and committee meetings.
The
following table shows the total compensation for non-employee
directors during 2017. David H. Wang, our sole executive officer
who served as a member of the board during 2017, did not receive
any additional compensation for such service as a director.
Zhengfan Yang joined the board in January 2018 and therefore did
not receive any fees for director services during
2017.
2017 DIRECTOR COMPENSATION TABLE
|
Director
|
Fees Earned or
Paid in Cash($)
|
Option Awards(1)($)
|
Total($)
|
|
Haiping Dun(2)
|
$
4,500
|
$
—
|
$
4,500
|
|
Chenming C. Hu(2)
|
4,167
|
250,000
|
254,167
|
|
Tracy Liu(2)
|
3,667
|
114,000
|
117,667
|
|
Yinan Xiang
|
3,000
|
—
|
3,000
|
(1)
The amounts shown
represent the aggregate grant date fair value of stock awards
granted in accordance with Financial Accounting Standards Board
Accounting Standards Codification Topic 718,
Compensation—Stock Compensation. The amounts do not
necessarily correspond to the actual amounts that will be earned by
the directors. For assumptions made in valuing these awards and
related information, see note 2 to our consolidated financial
statements included in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2017.
(2)
Chair of a board
committee during 2017.
18
Proposal 1 — Election of Directors
At the Annual Meeting,
stockholders will elect the entire board of directors to serve for
the ensuing year and until their successors are elected and
qualified. The board has designated as nominees for election the
six persons named below, each of whom currently serves as a
director.
Shares
of common stock that are voted as recommended by the board will be
voted in favor of the election as directors of the nominees named
below. If any nominee becomes unavailable for any reason or if a
vacancy should occur before the election, which we do not
anticipate, the shares represented by a duly completed proxy may be
voted in favor of such other person as may be determined by the
Proxy Committee.
Director Qualifications
The board of directors has
determined that, as a whole, it must have the right mix of
characteristics, skills and diversity to provide effective
oversight of our Company. In April 2018
the
nominating and governance committee adopted Qualifications for
Nomination to the board, a copy of which is attached to this Proxy
Statement as
Annex C
and posted on our website at
media.corporate-ir.net/media_files/IROL/25/254659/acm-bd-qualifications.pdf.
The
Qualifications for Nomination provide that, in selecting directors,
the board should seek to achieve a mix of directors that enhances
the diversity of background, skills and experience on the board,
including with respect to age, gender, international background,
ethnicity and specialized experience. Directors should have
relevant expertise and experience and be able to offer advice and
guidance to our chief executive officer based on that expertise and
experience. Also, a majority of directors should be independent
under applicable Nasdaq listing standards, board and committee
guidelines, and applicable laws and regulations. Each director is
also expected to:
●
be of the highest
ethical character and share the values of ACM as reflected in its
Code of Conduct;
●
be highly
accomplished in his or her field, with superior credentials and
recognition;
●
have sound business
judgment, be able to work effectively with others, have sufficient
time to devote to our affairs, and be free from conflicts of
interest; and
●
be independent of
any particular constituency and able to represent all of our
stockholders.
The
board conducts a self-assessment process every year and
periodically reviews the diversity of skills and characteristics
needed in the board’s oversight of our company, as well as
the effectiveness of the mix of skills and experience. The board
considers the skill areas represented on the board, those skill
areas represented by any directors who are expected to retire or
leave the board in the near future, and recommendations of
directors regarding skills that could improve the ability of the
board to carry out its responsibilities.
Identifying and Evaluating Nominees for Directors
When the board of directors or
its nominating and governance committee has identified the need to
add a new director with specific qualifications or to fill a
vacancy on the board, the chair of the nominating and governance
committee will initiate a search, seeking input from other
directors and senior management, review any candidates that the
nominating and governance committee has previously identified, and,
if necessary, hire a search firm. The nominating and governance
committee will identify the initial list of candidates who satisfy
the specific criteria and otherwise qualify for membership on the
board. At least one member of the nominating and governance
committee (preferably the chair) and the Chair of the Board and
Chief Executive Officer will interview each qualified candidate;
other directors will also interview the candidate if practicable.
Based on a satisfactory outcome of those interviews, the nominating
and governance committee will make its recommendation on the
candidate to the board.
Our
Bylaws include a procedure that stockholders must follow in order
to nominate a person for election as a director at an annual
meeting of stockholders. The Bylaws require that timely notice of
the nomination in proper written form, including all required
information, be provided to the Corporate Secretary.
19
Information Concerning Nominees for Election as
Directors
The
information appearing in the following table sets forth, for each
nominee for election as a director:
●
The nominee’s
professional experience for at least the past five
years.
●
The year in which
the nominee first became one of our directors.
●
Each committee of
the board of directors on which the nominee currently
serves.
●
The nominee’s
age as of the record date for the Annual Meeting.
●
The relevant skills
the nominee possesses that qualify him or her for nomination to the
board.
●
Directorships held
by each nominee presently and at any time during the past five
years at any public company or registered investment
company.
Zhengfan
Yang and Yinan Xiang have been nominated in accordance with voting
agreements with two of our stockholders. See “Corporate
Governance—Director Nomination Rights.”
|
DAVID H.
WANG
Age:
56
ACM
Board Service
●
Tenure: 20 years
(1998)
|
|
|
HAIPING DUN
Age:
68
ACM
Board Service
●
Tenure: 15 years
(2003)
●
Compensation
Committee (Chair)
●
Nominating and
Governance Committee
INDEPENDENT
|
|
Professional Experience
●
Our founder and
has served as Chief Executive Officer, President and one of our
directors since January 1998.
●
Inventor of
stress-free Cu polishing technology.
●
Holds more than
100 patents in semiconductor equipment and process
technology.
●
Received a Ph.D.
and Master of Engineering in Precision Engineering from Osaka
University and a Bachelor of Science in Precision Instruments from
Tsinghua University.
|
|
Professional Experience
●
Served as one of
our directors since 2003.
●
Former Senior
Director of Intel Corporation, a company where he was employed
since 1983.
●
President of
Champion Microelectronic Corp, a public company in Taiwan since
April 2016.
●
Received a Ph.D.
in material science and engineering from Stanford University, a
Master of Science in physics from the University of Washington and
a Bachelor of Science in physics from National Taiwan
University.
|
||
|
Relevant Skills
●
Industry
●
Innovation
●
Leadership
|
|
Relevant Skills
●
Industry
●
Global
●
Leadership
|
||
|
Other Public Board Service
●
N/A
|
|
Other Public Board Service
●
Champion
Microelectronic Corp. 2004-present
|
||
20
|
CHENMING C.
HU
Age:
70
ACM
Board Service
●
Tenure: 2 years
(2017)
●
Audit
Committee
●
Compensation
Committee
●
Nominating and
Governance Committee (Chair)
|
|
|
TRACY LIU
Age:
53
ACM
Board Service
●
Tenure: 3 years
(2016)
●
Audit Committee
(Chair)
●
Compensation
Committee
INDEPENDENT
|
|
Professional Experience
●
Served as one of
our directors since January 2017.
●
Served as a
member of our board of advisors since May 2016.
●
Professor in
electrical engineering and computer sciences at the University of
California, Berkeley since 1976.
●
Taiwan
Semiconductor Manufacturing Company Distinguished Chair Professor
Emeritus and Professor of the Graduate School at the University of
California, Berkeley since 2010.
●
Developed FinFet
in 1999.
