UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDU
LE 14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant x
|
Filed by a Party other than the Registrant o
|
|
Check
the appropriate box:
|
o
|
Preliminary
Proxy Statement
|
o
|
Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|
x
|
Definitive
Proxy Statement
|
o
|
Definitive
Additional Materials
|
o
|
Soliciting
Material Pursuant to §240.14a-12
|
|
|
Gulf
Resources, Inc.
(Name
of Registrant as Specified in Its Charter)
|
|
|
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
|
|
Payment
of Filing Fee (Check the appropriate box):
|
x
|
No
fee required.
|
o
|
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)
|
|
|
|
|
¨
|
Fee
paid previously with preliminary materials.
|
|
|
o
|
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)
|
|
|
|
|
|
(2)
|
Form,
Schedule or Registration Statement No.:
|
|
|
|
|
(3)
|
|
|
|
|
|
(4)
|
|
Gulf
Resources, Inc.
99
Wenchang Road, Chenming Industrial Park,
Shouguang
City, Shandong,
People’s
Republic of China 262714
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
to
be held on June 22, 2010
TO THE
STOCKHOLDERS OF Gulf Resources, Inc.:
The
Annual Meeting of the stockholders of Gulf Resources, Inc., a Delaware
corporation (“Company”), will be held on June 22, 2010, at 9:00 a.m.(local
time), at the company’s headquarters located at 99 Wenchang Road, Chenming
Industrial Park, Shouguang City, Shandong Province, People’s Republic of China,
for the following purposes:
|
1.
|
To
elect seven directors, consisting of Ming Yang, Xiaobin Liu, Naihui Miao,
Richard Khaleel, Biagio Vignolo, Shi Tong Jiang and Ya Fei Ji, to hold
office for a one-year term or until their successors are elected and
qualified;
|
|
2.
|
To
ratify the appointment of BDO Limited, independent public accountants, as
the auditor of the Company the year
2010;
|
|
3.
|
To
approve the Company’s 2007 Equity Incentive Plan, as amended,
and
|
|
4.
|
To
transact any other business as may properly be presented at the Annual
Meeting or any adjournment thereof.
|
A proxy
statement, providing information, and a form of proxy to vote, with respect to
the foregoing matters accompany this notice.
By Order
of the Board of Directors,
/s/ Ming Yang
Ming
Yang
Chairman
of the Board of Directors
Dated:
April 29, 2010
IMPORTANT
Whether
you expect to attend the Annual Meeting, please complete, date, and sign the
accompanying proxy, and return it promptly in the enclosed return envelope. If
you grant a proxy, you may revoke it at any time prior to the Annual Meeting or
nevertheless vote in person at the Annual Meeting.
PLEASE
NOTE: If your shares are held in street name, your broker, bank,
custodian, or other nominee holder cannot vote your shares in the election of
directors, unless you direct the nominee holder how to vote, by marking your
proxy card.
Gulf
Resources, Inc.
99
Wechang Road, Chenming Industrial Park,
Shouguang
City, Shandong,
People’s
Republic of China 262714
PROXY
STATEMENT
for
Annual
Meeting of Stockholders
to
be held on June 22, 2010
PROXY
SOLICITATION
Company
is soliciting proxies on behalf of the Board of Directors in connection with the
annual meeting of stockholders on June 22, 2010 and at any adjournment
thereof. Company will bear the entire cost of preparing, assembling,
printing and mailing this Proxy Statement, the accompanying proxy, and any
additional material that may be furnished to stockholders. Broadridge
and American Stock Transfer & trust Co., LLC has been engaged to solicit
proxies and distribute materials to brokers, banks, custodians, and other
nominee holders for forwarding to beneficial owners of Company stock, and
Company will pay Broadridge and American Stock Transfer & trust Co., LLC
approximately $0,000 for these services and reimburse certain of its expenses;
in addition, Company will reimburse nominee holders their forwarding
costs. Proxies also may be solicited through the mails or direct
communication with certain stockholders or their representatives by Company
officers, directors, or employees, who will receive no additional compensation
therefor.
May 3,
2010 is the approximate date on which this Proxy Statement and the accompanying
form of proxy are first being sent to stockholders.
GENERAL INFORMATION ABOUT
VOTING
Record
Date, Outstanding Shares, and Voting Rights
As of
April 29, 2010, the record date for the meeting, Company had outstanding
34,553,566 shares of Common Stock outstanding, being the class of stock entitled
to vote at the meeting. Each share of Common Stock entitles its holder to one
vote.
Procedures
for Voting or Revoking Proxies
You may
vote your proxy by completing, dating, signing, and mailing the accompanying
form of proxy in the return envelope provided. The persons authorized
by any of those means to vote your shares will vote them as you specify or, in
absence of your specification, as stated on the form of proxy. You
may revoke any proxy by notifying Company in writing at the above address,
ATTN: Secretary, or by voting a subsequent proxy or in person at the
meeting.
Attending
the Meeting
You may
obtain directions to the meeting at www.gulfresourcesinc.cn or by writing to
Company at the above address, ATTN: Secretary. If you
attend the meeting, you may vote there in person, regardless whether you have
voted by any of the other means mentioned in the preceding
paragraph.
Required
Votes
Directors
are elected by a plurality of votes cast. A majority of votes cast is
required to approve each other matter to be considered at the
meeting. Abstentions and broker non-votes have no effect on the
proposals being voted upon.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding beneficial ownership of
Common Stock, as of the record date of the meeting, by each of Company’s
directors and executive officers; all executive officers and directors as a
group, and each person known to Company to own beneficially more than 5% of
Company’s Common Stock. Except as otherwise noted, the persons identified have
sole voting and investment powers with respect to their shares. As of
April 28, 2009, there were 34,541,066 shares of the Company’s Common Stock
outstanding.
Name
of Beneficial Owner (1)
|
|
|
|
|
|
|
Ming
Yang
|
|
|
13,391,454 |
(2) |
|
|
38.8 |
% |
Xiaobin
Liu
|
|
|
50,000 |
(3) |
|
|
* |
|
Min
Li
|
|
|
50,000 |
(4) |
|
|
|
|
Naihui
Miao
|
|
|
50,000 |
(5) |
|
|
* |
|
Richard
Khaleel
|
|
|
37,500 |
(6) |
|
|
* |
|
Biagio
Vignolo
|
|
|
37,500 |
(7) |
|
|
* |
|
Shi
Tong Jiang
|
|
|
25,000 |
(8) |
|
|
* |
|
Ya
Fei Ji
|
|
|
25,000 |
(9) |
|
|
* |
|
All
Directors and Executive Officers as a Group (seven
persons)
|
|
|
13,666,954 |
|
|
|
39.5 |
% |
FMR
LLC
|
|
|
3,740,091 |
(10) |
|
|
10.8 |
% |
Billion
Gold Group Limited
|
|
|
2,000,000 |
(11) |
|
|
5.8 |
% |
* Less
than 1%.
(1) The
address of each director and executive officer is c/o Gulf Resources, Inc., 99
Wenchang Road, Chenming Industrial Park, Shouguang City, Shandong, People’s
Republic of China 262714
(2)
Includes 2,512,200 shares owned by Ming Yang, 5,079,721 shares owned by
Ms. Wenxiang Yu, the wife of Mr. Yang, 1,674,800 shares owned by Mr. Zhi
Yang, Mr. Yang’s son, and 4,124,733 shares owned by Shandong Haoyuan
Industry Group Ltd. ("SHIG"), of which Mr. Yang is the controlling shareholder,
chief executive officer and a director. Mr. Yang disclaims beneficial
ownership of the shares owned by his wife and SHIG.
(3)
Includes 50,000 shares issuable upon exercise of options held by Mr. Liu
described above.
(4)
Includes 50,000 shares issuable upon exercise of options held by Mr. Liu
described above.
(5)
Includes 50,000 shares issuable upon exercise of options held by Mr. Miao
described above.
(6)
Includes 37,500 shares issuable upon exercise of options held by Mr. Khaleel
described above.
(7)
Includes 25,000 shares issuable upon exercise of options held by Mr. Vignolo
described above and 12,500 shares of common stock.
(8)
Includes 25,000 shares issuable upon exercise of options held by Mr. Jiang
described above.
(9)
Includes 25,000 shares issuable upon exercise of options held by Mr. Ji
described above.
(10) The
address of Fidelity Management & Research Company ("Fidelity") is 82
Devonshire Street, Boston, Massachusetts 02109. Fidelity is a
wholly-owned subsidiary of FMR LLC and an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of
3,740,091 shares or 11.857% of the Common Stock outstanding of the Company as a
result of acting as investment adviser to various investment companies
registered under Section 8 of the Investment Company Act of 1940.
The
ownership of one investment company, Fidelity Dividend Growth Fund, amounted to
2,504,740 shares or 7.26% of the common stock outstanding. Fidelity Dividend
Growth Fund has its principal business office at 82 Devonshire Street, Boston,
Massachusetts 02109.
Edward C.
Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has
sole power to dispose of the 3,740,091 shares owned by the
Funds. Members of the family of Edward C. Johnson 3d, Chairman of FMR
LLC, are the predominant owners, directly or through trusts, of Series B voting
common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The
Johnson family group and all other Series B shareholders have entered into a
shareholders' voting agreement under which all Series B voting common shares
will be voted in accordance with the majority vote of Series B voting common
shares. Accordingly, through their ownership of voting common shares
and the execution of the shareholders' voting agreement, members of the Johnson
family may be deemed, under the Investment Company Act of 1940, to form a
controlling group with respect to FMR LLC.
Neither
FMR LLC nor Edward C. Johnson 3d, Chairman of FMR LLC, has the sole power to
vote or direct the voting of the shares owned directly by the Fidelity Funds,
which power resides with the Funds' Boards of Trustees. Fidelity carries out the
voting of the shares under written guidelines established by the Funds' Boards
of Trustees.
(11) The
address of Billion Gold Group is No. 41 Huajia Thorpe, Fenghuang Village, Tingzu
Township, Echeng District, Ezhou City, Hubei Province, China.
(12) The
address of Topgood International Limited is No. 48 Huajia Thorpe, Fenghuang
Village, Tingzu Township, Echeng District, Ezhou City, Hubei Province,
China.
PROPOSAL
1
ELECTION
OF DIRECTORS
Nominees
of the Board of Directors
The Board
of Directors has nominated the persons identified below for election as
directors, to serve until the next annual meeting and their successors have been
elected and qualified If any nominee becomes unavailable for
election, which is not expected, the persons named in the accompanying proxy
intend to vote for any substitute whom the Board nominates.
|
|
|
|
Other
positions with Company; other directorships held in last five
years
|
|
Has
served as Company director since
|
Ming
Yang
|
|
43 |
|
Chairman
of the Board of Director
|
|
December
2006
|
Xiaobin
Liu
|
|
42 |
|
Chief
Executive Officer and Director
|
|
March
2009
|
Naihui
Miao
|
|
41 |
|
Secretary,
Chief Operating Officer and Director
|
|
January
2006
|
Richard
Khaleel (1)(3)
|
|
59 |
|
Independent
Director
|
|
October
2007
|
Biagio
Vignolo (1) (2)
|
|
62 |
|
Independent
Director
|
|
November
2007
|
Shi
Tong Jiang (1) (2)(3)
|
|
42 |
|
Independent
Director
|
|
April
2008
|
Ya
Fei Ji (2)(3)
|
|
46 |
|
Independent
Director
|
|
June
2009
|
(1)
Serves as a member of the Audit Committee.
(2)
Serves as a member of the Compensation Committee.
