ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Executive Officers and Directors
The following discussion sets forth information regarding
the executive officers and directors of the Company as of April 29, 2016. The board of directors is comprised of only one class.
All of the directors will serve until the next annual meeting of stockholders and until their successors are elected and qualified,
or until their earlier death, retirement, resignation or removal. Provided below is a brief description of our executive officers’
and directors’ business experience during the past five years.
Name
|
|
Age
|
|
Other positions with Company; other
directorships held in last five years
|
|
Has served as Company
director since
|
Handong Cheng
|
|
45
|
|
Chairman of the Board, Chief Executive Officer and President
|
|
September 2007
|
George Chu
|
|
40
|
|
Chief Operating Officer, Secretary and Director
|
|
June 2015
|
Watanabe Mototake
|
|
74
|
|
Independent Non-Executive Director
|
|
November 2009
|
Zhiqing Chen
|
|
43
|
|
Independent Non-Executive Director
|
|
November 2009
|
Douglas MacLellan
|
|
60
|
|
Independent Non-Executive Director
|
|
November 2009
|
Chang Qiu
|
|
52
|
|
Independent Non-Executive Director
|
|
December 2014
|
The business experience during at least the last five years of each of
these individuals is as follows:
Handong Cheng, Chairman of the Board. Chief Executive
Officer and President
. Mr. Cheng has served as Chief Executive Officer of ChinaNet since September 2007. Prior to that role,
from October 2003 to September 2007, Mr. Cheng acted as President of ChinaNet Online Advertising Limited. Mr. Cheng holds an EMBA
degree from Guanghua School of Management at the Peking University, and a degree in economic law from the College of Law of Wuhan
University.
George Kai Chu, Chief Operating Officer, Secretary
and Director
. Mr. Chu has been our Chief Operating Officer and Secretary since May 2010. From December 2007 to May 2010, Mr.
Chu served as the Special Executive to the Chairman of Dachan Food (Asia) Ltd. in Beijing and also served at Dachan Food as the
Head of the Beijing and Hubei Operations. From June 2007 to December 2007, Mr. Chu acted as Senior Business Advisor to the Chinese
Aviation and Space Industry Development Association (CASIDA) in Taipei. From January 2005 to June 2007, Mr. Chu served as a Senior
Vice President at the Royal Bank of Canada Financial Group, Asset Management in Vancouver, Toronto and New York. Mr. Chu has a
joint major bachelor degree in accounting and management information systems from Simon Fraser University, an MBA degree from Harvard
University and an EMBA degree from Guanghua School of Management at the Peking University.
Zhiqing Chen, Director
.
Mr. Chen has
been a partner at Chen & Partners Law Firm since July 2010. From January 2002 to June 2010, Mr. Chen was a partner at Jin Mao
P.R.C. Lawyers in Shanghai, a law firm specializing in corporate law, including foreign investments and mergers and acquisitions.
Mr. Chen’s clients include local PRC enterprises as well as international corporations. Prior to joining the Company, Mr.
Chen served as a non-management director for Shanghai Fumai Investment Management Co., Ltd., Shanghai Zhijinwu Investment Management
Co., Ltd, and Shanghai Merciful Groups Co., Ltd. Mr. Chen received a bachelor’s degree in international law from East China
University and an EMBA degree from Guanghua School of Management at the Peking University.
Watanabe Mototake, Director
.
Mr. Watanabe
serves as a corporate advisor to SJI, Inc. (Jasdaq Market), a provider of computer and computer peripheral equipment and software
merchant wholesaler, and has served in several capacities there since July 2005, including operating officer, manager of the president’s
office and corporate auditor. From June 2007 to June 2008, Mr. Watanabe served as the Corporate Auditor for SJ Holdings, Inc.,
a provider of information services such as system development and provision of system-related consulting and maintenance support
services. From April 2000 to April 2005, Mr. Watanabe served as the executive director for TCC Inc., a power conversion company
specializing in high quality connectors and adapters for the RF connector industry. Mr. Watanabe graduated in 1966 from Chuo University
Faculty of Commerce in Japan.