●
Served as the
Chief Technology Officer of Taiwan Semiconductor Manufacturing
Company Ltd. from 2001 to 2007.
●
Member of the
U.S. National Academy of Engineering and the Chinese Academy of
Sciences, and Taiwan’s Academia Sinica.
●
Received a
Master of Science degree and Ph.D. from the University of
California, Berkeley and a Bachelor of Science degree from National
Taiwan University, all in electrical engineering.
|
|
Professional Experience
●
Served as one of
our directors since September 2016.
●
Founder and
owner of H&M Financial Consulting since 2006, where she
provides international accounting and tax solutions to
high-technology companies.
●
Received a
Bachelor of Science from Nankai University and a Master of
Accounting and Tax from Golden Gate University.
●
Certified Public
Accountant and a member of the American Institute of Certified
Public Accountants.
|
||
|
Relevant Skills
●
Innovation
●
Industry
●
Education
|
|
Relevant Skills
●
Finance
●
Leadership
●
Global
|
||
|
Other Public Board Service
●
Ambarella,
Inc. 2011-present
●
Inphi
Corporation 2010-present
|
|
Other Public Board Service
●
N/A
|
||
21
|
YINAN XIANG
Age:
43
ACM
Board Service
●
Tenure: 6 months
(2017)
●
Audit
Committee
INDEPENDENT
|
|
|
ZHENGFAN
YANG
Age:
37
ACM
Board Service
●
Tenure: 4 months
(2018)
●
Nominating and
Governance Committee
INDEPENDENT
|
|
Professional Experience
●
Served as one of
our directors since November 2017.
●
Vice President of Shanghai S&T Venture Capital (Group) Co.
Ltd., or SSTVC, since October 2016
●
Manager of the
Project Investment Department of SSTVC from September 2014 to
September 2016.
●
Manager of
Invest Department II of Shanghai Science and Technology Venture
Capital Co., Ltd. from 2012 to August 2014.
●
Received a
Bachelor of Science in Finance degree from Shanghai University of
Finance and Economics.
|
|
Professional Experience
●
Served as one of
our directors since January 2018.
●
Director of
Direct Investment Division III of Sino IC Capital Co., Ltd. since
February 2017.
●
Associate
Director of Direct Investment Division I at Sino IC Capital Co. Ltd
from 2014 to 2017.
●
Vice President
of CDB Urban Development Fund from November 2011 to December
2014.
●
Principal Staff
Member at People’s Bank of China from 2007 to
2011.
●
Engineer from
December 2004 to July 2007 at Nutech Company, Ltd.
●
Received a
Master of Science degree from the University of Bristol and a
Bachelor of Science degree from Zhejiang University.
|
||
|
Relevant Skills
●
Industry
●
Finance
|
|
Relevant Skills
●
Finance
●
Industry
|
||
|
Other Public Board Service
●
N/A
|
|
Other Public Board Service
●
N/A
|
||
The board of directors recommends a vote
FOR
each of the six nominees for election as directors.
22
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a)
of the Securities Exchange Act requires our executive officers and
directors and any persons owning ten percent or more of our
Class A common stock to file reports with the SEC to report
their beneficial ownership of and transactions in our securities
and to furnish us with copies of the reports.
Based
solely upon a review of the Section 16(a) reports furnished to
us, along with written representations from our executive officers
and directors, we believe that all required reports were timely
filed during 2017.
The
following table sets forth the number of outstanding shares of
Class A and Class B common stock beneficially owned and
the percentage of each class beneficially owned, as of the record
date of April 30, 2018, by:
●
each person known
to us to be the beneficial owner of more than five percent of the
then-outstanding Class A common stock (on an as-converted basis) or
the then-outstanding Class B common stock;
●
each director and
named executive officer; and
●
all of our
directors and executive officers as a group.
The
number of shares of Class A and Class B common stock
beneficially owned by each person is determined under the rules of
the SEC. Under these rules, beneficial ownership includes any
shares as to which the individual has sole or shared voting power
or investment power and also any shares that the individual has the
right to acquire by June 29, 2018 (sixty days after April 30,
2018) through the exercise or conversion of a security or other
right. Unless otherwise indicated, each person has sole investment
and voting power, or shares such power with a family member, with
respect to the shares set forth in the following table. The
inclusion in this table of any shares deemed beneficially owned
does not constitute an admission of beneficial ownership of those
shares for any other purpose.
Unless
otherwise indicated, the address of all individuals listed above is
c/o ACM Research, Inc., 42307 Osgood Road, Suite I, Fremont,
California 94539.
COMMON STOCK BENEFICIAL OWNERSHIP TABLE
|
|
Class A
|
Class B
|
% of Total Voting
|
||
|
Beneficial Owner
|
Shares
|
%
|
Shares
|
%
|
Power(1)
|
|
5% Stockholders
|
|
|
|
|
|
|
H.L. Hsieh(2)
|
1,019,211
|
7.5
%
|
133,334
|
5.8
%
|
6.0
%
|
|
Shanghai Science and Technology Venture Capital Co.,
Ltd.(3)
|
1,666,170
|
12.3
|
—
|
—
|
2.8
|
|
Pudong Science and Technology (Cayman) Co., Ltd.(4)
|
1,119,576
|
8.3
|
—
|
—
|
1.9
|
|
Xinxin (Hongkong) Capital Co., Limited (5)
|
833,334
|
6.2
|
—
|
—
|
1.4
|
|
Zhangjiang AJ Company Limited(6)
|
787,098
|
5.8
|
—
|
—
|
1.3
|
|
Named Executive Officers and Directors
|
|
|
|
|
|
|
David H. Wang(7)
|
2,605,608
|
16.6
|
1,422,270
|
61.9
|
49.2
|
|
Yinan Xiang(8)
|
1,666,170
|
12.3
|
—
|
—
|
2.8
|
|
Haiping Dun(9)
|
545,638
|
4.0
|
100,000
|
4.3
|
4.1
|
|
Zhengfan Yang(10)
|
833,334
|
6.2
|
—
|
—
|
*
|
|
Fufa Chen(11)
|
133,054
|
1.0
|
—
|
—
|
*
|
|
Chenming Hu(12)
|
88,547
|
*
|
—
|
—
|
*
|
|
Tracy Liu(13)
|
40,942
|
*
|
—
|
—
|
*
|
|
Min Xu(14)
|
38,889
|
*
|
—
|
—
|
*
|
|
All executive officers and directors as a group (11
persons)(15)
|
6,645,599
|
39.4
%
|
1,572,271
|
68.4
%
|
59.7
%
|
*
Less than
1%.
(footnotes
continued on next page)
23
(1)
Percentage of total
voting power represents voting power with respect to all shares of
Class A and Class B common stock, voting as a single class. Holders
are entitled to one vote per share of Class A common stock and
twenty votes per share of Class B common stock.
(2)
Includes 133,334
shares of Class A common stock issuable upon conversion of
Class B common stock.
(3)
Weiguo Shen is the
Chairman and General Manager of Shanghai Science and Technology
Venture Co., Ltd., or SSTVC, and may be deemed to beneficially own
the shares held by SSTVC. The address of SSTVC and Mr. Shen is 1643
Huaihai Road, Shanghai, PRC.
(4)
Pudong Science and
Technology (Cayman) Co., Ltd., or PST, is a wholly owned subsidiary
of Shanghai Pudong High-Tech Investment Co., Ltd. Long Ji is the
Corporate Representative of Pudong High-Tech Investment Co., Ltd.
and may be deemed to beneficially own the shares held by PST. The
address of PST, its parent and Mr. Ji is No. 439, 13 Building,
Chunxiao Road, Zhangjiang Hi-tech Park, Pudong District, Shanghai,
PRC.
