UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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CHINANET ONLINE HOLDINGS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Date Filed:
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CHINANET ONLINE HOLDINGS, INC.
No. 3 Min Zhuang Road, Building 6
Yu Quan Hui Gu Tuspark, Haidian District
Beijing, PRC 100195
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on June 27, 2019
TO THE STOCKHOLDERS OF CHINANET ONLINE HOLDINGS, INC.:
The Annual Meeting of the stockholders of ChinaNet
Online Holdings, Inc., a Nevada corporation (the “Company”), will be held on June 27, 2019, at 10:00 a.m. local time,
at No. 3 Min Zhuang Road, Building 6, Yu Quan Hui Gu Tuspark, Haidian District, Beijing, PRC 100195, for the following purposes:
1.
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To elect five (5) directors;
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2.
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To ratify the appointment of Marcum Bernstein & Pinchuk LLP, as the Company’s independent
accountants, for the fiscal year ending December 31, 2019;
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3.
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To conduct an advisory vote to approve the compensation paid to the Company’s named
executive officers, as disclosed under the caption Election of Directors – Executive Compensation; and
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To transact any other business as may properly be presented at the Annual Meeting or any adjournment thereof.
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A proxy statement, providing information, and a
form of proxy to vote, with respect to the foregoing matters accompany this notice.
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By Order of the Board of Directors,
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/s/ Handong Cheng
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Handong Cheng
Chairman of the Board, Chief Executive Officer and President
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Dated: April 30, 2019
Important Notice Regarding Availability of Proxy Materials for the
Stockholders Meeting
To Be Held on June 27, 2019.
The Proxy Statement and the Company’s annual report to Stockholders are available at
the Company’s website,
www.chinanet-online.com
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IMPORTANT
Whether or not 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, vote a subsequent proxy, or 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 or with respect to executive compensation,
unless you direct the nominee holder how to vote, by marking your proxy card.
CHINANET ONLINE HOLDINGS, INC.
No. 3 Min Zhuang Road, Building 6
Yu Quan Hui Gu Tuspark, Haidian District
Beijing, PRC 100195
PROXY STATEMENT
for
Annual Meeting of Stockholders
to be held on June 27, 2019
PROXY SOLICITATION
ChinaNet Online Holdings, Inc., a Nevada corporation
(the “Company”) is soliciting proxies on behalf of the Board of Directors (the “Board”) in connection with
the annual meeting of stockholders on June 27, 2019 and at any adjournment thereof. The 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. 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 1, 2019 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 26, 2019, the record date for the meeting,
the Company had outstanding 16,412,543 shares of Common Stock 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. Abstentions and
broker non-votes represented by submitted proxies will be included in the calculation of the number of the shares present at the
Annual Meeting for the purposes of determining a quorum. "Broker non-votes" means shares held of record by a broker that
are not voted because the broker has not received voting instructions from the beneficial owner of the shares and either lacks
or declines to exercise the authority to vote the shares in its discretion. You may revoke any proxy by notifying the Company in
writing at the above address, ATTN: Secretary, or by voting a subsequent proxy or in person at the meeting.
Proposal One. Directors are elected by a plurality,
and the nominees who receive the most votes will be elected. Proposal One is considered a "non-routine" matter under
NASDAQ Stock Market ("NASDAQ") rules, and, accordingly, brokerage firms and nominees do not have the authority to vote
their clients' unvoted shares on Proposal One or to vote their clients' shares if the clients have not furnished voting instructions
within a specified period of time prior to the Annual Meeting. Abstentions and broker non-votes will not be counted as votes cast
and will have no effect on the outcome of the vote on Proposal One.
Proposal Two. To be approved, the ratification of
Marcum Bernstein & Pinchuk LLP, as the Company's independent accountants must receive the affirmative vote of the majority
of the shares of Common Stock present in person or by proxy and cast at the Annual Meeting. Proposal Two is considered a "routine"
matter under NASDAQ rules, and, accordingly, brokerage firms and nominees have the authority to vote their clients' unvoted shares
on Proposal Two as well as to vote their clients' shares where the clients have not furnished voting instructions within a specified
period of time prior to the Annual Meeting. Abstentions and broker non-votes will not be counted as votes cast and will have no
effect on the outcome of the vote on Proposal Two.