Douglas MacLellan, Director.
Mr. MacLellan currently serves as
chairman of eWellness Healthcare Corporation (OTCQB: EWLL), a distance monitored physical therapy telemedicine company. Until
April 2014, he was chairman and chief executive officer at Radient Pharmaceuticals Corporation, a vertically integrated specialty
pharmaceutical company, and also serves as president and chief executive officer for the MacLellan Group, an international financial
advisory firm established in 1992, where he advises clients on strategic planning, operational activities, corporate finance,
economic policy, asset allocation and mergers & acquisitions. From August 2005 to May 2009, Mr. MacLellan was co-founder and
vice chairman at Ocean Smart, Inc., a Canadian based aquaculture company. From February 2002 to September 2006, Mr. MacLellan
served as chairman and co-founder at Broadband Access MarketSpace, Ltd., a China based IT advisory firm, and was also a co-founder
at Datalex Corp., a software and IT company specializing in mainframe applications, from February 1997 to May 2002. Mr. MacLellan
was educated at the University of Southern California in economic and international relations.
Chang Qiu, Director
. Mr. Qiu has served as
a Principal of Sansar Capital Management since 2007. From 2001 through 2007, Mr. Qiu served as the Founder, Managing Director and
Senior Equity Analyst of Forun Technologies. Prior to that, Mr. Qiu worked at IBM and other organizations in business and research
functions. Mr. Qiu received an MBA degree from Columbia Business School, a Ph.D degree from Colorado School of Mines, and a bachelor’s
degree from Wuhan University, China.
The business experience during at least the last
five years of the Company’s executive officers not included above is as follows:
Zhige Zhang, Chief Financial Officer and Treasurer
.
Mr. Zhang has served as Chief Financial Officer of ChinaNet since January 2009. Prior to that role, from January 2008 to January
2009, Mr. Zhang served as Executive Director of ChinaNet Online Media Group Limited. From January 2007 to December 2007, Mr. Zhang
was Director and Vice President of Fu Jian Rong Ji Software Limited Corporation, a software company. From August 2002 to December
2006, Mr. Zhang acted as Chief Operating Officer of Beijing HSHZ Information System Engineering Company, a computer technology
company. Mr. Zhang holds a degree in industry design from Guilin University of Electronic Technology.
Ken Jenfeng Wu, Chief Information Officer.
Mr. Wu has served as
our Chief Information Officer since February 2015. From 2012 to 2014, Mr. Wu served as the Managing Director of Trussti Technologies
Pte Ltd. From 2010 to 2012, Mr. Wu served as the Chief Technology Officer of Blackwell Global Investments (Cyprus) Limited. Mr.
Wu holds a Bachelor of Computer Science and Engineering from Tatung University, Taiwan.
Mable Mingyu Chang, Chief Branding Officer
.
Ms. Chang has served as our Chief Branding Officer since April 2015. Prior to that role, from March 2011 to March 2015, Ms. Chang
acted as the General Manager of our operating subsidiaries in Quanzhou City, Fujian Province, the PRC, which are primarily engaged
in providing offline brand management and sales channel building services. Ms. Chang has over fifteen years of experience in brand
management and consulting services and acted as brand consultant in several international advertising firms, including The Brand
Union, Ogilvy and Lintas Beijing. Ms. Chang holds a Bachelor of Food Science from National Chung Hsing, Taiwan.
Family Relationships
No director or executive officer is related to any other director or executive
officer.
Board Operations
Board Leadership Structure
Mr. Handong Cheng holds the positions of chief executive
officer and chairman of the Board of the Company. The Board believes that Mr. Cheng’s services as both chief executive officer
and chairman of the Board is in the best interest of the Company and its stockholders. Mr. Cheng possesses detailed and in-depth
knowledge of the issues, opportunities and challenges facing the Company in the advertising and media industry and its business
and is thus best positioned to develop agendas that ensure that the Board’s time and attention are focused on the most critical
matters relating to the business of the Company. His combined role enables decisive leadership, ensures clear accountability, and
enhances the Company’s ability to communicate its message and strategy clearly and consistently to the Company’s stockholders,
employees and customers.