(5)
Xinxin (Hongkong)
Capital Co., Limited has, but has not yet exercised, a right to
designate one individual for nomination and election to the board
of directors, as described under “Corporate
Governance—Director Nomination Rights.” Xinxin
(Hongkong) Capital Co., Limited is a wholly owned subsidiary of
Xunxin (Shanghai) Capital Co., Ltd., which is a wholly owned
subsidiary of China IC Industry Investment Fund. Sino IC Capital
Co., Limited is the management company of China IC Industry
Investment Fund and Kai Ren is the Vice President of Sino IC
Capital Co., Limited and may be deemed to beneficially own the
shares held by Xinxin (Hongkong) Capital Co., Limited. The address
of Xinxin (Hongkong) Capital Co., Limited, Xunxin (Shanghai)
Capital Co., Limited, Sino IC Capital Co., Limited, China IC
Industry Investment Fund and Kai Ren is 3rd Floor North, No. 7
Financial Street, Xicheng District, Beijing 100033, P. R.
China.
(6)
Zhangjiang AJ
Company Limited is a wholly owned subsidiary of Shanghai Zhangjiang
Science & Technology Venture Capital Co., Ltd. Weiwei Chen is
the Chairman, General Manager and Corporate Representative of
Shanghai Zhangjiang Science & Technology Venture Capital Co.,
Ltd. and may be deemed to beneficially own the shares held by
Zhangjiang AJ Company Limited. The address of Zhangjiang AJ Company
Limited and its parent and Ms. Chen is 1387 Zhangdong Road,
Building 16, Room C305, Zhangjiang Hi-tech Park, Shanghai,
PRC.
(7)
Includes (a)
206,667 shares of Class A common stock held by Dr. Wang and Jing
Chen, as Trustees for the Wang-Chen Family Living Trust; (b) 60,000
shares of Class A common stock held by Dr. Wang and Jing Chen, as
Trustees for The David Hui Wang and Jing Chen Family Irrevocable
Trust for Wang Children; (c) 1,422,270 shares of Class A common
stock issuable upon conversion of Class B common stock, of which
shares of Class B common stock a total of 117,334 are held by Dr.
Wang’s son, Brian Wang, 117,334 are held by Dr. Wang’s
daughter, Sophia Wang, 33,334 are held by Dr. Wang’s
spouse, Jing Chen, and 7,334 are held by Dr. Wang and Jing Chen, as
Trustees for The David Hui Wang and Jing Chen Family Irrevocable
Trust for Wang Children; and (d) 753,059 shares of Class A common
stock issuable upon the exercise of options exercisable by June 29,
2018, including 15,279 shares of Class A common stock issuable upon
the exercise of an option issued to Dr. Wang’s daughter,
Sophia Wang.
(8)
Consists of shares
owned by Shanghai Science and Technology Venture Co., Ltd., or
SSTVC (see note (3) above). As described under "Corporate
Governance—Director Nomination Rights," SSTVC has exercised a
contractual right by designating Ms. Xiang for nomination to the
board and the board has elected Ms. Xiang to the board. Ms. Xiang
disclaims beneficial ownership of the shares owned by SSTVC except
to the extent of her pecuniary interest therein.
(9)
Includes 100,000
shares of Class A common stock issuable upon conversion of Class B
common stock and 131,947 shares of Class A common stock issuable
under options exercisable by June 29, 2018.
(10)
Consists of shares
owned by Xinxin (Hongkong) Capital Co., Limited (see note (5)
above). As described under "Corporate Governance—Director
Nomination Rights," Xinxin (Hongkong) Capital Co., Limited has
exercised a contractual right by designating Mr. Yang for
nomination to the board and the board has elected Mr. Yang to the
board. Mr. Yang disclaims beneficial ownership of the shares owned
by Xinxin (Hongkong) Capital Co., Limited except to the extent of
his pecuniary interest therein.
(11)
Includes 3,471
shares of Class A common stock issuable under options exercisable
by June 29, 2018.
(12)
Consists of shares
issuable under options exercisable by June 29, 2018.
(13)
Includes 38,542
shares of Class A common stock issuable under options exercisable
by June 29, 2018.
(14)
Mr. Xu’s
employment terminated effective January 24, 2018.
(15)
Includes (a)
1,597,938 shares of Class A common stock issuable upon conversion
of Class B common stock, (b) 1,140,705 shares of Class A common
stock issuable under options exercisable by June 29, 2018, and (c)
397,502 shares of Class A common stock held by Shengxin (Shanghai)
Management Consulting Limited Partnership, or SMC, as described
under “Certain Relationships and Related-Person
Transactions—Warrant Issuance and Exercise.” Jian Wang
is the general partner of SMC and may be deemed to beneficially own
the shares of Class A common stock held by SMC. Jian Wang is our
Vice President, Research and Development and the brother of David
H. Wang, our Chair of the Board, Chief Executive Officer and
President. See notes (7) through (14).
24
Executive Officers
The
following table sets forth, as of April 30, 2018, the names of our
executive officers, their ages, their positions and business
experience, and the year of their first election as officers. Each
executive officer serves at the discretion of the board of
directors and holds office until his successor is duly elected and
qualified or until his earlier resignation or removal.
EXECUTIVE OFFICERS
|
Name
|
|
Age
|
|
Positions and Business Experience
|
|
Year First
Elected Officer
|
|
David
H. Wang
|
|
56
|
|
Please
see “Proposal 1. Election of Directors—Information
Concerning Nominees for Election as Directors.”
|
|
1998
|
|
Fufa
Chen
|
|
57
|
|
Vice
President, Sales (2007-present); received a Ph.D. in electrical
engineering from the State University of New York, Stony
Brook.
|
|
2007
|
|
Jian
Wang
|
|
53
|
|
Vice
President, Research and Development (January 2015-present);
Director of Research and Development of ACM Research (Shanghai),
Inc. (2011-January 2015), focusing on the research and development
of stress-free polishing and electro-chemical-copper-planarization
technologies; received a Master of Science degree in computer
science from Northwestern Polytechnic University, a Master of
Science degree in marine engineering from Kobe University and a
Bachelor of Science degree in mechanical engineering from Southeast
University.
|
|
2015
|
|
Sotheara
Cheav
|
|
66
|
|
Vice
President, Manufacturing of ACM Research (Shanghai), Inc. (January
2015-present); Director of Manufacturing of ACM Research
(Shanghai), Inc. (2011-December 2014); received a Bachelor of
Science degree in science and technology from the University of
Cambodia and an Associate of Science degree in electronics from Bay
Valley Technical Institute.
|
|
2015
|
David
Wang and Jian Wang are brothers.