(3)
Serves as a member of the Nominating and Corporate Governance
Committee.
Ming Yang, Chairman of the Board of
Director – Mr. Yang has served as Chairman of Shouguang City Yuxin
Chemical Company Limited since July 2000. Since May 2005, Mr. Yang has served as
Chairman of Shouguang City Haoyuan Chemical Company Limited, Shouguang City He
Mao Yuan Bromize Company Limited, and Shouguang City Qing River Real Estate
Construction Company. He was nominated as director of Qinghe Oil
Field Office in 1993, where he managed operations. In 1997 he was appointed
chairman and general manager of Shouguang Qinghe Shiye LLC and during the next
three years its profits doubled. He took the position of general manager of
Shouguang City Yu Xin Chemical Industry Co., Ltd. in 2000. During his stay, he
focused on quality management and technology progress, which led to a 100
percent success rate of all products. He also helped the company successfully
pass the ISO certification and become a private high-tech enterprise. In 2005 he
was appointed to the position of chairman, where he has helped the company to
become a leading producer of bromine and crude salt in China. In 2006
he became the chairman of Gulf Resources, Inc. Mr. Yang has been the
representative of Shandong Shouguang congress since 1995 and in 1998 he was
awarded as Honorary Entrepreneur in Weifang City.
Xiaobin Liu, Chief Executive Officer and
Director – Mr. Liu was appointed as Chief Executive Officer and Director
on March 10, 2009. Mr. Liu joined the Company as Vice President in January
2007. Before he joined the Company, Mr. Liu had served as Vice
President of Shenzhen Dasheng Corporation, a public company in China, from 2005
to 2006, Manager of Securities Department with Saige International Trust and
Investment Corporation from 2000 to 2005, Vice President with Hainan Wanquanhe
Development Corporation from 1995 to 2000. Prior to that, Mr. Yang
worked in the Financial Department of Chinese Black Metal Limited Company from
1992 to 1995 and the Financial Department of Shaanxi Aircraft Manufacturing
Company from 1988 to 1992. Mr. Liu earned a masters degree from the
Economic and Management School at Hong Kong City University.
Naihui Miao, Secretary, Chief
Operating Officer and Director – Mr. Miao has served as Vice President of
Shouguang City Haoyuan Chemical Company Limited since January
2006. Since January 2006, Mr. Miao has served as Director, Secretary
and Vice President of Gulf Resources, Inc. and he is in charge of sales, human
resource and business management. From 2005 to 2006, Mr. Miao served
as Vice President of Shouguang City Yuxin Chemical Company Limited as the deputy
general manager. From 1991 to 2005, Mr. Miao served as a Manager and
then Vice President of Shouguang City Commercial Trading Center Company
Limited. He was the director of Shouguang Business Trade Center since
1986.
Richard Khaleel, Independent Director
– Mr. Khaleel was appointed a director on October 24, 2007. From 2004 to
2007, Mr. Khaleel served as Executive Vice President and Chief Marketing Officer
for the Bank of New York, a $30 billion leading global financial services
company, where he helped create and implement programs that grew the
institutional asset management business of that bank. From 1996 to
2003, Mr. Khaleel was Chief Creative Marketing Officer at Alliance Bernstein LP,
where he led development and execution of marketing programs for its
institutional and retail business. From 1994 to 1996, Mr. Khaleel was vice
president of marketing for CNBC, where he was responsible for consumer
marketing, strategic planning, positioning and promotions. Prior to 1996, Mr.
Khaleel worked in senior marketing positions at various global advertising
agencies. He received a degree in Political Science from Princeton University
and an MBA in Finance from New York University.
Biagio Vignolo, Independent Director
– Mr. Vignolo was appointed a director on November 6,
2007. Mr. Vignolo has been CFO of Perseus Books Group
since May of 2008. Prior to that he was a partner with
Tatum, LLC, the largest executive services firm in the US since 2005.
As a Tatum Partner he was the acting CFO for Sara Lee's
$5 billion Hanes Brands, Inc. division where he where he built a separate
financial team for the new public company as it separated from Sara Lee and also
implemented Sarbanes-Oxley controls. From 2003 through 2005,
Mr. Vignolo was Executive Vice President and Chief Financial Officer at Exide
Technologies. From 1989 to 2001, Mr. Vignolo was Executive Vice
President and CFO of Sun Chemical Corp. Mr. Vignolo received a B.S.
degree in Accounting from Rider University.
Shi Tong Jiang, Independent Director
– Mr. Jiang was appointed a director on April 23, 2008. Mr.
Jiang is Chief of the Shouguang City Audit Bureau, Shandong Province, has been
with the Audit bureau since 1990. During his career at the Shouguang City Audit
Bureau he has held multiple positions including, Auditing Officer and Audit
Section Deputy Chief. The Shouguang City Audit Bureau is responsible for the
independent audit supervision of the affairs of the government. From 1987 to
1990 Mr. Jiang attended Shandong Financial Institution.
Ya Fei Ji, Independent Director
- Mr. Ji was appointed a director on June 13, 2009. Mr. Ji
graduated from East China University in 1992 with a Master’s degree in Fine
Chemicals. From 1992 through 1996, Mr. Ji worked as an assistant researcher at
the Drug Research Institute of Anhui Province. Mr. Ji taught and conducted
research at the China University of Mining and Technology (Beijing) from 1996
until 2001, where he became an Associate Professor in 1999 and received a
doctorate degree in chemical engineering in 2001. From 2001 to 2003, Mr. Ji
conducted post-doctorate research at the the Institute of Materia Medica,
Chinese Academy of Medical Sciences and Peking Union Medical College. From 2003
to the present, Mr. Ji has taught and conducted research at the East China
University of Science and Technology. Mr. Ji has published over 40
articles and has applied for two patents.
There are
no family relationships among the directors and the executive
officers.
The Board
of Directors has determined that Richard Khaleel, Biagio Vignolo, Shi Tong Jiang
and Ya Fei Ji are independent under Rule 5605(a)(2) of the NASDAQ Listing
Rules.
Board
Operations
The
positions of principal executive officer and chairman of the Board of Company
are held by different persons. The chairman of the Board chairs Board
and stockholder meetings and participates in preparing their
agendas. The chairman of the Board also calls, plans, and chairs the
independent directors’ executive sessions and serves as a focal point for
communication between management and the Board between Board meetings, although
there is no restriction on communication between directors and
management. Company believes that these arrangements afford the
independent directors sufficient resources to supervise management effectively,
without being overly engaged in day-to-day operations.
The Board
plays an active role, as a whole and also at the committee level, in overseeing
the management of the Company’s risks. The Board regularly reviews reports from
members of senior management and committees on areas of material risk to the
Company, including operational, financial, legal, strategic and regulatory
risks.
The Board
of Directors met held seven meetings and entered into six written consents
during 2009. During 2009, no director attended fewer than 75% of the meetings of
the Board of Directors and Board committees of which the director was a
member.
The Board
has adopted a code of ethics applicable to Company’s directors, officers, and
employees. The code of ethics is available at Company’s website,
www.gulfresourcesinc.cn.
Board
Committees
The Board
of Directors has standing audit, compensation, and nominating committees,
comprised solely of independent directors. Each committee has a
charter, which is available at Company’s website,
www.gulfresourcesinc.cn.
Audit
Committee
The Audit
Committee is responsible for reviewing the results and scope of the audit, and
other services provided by our independent auditors, and reviewing and
evaluating our system of internal controls. Mr. Vignolo is the Audit
Committee Financial Expert and Mr. Jiang is the chair of the Audit Committee.
Our audit committee met five times during 2009. Our Board of Directors has
determined that Messrs. Khaleel, Vignolo and Jiang are “independent directors”
within the meaning of Rule 10A-3 under the Exchange Act, as determined based
upon the criteria for “independence” set forth in the rules of The NASDAQ Stock
Market.
Audit
Committee Report
With
respect to the audit of Company’s financial statements for the year ended
December 31, 20
09, the Audit
Committee
|
·
|
has
reviewed and discussed the audited financial statements with
management;
|
|
·
|
has
discussed with Company’s independent accountants the matters required to
be discussed by the statement on Auditing Standards No. 61, as amended
(AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the
Public Company Accounting Oversight Board in Rule 3200T;
and
|
|
·
|
has
received the written disclosures and the letter from the independent
accountant required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent accountant's
communications with the Audit Committee concerning independence and has
discussed with the independent accountant the independent accountant's
independence.
|
Based on
these reviews and discussions, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the company's
annual report on Form 10-K for the year ended December, 2009.
Shi Tong
Jiang, Chair
Richard
Khaleel
Biagio
Vignolo
Compensation
Committee
The
compensation committee is responsible for (a) reviewing and providing
recommendations to the board of directors on matters relating to employee
compensation and benefit plans, and (b) assisting the board in determining the
compensation of the chief executive officer and making recommendations to the
board with respect to the compensation of the chief financial officer, other
executive officers of the Company and independent directors. Each of Ya Fei Ji,
Shi Tong Jiang and Biagio Vignolo are members of the compensation committee. The
compensation committee operates under a written charter. Mr. Ji is the chairman
of compensation committee.
The
Compensation Committee took action by written consent three times in
2009. Further information regarding Company’s processes and
procedures for determining executive compensation are set forth under the
caption, Compensation Discussion and Analysis.
Compensation
Committee Report
The
Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis set forth beginning on page __ and
, based on the review and discussions,
recommended to the board of directors that the Compensation Discussion and
Analysis be included in this proxy statement.
Shi Tong
Jiang, Chair
Ya Fei
Ji
Biagio
Vignolo
Nominating
and Corporate Governance Committee
Our Board
of Directors established a nomination and corporate governance committee in June
2009.The purpose of the nominating and corporate governance committee is to
assist our board of directors in identifying qualified individuals to become
board members, in determining the composition of the board of directors and in
monitoring the process to assess board effectiveness. Each of Ya Fei Ji, Shi
Tong Jiang and Richard Khaleel are members of the nominating and corporate
governance committee. The nominating and corporate governance committee operates
under a written charter. Mr. Jiang is the chairman of nominating and corporate
governance committee.
The
Nominating and Corporate Governance Committee did not meetduring
2009.
The
Nominating and Corporate Governance Committee will consider director candidates
recommended by security holders. Potential nominees to the Board of Directors
are required to have such experience in business or financial matters as would
make such nominee an asset to the Board of Directors and may, under certain
circumstances, be required to be “independent”, as such term is defined under
Rule 5605 of the listing standards of NASDAQ and applicable SEC regulations.
Security holders wishing to submit the name of a person as a potential nominee
to the Board of Directors must send the name, address, and a brief (no more than
500 words) biographical description of such potential nominee to the Nominating
and Corporate Governance Committee at the following address: Nominating and
Corporate Governance Committee of the Board of Directors, c/o Gulf Resources,
Inc., 99 Wenchang Road, Chenming Industrial Park, Shouguang City, Shandong,
People’s Republic of China 262714. Potential director nominees will be evaluated
by personal interview, such interview to be conducted by one or more members of
the Nominating and Corporate Governance Committee, and/or any other method the
Nominating and Corporate Governance Committee deems appropriate, which may, but
needs not, include a questionnaire. The Nominating and Corporate Governance
Committee may solicit or receive information concerning potential nominees from
any source it deems appropriate. The Nominating and Corporate Governance
Committee need not engage in an evaluation process unless (i) there is a vacancy
on the Board of Directors, (ii) a director is not standing for re-election, or
(iii) the Nominating and Corporate Governance Committee does not intend to
recommend the nomination of a sitting director for re-election. A potential
director nominee recommended by a security holder will not be evaluated
differently from any other potential nominee. Although it has not done so in the
past, the Nominating and Corporate Governance Committee may retain search firms
to assist in identifying suitable director candidates.