The Board has not designated a lead director. Given
the limited number of directors comprising the Board, the independent directors call and plan their executive sessions collaboratively
and, between meetings of the Board, communicate with management and one another directly. Under these circumstances, the directors
believe designating a lead director to take on responsibility for functions in which they all currently participate might detract
from rather than enhance performance of their responsibilities as directors.
Director Qualifications
The Company seeks directors with established strong
professional reputations and experience in areas relevant to the strategy and operations of its businesses. The Company also seeks
directors who possess the qualities of integrity and candor, who have strong analytical skills and who are willing to engage management
and each other in a constructive and collaborative fashion, in addition to the ability and commitment to devote time and energy
to service on the Board and its committees. We believe that all of our directors meet the foregoing qualifications.
The Nominating and Corporate Governance Committee
and the Board believe that the leadership skills and other experience of the Board members, as described below, provide the Company
with a range of perspectives and judgment necessary to guide our strategies and monitor their execution.
Handong Cheng
. Mr. Cheng is the founder of
the Company and has been serving the franchise and advertising media industries for more than ten years. In 2003, he participated
in the establishment of Beijing ChinaNet Online Advertising limited and Business Opportunity Online (Beijing) Networking Technology
Ltd. (www.28.com), an entity engaged in operational, administration and management activities. Mr. Cheng has contributed to the
Board’s strong leadership and vision for the development of the Company.
George Chu
. Mr. Chu has been our Chief Operating
Officer and Secretary since May 2010. Mr. Chu has years of experience in capital markets, financial and business management.
Douglas MacLellan.
Mr. MacLellan has been
working in China since 1983 and has experience with joint venture and wholly-foreign owned enterprise structuring. In addition,
Mr. MacLellan has nearly twenty years of active audit committee chair experience.
Zhiqing Chen
. Mr. Chen contributes to the
Board extensive legal knowledge with respect to foreign investments and mergers and acquisitions. Mr. Chen also has experience
working with PRC enterprises and international corporations.
Mototake Watanabe
.
Mr. Watanabe has
nearly twenty years of experience in management, finance, business strategy and audit.
Chang Qiu
. Mr. Qiu has extensive experience
working with PRC enterprises and international corporations. Mr. Qiu contributes to the Board his knowledge with respect to foreign
investments, business strategy and corporate finance.
Meetings of the Board of Directors
The Board held five meetings during 2015. During
2015, no director attended fewer than 75% of the meetings of the Board and Board committees of which the director was a member.
The Company’s directors are expected to attend
board meetings as frequently as necessary to properly discharge their responsibilities and to spend the time needed to prepare
for each such meeting. The Company’s directors are expected to attend annual meetings of stockholders, but we do not have
a formal policy requiring them to do so. All of our directors attended the 2015 annual meeting of stockholders.
Code of Ethics
The Company adopted a Code of Ethics applicable to
its directors, officers and employees on December 21, 2009. The Code of Ethics is designed to deter wrongdoing and to promote ethical
conduct and full, fair, accurate, timely and understandable reports that the Company files or submits to the Securities and Exchange
Commission and others. A printed copy of the Code of Ethics may be obtained free of charge by writing to us at our headquarters
located at No. 3 Min Zhuang Road, Building 6, Yu Quan Hui Gu Tuspark, Haidian District, Beijing, PRC 100195 or on our website,
www.chinanet-online.com.
Board Committees
The Board has a standing audit, compensation, and
nominating and corporate governance committee, comprised solely of independent directors. Each committee has a charter, which is
available at the Company’s website, www.chinanet-online.com.