25
Executive Compensation
Summary Compensation Table
The
following table provides information concerning the compensation
paid for 2017 and 2016 to our “named executive
officers,” who consist of our Chief Executive Officer and
President, our Chief Financial Officer and Treasurer, and our next
most highly compensated executive officer during 2017:
SUMMARY COMPENSATION TABLE
|
Name and Principal Position
|
Year
|
Salary
($)(1)
|
Bonus
($)(1)
|
Option
Awards
($)(2)
|
All Other Compensation ($)(1)(3)
|
Total
($)
|
|
David
H. Wang
|
2017
|
$
174,656
|
—
|
—
|
$
14,066
|
$
188,722
|
|
Chief Executive Officer and President
|
2016
|
171,364
|
$
7,837
|
$
760,000
|
10,840
|
950,041
|
|
Min
Xu(4)
|
2017
|
144,472
|
25,000
|
—
|
34,463
|
203,935
|
|
Chief Financial Officer and Treasurer
|
2016
|
19,696
|
—
|
228,000
|
13,555
|
261,251
|
|
Fufa
Chen
|
2017
|
156,554
|
—
|
—
|
40,238
|
196,792
|
|
Vice President, Sales of ACM Shanghai
|
2016
|
153,600
|
7,516
|
—
|
10,840
|
171,956
|
(1)
Except as otherwise
indicated, compensation amounts were paid in RMB and have been
converted to U.S. dollars for purposes of the table. The RMB per
U.S. dollar exchange rate used for such conversion reflects the
average exchange rate during 2017 and 2016, as
appropriate.
(2)
The amounts shown
represent the aggregate grant date fair value of stock awards
granted in accordance with Financial Accounting Standards Board
Accounting Standards Codification Topic 718,
Compensation—Stock Compensation
.
The amounts do not necessarily correspond to the actual amounts
that will be earned by the named executive officers. For
assumptions made in valuing these awards and related information,
see note 2 to our consolidated financial statements included in our
Annual Report on Form 10-K for the fiscal year ended December 31,
2017.
(3)
The amounts shown
are attributable to the following:
|
Name and Principal Position
|
Year
|
Housing Subsidy
($)
|
Health and Welfare Plans
($)
|
Tax Preparation
($)
|
Total
($)
|
|
David
H. Wang
|
2017
|
$
11,463
|
$
2,603
|
—
|
$
14,066
|
|
|
2016
|
10,840
|
—
|
—
|
10,840
|
|
Min
Xu
|
2017
|
11,463
|
20,000
|
$
3,000
|
34,463
|
|
|
2016
|
13,555
|
—
|
—
|
13,555
|
|
Fufa
Chen
|
2017
|
11,463
|
28,775
|
—
|
40,238
|
|
|
2016
|
10,840
|
—
|
—
|
10,840
|
(4)
Mr. Xu was
appointed in November 2016, and his employment ended in
January 2018.
Narrative Explanation of the Summary Compensation
Table
The
compensation paid to our named executive officers consists of the
following components:
●
base
salary;
●
performance-based
cash bonuses;
●
long-term incentive
compensation in the form of stock options; and
●
benefits consisting
principally of housing subsidies and health and welfare plan
contributions.
Annual
base salaries of our named executive officers in 2017 were as
follows: David Wang, $169,192 (1,156,260 RMB); Fufa Chen,
$151,879 (1,038,264 RMB); and Min Xu, $150,000. Annual base
salaries of our named executive officers in 2016 were as follows:
David Wang, $171,364 (1,138,248 RMB); Fufa Chen, $153,600
(1,020,252 RMB); and Min Xu, $115,000.
We do
not have any established policy with regard to cash incentive
bonuses for our executive officers. The compensation committee may
decide to pay cash incentive bonuses to compensate executive
officers for the achievement of specific business objectives,
profitability, and individual performance and objectives
established by the compensation committee.
26
We
offer stock options and restricted shares to our employees,
including our named executive officers, as the long-term incentive
component of our compensation program. Our stock options allow our
employees to purchase shares of Class A common stock at a price
equal to the fair market value of the Class A common stock on the
date of grant. Our stock options generally vest as to 25% of the
total number of option shares on the first anniversary of the award
and in equal monthly installments over the following 36 months,
subject to accelerated vesting in full upon the occurrence of a
defined change in control of our company.
Grants of Plan-Based Awards
We did
not grant any compensation in the form of plan-based awards during
2017 to our named executive officers.
Outstanding Equity Awards at 2017 Fiscal Year-End
The
following table sets forth information regarding each unexercised
option held by each of our named executive officers as of
December 31, 2017:
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2017
|
|
Option Awards
|
|||
|
|
Number of Securities Underlying Unexercised
Options
|
Option
|
||
|
Name
|
Exercisable(#)
|
Unexercisable(#)
|
Exercise Price($)
|
Expiration Date
|
|
David H. Wang
|
166,667
|
—
|
$
0.75
|
05/01/21
|
|
|
133,334
|
—
|
0.75
|
05/01/21
|
|
|
266,667
|
133,333
|
1.50
|
05/01/25
|
|
|
—
|
333,334
|
3.00
|
12/27/26
|
|
Min Xu
|
36,111
|
63,889
|
3.00
|
11/14/26
|
|
Fufa Chen
|
33,334
|
—
|
0.75
|
05/01/21
|
|
|
22,220
|
11,114
|
1.50
|
05/01/25
|
For
information regarding the vesting acceleration provisions
applicable to the options held by our named executive officers,
please see “—Severance Benefits” and
“—Change in Control Benefits” below.
Executive Retention Agreement
We
entered into an executive retention agreement with Min Xu upon his
hiring as our Chief Financial Officer and Treasurer in November
2016. Mr. Xu’s employment ended effective January 24, 2018.
For purposes of the executive retention agreement, we terminated
Mr. Xu’s services without cause, and he therefore was
entitled to receive, by February 24, 2018, a cash payment equal to
the sum of:
●
accrued base
salary, commission and vacation pay; and
●
$150,000, his
then-current annual base salary.
The
executive retention agreement provided that Mr. Xu is entitled to
continue to receive specified benefits through January 24,
2019.
Payments Upon Termination or Change in Control
The
following table shows the amounts that would have been payable to
each of our named executive officers in the event of termination of
the named executive officer’s employment or a change in
control, assuming a termination or change in control date of
December 31, 2017:
27
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
|
|
Termination
|
|
|
|
Name
|
For Cause
|
Without Cause
|
Change in Control
|
|
David H.
Wang
|
|
|
|
|
Cash
Compensation
|
—
|
—
|
—
|
|
Health
Benefits
|
—
|
—
|
—
|
|
Stock Award
Vesting Acceleration(1)
|
—
|
—
|
—
|
|
Min
Xu(2)
|
|
|
|
|
Cash
Compensation
|
—
|
$
150,000
|
—
|
|
Health
Benefits
|
—
|
20,000
|
—
|
|
Stock Award
Vesting Acceleration(1)
|
—
|
—
|
—
|
|
Fufa
Chen
|
|
|
|
|
Cash
Compensation
|
—
|
—
|
—
|
|
Health
Benefits
|
—
|
—
|
—
|
|
Stock Award
Vesting Acceleration(1)
|
—
|
—
|
—
|
(1)
The market value is
calculated by multiplying the number of then-unvested shares by
$5.25, the closing price of the Class A common stock as of the
close of business on December 29, 2017. Pursuant to the terms
of stock option agreements awarded under the 2016 Omnibus Incentive
Plan, in the event of the occurrence of a change in control, as
defined in the 2016 Omnibus Incentive Plan, all of the
then-unvested shares subject to any outstanding stock options will
accelerate, vest and become exercisable immediately prior to the
occurrence of such change in control. Pursuant to the terms of
stand-alone stock option agreements, in the event of a corporate
transaction, as defined in the stand-alone stock option agreements,
the then-unvested shares subject to any outstanding stock options
will accelerate, vest and become immediately exercisable upon the
occurrence of such corporate transaction.
(2)
As described under
“—Executive Retention Agreement,” we entered into
an executive retention agreement with Mr. Xu in November 2016.