Proposal Three. To be approved, the proposal regarding
the Company's executive compensation for the fiscal year ended December 31, 2018 must receive the affirmative vote of the majority
of the shares of Common Stock present in person or by proxy and cast at the Annual Meeting. Proposal Three is considered a "non-routine"
matter under NASDAQ rules, and, accordingly, brokerage firms and nominees do not have the authority to vote their clients' unvoted
shares on Proposal Three or to vote their clients' shares if the clients have not furnished voting instructions within a specified
period of time prior to the Annual Meeting. Abstentions and broker non-votes will not be counted as votes cast and will have no
effect on the outcome of the vote on Proposal Three. The vote on Proposal Three is advisory and therefore not binding on the Company,
the Compensation Committee or the Board of Directors. Although non-binding, the Board of Directors values the opinions that the
shareholders express in their votes, and the votes will provide information to the Compensation Committee regarding investor sentiment
about the Company's executive compensation philosophy, policies and practices, which the Compensation Committee will be able to
consider when determining executive compensation in the future.
Attending the Meeting
You may obtain directions to the meeting at www.chinanet-online.com
or by writing to the Company at the above address, ATTN: Secretary. If you attend the meeting, you may vote there in person, regardless
of whether you have voted by any of the other means mentioned in the preceding paragraph.
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 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.
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Common Stock
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Name of Beneficial Owner (1)
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Number
of Shares
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Percent
of Class (2)
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Handong Cheng (3)(5)
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4,578,180
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27.69
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%
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Zhige Zhang (3)(6)
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2,971,876
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18.10
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%
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George Kai Chu (7)
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896,315
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5.43
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%
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Ken Jenfeng Wu (8)
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39,620
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*
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Zhiqing Chen (9)
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94,000
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*
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Watanabe Mototake (10)
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54,000
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*
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Chang Qiu (11)
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60,000
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*
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Zhongyi Liu
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-
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-
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All Directors and Executive Officers as a Group (8 persons)
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5,752,015
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34.45
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%
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Rise King Investments Limited (3)(4)
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2,941,976
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17.93
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%
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Xuanfu Liu (3)
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2,941,976
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17.93
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%
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___________
* 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 26, 2019, 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) 2,941,976 shares of common stock owned by Rise King
and which are deemed to be beneficially owned by Mr. Cheng; (ii) 1,512,868 shares of common stock owned directly by Mr. Cheng;
and (iii) options to purchase up to 123,336 shares of the Company’s common stock that are exercisable within 60 days from
April 26, 2019.
(6) Consists of (i) 2,941,976 shares of common stock of which are owned
by Rise King and which are deemed to be beneficially owned by Mr. Zhang; (ii) 23,300 shares of common stock held directly by Mr.
Zhang; and (iii) options to purchase up to 6,600 shares of the Company’s common stock that are exercisable within 60 days
from April 26, 2019.
(7) Consists of (i) 809,979 shares of common stock and (ii) options
to purchase up to 86,336 shares of the Company’s common stock that are exercisable within 60 days from April 26, 2019.
(8) Consists of (i) 21,620 shares of common stock and (ii) options to
purchase up to 18,000 shares of the Company’s common stock that are exercisable within 60 days from April 26, 2019.
(9) Consists of (i) 70,000 shares of common stock and (ii) options to
purchase up to 24,000 shares of the Company’s common stock that are exercisable within 60 days from April 26, 2019.
(10) Consists of (i) 30,000 shares of common stock and (ii) options
to purchase up to 24,000 shares of the Company’s common stock that are exercisable within 60 days from April 26, 2019.