Audit Committee
The Audit Committee, which is established in accordance
with Section 3(a)(58)(A) of the Exchange Act, engages Company’s independent accountants, reviewing their independence and
performance; reviews the Company’s accounting and financial reporting processes and the integrity of its financial statements;
the audits of the Company’s financial statements and the appointment, compensation, qualifications, independence and performance
of the Company’s independent auditors; the Company’s compliance with legal and regulatory requirements; and the performance
of the Company’s internal audit function and internal control over financial reporting. The Audit Committee held four meetings
during 2015.
The members of the Audit Committee are Douglas MacLellan,
Chair, Zhiqing Chen and Mototake Watanabe. The Board has determined that Douglas MacLellan is an audit committee financial expert,
as defined in the Exchange Act.
Audit Committee Report
With respect to the audit of the Company’s
financial statements for the year ended December 31, 2015, the Audit Committee:
|
•
|
reviewed and discussed the audited financial statements with management;
|
|
•
|
discussed with the 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
|
|
•
|
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 upon the foregoing review and discussion, the
Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2015, which was filed on April 14, 2016.
Douglas MacLellan, Chair
Zhiqing Chen
Mototake Watanabe
Compensation Committee
The Compensation Committee reviews annually the Company’s
corporate goals and objectives relevant to the officers’ compensation, evaluates the officers’ performance in light
of such goals and objectives, determines and approves the officers’ compensation level based on this evaluation; makes recommendations
to the Board regarding approval, disapproval, modification, or termination of existing or proposed employee benefit plans, makes
recommendations to the Board with respect to non-CEO and non-CFO compensation and administers the Company’s incentive-compensation
plans and equity-based plans. The Compensation Committee has the authority to delegate any of its responsibilities to subcommittees
as it may deem appropriate in its sole discretion. The chief executive officer of the Company may not be present during voting
or deliberations of the Compensation Committee with respect to his compensation. The Company’s executive officers do not
play a role in suggesting their own salaries. Neither the Company nor the Compensation Committee has engaged any compensation consultant
who has a role in determining or recommending the amount or form of executive or director compensation. The Compensation Committee
held one meeting during 2015.
The members of the Compensation Committee are Douglas
MacLellan, Chair, Zhiqing Chen and Mototake Watanabe.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee
assists the Board in identifying qualified individuals to the Board as its nominees for election as directors, in determining the
composition of the Board, and in assessing the Board’s effectiveness. The Nominating and Corporate Governance Committee did
not hold any meetings during 2015.
The members of the Nominating and Corporate Governance
Committee are Zhiqing Chen, Chair, Douglas MacLellan and Mototake Watanabe.
The Nominating and Corporate Governance Committee
will consider director candidates recommended by security holders. Potential nominees to the Board are required to have such experience
in business or financial matters as would make such nominee an asset to the Board 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 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 ChinaNet Online
Holdings, Inc., No. 3 Min Zhuang Road, Building 6, Yu Quan Hui Gu Tuspark, Haidian District, Beijing, PRC. 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
need 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, (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,
c/o Secretary, ChinaNet Online Holdings, Inc., No. 3 Min Zhuang Road, Building 6, Yu Quan Hui Gu Tuspark, Haidian District, Beijing,
PRC, 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 2015, all such reports were filed timely.
ITEM 11. EXECUTIVE COMPENSATION
Compensation of Executive Officers
Our Board of Directors has not adopted or established
a formal policy or procedure for determining the amount of compensation paid to our executive officers. No pre-established, objective
performance goals or metrics have been used by the Board of Directors in determining the compensation of our executive officers.
Elements of Compensation
Our executive officers receive a base salary to compensate
them for services rendered during the year. In additional to their base salary, we also provide equity incentives to attract and
retain executive talent for the Company’s continued success.
Base Salary and Bonus. The value of base salary and
bonus for each our executive reflects his skill set and the market value of that skill set in the sole discretion of the Board
of Director.