Under the executive retention agreement, if Mr. Xu were to be
terminated for cause, he would be entitled to a cash payment equal
to his then-current annual base salary through the termination
date. If Mr. Xu was terminated without cause, he would have been
entitled to a cash payment equal to the sum of his accrued base
salary, commission and vacation pay and an amount equal to his
then-current annual base salary, and he also would be entitled to
continue to receive specified health benefits for 12 months after
the termination date.
Section 162(m) Considerations
Internal
Revenue Code Section 162(m) limits the deductibility of
compensation in excess of $1 million paid to any one named
executive officer in any calendar year. Under the tax rules in
effect before 2018, compensation that qualified as
“performance-based” under Section 162(m) was deductible
without regard to this $1 million limit. In 2017 and prior years,
the board of directors and the compensation committee designed
awards that were intended to qualify for this performance-based
compensation exception. However, the Tax Cuts and Jobs Act, which
was signed into law December 22, 2017, eliminated this
performance-based compensation exception effective January 1,
2018, subject to a special rule that “grandfathers”
certain awards and arrangements that were in effect on or before
November 2, 2017. As a result, compensation that the compensation
committee structured in 2017 and prior years with the intent of
qualifying as performance-based compensation under Section 162(m)
that is paid on or after January 1, 2018 may not be fully
deductible, depending on the application of the special grandfather
rules. Moreover, from and after January 1, 2018, compensation
awarded in excess of $1 million to our named executive officers
generally will not be deductible. While the Tax Cuts and Jobs Act
will limit the deductibility of compensation paid to the named
executive officers, the compensation committee will design
compensation programs that are intended to be in the best long-term
interests of our company and stockholders, with deductibility of
compensation being one of a variety of considerations taken into
account.
Equity Compensation Plan Information
The
following table provides information as of December 31, 2017
with respect to shares of Class A common stock that may be issued
under equity plans and standalone option grants:
28
CLASS A COMMON STOCK ISSUABLE UNDER EQUITY PLANS
|
Plan Category
|
Number of Securities to be Issued Upon Exercise of Outstanding
Options, Warrants and Rights(a)
|
Weighted Average Exercise Price of Outstanding Options, Warrants
and Rights(b)
|
Number of Securities Remaining Available for Future Issuance Under
Equity Compensation Plans(1)(c)
|
|
Equity compensation
plans approved by stockholders(2)
|
2,991,926
|
$
2.48
|
1,180,658
|
|
Equity compensation
plans not approved by stockholders(3)
|
1,670,008
|
1.22
|
—
|
|
Totals
|
2,991,926
|
|
1,180,658
|
(1)
Consists of shares
of Class A common stock available at December 31, 2017 for awards
under our 2016 Omnibus Incentive Plan. Excludes securities
reflected in column (a).
(2)
Consists of awards
issued or issuable under our 2016 Omnibus Incentive Plan and 1998
Stock Option Plan.
(3)
Consists of
non-qualified stock option agreements granted between 2007 and 2015
outside of any equity incentive plan.
29
Proposal 2
— Advisory Vote on 2017 Executive
Compensation
Our
stockholders have the opportunity at the Annual Meeting to vote to
approve, on a non-binding, advisory basis, the compensation of our
named executive officers in 2017 as disclosed in this Proxy
Statement in accordance with SEC rules.
Our
compensation program is intended to provide appropriate and
balanced incentives toward achieving our annual and long-term
strategic objectives and to create an alignment of interests
between our executives and stockholders. This approach is intended
to motivate our existing executives and to attract new executives
with the skills and attributes that we need. Please refer to
“Executive Compensation” for an overview of the
compensation of our named executive officers.
We are
asking for stockholder approval of the compensation of our named
executive officers as disclosed in this Proxy Statement in
accordance with SEC rules, which disclosures include the
disclosures in the compensation tables and narrative disclosures
included under “Executive Compensation.” This vote is
not intended to address any specific item of compensation, but
rather the overall compensation of our named executive officers and
the policies and practices described in this Proxy
Statement.
Accordingly,
stockholders are being asked to vote on the following
resolution:
Resolved:
That the
stockholders approve the compensation paid to the “named
executive officers” of ACM Research, Inc. with respect to the
year ended December 31, 2017, as disclosed, pursuant to
Item 402 of Regulation S-K promulgated by the Securities and
Exchange Commission, in the Proxy Statement for the 2018 Annual
Meeting of Stockholders, including the compensation tables and
narrative discussion set forth under “Executive
Compensation” therein.
This
vote is advisory and not binding on ACM, the board of directors or
the compensation committee. The board and the compensation
committee value the opinions of our stockholders, however, and to
the extent there is any significant vote against the named
executive officer compensation disclosed in this Proxy Statement,
we will consider our stockholders concerns and the compensation
committee will evaluate whether any actions are necessary or
appropriate to address those concerns.
The board of directors recommends a vote
FOR
the approval of the compensation paid to our named executive
officers
with
respect to 2017, as disclosed in the compensation tables and
narrative discussion set forth under
“Executive Compensation” and elsewhere in this
Proxy Statement
30
Proposal 3 — Advisory Vote on Frequency of Future Advisory
Votes on
Executive Compensation
In
accordance with Section 14A of the Securities Exchange Act, we are
requesting our stockholders vote, on a non-binding, advisory basis,
on how frequently they would like to cast an advisory vote on the
compensation of our named executive officers. By voting on this
proposal, stockholders may indicate whether they would prefer an
advisory vote on named executive officer compensation annually,
every two years or every three years.
The
board of directors believes that conducting an advisory “say
on pay” vote every three years is most appropriate for us.
This frequency will allow stockholders to focus on the structure of
our overall compensation program rather than any single event in a
given year. Doing so will enable stockholders to engage in more
thoughtful analysis of our executive compensation program by
providing an appropriate interval between votes. Additionally, an
advisory vote every three years is compatible with our desire to
focus on ensuring that our executives have a continuing stake in
our long-term success.
Accordingly,
the stockholders are being asked to vote on the following
resolution:
Resolved:
t
hat the stockholders wish ACM
Research, Inc. to present an advisory vote on the compensation of
named executive officers pursuant to Section 14A of the Securities
Exchange Act every three years.
This
vote is advisory and not binding on ACM, the board or the
compensation committee. The board and the compensation committee
value the opinions of our stockholders, however, and will carefully
consider the outcome of the advisory vote when making future
decisions regarding the frequency of advisory votes on executive
compensation.
The board of directors recommends a vote for the approval of
a
TRIENNIAL
advisory vote on the compensation of named executive
officers
pursuant to Section 14A of the Securities Exchange
Act.
31
Proposal 4 — Ratification of Appointment of Independent
Auditor for 2018
The
audit committee has approved the retention of BDO China Shu Lun Pan
Certified Public Accountants LLP, or BDO, an independent registered
public accounting firm, as our independent auditor to examine and
report on our consolidated financial statements for the year ending
December 31, 2018. The audit committee considers BDO to be
well qualified. Even if the proposal is approved, the audit
committee may, in its discretion, appoint a different independent
registered public accounting firm to serve as independent auditor
at any time during the year.
Representatives
of BDO will attend the Annual Meeting and will have the opportunity
to make a statement if they desire to do so. We expect they will be
available to respond to appropriate questions.
The board of directors recommends a vote
FOR
the ratification of the appointment of BDO as our independent
auditor for 2018.