The Board
does not have a formal policy on Board candidate qualifications. The
Board may consider those factors it deems appropriate in evaluating director
nominees made either by the Board or stockholders, including judgment, skill,
strength of character, experience with businesses and organizations comparable
in size or scope to the Company, experience and skill relative to other Board
members, and specialized knowledge or experience. Depending upon the
current needs of the Board, certain factors may be weighed more or less
heavily. In considering candidates for the Board, the directors
evaluate the entirety of each candidate’s credentials and do not have any
specific minimum qualifications that must be met. “Diversity,” as such, is not a
criterion that the Committee considers. The directors will consider
candidates from any reasonable source, including current Board members,
stockholders, professional search firms or other persons. The
directors will not evaluate candidates differently based on who has made the
recommendation.
Stockholder
Communications
Stockholders
can mail communications to the Board of Directors, c/o Secretary, Gulf
Resources, Inc., 99 Wenchang Road, Chenming Industrial Park, Shouguang City,
Shandong, People’s Republic of China 262714, who will forward the correspondence
to each addressee.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires Company’s directors and
executive officers and any beneficial owner of more than 10% of any class of
Company equity security to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and furnish copies of the reports to
Company. Based solely on the Company’s review of copies of such forms
and written representations by Company’s executive officers and directors
received by it, Company believes that during 2009, all such reports were filed
timely, except that [list the name of the person and number of late reports,
update].
Executive
Compensation
Compensation
Discussion and Analysis
This
compensation discussion describes the overall compensation practices at the
Company and specifically describes the compensation for the following named
executive officers (“Named Executive Officers”):
|
·
|
Xiaobin
Liu, Chief Executive Officer
|
|
·
|
Min
Li, Chief Financial Officer
|
|
·
|
Naihui
Miao, Chief Operating Officer
|
The Board
of Directors appointed the Compensation Committee of our Board of Directors to
evaluate and determine the compensation programs of the Company’s Named
Executive Officers, including the Chief Executive Officer and the Chief
Financial Officer.
Compensation
Philosophy and Objectives
Our
primary goal with respect to our compensation programs has been to attract and
retain the most talented and dedicated employees in key positions in order to
compete effectively in the market place, successfully execute our growth
strategies, and create lasting shareholder value. The Compensation Committee
evaluates both individual and Company performance when determining the
compensation of our executives. Our executives’ overall compensation is tied to
the Company financial and operational performance, as measured by revenues and
net income, as well as to accomplishing strategic goals such as merger and
acquisitions and fund raising. The Compensation Committee believes that a
significant portion of our executive’s total compensation should be at-risk
compensation that is linked to stock-based incentives to align their interests
with those of shareholders.
Additionally,
the Compensation Committee has determined that an executive officer who is a
Chinese national and is based in China will be entitled to a locally competitive
package and an executive officer who is an expatriate or who is based in the
U.S. will be paid a salary commensurate with those paid to the executives in the
U.S. The Compensation Committee evaluates the appropriateness of the
compensation programs annually and may make adjustments after taking account the
subjective evaluation described previously.
We apply
our compensation policies consistently for determining compensation of our Chief
Executive Officer as we do with the other executives. The Compensation Committee
assesses the performance of our Chief Executive Officer annually and determines
the base salary and incentive compensation of our chief executive
officer.
Our Chief
Executive Officer is primarily responsible for the assessment of our other
executive officers’ performance. Ultimately, it is the Compensation Committee’s
evaluation of the chief executive officer’s assessment along with competitive
market data that determines each executive’s total compensation.
Elements
of Our Executive Compensation Programs
Base Salary. All full time
executives are paid a base salary. Base salaries for our named executives are
set based on their professional qualifications and experiences, education
background, scope of their responsibilities, taking into account competitive
market compensation levels paid by other similar sized companies for similar
positions and reasonableness and fairness when compared to other similar
positions of responsibility within the Company. Base salaries are reviewed
annually by the Compensation Committee, and may be adjusted annually as
needed.
Annual Bonuses. The Company
does not pay guaranteed annual bonuses to our executives or to employees at any
level because we emphasize pay-for-performance. The Compensation Committee
determines cash bonuses towards the end of each fiscal year to award our
executive officers including our Chief Executive Officer and Chief Financial
Officer based upon a subjective assessment of the Company’s overall performance
and the contributions of the executive officers during the relevant
period.
Equity Incentive
Compensation. A key element of our pay-for-performance philosophy is our
reliance on performance-based equity awards through the Company’s stock option
plan. This program aligns executives’ and shareholders’ interests by providing
executives an ownership stake in the Company. Our Compensation Committee has the
authority to award equity incentive compensation, i.e. stock options, to our
executive officers in such amounts and on such terms as the Compensation
Committee determines in its sole discretion. The Compensation Committee reviews
each executive’s individual performance and his or her contribution to our
strategic goals and determines the amount of stock options to be awarded towards
the end of the fiscal year. The Compensation Committee grants equity incentive
compensation at times when there are not material non-public information to
avoid timing issues and the appearance that such awards are made based on any
such information. The exercise price is the closing market price on the date of
the grant.
Other Compensation. We
provide our executives with certain other benefits, including reimbursement of
business and entertainment expenses, health insurance, vacation and sick leave
plan. The Compensation Committee in its discretion may revise, amend or add to
the officer’s executive benefits as it deems necessary. We believe that these
benefits are typically provided to senior executives of similar companies in
China and in the U.S.
Summary
Compensation Table
The
following table sets forth information regarding compensation of the named
executive officers for each of the three fiscal years in the period ended
December 31, 2009.
FISCAL
2009 COMPENSATION TABLE
|
Name
and Principal Position
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
Incentive Plan Compensation ($)
|
|
Nonqualified
Deferred Compensation Earnings ($)
|
|
All
Other Compensation ($)
|
|
|
Ming
Yang, CEO (2)
|
|
2009
2008
|
|
0
20,724
|
|
N/A
N/A
|
|
N/A
N/A
|
|
N/A
N/A
|
|
N/A
N/A
|
|
N/A
N/A
|
|
N/A
N/A
|
|
O
20,724
|
Xiaobin
Liu, CEO (3)
|
|
2009
|
|
43,924
|
|
N/A
|
|
N/A
|
|
23,970
|
|
N/A
|
|
N/A
|
|
N/A
|
|
67,894
|
Min
Li, CFO (4)
|
|
2009
2008
|
|
17,574
14,004
|
|
N/A
N/A
|
|
N/A
N/A
|
|
23,970
|
|
N/A
N/A
|
|
N/A
N/A
|
|
N/A
N/A
|
|
41,544
14,004
|
Naihui
Miao, COO (5)
|
|
2009
|
|
26,340
|
|
N/A
|
|
N/A
|
|
23,970
|
|
N/A
|
|
N/A
|
|
N/A
|
|
40,310
|
(1)
Represents the dollar amount recognized for financial statement reporting
purposes in accordance with FAS 123R.
(2) Mr.
Yang became our Chief Executive Officer on December 29, 2006, and resigned as
Chief Executive Officer on March 9, 2009. Mr. Yang remains the
Chairman of our Board of Directors.
(3) Mr.
Liu became our Chief Executive Officer on March 10, 2009.
(4) Mr.
Li became our Chief financial Officer on December 29, 2006.
(5) Mr.
Miao became our Chief Operating Officer on July 10, 2009.
Except as
disclosed below under the caption “Directors Compensation,” we have not paid or
accrued any fees to any of our executive directors for serving as a member of
our Board of Directors. We do not have any retirement, pension, profit sharing
or stock option plans or insurance or medical reimbursement plans covering our
officers and directors.
During
each of the last two fiscal years, none of our other officers had salary and
bonus greater than $100,000. Our executive officers are reimbursed by us for any
out-of-pocket expenses incurred in connection with activities conducted on our
behalf. There is no limit on the amount of these out-of-pocket expenses and
there will be no review of the reasonableness of such expenses by anyone other
than our board of directors, which includes persons who may seek reimbursement,
or a court of competent jurisdiction if such reimbursement is
challenged.
Grants
of Plan-Based Awards
The
following table sets forth information regarding each award made to the named
executive officers, under Company’s 2007 Equity Incentive Plan, during fiscal
2009.
FISCAL
2009 GRANTS OF PLAN-BASED AWARDS
|
|
|
|
|
Estimated
Future Payouts Under Non-Equity Incentive Plan
Awards
|
|
Estimated
Future Payouts Under Equity Incentive Plan Awards
|
|
All
Other Stock Awards: Number of Shares of
|
|
Option
Awards: Number of Securities
|
|
Exercise
or Base Price of
|
|
Grant
Date Fair Value of Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ming
Yang, CEO (1)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Xiaobin
Liu, CEO (2)
|
|
3/10/09
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
25,000
|
|
$4.80
|
|
$9,250
|
Min
Li, CFO (3)
|
|
3/10/09
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
25,000
|
|
$4.80
|
|
$9,250
|
Naihui
Miao, COO (4)
|
|
3/10/09
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
25,0000
|
|
$4.80
|
|
$9,250
|
(1) Mr.
Yang became our Chief Executive Officer on December 29, 2006, and resigned as
Chief Executive Officer on March 9, 2009. Mr. Yang remains the
Chairman of our Board of Directors.
(2) Mr.
Liu became our Chief Executive Officer on March 10, 2009.
(3) Mr.
Li became our Chief financial Officer on December 29, 2006.
(4) Mr.
Miao became our Chief Operating Officer on July 10, 2009.
Narrative
Discussion
The
following employment agreements were entered into by the Company and the
following executive officers:
Xiaobin
Liu
The
Company entered into an employment agreement with Xiaobin Liu on March 12, 2009
to serve as Chief Executive Officer and a member of the board of directors for a
term of three years. Pursuant to the agreement Mr. Liu will receive
annual compensation equal to $43,935. In addition Mr. Liu is entitled
to participate in any and all benefit plans from time to time, in effect for
employees, along with vacation, sick and holiday pay in accordance with policies
established and in effect from time to time.
Min
Li
Shouguang
Yuxin Chemical Industry Company Limited, or SYCI, entered into an employment
agreement with Min Li on March 18, 2008 to serve as chief financial officer for
a term of ten years. Pursuant to the agreement Mr. Li is entitled to
participate in any and all benefit plans from time to time, in effect for
employees, along with vacation, sick and holiday pay in accordance with policies
established and in effect from time to time.
Naihui
Miao
The
Company entered into an employment agreement with Naihui Miao on July 10, 2009
to serve as Chief Operating Officer for a term of three
years. Pursuant to the agreement Mr. Miao will receive annual
compensation equal to $26,340. In addition Mr. Miao is entitled to
participate in any and all benefit plans from time to time, in effect for
employees, along with vacation, sick and holiday pay in accordance with policies
established and in effect from time to time.
Assuming
the employment of the Company’s named executive officers were to be terminated
without cause or for good reason or in the event of change in control, as of
December 31, 2009, the following individuals would have been entitled to
payments in the amounts set forth opposite to their name in the below
table:
|
|
|
Xiaboin
Liu
|
|
$0
|
Min
Li
|
|
$0
|
Naihui
Miao
|
|
$0
|
Outstanding
Equity Awards at Fiscal Year-End
The
following table sets forth, for each named executive officer, information
regarding unexercised stock options, unvested stock awards, and equity incentive
plan awards outstanding as of December 31, 2009.