(11) Consists of 60,000 shares of common stock.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees of the Board of Directors
The Board, upon the recommendation of the Nominating
and Corporate Governance Committee, has nominated the persons identified below for election as directors, to serve until the next
annual meeting and until their successors have been elected and qualified, unless such directors resign or are terminated prior
thereto. 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.
Name
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Age
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Other positions with Company; other
directorships held in last five years
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Has served as Company
director since
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Handong Cheng
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48
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Chairman of the Board, Chief Executive Officer and President
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September 2007
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George Kai Chu
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43
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Chief Operating Officer, Secretary and Director
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June 2015
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Watanabe Mototake
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77
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Independent Non-Executive Director
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November 2009
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Zhiqing Chen
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46
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Independent Non-Executive Director
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November 2009
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Chang Qiu
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55
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Independent Non-Executive Director
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December 2014
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The business experience during 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’s 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.
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.
Zhongyi Liu, Chief Strategy Officer.
Mr. Liu has served as our
Chief Strategy Officer since January 2018. In 2013, Mr. Liu co-founded You Ni Xiang Ban Information Technology Co., Ltd. and serves
as the president of the Company. In 2014, Mr. Liu co-founded Wei Qi Ji (Beijing) Mobile Technology Co., Ltd. In 2017, Mr. Liu co-founded
Fu De Shu (Beijing) Blockchain Technology Co., Ltd. Mr. Liu was graduated from Huazhong Agricultural University.
No director or executive officer is related to any
other director or executive officer.
The Board has determined that Watanabe Mototake,
Zhiqing Chen 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”).
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 shareholders. 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 shareholders,
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 fifteen 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 Kai 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.
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-five 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 2018. During
2018, 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 shareholders, but we do not have
a formal policy requiring them to do so. All of our directors attended the 2018 annual meeting of shareholders.
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 2018.
The members of the Audit Committee are Chang Qiu,
Zhiqing Chen and Mototake Watanabe. The Board has determined that Mr. Qiu 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, 2018, the Audit Committee:
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reviewed and discussed the audited financial statements with management;
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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
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·
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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.
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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, 2018, which was filed on April 15, 2019.
Chang Qiu, 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 did not hold any meeting during 2018.
The members of the Compensation Committee are Zhiqing
Chen, Chang Qiu 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 meeting during 2018.
The members of the Nominating and Corporate Governance
Committee are Zhiqing Chen, Chang Qiu 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 2018, all such reports were filed timely.
Executive Compensation
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”). The 2015 Plan was approved by our stockholders on June 25, 2015.
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, 2018.
SUMMARY COMPENSATION OF NAMED EXECUTIVE OFFICERS
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Stock
Awards
(1)
($)
|
|
Option
Awards
(2)
($)
|
|
Total
|
Handong Cheng (Principal Executive Officer)
|
|
2018
|
|
30,347
|
|
-
|
|
-
|
|
30,347
|
|
|
2017
|
|
23,500
|
|
701,327
|
|
33,097
|
|
757,924
|
Zhige Zhang (Principal Financial Officer)
|
|
2018
|
|
17,545
|
|
-
|
|
-
|
|
17,545
|
|
|
2017
|
|
17,018
|
|
-
|
|
-
|
|
17,018
|
George Kai Chu (Chief Operating Officer and Secretary)
|
|
2018
|
|
27,053
|
|
-
|
|
-
|
|
27,053
|
|
|
2017
|
|
26,067
|
|
360,603
|
|
27,716
|
|
414,386
|
|
(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 vested on September 15, 2015, an additional one-third of the options vested on September 14,
2016 and the remaining one-third of the option vested on September 14, 2017. The exercise price of the options is $2.10 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 2018 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 ($)
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested (#)
|
|
Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares, Units
or Other Rights That Have
Not Vested ($)
|
Handong Cheng (Principal Executive Officer)
|
|
23,936
|
|
-
|
|
-
|
|
3.00
|
|
November 29, 2021
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
99,400
|
|
-
|
|
-
|
|
2.10
|
|
September 14, 2020
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhige Zhang (Principal Financial Officer)
|
|
6,600
|
|
-
|
|
-
|
|
3.00
|
|
November 29, 2021
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George Kai Chu (Chief Operating Officer and Secretary)
|
|
3,096
|
|
-
|
|
-
|
|
3.00
|
|
November 29, 2021
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
83,240
|
|
-
|
|
-
|
|
2.10
|
|
September 14, 2020
|
|
-
|
|
-
|
|
-
|
|
-
|
Compensation of Directors
The following table sets forth information regarding compensation of
each director, other than named executive officers, for fiscal 2018.