32
Accounting Matters
Principal Independent Auditor Fees
The
following table sets forth the aggregate fees billed to us by BDO
for professional services rendered for the years ended
December 31, 2017 and 2016:
|
|
2017
|
2016
|
|
Audit
Fees(1)
|
$
385,000
|
$
41,000
|
(1)
Includes services
relating to the audit of the annual consolidated financial
statements, review of quarterly consolidated financial statements,
statutory audits, comfort letters, and consents and review of
documentation filed with SEC-registered and other securities
offerings. In 2017 and 2016, BDO did not provide us with any
audit-related or tax services.
Audit Committee Pre-Approval Policies and Procedures
The
audit committee has adopted a policy that requires the audit
committee or a member of the audit committee to pre-approve all
engagements with our independent auditor. These services include
audit services, audit-related services and tax services. Each year,
the audit committee must approve the independent auditor’s
retention to audit our financial statements, subject to
ratification by the stockholders. The audit committee also approves
the estimated fees associated with the audit before the audit
begins. The audit committee or a member of the audit committee also
pre-approves any engagement of an auditing firm other than the
independent auditor to perform a statutory audit for any of our
subsidiaries.
Report of Audit Committee
The
audit committee of the board of directors is responsible for
providing independent, objective oversight of the financial
reporting processes and internal controls of ACM Research, Inc., or
ACM. The audit committee operates under a written charter approved
by the board. A copy of the current charter is available on
ACM’s website at
media.corporate-ir.net/media_files/IROL/25/254659/acm-ac-charter-final.pdf
.
Management
is responsible for ACM’s system of internal control and
financial reporting processes and for the preparation of
consolidated financial statements in accordance with U.S. generally
accepted accounting principles. The independent auditor is
responsible for performing an independent audit of ACM’s
consolidated financial statements in accordance with the standards
of the Public Company Accounting Oversight Board, or the PCAOB. The
audit committee’s responsibility is to monitor and oversee
these processes.
In
connection with these responsibilities, the audit committee met
with management and BDO China Shu Lun Pan Certified Public
Accountants LLP or BDO, the independent auditor of ACM, to review
and discuss the audited consolidated financial statements as of and
for the year ended December 31, 2017, or the 2017 Audited Financial
Statements. Management represented that ACM had prepared the 2017
Audited Financial Statements in accordance with U.S. generally
accepted accounting principles. The audit committee discussed with
BDO the matters required by PCAOB in accordance with Auditing
Standard No. 16, “
Communications with Audit
Committees
.”
The
audit committee received from BDO the written communication that is
required by PCAOB Rule 3526, “
Communication with Audit Committees Concerning
Independence
,” and the audit committee discussed with
BDO that firm’s independence. The audit committee also
considered whether BDO’s provision of non-audit services and
the audit and non-audit fees paid to BDO were compatible with
maintaining BDO’s independence. On the basis of these
reviews, the audit committee determined that BDO has the requisite
independence.
Prior
to ACM’s filing of its Annual Report on Form 10-K for the
fiscal year ended December 31, 2017 with the SEC, the audit
committee also reviewed the Report of Independent Registered Public
Accounting Firm provided by BDO with respect to its audit of the
2017 Audited Financial Statements, which Report was included in
such Form 10-K.
33
Based
upon its discussions with management and BDO and its review of the
information provided by, and the representations of, management and
BDO, the audit committee recommended to the board that the 2017
Audited Financial Statements be included in ACM’s Annual
Report on Form 10-K for the fiscal year ended December 31,
2017.
The
audit committee selected BDO as ACM’s independent auditor for
the fiscal year ending December 31, 2018, subject to
ratification of the selection by the stockholders of
ACM.
Audit Committee
Tracy Liu
Chenming Hu
Yinan Xiang
34
Stockholder Proposals for 2019 Annual Meeting
In
order for stockholder proposals for the 2019 Annual Meeting of
Stockholders to be eligible for inclusion in the proxy statement
and form of proxy card for that meeting, we must receive the
proposals at our corporate headquarters, 42307 Osgood Road, Unit I,
Fremont, California 94539, directed to the attention of our
Corporate Secretary, no later than January 4, 2019. In addition,
all proposals will need to comply with Rule 14a-8 of the Securities
Exchange Act, which sets forth the requirements for the inclusion
of stockholder proposals in our sponsored proxy
materials.
Our
Bylaws set forth the procedures you must follow in order to
nominate a director for election or present any other proposal at
an annual meeting of our stockholders, other than proposals
intended to be included in our sponsored proxy materials. In
addition to any other applicable requirements, for a stockholder to
properly bring business before the 2019 Annual Meeting of
Stockholders, the stockholder must give us notice thereof in proper
written form, including all required information, at our corporate
headquarters, 42307 Osgood Road, Unit I, Fremont, California
94539, directed to the attention of our Corporate Secretary,
between February 15, 2019 and March 17, 2019. A copy of our
Bylaws is available at:
sec.gov/Archives/edgar/data/1680062/000119312517342650/d407541dex302.htm
.
Delivery of Documents to Security Holders Sharing an
Address
SEC
rules permit us to deliver one Notice of Internet Availability to
two or more stockholders who share an address, unless we have
received contrary instructions from one or more of the
stockholders. This delivery method, which is known as
“householding,” can reduce our expenses for printing
and mailing. Any stockholder of record at a shared address to which
a single copy of the Notice of Internet Availability was delivered
may request a separate Notice of Internet Availability, or a
separate copy of the 2017 Annual Report and this Proxy Statement,
by (a) sending a letter to Shareholder Services at ACM
Research, Inc., 42307 Osgood Road, Unit I, Fremont, California
94539, to the attention of our Corporate Secretary, or
(b) sending us an email at
investor.relations@acmrcsh.com
.
Stockholders of record who wish to receive separate copies of these
documents in the future may also contact us as stated above.
Stockholders of record who share an address and receive two or more
copies of the Notice of Internet Availability may contact us as
stated above to request delivery of a single copy. A stockholder
who holds shares in “street name” and who wishes to
obtain copies of proxy materials should follow the instructions on
the stockholder’s voting instruction form or should contact
the holder of record.
Other Matters
We will
pay all expenses of preparing, printing and mailing, and making
available over the Internet, the Annual Meeting proxy materials, as
well as all other expenses of soliciting proxies for the Annual
Meeting on behalf of the board of directors. Issuer Direct
Corporation will solicit proxies by personal interview, mail,
telephone, facsimile, email, Internet or other means of electronic
transmission and will request brokerage houses, banks, and other
custodians, nominees and fiduciaries to forward soliciting material
to the beneficial owners of common stock held of record by these
persons. We will pay a fee of approximately $10,000 to Issuer
Direct Corporation for its services and will reimburse it for
payments made to brokers and other nominees for their expenses in
forwarding soliciting material. In addition, certain of our
directors, officers and employees, who will receive no compensation
in addition to their regular salary or other compensation, may
solicit proxies by personal interview, mail, telephone, facsimile,
email, Internet or other means of electronic
transmission.
35
Annex A
ACM Research, Inc.
Standards for Director Independence
The Board of Directors (the “
Board
”) of ACM Research, Inc.
(“
ACM
”) has approved this policy for Standards
for Director Independence (this “
Policy
”) on April 30, 2018, and this Policy shall
take effect immediately.
Under the Governance Guidelines adopted by the Board and the
requirements of Nasdaq, the Board must consist of a majority of
independent directors. Its three standing committees—the
audit committee, the
nominating
and governance committee
, and
the compensation committee—are composed entirely of directors
who are independent.