OUTSTANDING
EQUITY AWARDS AT 2009 FISCAL YEAR END
|
|
|
|
|
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#)
|
|
Option
Exercise Price ($)
|
|
|
|
Number
of Shares or Units of Stock That Have Not Vested (#)
|
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)
|
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested (#)
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
Other Rights That Have Not Vested ($)
|
Ming
Yang, CEO(1)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Xiaobin
Liu, CEO(2)
|
|
25,000
|
|
-
|
|
-
|
|
4.80
|
|
3/10/19
|
|
-
|
|
-
|
|
-
|
|
-
|
Min
Li, CFO
|
|
25,000
|
|
-
|
|
-
|
|
4.80
|
|
3/10/19
|
|
-
|
|
-
|
|
-
|
|
-
|
Naihui
Miao
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
(1) Mr.
Yang became our Chief Executive Officer on December 11, 2006, and resigned as
Chief Executive Officer on March 9, 2009. Mr. Yang remains the
Chairman of our Board of Directors.
(2) Mr.
Liu became our Chief Executive Officer on March 10, 2009.
Option
Exercises and Stock Vested
The
following table sets forth aggregate information with respect to each executive
officer regarding exercise of stock options, stock appreciation rights, and
similar instruments and vesting of restricted stock, restricted stock units and
similar instruments , for fiscal 2009.
FISCAL
2009 OPTION EXERCISES AND STOCK VESTED
|
|
|
|
|
|
|
|
Number
of Shares
Acquired
on Exercise (#)
|
|
Value
Realized on Exercise ($)
|
|
Number
of Shares
Acquired
on Vesting (#)
|
|
Value
Realized on Vesting ($)
|
Ming
Yang, CEO
|
|
0
|
|
0
|
|
0
|
|
0
|
Xiaobin
Liu, CEO
|
|
0
|
|
0
|
|
0
|
|
0
|
Min
Li, CFO
|
|
0
|
|
0
|
|
0
|
|
0
|
Naihui
Miao
|
|
0
|
|
0
|
|
0
|
|
0
|
Pension
Benefits Table
The
Company does not provide to any of its named executive officers any plans that
provide for payments or other benefits at, following, or in connection with
retirement.
Nonqualified
Defined Contribution and Other Nonqualified Deferred Compensation Plans
Table
None of
our named executive officer had any non-qualified defined contribution or other
plan that provides for the deferral of compensation, for fiscal
2009.
Compensation
of Directors
The
following table sets forth information regarding compensation of each director,
other than named executive officers, for fiscal 2009.
FISCAL
2009 DIRECTOR COMPENSATION
|
|
|
Fees
Earned or Paid in Cash ($)
|
|
|
|
|
|
Non-Equity
Incentive Plan Compensation ($)
|
|
[Change
in Pension Value and]* Nonqualified Deferred Compensation Earnings
($)
|
|
All
Other Compensation ($)
|
|
|
Richard
Khaleel
|
|
32,500
|
|
N/A
|
|
90,648
|
|
N/A
|
|
N/A
|
|
N/A
|
|
123,148
|
Biagio
Vignolo
|
|
32,500
|
|
N/A
|
|
92,315
|
|
N/A
|
|
N/A
|
|
N/A
|
|
124,815
|
Shi
Tong Jiang
|
|
10,000
|
|
N/A
|
|
20,486
|
|
N/A
|
|
N/A
|
|
N/A
|
|
30,486
|
Ya
Fei Ji
|
|
0
|
|
N/A
|
|
39,543
|
|
N/A
|
|
N/A
|
|
N/A
|
|
39,543
|
(1)
Represents the dollar amount recognized for financial statement reporting
purposes in accordance with FAS 123R.
We have
entered into an agreement on October 24, 2007 and November 6, 2007
with Richard Khaleel and Biagio Vignolo, respectively pursuant to which we
pay them $32,500 per annum for serving as a director, plus additional fees for
serving on committees of the Board. In addition, those agreements
provide that we will grant Mr. Khaleel and Mr. Vignolo options to purchase12,500
shares of our common stock upon execution of the agreements, and on the
anniversary of that date in 2008 and 2009 at an exercise price not less than the
closing sale price of such stock on the date of grant. The granting
of future options is contingent upon the individual’s continued service with our
company.
We have
agreed to pay Shi Tong Jiang $10,000 per annum for serving as a director. In May
of 2009, we granted to Shi Tong Jiang an option to purchase 12,500 shares of our
common stock at an exercise of $4.80 per share.
We do not
pay Ya Fei Ji any cash compensation for serving as a director. In
June 2009 we granted Ya Fei Ji an option to purchase 25,000 shares of our common
stock at an exercise price of $4.80 per share for his first year as a director
with the Company.
Certain
Relationships and Related Transactions
The
following table provides a summary of our related party transaction during 2008
and 2009.
|
|
Years
ended December 31,
|
|
|
|
2009
|
|
|
2008
|
|
Waiver
of interest expenses during first quarter 2008 by a related
party:
|
|
|
|
|
|
|
Shenzhen
Huayin Guaranty and Investment Company Limited (Note i)
|
|
$
|
-
|
|
|
$
|
131,533
|
|
Note
and loan payable – First Capital Limited (Note i)
|
|
|
-
|
|
|
|
1,650,000
|
|
Shenzhen
Huayin Guaranty and Investment Company Limited (Note i)
|
|
$
|
-
|
|
|
$
|
21,337,493
|
|
Due
to related party:
|
|
|
|
|
|
|
|
|
Hong
Kong Jiaxing Lighting Limited (Note ii)
|
|
$
|
-
|
|
|
$
|
852,067
|
|
Due
to key management (Min Li)
|
|
|
1,190
|
|
|
|
-
|
|
|
|
$
|
1,190
|
|
|
$
|
852,067
|
|
Note
i:
|
The
above related parties were stockholders of the
Company.
|
Note
ii:
|
The
above party is related to the Company by way of director and shareholder
in common.
|
As of
December 31, 2008 we had outstanding loans from Shenzhen Huayin Guaranty and
Investment Company Limited (“SHG”), a shareholder of the Company, in the
aggregate amount of $21, 337,493. Of this amount, $3,000,000 was
unsecured, non-interest bearing and was due in May 2009. The balance,
$18,337,493 was loaned by SHG during 2007 and 2008 to the Company unsecured
pursuant to an agreement which, as is Chinese custom, states that the loan need
not be paid in the immediate future.
During
the three months ended March 31, 2008, Shenzhen Huayin Guaranty and Investment
Company Limited waived $131,533 of accrued interest, which was recorded as a
credit to additional paid in capital
On
January 24, 2009, the Company entered into an agreement with SHG to issue an
aggregate of 5,250,000 shares of the Company's common stock at a price equal to
$1.0137 per share to Top King Group Limited ("Top King"), Billion Gold Group
Limited ("Billion Gold"), Topgood International Limited ("Topgood"), in lieu of
paying off in cash approximately $21.3 million in existing loans payable to
SHG. Upon the issuance of the shares in the amount of 1,500,000
shares to Top King 2,000,000 shares to Billion Gold, 1,750,000 shares
to Topgood, the aforesaid loans were deemed paid in full and
cancelled.
The
$1,650,000 was loaned to the company on September 30, 2008 by First Capital
Limited, a shareholder and was unsecured, non-interest bearing with no fixed
term of repayment
The
$852,067 due to Jiaxing Lighting represents funds the Company received from
Jiaxing Lighting for investment purposes in SCHC. Mr. Ming Yang, our
then CEO, is the director and shareholder of Jiaxing Lighting. These
monies are unsecured, non-interest bearing and have no fixed repayment
terms.
It is
Company’s policy to not enter any transaction other than compensation
arrangements in the ordinary course with any director, executive officer,
employee, or principal stockholder or party related to them, unless authorized
by a majority of the directors having no interest in the transaction, upon a
favorable recommendation by the Audit Committee or a majority of its
disinterested members.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF
THE BOARD OF DIRECTORS’ NOMINEES.
PLEASE
NOTE: If your shares are held in street name, your broker, bank,
custodian, or other nominee holder cannot vote your shares in the election of
directors, unless you direct the holder how to vote, by marking your
proxy.
PROPOSAL
2
RATIFICATION
OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Audit
Committee has appointed BDO Limited as independent accountants for fiscal 2010,
subject to the ratification by stockholders. Representatives of BDO
Limited are expected to be present at the Annual Meeting to respond to
appropriate questions and will have an opportunity to make a statement, if they
so desire
If
stockholders fail to ratify the appointment, or, if before the next Annual
Meeting, BDO Limited declines or the Audit Committee terminates the engagement,
or BDO Limited otherwise become unable to serve, the Audit Committee will
appoint other independent accountants whose selection for any period subsequent
to the next Annual Meeting year will be subject to stockholder
ratification.
On
February 10, 2010, the Company dismissed its principal independent accountant,
Morison Cogen, LLP (“MC”) from its engagement with the Company, which dismissal
was effective immediately. MC was engaged by the Company in February
2007. The decision to dismiss MC as the Company’s principal independent
accountant was approved by the Audit Committee of the Company on February 9,
2010.
There
were no disagreements between the Company and MC on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, from the time of MC’s engagement up to the date of dismissal which
disagreements that, if not resolved to MC’s satisfaction, would have caused MC
to make reference to the subject matter of the disagreement in connection with
its report issued in connection with the audit of the Company’s financial
statements. None of the reportable events described under Item
304(a)(1)(v)(A)-(D) of Regulation S-K occurred within the two fiscal years of
the Company ended December 31, 2007 and 2008 and subsequently up to the date of
dismissal except for the following: as described in MC’s annual report dated
March 12, 2009 on the Company’s internal control over financial reporting
included in the Company’s Form 10-K for the year ended December 31, 2008, that
in MC’s opinion the Company had not maintained effective internal control over
financial reporting as of December 31, 2008 based on criteria established in
Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Although the Company’s management agreed with MC’s report
on the point that there was a weakness in the Company’s internal control,
management did not believe the weakness was material and concluded that the
Company’s internal control over financial reporting was effective a of December
31, 2008.
The
Company’s audit committee discussed with MC its opinion that the Company had not
maintained effective internal controls over financial reporting as of December
31, 2008. In addition, the Company has authorized MC to respond fully
to the inquiries of MC’s successor accountant concerning such
opinion.
MC’s
audit report on financial statements for the fiscal year ended December 31, 2008
of the Company contained no adverse opinion or disclaimer of opinion, nor was it
qualified or modified as to uncertainty, audit scope or accounting
principles. MC did not perform an audit of the financial statements
of the Company for the fiscal year ended December 31, 2009.
The
company received a letter from MC addressed to the Securities and
Exchange Commission stating that it concurs with the statements made by the
Company with respect to MC in its Amended Current Report on Form 8-K filed on
March 23, 2010except for the following: as described in MC’s report
dated March 12, 2009 on the Company’s internal control over financial reporting
included in the Company’s Form 10-K for the year ended December 31, 2008, that
in MC’s opinion the Company had not maintained effective internal control over
financial reporting as of December 31, 2008 based on criteria established in
Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
On
February 10, 2010, the Company engaged BDO Limited ("BDO") to serve as its
independent auditor, effective immediately upon the dismissal of
MC. The decision to engage BDO as the Company’s principal independent
accountant was approved by the Audit Committee of the Company on February 9,
2010. During the two fiscal years of the Company ended December 31,
2008 and 2009, and through the date of the BDO’s engagement, the Company did not
consult BDO regarding either: (i) the application of accounting principles to a
specified transaction (either completed or proposed), or the type of audit
opinion that might be rendered on the Company’s financial statements; or (ii)
any matter that was either the subject of a “disagreement” or “reportable event”
within the meaning set forth in Regulation S-K, Item 304 (a)(1)(iv) or
(a)(1)(v).