Equity Incentives. The ChinaNet Online Holdings,
Inc. 2015 Equity Incentive Plan (the “2015 Plan”) provides for the granting of distribution equivalent rights, incentive
stock options, non-qualified stock options, performance share awards, performance unit awards, restricted stock awards, restricted
stock unit awards, stock appreciation rights, tandem stock appreciation rights, unrestricted stock awards or any combination of
the foregoing, as may be best suited to the circumstances of the particular employee, director or consultant as provided therein
(the “Awards”). Certain Awards are intended to qualify as “incentive stock options” within the meaning
of the Internal Revenue Code (the “Code”).
Retirement Benefits. Our executive officers are not
presently entitled to company-sponsored retirement benefits.
Perquisites. We have not provided our executive officers
with any material perquisites and other personal benefits and, therefore, we do not view perquisites as a significant or necessary
element of our executive’s compensation.
Deferred Compensation. We do not provide our executives
the opportunity to defer receipt of annual compensation.
Summary Compensation Table
The following table sets forth information regarding compensation of the
named executive officers for each of the two fiscal years in the period ended December 31, 2015.
SUMMARY COMPENSATION OF NAMED EXECUTIVE OFFICERS
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Stock Awards
(1)
($)
|
|
Option Awards
(2)
($)
|
|
Total
|
Handong Cheng (Principal Executive Officer)
|
|
2015
|
|
35,174
|
|
780,000
|
|
51,583
|
|
866,757
|
|
|
2014
|
|
37,898
|
|
780,000
|
|
-
|
|
817,898
|
Zhige Zhang (Principal Financial Officer)
|
|
2015
|
|
32,512
|
|
-
|
|
-
|
|
32,512
|
|
|
2014
|
|
32,803
|
|
-
|
|
-
|
|
32,803
|
George Kai Chu (Chief Operating Officer and Secretary)
|
|
2015
|
|
31,491
|
|
780,000
|
|
43,197
|
|
854,688
|
|
|
2014
|
|
32,444
|
|
780,000
|
|
-
|
|
812,444
|
|
(1)
|
The aggregate grant date fair value of the restricted stock awarded to each named executive officer is computed in accordance
with FASB ASC Topic 718.
|
|
(2)
|
The aggregate grant date fair value of the options awarded to each executive officer is computed in accordance with FASB ASC
Topic 718. One-third of the options were vested when awarded, an additional one-third of the options will be vested on the first
anniversary of the date of grant and the remaining one-third of the option will be vested on the second anniversary of the date
of grant. The exercise price of the options was $0.84 per share and the options will expire on September 14, 2020.
|
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, which
includes persons who may seek reimbursement, or a court of competent jurisdiction if such reimbursement is challenged.
Employment Agreements
We, through Rise King Century Technology Development
(Beijing) Co., Ltd., our indirect wholly owned subsidiary (“Rise King WFOE”), or Business Opportunity Online (Beijing)
Network Technology Co., Ltd. (Business Opportunity Online”) or Beijing CNET Online Advertising Co., Ltd. (“Beijing
CNET Online”), our indirect wholly owned Variable Interest Entities, entered into a standard employment contract with our
executive officers from April 1, 2009 or the actual employment start date, if later, for a set period of years. According to these
contracts, these executive officers will devote substantially all of his/her time to the service of the Company and may not compete
directly or indirectly with us. These executive officers also agreed that in the event that his/her employment with us is terminated,
for a period of two year following the date of his/her termination of employment, he/she will not contact, for any commercial purpose,
or provide to a third party, information about clients or entities with which we were acquainted during the term of his employment
with us. Subject to certain exceptions, either party may terminate the employment agreement upon 30 days prior written notice.
Before April 1, 2009, we did not have any employment agreements with any of our executive officers.
The Company does not have change-in-control agreements
with any of its directors or executive officers, and the Company is not obligated to pay severance or other enhanced benefits to
executive officers upon termination of their employment.