For a director to be deemed “independent,” the Board
must affirmatively determine, based on all relevant facts and
circumstances, that the director has no material relationships with
ACM (either directly or as a partner, shareholder or officer of an
organization that has a relationship with ACM). To assist with the
determination of independence, the Board has established
categorical standards consistent with the corporate governance
standards of Nasdaq. These categorical standards require that, to
be independent, a director may not have a material relationship
with ACM. Even if a director meets all categorical standards for
independence described below, the Board reviews all other
relationships with ACM in order to conclude that each independent
director has no material relationship with ACM.
The Board annually reviews the independence of all non-employee
directors. ACM identifies the directors that it has determined to
be independent and discloses the basis for that determination in
its annual proxy statement for the election of
directors.
Material Relationships with ACM
A director would be deemed to have a material relationship with ACM
in any of the following circumstances:
●
the
director is or has been within the last three years an employee, or
has an immediate family member who is or has been within the last
three years an executive officer, of ACM or any of its
subsidiaries;
●
the
director has received, or a member of the director’s
immediate family has received, during any twelve-month period
within the last three years, more than $100,000 in direct
compensation from ACM or any of its subsidiaries other than
director and committee fees and pension or other forms of deferred
compensation for prior service, provided that such compensation is
not contingent in any way on continued service and provided further
that compensation received by a director for former service as an
interim chairman or executive officer or by an immediate family
member for service as an employee other than an executive officer
need not be considered;
●
the
director (a) is, or has a member of the director’s
immediate family who is, a current partner of a firm that is the
internal or external auditor of ACM or any of its subsidiaries,
(b) is a current employee of such a firm, (c) has an
immediate family member who is a current employee of such a firm
and who personally works on the audit of ACM or any of its
subsidiaries, or (d) was, or has a member of the
director’s immediate family who was, within the last three
years (but is no longer) a partner or employee of such a firm and
personally worked on the audit of ACM or any of its
subsidiaries;
●
the
director is employed, or has a member of the director’s
immediate family who is employed, or has been within the last three
years employed, as an executive officer of another company where
any of our present executive officers at the same time serves or
served on that company’s compensation committee;
●
the
director is an employee, or has a member of the director’s
immediate family who is an executive officer, of another company
that makes payments to, or receives payments from, ACM or its
subsidiaries for property or services in an amount which, in any of
the last three fiscal years, exceeded the greater of $1 million or
2% of such other company’s consolidated gross revenues;
or
●
the
director serves as an executive officer of a charitable
organization to which ACM has contributed, in any one year within
the preceding three years, in excess of the greater of $1 million
or 2% of the charitable organization’s consolidated gross
revenues.
A-1
Material Relationships with an Executive Officer
Consistent with the expectation that non-employee directors will
not have professional or financial relationships (including
side-by-side investments) that could impair their independence, a
director will be deemed to have a material relationship with ACM
and not be considered independent, if any of the following
apply:
●
the
director receives, or has an immediate family member who receives,
any direct compensation from an executive officer or any immediate
family member of an executive officer of the Company;
●
an
entity affiliated with the director or with an immediate family
member of a director receives any payment from any executive
officer of the Company, other than in a routine, commercial or
consumer transaction with terms no more favorable than those
customarily offered to similarly-situated persons;
●
the
director or an immediate family member of a director receives, or
is affiliated with an entity that receives, any payment, whether
direct or indirect, for legal, accounting, financial or other
professional services provided to an executive officer of the
Company or an immediate family member of an executive officer;
and
●
the
director or an immediate family member of a director is a current
executive officer of a tax-exempt organization that receives
contributions from an executive officer of the Company, in an
amount that exceeds the lesser of $100,000 or 1% of the tax exempt
organization’s consolidated gross revenues in that fiscal
year.
Relationships That Are Not Material
A director generally will not be deemed to have a material
relationship with ACM and will be considered independent, if any of
the following, when viewed singularly, apply:
●
a
transaction in which the director’s interest arises solely
from the director’s position as a director of another
corporation or organization that is a party to the transaction, and
the director did not participate in furtherance or approval of the
transaction and the transaction was negotiated on an arms’
length basis;
●
a
transaction in which the director’s interest arises solely
from the director’s ownership of an equity or limited
partnership interest in the other party to the transaction, so long
as the aggregate ownership of all directors, director nominees,
executive officers and five percent stockholders of ACM (together
with their immediate family members) does not exceed five percent
of the equity or partnership interests in that other
party;
●
a
transaction in which the director’s interest arises solely
from the director’s status as an employee or non-controlling
equity owner of a company to which ACM was indebted at the end of
our last full fiscal year in an aggregate amount not in excess of
five percent of our total consolidated assets;
●
ownership
by the director of equity or other securities of ACM, as long as
the director is not the beneficial owner, directly or indirectly,
of more than ten percent of any class of our equity
securities;
●
the
receipt by the director of compensation for service as a member of
the board of directors or any committee thereof, including regular
benefits received by other non-employee directors;
●
any
other relationship or transaction that is not listed above and in
which the amount involved does not exceed $120,000;
●
any
immediate family member of the director having any of the above
relationships; and
●
any
relationship between ACM and a non-immediate family member of the
director.
Definitions
For purposes of these standards:
●
An
“executive officer” means an “officer” for
the purposes of Rule 16a-1(f) under the Securities Exchange Act of
1934.
●
An
“immediate family member” includes a person’s
spouse, parents, children, siblings, mothers and fathers-in-law,
sons and daughters-in-law, brothers and sisters-in-law, and anyone
(other than tenants and domestic employees) who shares such
person’s home. When applying the three-year look-back
provisions above, ACM need not consider individuals who are no
longer immediate family members as a result of legal separation or
divorce, or those who have died or become
incapacitated.
Directors
have an affirmative obligation to inform the Board of any material
changes in their circumstances or relationships that may impact
their designation by the Board as “independent.” This
obligation includes all business relationships between, on the one
hand, directors or members of their immediate family, and, on the
other hand, ACM and its affiliates or members of senior management
and their affiliates, whether or not such business relationships
are subject to any other approval requirements of ACM.
A-2
Annex B
ACM Research, Inc.
Policy and Procedures for Stockholder Nominations to the Board of
Directors
The Board of Directors (the “
Board
”) of ACM Research, Inc.
(“
ACM
”) has approved this Policy and Procedures
for Stockholder Nominations to the Board of Directors (this
“
Policy
”) on April 30, 2018, and this Policy shall
take effect immediately.
1.
The
Nominating and Governance Committee will consider director
candidates recommended by stockholders for open positions on the
Board. This Policy addresses the consideration of director
candidates recommended by stockholders for nomination by the
Board.
2.
Recommendations
should be submitted to the Secretary of ACM in writing, along with
a statement signed by the candidate acknowledging
that:
a.
the
candidate, if elected, will serve as a director of ACM and will
represent all stockholders of ACM in accordance with applicable
laws and ACM’s charter and Bylaws; and
b.
the
candidate, if elected, will comply with ACM’s Code of
Business Conduct, Governance Guidelines, and any other applicable
rule, regulation, policy or standard of conduct applicable to the
Board and its individual members.
In
addition, each candidate must submit a fully completed and signed
Questionnaire for Directors and Officers on ACM’s standard
form and provide any additional information requested by ACM,
including any information that would be required to be included in
a proxy statement in which the candidate is named as a nominee for
election as a director and information showing that the candidate
meets the Board’s qualifications for nomination as a director
and for service on the committees of the Board. Also, a candidate
must be available for interviews with members of the Board, if
required by ACM’s process for identifying and evaluating
nominees for director.