Services
and Fees of Independent Accountants
No monies
have been paid to BDO during the last two fiscal years. The Aggregate
fees billed to the MC during the last two fiscal years were as
follows:
|
|
|
|
|
|
|
Audit
Fees
|
|
$ |
160,000 |
|
|
$ |
219,376 |
|
Audit
Related Fees
|
|
$ |
4,965 |
|
|
$ |
9,775 |
|
Tax
Fees
|
|
$ |
0 |
|
|
$ |
0 |
|
All
Other Fees
|
|
$ |
0 |
|
|
$ |
0 |
|
Total
|
|
$ |
164,965 |
|
|
$ |
229,1551 |
|
Audit-Related
Fees
This
category consists of services by our independent auditors that are reasonably
related to the performance of the audit or review of our financial statements
and are not reported above under Audit Fees. This category includes accounting
consultations on transaction and proposed transaction related
matters.
We
incurred these fees in connection with registration statements, financing, and
acquisition transaction.
Tax
Fees
The
aggregate fees in each of the last two years for the professional services
rendered by the principal accountant for tax compliance, tax advice and tax
planning were approximately $8,000.
All
Other Fees
There are
no other fees to disclose.
Pre-Approval
of Services
The Audit
Committee appoints the independent accountant each year and pre-approves the
audit services. The Audit Committee chair is authorized to
pre-approve specified non-audit services for fees not exceeding specified
amounts, if he promptly advises the other Audit Committee members of such
approval.
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” RATIFICATION OF
THE APPOINTMENT OF THE INDEPENDENT ACCOUNTANTS.
PROPOSAL
3
APPROVAL
OF GULF RESOURCES, INC. 2007 EQUITY INCENTIVE PLAN, AS AMENDED
At the
annual meeting, the stockholders are being asked to approve and ratify the Gulf
Resources, Inc. 2007 Equity Incentive Plan, as amended (the “2007 Plan”), a copy
of which is attached hereto as Exhibit A. The 2007 Plan was adopted by the board
of directors on February 28, 2007 and amended by the board of directors on April
20, 2010.
The
following table relates to securities underlying our compensation plans as of
December 31, 2009.
Equity
Compensation Plan Information
|
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
|
Weighted-average
exercise price of outstanding options, warrants and
rights
|
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
|
(a)
|
|
(b)
|
|
(c)
|
Equity
compensation plans approved by security holders
|
|
0
|
|
0
|
|
0
|
Equity
compensation plans not approved by security holders
|
|
325,000
|
|
$6.80
|
|
2,175,000
|
Total
|
|
325,000
|
|
$6.80
|
|
2,175,000
|
As of the
date of this proxy statement 2,500,000 shares have been authorized by the board
of directors for issuance under the 2007 Plan.
The
Gulf Resources, Inc. 2007 Equity Incentive Plan
Administration. The 2007 Plan
is administered by the compensation committee of the board of directors, which
consists of three members of the board of directors, each of whom is a
“non-employee director” within the meaning of Rule 16b-3 promulgated under the
Exchange Act and an “outside director” within the meaning of Code Section
162(m). Among other things, the compensation committee has complete discretion,
subject to the express limits of the 2007 Plan, to determine the directors,
employees and independent contractors to be granted an award, the type of award
to be granted, the number of shares of Common Stock subject to each award, the
exercise price of each option and base price of each SAR, the term of each
award, the vesting schedule for an award, whether to accelerate vesting, the
value of the stock, and the required withholding. The compensation committee may
amend, modify or terminate any outstanding award, provided that the
participant’s consent to such action is required if the action would materially
and adversely affect the participant. The compensation committee is also
authorized to construe the award agreements, and may prescribe rules relating to
the 2007 Plan. Notwithstanding the foregoing, the Committee does not have any
authority to grant or modify an award under the 2007 Plan with terms or
conditions that would cause the grant, vesting or exercise to be considered
nonqualified “deferred compensation” subject to Section 409A of the
Code.
Grant of Awards; Shares Available
for Awards. The 2007 Plan provides for the grant of options, SARs,
performance share awards, performance unit awards, distribution equivalent right
awards, restricted stock awards and unrestricted stock awards in an amount equal
to 2,500,000 shares of common stock, to directors, officers, employees and
independent contractors of the Company or its affiliates. If any award expires,
is cancelled, or terminates unexercised or is forfeited, the number of shares
subject thereto is again available for grant under the 2007 Plan.
Currently,
there are 15 employees and directors who would be entitled to receive stock
options and/or restricted shares under the 2007 Plan. Future new hires and
additional consultants would be eligible to participate in the 2007 Plan as
well. The number of stock options and/or restricted shares to be granted to
executives and directors cannot be determined at this time as the grant of stock
options and/or restricted shares is dependent upon various factors such as
hiring requirements and job performance.
Stock Options. Options
granted under the 2007 Plan may be either “incentive stock options” (“ISOs”),
which are intended to meet the requirements for special federal income tax
treatment under the Code, or “nonqualified stock options” (“NQSOs”). Options may
be granted on such terms and conditions as the Committee may
determine.
Stock Appreciation
Rights. A SAR
entitles the participant, upon exercise, to receive an amount, in cash or stock
or a combination thereof, equal to the increase in the fair market value of the
underlying stock between the date of grant and the date of exercise. SARs may be
granted in tandem with, or independently of, options granted under the 2007
Plan. A SAR granted in tandem with an option (i) is exercisable only at such
times, and to the extent, that the related option is exercisable in accordance
with the procedure for exercise of the related option; (ii) terminates upon
termination or exercise of the related option (likewise, the option granted in
tandem with a SAR terminates upon exercise of the SAR); (iii) is transferable
only with the related option; and (iv) if the related option is an ISO, may be
exercised only when the value of the stock subject to the option exceeds the
exercise price of the option. A SAR that is not granted in tandem with an option
is exercisable at such times as the Committee may specify.
Performance Shares or Performance
Unit Awards.
Performance share or performance unit awards entitle the participant to
receive cash or shares of stock upon attaining specified performance goals. In
the case of performance units, the right to acquire the units is denominated in
cash values.
Distribution Equivalent Right
Awards. A
distribution equivalent right award under the 2007 Plan entitles the participant
to receive bookkeeping credits, cash payments and/or common stock distributions
equal in amount to the distributions that would have been made to the
participant had the participant held a specified number of shares of the
Company’s common stock during the period the participant held the distribution
equivalent right. A distribution equivalent right may be awarded under the 2007
Plan as a component of another award, where, if so awarded, such distribution
equivalent right will expire or be forfeited by the participant under the same
conditions as under such other award.
Restricted Stock Awards or
Restricted Stock Unit Award. A restricted stock award
is a grant or sale of stock to the participant, subject to the Company’s right
to repurchase all or part of the shares at their purchase price (or to require
forfeiture of such shares if purchased at no cost) in the event that conditions
specified by the Committee in the award are not satisfied prior to the end of
the time period during which the shares subject to the award may be repurchased
by or forfeited to the Company. A restricted stock unit entitles the holder to
receive a cash payment equal to the fair market value of a share of Common
Stock, or one (1) share of Common Stock for each restricted stock unit subject
to such restricted stock unit award, if the holder satisfies the applicable
vesting requirement.
Unrestricted Stock
Awards. An
unrestricted stock award under the 2007 Plan is a grant or sale of the Company’s
common stock to the participant that is not subject to transfer, forfeiture or
other restrictions, in consideration for past services rendered to the Company
or an affiliate or for other valid consideration.
Change-in-Control
Provisions. In
connection with the grant of an award, the compensation committee may provide
that, in the event of a change in control, any outstanding awards that are
unexercisable or otherwise unvested will become fully vested and immediately
exercisable.
Amendment and
Termination. The compensation committee
may adopt, amend and rescind rules relating to the administration of the 2007
Plan, and amend, suspend or terminate the 2007 Plan, but no amendment will be
made that adversely affects in a material manner any rights of the holder of any
award without the holder’s consent, other than amendments that are necessary to
permit the granting of awards in compliance with applicable laws. We have
attempted to structure the 2007 Plan so that remuneration attributable to stock
options and other awards will not be subject to a deduction limitation contained
in Section 162(m) of the Code.
Certain
Federal Income Tax Consequences of the 2007 Plan
The
following is a general summary of the federal income tax consequences under
current tax law of options, stock appreciation rights and restricted stock. It
does not purport to cover all of the special rules, including special rules
relating to participants subject to Section 16(b) of the Exchange Act and the
exercise of an option with previously-acquired shares, or the state or local
income or other tax consequences inherent in the ownership and exercise of stock
options and the ownership and disposition of the underlying shares or the
ownership and disposition of restricted stock.
A
participant does not recognize taxable income upon the grant of NQSO or an ISO.
Upon the exercise of a NQSO, the participant recognizes ordinary income in an
amount equal to the excess, if any, of the fair market value of the shares
acquired on the date of exercise over the exercise price thereof, and the
Company will generally be entitled to a deduction for such amount at that time.
If the participant later sells shares acquired pursuant to the exercise of a
NQSO, the participant recognizes long-term or short-term capital gain or loss,
depending on the period for which the shares were held. Long-term capital gain
is generally subject to more favorable tax treatment than ordinary income or
short-term capital gain.
Upon the
exercise of an ISO, the participant does not recognize taxable income. If the
participant disposes of the shares acquired pursuant to the exercise of an ISO
more than two years after the date of grant and more than one year after the
transfer of the shares to the participant, the participant recognizes long-term
capital gain or loss and the Company is not be entitled to a deduction. However,
if the participant disposes of such shares within the required holding period,
all or a portion of the gain is treated as ordinary income and the Company is
generally entitled to deduct such amount.
In
addition to the tax consequences described above, a participant may be subject
to the alternative minimum tax, which is payable to the extent it exceeds the
participant’s regular tax. For this purpose, upon the exercise of an ISO, the
excess of the fair market value of the shares over the exercise price therefore
is an adjustment which increases alternative minimum taxable income. In
addition, the participant's basis in such shares is increased by such excess for
purposes of computing the gain or loss on the disposition of the shares for
alternative minimum tax purposes. If a participant is required to pay an
alternative minimum tax, the amount of such tax which is attributable to
deferral preferences (including the incentive option adjustment) is allowed as a
credit against the participant's regular tax liability in subsequent years. To
the extent the credit is not used, it is carried forward.
A
participant does not recognize income upon the grant of an SAR. The participant
has ordinary compensation income upon exercise of the SAR equal to the increase
in the value of the underlying shares, and the Company will generally be
entitled to a deduction for such amount.
A
participant does not recognize income on the receipt of a performance share
award until the shares are received. At such time, the participant recognizes
ordinary compensation income equal to the excess, if any, of the fair market
value of the shares over any amount paid for the shares, and the Company is
generally entitled to deduct such amount at such time.
A
participant who receives a grant of restricted stock generally recognizes
ordinary compensation income equal to the excess, if any of fair market value of
the stock at the time the restriction lapses over any amount paid for the
shares. Alternatively, the participant may elect to be taxed on the value at the
time of grant. The Company is generally entitled to a deduction at the same time
and in the same amount as the income required to be included by the
participant.
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE 2007
PLAN.