OUTSTANDING EQUITY AWARDS AT FISCAL 2015 YEAR END
OPTION AWARDS
|
|
STOCK AWARDS
|
Name
|
|
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
($)
|
|
Option
Expiration
Date
|
|
Number
of Shares
or Units
of Stock
That Have
Not
Vested (#)
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)
(1)
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested (#)
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights That
Have
Not Vested
($)
|
Handong Cheng (Principal Executive Officer)
|
|
59,840
|
|
-
|
|
-
|
|
1.20
|
|
November 29, 2021
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
82,833
|
|
165,667
|
|
-
|
|
0.84
|
|
September 14, 2020
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
666,667
|
|
460,000
|
|
-
|
|
-
|
Zhige Zhang (Principal Financial Officer)
|
|
16,500
|
|
-
|
|
-
|
|
1.20
|
|
November 29, 2021
|
|
-
|
|
-
|
|
-
|
|
-
|
George Kai Chu (Chief Operating Officer and Secretary)
|
|
7,740
|
|
-
|
|
-
|
|
1.20
|
|
November 29, 2021
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
69,367
|
|
138,733
|
|
-
|
|
0.84
|
|
September 14, 2020
|
|
|
|
|
|
|
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
666,667
|
|
460,000
|
|
-
|
|
-
|
|
(1)
|
The aggregate market value of shares or units of stock that have not vested is computed based on
the closing bid price of the Company’s common stock on April 25, 2016, which is $0.69 per share, as reported on the Nasdaq
Capital Market.
|
Compensation of Directors
The following table sets forth information regarding compensation of each
director, other than named executive officers, for fiscal 2015.
FISCAL 2015 DIRECTOR COMPENSATION
|
Name
|
|
Fees
Earned
or Paid
in Cash
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas MacLellan
|
|
60,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhiqing Chen
|
|
6,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mototaka Watanabe
|
|
6,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chang Qiu
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
The following table sets forth certain information
regarding beneficial ownership of Common Stock, as of April 29, 2016, by each of the Company’s directors and executive officers;
all executive officers and directors as a group, and each person known to the 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.
|
|
|
Common Stock
|
|
Name of Beneficial Owner (1)
|
|
|
Number
of Shares
|
|
|
|
Percent
of Class (2)
|
|
Handong Cheng (3)(5)
|
|
|
9,662,505
|
|
|
|
31.68
|
%
|
Zhige Zhang (3)(6)
|
|
|
7,514,662
|
|
|
|
24.74
|
%
|
George Kai Chu (7)
|
|
|
2,150,977
|
|
|
|
7.07
|
%
|
Mable Mingyu Chang (8)
|
|
|
53,200
|
|
|
|
*
|
|
Ken Jenfeng Wu (9)
|
|
|
69,048
|
|
|
|
*
|
|
Zhiqing Chen (10)
|
|
|
160,000
|
|
|
|
*
|
|
Watanabe Mototake (11)
|
|
|
110,000
|
|
|
|
*
|
|
Douglas MacLellan (12)
|
|
|
80,000
|
|
|
|
*
|
|
Chang Qiu
|
|
|
-
|
|
|
|
-
|
|
All Directors and Executive Officers as a Group (9 persons)
|
|
|
12,360,480
|
|
|
|
40.10
|
%
|
Rise King Investments Limited (3)(4)
|
|
|
7,439,912
|
|
|
|
24.51
|
%
|
Xuanfu Liu (3)
|
|
|
7,439,912
|
|
|
|
24.51
|
%
|
__________
* Less than one percent.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The address of each director and executive officer is c/o ChinaNet
Online Holdings, Inc., No. 3 Min Zhuang Road, Building 6, Yu Quan Hui Gu Tuspark, Haidian District, Beijing PRC 100195.
(2) Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to securities
anticipated to be exercisable or convertible at or within 60 days of April 29, 2016, are deemed outstanding for computing the percentage
of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person. The
indication herein that shares are anticipated to be beneficially owned is not an admission on the part of the listed stockholder
that he, she or it is or will be a direct or indirect beneficial owner of those shares.