3.
In
addition to the information to be provided by the candidate, at the
time of submitting the recommendation, the stockholder making the
recommendation should submit the following information in
writing:
a.
the
name and address of the stockholder as they appear in ACM’s
books and the class and number of shares of each class and series
ACM’s capital stock held beneficially and of record by the
stockholder; and
b.
a
description of all arrangements or understandings among the
stockholder and the candidate and any other persons (naming them)
pursuant to which the recommendation is being made by the
stockholder.
4.
A
stockholder who wishes to recommend a candidate for election as a
director at the next annual meeting of stockholders must submit the
information described in items 2 and 3 above for receipt by the
Secretary of ACM sufficiently in advance of the Board’s
approval of nominations for the annual meeting to permit the
Nominating and Governance Committee and the Board to complete its
evaluation of the candidate, which will generally be no later than
120 days prior to the first anniversary of ACM’s previous
annual meeting of stockholders.
5.
Candidates
who are recommended by a stockholder at a time when there are no
open positions on the Board and are considered qualified candidates
by the Nominating and Governance Committee may be placed on the
rolling list of candidates for open Board positions maintained by
that Committee, generally for a period of up to 24 months from the
date that the recommendation was received by the Secretary of the
Corporation.
6.
Candidates
recommended by stockholders will be evaluated by the Nominating and
Governance Committee on the same basis as candidates identified by
other means, including consideration of the qualifications for
nomination to the Board most recently approved by the
Board.
7.
Any
director nomination submitted by a stockholder for presentation by
the stockholder at an annual or special meeting of stockholders
must be made in accordance with the advance notice requirements
contained in Section 2.11 of ACM’s Bylaws.
B-1
Annex C
ACM Research, Inc.
Qualifications for Nomination to the Board of
Directors
The Board of Directors (the “
Board
”) of ACM Research, Inc.
(“
ACM
”) has approved this policy for
Qualifications for Nomination to the Board of Directors (this
“
Policy
”) on April 30, 2018, and this Policy shall
take effect immediately.
The Nominating and Governance Committee of the will consider the
following factors, at a minimum, in recommending to the Board
potential new board members or the continued service of existing
members:
1.
Directors
should be of the highest ethical character and share the values of
ACM as reflected in its Code of Business Conduct.
2.
Directors
should be highly accomplished in their respective fields, with
superior credentials and recognition.
3.
In
selecting directors, the Board should seek to achieve a mix of
Board members that enhances the diversity of background, skills and
experience on the Board, including with respect to age, gender,
international background, ethnicity and specialized
experience.
4.
Each
director should have relevant expertise and experience and be able
to offer advice and guidance to the chief executive officer of ACM
based on that expertise and experience.
5.
In
selecting directors, the Board should generally seek active and
former executives of public companies and of other complex
organizations, including government, educational and other not for
profit institutions, or persons with specialized expertise in a
discipline that is relevant to service as a director of
ACM.
6.
The
majority of directors should be independent under applicable
listing standards, Board and committee guidelines and any
applicable legislation.
8.
Each
director should have sound business judgment, be able to work
effectively with others, have sufficient time to devote to the
affairs of ACM, and be free from conflicts of
interest.
9.
Each
new director should confirm his or her willingness and ability to
serve for a number of years as a director prior to retirement from
the Board.
10.
The
Nominating and Governance Committee will also consider any other
factors related to the ability and willingness of a new member to
serve or an existing member to continue his or her
service.
C-1
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ACM RESEARCH, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS – JUNE 14, 2018 AT 10:00 A.M.
(EASTERN DAYLIGHT SAVING TIME)
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CONTROL ID:
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REQUEST ID:
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The signer hereby appoints David H. Wang and Tracy Liu (the
“Proxy Committee”) proxies with power of substitution
to act and vote at the 2018 Annual Meeting of Stockholders of ACM
Research, Inc. to be held at 10:00 a.m. (Eastern daylight saving
time) on June 14, 2018 and at any adjournments thereof. The 2018
Annual Meeting will be hosted live via the Internet at
www.investorcalendar.com/event/28590. The Proxy Committee is
directed to vote as indicated on the reverse side and in its
discretion upon any other matters that may properly come before the
2018 Annual Meeting.
The signer hereby revokes all proxies previously given by the
signer to vote at the 2018 Annual Meeting and any adjournments and
acknowledges receipt of ACM Research, Inc.’s Proxy Statement
for the 2018 Annual meeting.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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VOTE BY INTERNET
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Before the
Meeting
─ Go to
www.iproxydirect.com/ACMR
or scan
QR code
.
Use the Internet to transmit your voting
instructions and for electronic delivery of information up until
11:59 p.m. (EDST) on June 13, 2018. Have your control number (from
your Notice of Internet Availability) available when you access the
website, and follow the instructions to obtain your records and
create an electronic voting instruction form.
During the Meeting
─ Go
to
investorcalendar.com/event/28590
.
You may attend the meeting via the Internet and vote during the
meeting. Have your control number (from your Notice of Internet
Availability) available, and follow the instructions.
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VOTE BY PHONE
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Use a touch-tone telephone to call +1.866.752.8683 and transmit
your voting instructions up until 11:59 p.m. (EDST) on
June 13, 2018. Have your control number (from your Notice of
Internet Availability) available, and follow the
instructions.
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VOTE BY MAIL
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Mark, sign and date your proxy card and return it in the
pre-addressed envelope we provided with this proxy.
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ANNUAL MEETING OF THE STOCKHOLDERS OF
ACM RESEARCH, INC.
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PLEASE
COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE:
☒
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PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal 1
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FOR
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AGAINST
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FOR ALL
EXCEPT
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Election of Directors:
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David H. Wang
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Haiping Dun
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Chenming C. Hu
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Tracy Liu
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Yinan Xiang
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☐
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CONTROL ID:
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Zhengfan Yang
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☐
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REQUEST ID:
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Proposal 2
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FOR
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AGAINST
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ABSTAIN
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Advisory Vote on 2017 Executive Compensation.
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Proposal 3
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1 Year
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2 Years
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3 Years
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Abstain
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Advisory
vote on Frequency of Future Advisory Votes on Executive
Compensation.
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Proposal 4
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FOR
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AGAINST
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ABSTAIN
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Ratification of appointment of BDO China Shu Lan Pan Certified
Public Accountants LLP as independent auditor for
2018.
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In accordance with the Proxy Committee’s discretion, upon
such other matters as may properly come before the
meeting.
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The Board of Directors recommends a vote “FOR”
Proposals 1, 2 and 4 and a vote of “3 YEARS” for
Proposal 3. If no choice is specified, this proxy when properly
signed and returned will be voted “FOR” Proposals 1, 2
and 4 and “3 YEARS” for Proposal 3.
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IMPORTANT:
All holders must
sign. When signing as attorney, executor, administrator, or other
fiduciary, please give full title as such. Joint owners should each
sign personally. If a corporation or partnership, please sign in
full corporate or partnership name, by authorized officer. Please
sign exactly as your name(s) appear(s) hereon
Dated: ________________________, 2018
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MARK HERE FOR ADDRESS CHANGE
☐
New Address (if applicable):
________________________________________________________
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(Print Name of Stockholder and/or Joint
Tenant)
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(Signature of Stockholder)
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(Second Signature if held jointly)
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TABLE OF CONTENTS