OTHER
INFORMATION
Company’s
2009 annual report on Form 10-K, excluding exhibits, will be mailed without
charge to any stockholder entitled to vote at the meeting, upon written request
to Naihui Miao, COO and Secretary, Gulf Resources, Inc., 99 Wenchang Road,
Chenming Industrial Park, Shouguang City, Shandong, People’s Republic of China
262714..
Important
Notice Regarding Availability of Proxy Materials
This
proxy statement and Company’s 2009 annual report are available at Company’s
website, www.gulfresourcesinc.cn.
Other
Matters to Be Presented at the Annual Meeting
Company
did not have notice, as of March 18, 2010, of any matter to be presented for
action at the Annual Meeting, except as discussed in this proxy
statement. The persons authorized by the accompanying form of proxy
will vote in their discretion as to any other matter that comes before the
Annual Meeting.
Stockholder
Proposals for Next Annual Meeting
Stockholder
proposals intended to be included in the proxy statement for the next annual
meeting must be received by Company by January 3, 2011. The persons
authorized by the form of proxy to be sent in connection with the solicitation
of proxies on behalf of Company’s board of directors for next year’s annual
meeting will vote in their discretion as to any matter of which Company has not
received notice by March 18, 2011.
By Order
of the Board of Directors,
/s/ Ming
Yang
Ming
Yang
Chairman
of the Board of Directors
Dated:
April 29, 2010
Exhibit
“A”
AMENDED
AND RESTATED
GULF
RESOURCES, INC.
2007
EQUITY INCENTIVE PLAN
1. NAME.
The name
of the Plan is the “GULF RESOURCES, INC. 2007 EQUITY INCENTIVE
PLAN.”
2. PURPOSE.
The
purpose of this Plan is to provide incentives to attract, retain and motivate
eligible persons whose presence and potential contributions are important to the
success of the Company, its Parent and its Subsidiaries (if any), by offering
them an opportunity to participate in the Company’s future performance through
awards of Options, Restricted Stock and Stock Awards. Capitalized terms not
defined in the text are defined in Section 3.
3. DEFINITIONS. As
used in the Plan, the following terms shall have the following
meanings:
“AWARD”
means any award under the Plan, including any Option, Restricted Stock or Stock
Award.
“AWARD
AGREEMENT” means, with respect to each Award, the signed written agreement
between the Company and the Participant setting forth the terms and conditions
of the Award.
“BOARD”
means the Board of Directors of the Company.
“CAUSE”
means (i) if the Participant is a party to an employment or similar agreement
with the Company, Parent or a Subsidiary which agreement defines “Cause” (or a
similar term) therein, “Cause” shall have the same meaning as provided for in
such agreement, or (ii) for a Participant who is not a party to such an
agreement, “Cause” shall mean termination by the Company, Parent or a Subsidiary
of the employment (or other service relationship) of the Participant by reason
of the Participant’s (A) intentional failure to perform reasonably assigned
duties, (B) dishonesty or willful misconduct in the performance of the
Participant’s duties, (C) involvement in a transaction which is materially
adverse to the Company, Parent or a Subsidiary, (D) breach of fiduciary duty
involving personal profit, (E) willful violation of any law, rule, regulation or
court order (other than misdemeanor traffic violations and misdemeanors not
involving misuse or misappropriation of money or property), or (F) commission of
an act of fraud or intentional misappropriation or conversion of any asset or
opportunity of the Company, in each case as determined in good faith by the
Board, the determination of which shall be final, conclusive and binding on all
parties.
“CODE”
means the Internal Revenue Code of 1986, as amended.
“COMMITTEE”
means the Board.
“COMMON
STOCK” means the Company’s common stock, par value $.001 per share.
“COMPANY”
means GULF RESOURCES, INC., a Delaware corporation, or any successor
corporation.
“DISABILITY”
means the inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months.
“EXCHANGE
ACT” means the Securities Exchange Act of 1934, as amended.
“EXERCISE
PRICE” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option. The per Share Exercise Price
under an Option shall equal or exceed the Fair Market Value of a Share on the
date of the grant of such Option.
“FAIR
MARKET VALUE” means, as of any date, the value of a share of the Common Stock
determined as follows:
(a) if
the Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the date of determination on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading as reported in The Wall Street Journal;
(b) if
the Common Stock is quoted on the NASDAQ National Market, its closing price on
the NASDAQ National Market on the date of determination as reported in The Wall
Street Journal;
(c) if
the Common Stock is publicly traded but is not listed or admitted to trading on
a national securities exchange, the average of the closing bid and asked prices
on the date of determination (or if there are not bid and closing prices on the
date of termination on the date next preceding the determination date for which
there are bid and closing prices), as reported in The Wall Street
Journal;
(d) the
price per Share at which Shares of the Common Stock are initially offered for
sale to the public by the Company’s underwriters in the initial public offering
of the Common Stock pursuant to a registration statement filed with the SEC
under the Securities Act if the Award is made on the effective date of such
registration statement; or
(e) if
none of the foregoing is applicable, by the Committee in good
faith.
“INSIDER”
means an officer or director of the Company or any other person whose
transactions in the Common Stock are subject to Section 16 of the Exchange
Act.
“OPTION”
means an Award of an option to purchase Shares pursuant to Section
7.
“PARENT”
means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the
Company owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
“PARTICIPANT”
means a person who receives an Award under the Plan.
“PERFORMANCE
FACTORS” means the factors selected by the Committee, in its sole and absolute
discretion, from among the following measures to determine whether the
performance goals applicable to Awards, if any, have been
satisfied:
Net
revenue and/or net revenue growth;
|
(a)
|
Earnings
before income taxes and amortization and/or earnings before income taxes
and amortization growth;
|
|
(b)
|
Operating
income and/or operating income
growth;
|
|
(c)
|
Net
income and/or net income growth;
|
|
(d)
|
Earnings
per share and/or earnings per share
growth;
|
|
(e)
|
Total
stockholder return and/or total stockholder return
growth;
|
|
(g)
|
Operating
cash flow return on income;
|
|
(h)
|
Adjusted
operating cash flow return on
income;
|
|
(i)
|
Economic
value added; and
|
|
(j)
|
Individual
business objectives.
|
“PERFORMANCE
PERIOD” means the period of service determined by the Committee, not to exceed
five years, during which years of service or performance is to be measured for
purposes of Stock Awards.
“PLAN”
means this Gulf Resources, Inc. 2007 Equity Incentive Plan, as amended from time
to time.
“SEC”
means the U.S. Securities and Exchange Commission.
“SECURITIES
ACT” means the Securities Act of 1933, as amended.
“SHARES”
means shares of Common Stock reserved for issuance under the Plan, as adjusted
pursuant to Sections 4 and 19, and any successor security.
“STOCK
AWARD” means an Award of Shares pursuant to Section 9.
“SUBSIDIARY”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
“TERMINATION”
or “TERMINATED” means, for purposes of the Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an
employee, officer, director, consultant, independent contractor, or advisor to
the Company, Parent or a Subsidiary. An employee will not be deemed to have
ceased to provide services in the case of (i) sick leave, (ii) military leave,
or (iii) any other leave of absence approved by the Company, Parent or
Subsidiary, as applicable, provided that such leave is for a period of not more
than ninety (90) days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to a
formal policy adopted from time to time by the Company, Parent or a Subsidiary,
as applicable, and issued and promulgated to employees in writing. In the case
of any employee on an approved leave of absence, the Committee may make such
provisions respecting suspension of vesting of the Award while on leave from the
employ of the Company, Parent or a Subsidiary, as applicable, as it may deem
appropriate, except that in no event may an Option be exercised after the
expiration of the term set forth in the Option agreement. The
Committee shall have sole discretion to determine whether a Participant has
ceased to provide services for the Company, Parent or a Subsidiary, and the
effective date on which the Participant ceased to provide such services (the
“Termination Date”).
4. SHARES
SUBJECT TO THE PLAN.
4.1. Number
of Shares Available. Subject to Sections 4.2 and 19, the total aggregate number
of Shares initially reserved and available for grant and issuance pursuant to
the Plan shall be Five Million (5,000,000) Shares and shall include Shares that
are subject to: (a) issuance upon exercise of an Option but cease to be subject
to such Option for any reason other than exercise of such Option; (b) an Award
granted hereunder but forfeited or repurchased by the Company at the original
issue price; and (c) an Award that otherwise terminates without Shares being
issued. At all times the Company shall reserve and keep available a sufficient
number of Shares as shall be required to satisfy the requirements of all
outstanding Options granted under the Plan and all other outstanding but
unvested Awards granted under the Plan.
4.2. Adjustment
of Shares. In the event that the number of outstanding Shares shall change on
account of a stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in the capital
structure of the Company without consideration, then (a) the number of Shares
reserved for issuance under the Plan, (b) the per Share Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards shall be proportionately adjusted by the
Board, subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided, however, that
fractions of a Share shall not be issued but shall either be replaced by a cash
payment equal to the Fair Market Value of such fraction of a Share or shall
rounded up to the nearest whole Share, as determined by the
Committee.
5. ELIGIBILITY.
ISOs (as
defined in Section 7 below) may be granted solely to employees (including
officers and directors who are also employees) of the Company, Parent or a
Subsidiary. Options may be granted solely to employees, officers,
nonemployee directors, consultants, independent contractors and advisors of or
to the Company or a Subsidiary. All other Awards may be granted to
employees, officers, nonemployee directors, consultants, independent contractors
and advisors of or to the Company, Parent or a Subsidiary. In all
cases, for purposes of eligibility for Plan Awards, no consultant, contractor or
advisor services for the Company, Parent or a Subsidiary may be in connection
with the offer and sale of securities in a capital-raising transaction. A person
may be granted more than one Award under the Plan.
6. ADMINISTRATION.
6.1. Committee
Authority. The Plan shall be administered by the Committee or by the Board
acting as the Committee. Subject to the general purposes, terms and conditions
of the Plan, and to the direction of the Board, the Committee shall have full
power to implement and carry out the Plan. Without limitation, the Committee
shall have the authority to:
|
6.1.1
|
construe
and interpret the Plan, any Award Agreement and any other agreement or
document executed pursuant to the
Plan;
|
|
6.1.2
|
prescribe,
amend and rescind rules and regulations relating to the Plan or any
Award;
|
|
6.1.3
|
select
persons to receive Awards from those eligible pursuant to Section
5;
|
|
6.1.4
|
determine
the forms and terms of Awards;
|
|
6.1.5
|
determine
the number of Shares or other consideration subject to
Awards;
|
|
6.1.6
|
determine
whether Awards will be granted singly, in combination with, in tandem
with, in replacement of, or as alternatives to, other Awards under the
Plan or any other incentive or compensation plan of the Company, Parent or
a Subsidiary;
|
|
6.1.7
|
grant
waivers of Plan or Award
conditions;
|
|
6.1.8
|
determine
the vesting, exercisability and payment requirements and terms under
Awards;
|
|
6.1.9
|
correct
any defect, supply any omission or reconcile any inconsistency in the
Plan, any Award or any Award
Agreement;
|
|
6.1.10
|
determine
whether an Award has been earned;
and
|
|
6.1.11
|
make
all other determinations necessary or advisable for the administration of
the Plan.
|
6.2. Committee
Discretion. Any determination made by the Committee with respect to any Award
shall be made at the time of grant of the Award or, unless in contravention of
any express term of the Plan or Award, at any later time, and such determination
shall be final and binding on the Company and on all persons having an interest
in any Award under the Plan. The Committee may delegate to one or more officers
of the Company the authority to grant an Award under the Plan to Participants
who are not Insiders.