(3) Rise King Investments Limited (“Rise King”) is collectively
owned by Handong Cheng, Xuanfu Liu and Zhige Zhang. As a result, Mr. Cheng, Mr. Liu and Mr. Zhang may be deemed to be beneficial
owners of the shares of our common stock held by Rise King. Each of Mr. Cheng, Mr. Liu and Mr. Zhang disclaim such beneficial ownership,
and nothing herein shall be deemed to be an admission that Mr. Cheng, Mr. Liu or Mr. Zhang is the beneficial owner of any such
shares for any purpose. Information regarding this beneficial owner is furnished in reliance upon the Form 4, dated August 18,
2015.
(4) The business address of Rise King Investments Limited is P.O. Box
957, Offshore Incorporations Center, Road Town, Tortola, British Virgin Islands. Information regarding this beneficial owner is
furnished in reliance upon the Schedule 13D, dated July 6, 2009.
(5) Consists of (i) 7,439,912 shares of common stock owned by Rise King
and which are deemed to be beneficially owned by Mr. Cheng; (ii) 2,079,920 shares of common stock owned directly by Mr. Cheng;
and (iii) options to purchase up to 142,673 shares of the Company’s common stock that are exercisable within 60 days from
April 29, 2016.
(6) Consists of (i) 7,439,912 shares of common stock of which are owned
by Rise King and which are deemed to be beneficially owned by Mr. Zhang; (ii) 58,250 shares of common stock held directly by Mr.
Zhang; and (iii) options to purchase up to 16,500 shares of the Company’s common stock that are exercisable within 60 days
from April 29, 2016.
(7) Consists of (i) 2,073,870 shares of common stock and (ii) options
to purchase up to 77,107 shares of the Company’s common stock that are exercisable within 60 days from April 29, 2016.
(8) Consists of (i) 38,200 shares of common stock and (ii) options to purchase up to 15,000
shares of the Company’s common stock that are exercisable within 60 days from April 29, 2016.
(9) Consists of (i) 54,048 shares of common stock and (ii) options to
purchase up to 15,000 shares of the Company’s common stock that are exercisable within 60 days from April 29, 2016.
(10) Consists of (i) 100,000 shares of common stock and (ii) options
to purchase up to 60,000 shares of the Company’s common stock that are exercisable within 60 days from April 29, 2016.
(11) Consists of (i) 50,000 shares of common stock and (ii) options
to purchase up to 60,000 shares of the Company’s common stock that are exercisable within 60 days from April 29, 2016.
(12) Consists of options to purchase up to 80,000 shares of the Company’s common stock
that are exercisable within 60 days from April 29, 2016.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
Related parties of the Company represented
direct or indirect unconsolidated investees of the Company or entities that are directly or indirectly owned by Mr. Handong Cheng
or Mr. Xuanfu Liu, the owners of the Company’s PRC VIEs, Business Opportunities Online and Beijing CNET Online before the
Company’s offshore restructuring. The Company provides advertising and marketing services to the following related parties
in its normal course of business on the same terms as those provided to its unrelated clients.
Revenue from related parties:
|
|
Year Ended December 31,
|
|
|
2015
|
|
2014
|
|
|
|
US$(’000)
|
|
|
|
US$(’000)
|
|
|
|
|
|
|
|
|
|
|
-Beijing Saturday Education Technology Co., Ltd.
|
|
|
298
|
|
|
|
91
|
|
-Chuangshi Meiwei (Beijing) International Investment Management Co., Ltd.
|
|
|
346
|
|
|
|
-
|
|
-Beijing Saimeiwei Food Equipment Technology Co., Ltd,
|
|
|
99
|
|
|
|
260
|
|
-Beijing Fengshangyinli Technology Co., Ltd.
|
|
|
-
|
|
|
|
2
|
|
|
|
|
743
|
|
|
|
353
|
|
Director Independence
The Board has determined that Watanabe Mototake,
Zhiqing Chen, Douglas MacLellan and Chang Qiu are “independent” under the current independence standards of Rule 5605(a)(2)
of the Marketplace Rules of The NASDAQ Stock Market, LLC and meet the criteria set forth in Rule 10A(m)(3) under the U.S. Securities
Exchange Act of 1934, as amended (the “Exchange Act”).