7. OPTIONS.
The
Committee may grant Options to eligible persons (pursuant to the requirements of
Section 5) and shall determine whether such Options shall be Incentive Stock
Options within the meaning of the Code (“ISOs”) or Nonqualified Stock Options
(“NQSOs”), the number of Shares subject to the Option, the per Share Exercise
Price under the Option, the period during which the Option may be exercised, and
all other terms and conditions of the Option, subject to the
following:
7.1. Form
of Option Grant. Each Option granted under the Plan shall be evidenced by an
Award Agreement which shall expressly identify the Option as an ISO or an NQSO
(a “Stock Option Agreement”), and will be in such form and contain such
provisions (which need not be the same for each Participant) as the Committee
may from time to time approve, and which shall comply with and be subject to the
terms and conditions of the Plan.
7.2. Date
of Grant. The date of grant of an Option shall be the date on which the
Committee makes the determination to grant and sets all the material terms of
such Option, unless otherwise specified by the Committee. The Stock Option
Agreement and a copy of the Plan shall be delivered to the Participant within a
reasonable time after the granting of the Option, and shall be dated as of the
Option grant date.
7.3. Exercise
Period. Options may be exercisable within the times or upon the events
determined by the Committee as set forth in the Stock Option Agreement governing
such Option; provided, however, that no
Option shall be exercisable after the expiration of ten (10) years from the date
the Option is granted; and provided further that
no ISO granted to a person who directly or by attribution owns more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, Parent or a Subsidiary (a “Ten Percent Stockholder”) shall be
exercisable after the expiration of five (5) years from the date the ISO is
granted. The Committee also may provide for Options to become exercisable at one
time or from time to time, periodically or otherwise, in such number of Shares
or percentage of Shares as the Committee determines; provided, however, that in all
events a Participant shall be entitled to exercise an Option at the rate of at
least twenty percent (20%) per year over five (5) years from the date of grant,
subject to reasonable conditions such as continued employment or service; and
provided further that an
Option granted to a Participant who is an officer, director or consultant may
become fully exercisable, subject to reasonable conditions such as continued
employment or service, at any time or during any period established by the
Company.
7.4. Exercise
Price. The per Share Exercise Price under an Option shall be determined by the
Committee when the Option is granted and may be not less than eighty-five
percent (85%) of the Fair Market Value of a Share on the date of grant of the
Option; provided that the per Share
Exercise Price under an Option which is intended to be an ISO may not be less
than one hundred percent (100%) of the Fair Market Value of a Share on the date
of grant of the Option; provided further that
the per Share Exercise Price under an Option which is intended to be an
ISO and which is granted to a Ten Percent Stockholder shall not be less than one
hundred ten percent (110%) of the Fair Market Value of a Share on the date of
grant of the Option. Payment for the Shares purchased pursuant to the exercise
of an Option shall be made in accordance with Section 10.
7.5. Method
of Exercise. Options may be exercised only by delivery to the Company of a
written stock option exercise agreement (an “Exercise Agreement”) in a form
approved by the Committee (which need not be the same for each Participant),
stating the number of Shares being purchased, the restrictions imposed on the
Shares purchased under such Exercise Agreement, if any, and such representations
and agreements regarding the Participant’s investment intent and access to
information and other matters, if any, as may be required or desirable by the
Company to comply with applicable securities laws, together with payment in full
of the Exercise Price for the number of Shares for which the Option is being
exercised.
7.6. Termination.
Notwithstanding the exercise periods set forth in the Stock Option Agreement,
exercise of an Option shall always be subject to the following:
|
7.6.1
|
If
the Participant’s service is Terminated for any reason other than the
Participant’s death or Disability, then the Participant may exercise such
Participant’s Options only to the extent that such Options would have been
exercisable upon the Termination Date no later than three (3) months after
the Termination Date (or such longer time period not exceeding five (5)
years as may be determined by the Committee, with any exercise beyond
three (3) months after the Termination Date resulting in the Option, if it
was intended at grant to be an ISO, thereupon converting automatically to
an NQSO).
|
|
7.6.2
|
If
the Participant’s service is Terminated because of the Participant’s death
or Disability (or the Participant dies within three (3) months after a
Termination other than for Cause or because of Participant’s Disability),
then the Participant’s Options may be exercised only to the extent that
such Options would have been exercisable by the Participant on the
Termination Date and must be exercised by the Participant (or the
Participant’s legal representative) no later than twelve (12) months after
the Termination Date (or such longer time period not exceeding five (5)
years as may be determined by the Committee, with any such exercise beyond
twelve (12) months after the Termination Date, resulting in the Option, if
it was intended at grant to be an ISO, thereupon converting automatically
to an NQSO).
|
|
7.6.3
|
Notwithstanding
the provisions in Section 7.6(a), if the Participant’s service for the
Company or a Subsidiary is Terminated for Cause, neither the Participant,
the Participant’s estate nor such other person who may then hold the
Option shall be entitled to exercise the Option with respect to any Shares
whatsoever, after Termination, regardless of whether or not after
Termination the Participant may receive payment from the Company or a
Subsidiary for vacation pay, for services rendered prior to Termination,
for services rendered for the day on which Termination occurs, for salary
in lieu of notice, or for any other benefits. For the purpose of this
Section 7.6.3, Termination shall be deemed to occur on the date when the
Company or Subsidiary dispatches notice or advises the Participant that
his service is Terminated.
|
7.7. Limitations
on Exercise. The Committee may specify a reasonable minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum
number shall not prevent the Participant from exercising the Option for the full
number of Shares for which it is then exercisable.
7.8. Limitations
on ISOs. The aggregate Fair Market Value (determined as of the date of grant) of
Shares with respect to which an Option that is intended to be an ISO are
exercisable for the first time by a Participant during any calendar year (under
this Plan or under any other incentive stock option plan of the Company, Parent
or a Subsidiary) shall not exceed One Hundred Thousand Dollars ($100,000). If
the Fair Market Value of Shares on the date of grant with respect to which an
Option that is intended to be an ISO are exercisable for the first time by a
Participant during any calendar year exceeds One Hundred Thousand Dollars
($100,000), then the portion of the Option for the first One Hundred Thousand
Dollars ($100,000) worth of Shares to become exercisable in such calendar year
shall continue to be an ISO, and the portion of the Option for the amount in
excess of One Hundred Thousand Dollars ($100,000) that first becomes exercisable
in that calendar year shall thereupon convert automatically to an NQSO. In the
event that the Code or the regulations promulgated thereunder are amended after
the Effective Date to provide for a different limit on the Fair Market Value of
Shares permitted to be subject to ISOs, such different limit shall be
automatically incorporated herein and shall apply to any Options granted after
the effective date of such amendment with the intent of being ISOs.
7.9. Modification,
Extension or Renewal. The Committee may modify, extend or renew outstanding
Options and authorize the grant of new Options in substitution therefore; provided that any
such action may not, without the written consent of the applicable Participant,
impair any of such Participant’s rights under any Option previously granted. Any
outstanding Option that is intended to be an ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with the requirements
of Section 424(h) of the Code.
8. RESTRICTED
STOCK.
A
Restricted Stock Award is an offer by the Company to sell or award to an
eligible person Shares that are subject to transfer restrictions. The Committee
will determine to whom an offer will be made, the number of Shares the person
may purchase, the price, if any, to be paid (the “Purchase Price”), the transfer
restrictions to which the Shares shall be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:
8.1. Form
of Restricted Stock Award. All purchases under a Restricted Stock Award made
pursuant to the Plan shall be evidenced by an Award Agreement (a “Restricted
Stock Agreement”) which shall be in such form (which need not be the same for
each Participant) as the Committee shall from time to time approve, and shall
comply with and be subject to the terms and conditions of the Plan. The offer or
award of Restricted Stock shall be accepted by the Participant’s execution and
delivery of the Restricted Stock Agreement and full payment, if a sale, for the
Shares to the Company within thirty (30) days from the date the Restricted Stock
Agreement is delivered to the person. If such person does not execute and
deliver the Restricted Stock Agreement along with full payment, if a sale, for
the Shares to the Company within thirty (30) days, then the offer will
terminate, unless otherwise extended by the Committee.
8.2. Purchase
Price. The Purchase Price of Shares sold pursuant to a Restricted Stock Award,
if any, shall be determined by the Committee on the date the Restricted Stock
Award is made and shall not be less than one hundred percent (100%) of the Fair
Market Value of the Shares on the award date. Payment of the Purchase Price, if
any, shall be made in accordance with Section 10.
8.3. Terms
of Restricted Stock Awards. Restricted Stock Awards shall be subject to such
transfer restrictions as the Committee shall impose. These transfer restrictions
may be based upon completion of a specified number of years of employment or
service with the Company, Parent or a Subsidiary, or upon completion of the
performance goals as set out in advance in the Participant’s individual
Restricted Stock Agreement. Restricted Stock Awards may vary from Participant to
Participant and between groups of Participants. Prior to the grant of a
Restricted Stock Award, the Committee shall: (a) determine the nature, length
and starting date of any Performance Period for the Restricted Stock Award; (b)
select from among the Performance Factors to be used to measure performance
goals, if any; and (c) determine the number of Shares awarded to the
Participant. Prior to the payment of any Restricted Stock Award, the Committee
shall determine the extent to which such Restricted Stock Award has been earned.
Performance Periods may overlap and Participants may participate simultaneously
with respect to Restricted Stock Awards that are subject to different
Performance Periods and have different performance goals and other
criteria.
8.4. Termination
During Performance Period. If a Participant who has an outstanding Restricted
Stock Award is Terminated during a Performance Period for any reason, then such
Participant shall be entitled to payment (whether in Shares, cash or otherwise)
with respect to such Restricted Stock Award only to the extent earned as of the
date of Termination in accordance with the Restricted Stock Agreement, unless
the Committee determines otherwise.
9. STOCK
AWARDS.
9.1. Awards
of Stock. A Stock Award is an award of Shares for services rendered to the
Company, Parent or a Subsidiary. A Stock Award shall be awarded pursuant to an
Award Agreement (a “Stock Award Agreement”) that shall be in such form (which
need not be the same for each Participant) as the Committee shall from time to
time approve, and shall comply with and be subject to the terms and conditions
of the Plan. A Stock Award may be awarded upon satisfaction of such performance
goals as are set out in advance in the Participant’s individual Stock Award
Agreement (a “Performance Stock Award Agreement”) that will be in such form
(which need not be the same for each Participant) as the Committee shall from
time to time approve, and shall comply with and be subject to the terms and
conditions of the Plan. Stock Awards may vary from Participant to Participant
and between groups of Participants, and may be based upon the achievements or
performance of the Company, Parent or a Subsidiary and/or individual performance
factors or upon such other criteria as the Committee may determine.
9.2. Terms
of Stock Awards. The Committee shall determine the number of Shares to be
awarded to the Participant. If the Stock Award is being earned upon the
satisfaction of performance goals pursuant to a Performance Stock Award
Agreement, then the Committee shall: (a) determine the nature, length and
starting date of any Performance Period for each Stock Award; (b) select from
among the Performance Factors to be used to measure the performance, if any; and
(c) determine the number of Shares that may be awarded to the Participant. Prior
to the payment of any Stock Award, the Committee shall determine the extent to
which such Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Awards that
are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with
such performance goals and criteria as shall be determined by the Committee. The
Committee may adjust the performance goals applicable to the Stock Awards to
take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.
10. PAYMENT
FOR SHARE PURCHASES. PAYMENT FOR SHARES PURCHASED PURSUANT TO THE PLAN MAY BE
MADE IN CASH (BY CHECK) OR, WHERE EXPRESSLY APPROVED FOR THE PARTICIPANT BY THE
COMMITTEE AND WHERE PERMITTED BY LAW:
10.1. by
cancellation of indebtedness of the Company to the Participant;
10.2. by
surrender of shares that either: (1) have been owned by the Participant for more
than six (6) months and have been paid for within the meaning of SEC Rule 144
(and, if such shares were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such shares); or (2) were
obtained by the Participant in the public market;
10.3. by
waiver of compensation due or accrued to the Participant for services
rendered;
10.4. with
respect solely to purchases upon exercise of an Option, and provided that a
public market for the Common Stock exists:
|
10.4.1
|
through
a “same day sale” commitment from the Participant and a broker-dealer that
is a member of the National Association of Securities Dealers (an “NASD
Dealer”) whereby the Participant irrevocably elects to exercise the Option
and to sell a portion of the Shares so purchased to pay the Exercise
Price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the Company;
or
|
|
10.4.2
|
through
a “margin” commitment from the Participant and a NASD Dealer whereby the
Participant irrevocably elects to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer in a margin account as security for
a loan from the NASD Dealer in the amount of the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company;
or
|
|
10.4.3
|
through
a cashless exercise, whereby the number of shares to be issued upon
exercise of the Option shall be reduced by that number of shares having an
aggregate Fair Market Value equal to the exercise price as of the date of
exercise; or
|
|
10.4.4
|
by
any combination of the foregoing.
|
11. WITHHOLDING
TAXES.
11.1. Withholding
Generally. Whenever Shares are to be issued in satisfaction of Awards granted
under the Plan, the Company may require the Participant to remit to the Company
an amount sufficient to satisfy any applicable federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such Shares. Whenever under the Plan payments in satisfaction
of Awards are to be made in cash, such payments shall be net of an amount
sufficient to satisfy any applicable federal, state, and local withholding tax
requirements.
11.2. Stock
Withholding. When, under applicable tax laws, a Participant incurs tax liability
in connection with the exercise or vesting of any Award that is subject to tax
withholding and the Participant is obligated to pay the Company the amount
required to be withheld, the Committee may allow the Participant to satisfy the
minimum withholding tax obligation by electing to have the Company withhold from
the Shares to be issued pursuant to the Award that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose shall be made in accordance with the requirements established by the
Committee and shall be in writing in a form acceptable to the
Committee.
12. PRIVILEGES
OF STOCK OWNERSHIP.
No
Participant shall have any of the rights of a stockholder with respect to any
Shares until the Shares are issued to the Participant. After Shares are issued
to the Participant, the Participant shall be a stockholder and shall have all
the rights of a stockholder with respect to such Shares, including the right to
vote and receive all dividends or other distributions made or paid with respect
to such Shares; provided, that if
such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company shall be subject to the same
transfer restrictions as the Restricted Stock.
13. NON-TRANSFERABILITY
OF AWARDS.
13.1. Awards
of Stock and Restricted Stock granted under the Plan, and any interest therein,
shall not be transferable or assignable by the Participant, and may not be made
subject to execution, attachment or similar process, other than by will or by
the laws of descent and distribution. Awards of Options granted under the Plan,
and any interest therein, shall not be transferable or assignable by the
Participant, and may not be made subject to execution, attachment or similar
process, other than by will or by the laws of descent and distribution, by
instrument to an inter vivos or testamentary trust in which the Options are to
be passed to beneficiaries upon the death of the trustor, or by gift to a member
of the Participant’s “immediate family,” as that term is defined in 17 C.F.R.
240.16a-l(e). During the lifetime of the Participant an Award shall be
exercisable solely by the Participant. During the lifetime of the Participant,
any elections with respect to an Award may be made only by the Participant
unless otherwise determined by the Committee and set forth in the Award
Agreement.
13.2. The
restrictions under this Section 13 shall cease to apply to Shares received as
part of a Stock Award or Restricted Stock Award under the Plan at the time
ownership of such Shares vests in the recipient of the Award. Similarly, said
restrictions shall not apply to Shares received upon the exercise of vested
Options.
14. CERTIFICATES.
All
certificates for Shares or other securities delivered under the Plan shall be
subject to such stop transfer orders, legends and other restrictions as the
Committee shall deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.
15. ESCROW;
PLEDGE OF SHARES.
To
enforce any transfer restrictions in connection with a Participant’s Shares, the
Committee may require the Participant to deposit all certificates representing
Shares, together with stock powers or other instruments of transfer approved by
the Committee appropriately endorsed in blank, with the Company or an agent
designated by the Company to hold in escrow until such transfer restrictions
have lapsed or terminated, and the Committee shall cause a legend or legends
referencing such transfer restrictions to be placed on the certificates. Any
Participant who is permitted to execute a promissory note as partial or full
consideration for the purchase of Shares under the Plan shall be required to
pledge and deposit with the Company all or part of the Shares so purchased as
collateral to secure the payment of the Participant’s obligation to the Company
under the promissory note; provided, however, that the
Committee may require or accept other or additional forms of collateral to
secure the payment of such obligation and, in any event, the Company shall have
full recourse against the Participant under the promissory note notwithstanding
any pledge of the Participant’s Shares or other collateral. In connection with
any pledge of Shares, a Participant shall be required to execute and deliver a
written pledge agreement in such form as the Committee shall from time to time
approve. The Shares purchased with the promissory note shall be proportionately
released from the pledge on a pro rata basis as the payments under the
promissory note are made.
16. EXCHANGE
OF AWARDS.
The
Committee may, at any time or from time to time, authorize the Company, with the
consent of the respective Participants, to issue new Awards in exchange for the
surrender and cancellation of any or all outstanding Awards.
17. SECURITIES
LAW AND OTHER REGULATORY COMPLIANCE.
An Award
shall not be effective unless such Award is in compliance with all applicable
federal and state securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or quoted, as they are in effect on the
date of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in the Plan, the Company shall have no
obligation to issue or deliver certificates for Shares under the Plan prior to:
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and/or (b) completion of any registration
or other qualification of such Shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or
advisable. The Company shall be under no obligation to register the Shares with
the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company shall have no liability for any inability or failure to
do so.
18. NO
OBLIGATION TO EMPLOY OR CONTINUE SERVICE.
Nothing
in the Plan or any Award granted under the Plan will confer or be deemed to
confer on any Participant any right to continue in the employ or service of, or
to continue any other relationship with, the Company, Parent or any Subsidiary,
or limit in any way the right of the Company, Parent or any Subsidiary to
terminate a Participant’s employment, service or other relationship at any time,
with or without Cause.
19. CORPORATE
TRANSACTIONS.
19.1. Assumption
or Replacement of Awards by Successor. In the event of (a) a dissolution or
liquidation of the Company, (b) a merger or consolidation in which the Company
is not the surviving corporation (other than a merger or consolidation with a
wholly-owned Subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in
the stockholders of the Company or their relative stock holdings and the Awards
granted under this Plan are assumed, converted or replaced by the successor
corporation, which assumption shall be binding on all Participants), (c) a
merger in which the Company is the surviving corporation but after which the
stockholders of the Company immediately prior to such merger (other than any
stockholder that merges, or which owns or controls another corporation that
merges, with the Company in such merger) cease to own their shares or other
equity interest in the Company, (d) the sale of substantially all of the assets
of the Company, or (e) the acquisition, sale, or transfer of more than fifty
percent (50%) of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement shall be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the awards). The successor
corporation may also issue, in place of outstanding Shares held by the
Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Section 19.1, such
Awards shall expire on such transaction at such time and on such conditions as
the Committee shall determine. Notwithstanding anything in the Plan to the
contrary, the Committee may provide that the vesting of any or all Awards
granted pursuant to the Plan will accelerate upon a transaction described in
this Section 19. If the Committee exercises such discretion with respect to
Options, such Options will become exercisable in full prior to the consummation
of such event at such time and on such conditions as the Committee determines,
and if such Options are not exercised prior to the consummation of the corporate
transaction, they shall terminate at such time as determined by the
Committee.
19.2. Other
Treatment of Awards. Subject to any greater rights granted to Participants under
the foregoing provisions of this Section 19, in the event of the occurrence of
any transaction described in Section 19.1, any then outstanding Awards shall be
treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation, or sale of assets.
20. ADOPTION
AND EFFECTIVE DATE.
This 2007
Equity Incentive Plan is effective as of February 28, 2007, the date it was
adopted by the Board. This amendment and restatement of the Plan is
effective as of January 1, 2008.
21. STOCKHOLDER
APPROVAL.
The Plan
shall be approved by the stockholders of the Company within twelve (12) months
before or after the date the Plan is adopted by the Company.
22. GOVERNING
LAW.
The Plan
and all agreements hereunder shall be governed by and construed in accordance
with the laws of the State of Delaware.
23. AMENDMENT
OR TERMINATION OF PLAN.
The Board
may at any time terminate or amend the Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be executed
pursuant to the Plan; provided, however, that the
Board shall not, without the approval of the stockholders of the Company, amend
the Plan in any manner that requires such stockholder approval under the Code,
if applicable, or by any stock exchange or market on which the Common Stock is
listed for trading. Notwithstanding the foregoing, no amendment or
termination of the Plan shall adversely affect any Participant’s entitlements to
a previously granted Award, unless the Participant consents thereto in
writing.
24. NONEXCLUSIVITY
OF PLAN.
None of
the adoption of the Plan by the Board, the submission of the Plan to the
stockholders of the Company for approval, nor any provision of the Plan shall be
construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
25. ACTION
BY COMMITTEE.
Any
action permitted or required to be taken by the Committee or any decision or
determination permitted or required to be made by the Committee pursuant to the
Plan shall be taken or made in the Committee’s sole and absolute
discretion.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
FOR
THE ANNUAL MEETING OF STOCKHOLDERS OF
GULF
RESOURCES, INC.
TO
BE HELD ON JUNE 22, 2010
Min Yang
and Xiaobin Liu, and each of them, each with full power of substitution, hereby
are authorized to vote as specified below or, with respect to any matter not set
forth below, as a majority of those or their substitutes present and acting at
the meeting shall determine, all of the shares of capital stock of Gulf
Resources, Inc. that the undersigned would be entitled to vote, if personally
present, at the 2010 annual meeting of stockholders and any adjournment
thereof.
Unless
otherwise specified, this proxy will be voted FOR Proposals 1, 2
and 3. The Board of Directors recommends a vote FOR Proposals 1, 2
and 3.
o
FOR all nominees listed below (except as marked to the contrary
below)
|
o
WITHHOLD AUTHORITY to vote for all nominees listed
below
|
Ming
Yang, Xiaobin Liu, Naihui Miao, Richard Khaleel, Biagio Vignolo, Shi Tong
Jiang and Ya Fei Ji
|
INSTRUCTION:
To withhold authority to vote for any nominee, write the nominee’s name in the
space provided below.
_______________________________________________________________________________
2.
|
RATIFICATION
OF INDEPENDENT ACCOUNTANTS
|
o FOR
|
o AGAINST
|
o ABSTAIN
|
3.
|
APPROVAL
OF 2007 EQUITY INCENTIVE PLAN, AS
AMENDED
|
o FOR
|
o AGAINST
|
o ABSTAIN
|
Please
sign exactly as your name appears below. When shares are held by joint tenants,
each should sign. When signing as attorney, executor, administrator, trustee,
guardian, corporate officer, or partner, please give full title as
such.
Date: __________,
2010
|
______________________________
Signature
______________________________
Signature
if held jointly
|
PLEASE
MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.