FISCAL 2018 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
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhiqing Chen
|
|
6,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mototaka Watanabe
|
|
6,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chang Qiu
|
|
6,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
6,000
|
Certain Relationships and Related Transactions
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 card.
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Audit Committee has appointed Marcum Bernstein
& Pinchuk LLP as independent accountants for fiscal 2019. Representatives of Marcum Bernstein & Pinchuk LLP 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.
In the event the stockholders fail to ratify the
selection of Marcum Bernstein & Pinchuk LLP, the Audit Committee will reconsider whether to retain the firm. Even if the selection
is ratified, the Audit Committee and the Board, in their discretion, may direct the appointment of a different independent accounting
firm at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders.
Services and Fees of Independent Accountants
Aggregate fees billed to the Company by Marcum Bernstein & Pinchuk
LLP during the fiscal years ended December 31, 2018 and 2017 were as follows:
Fees
|
|
2018
|
|
2017
|
Audit Fees
|
|
$
|
244,070
|
|
|
$
|
211,150
|
|
Audit Related Fees
|
|
$
|
-
|
|
|
$
|
-
|
|
Tax Fees
|
|
$
|
-
|
|
|
$
|
-
|
|
All Other Fees
|
|
$
|
12,360
|
|
|
$
|
-
|
|
Total
|
|
$
|
256,430
|
|
|
$
|
211,150
|
|
Audit Fees
This category includes aggregate fees billed by
our independent auditors for the audit of our annual financial statements, review of financial statements included in our quarterly
reports on Form 10-Q and services that are normally provided by the auditor in connection with statutory and regulatory filings
for those fiscal years.
Audit-Related Fees
This category consists of services by our independent
auditors that, including accounting consultations on transaction related matters, are reasonably related to the performance of
the audit or review of our financial statements and are not reported above under Audit Fees.
Tax Fees
This category consists of professional services
rendered for tax compliance and preparation of our corporate tax returns and other tax advice.
All Other Fees
This category consists of professional services
rendered for products and services provided, other than the services reported above under Audit Fees, Audit-Related Fees and Tax
Fees.
Pre-Approval of Services
The Audit Committee must pre-approve all audit,
review, attest and permissible non-audit services (including any permissible internal control-related services) to be provided
to the company or its subsidiaries by the independent auditors. The Audit Committee may establish pre-approval policies and procedures
in compliance with applicable SEC rules. All services described under the caption Services and Fees of Independent Accountants
were pre-approved.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “
FOR
”
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT ACCOUNTANTS.
PROPOSAL 3
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
Pursuant to Securities Exchange Act Section 14A,
we are submitting to shareholders an advisory vote to approve the compensation paid to the Company’s named executive offices,
as disclosed under the caption Election of Directors—Executive Compensation, pursuant to Item 402 (m) through (q) of Regulation
S-K, compensation tables, and narrative discussion.
The advisory vote is not binding on the Company,
the Board of Directors, or management; if executive compensation is not approved by a majority of the votes cast, the Compensation
Committee will take account of this fact when considering executive compensation for future years.
A majority of votes cast is required for advisory approval of executive
compensation.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “
FOR
”
THE FOLLOWING ADVISORY RESOLUTION:
RESOLVED
, that the compensation paid to Company’s named
executive offices, as disclosed under the caption Election of Directors—Executive Compensation, pursuant to Item 402 (m)
through (q) of Regulation S-K, compensation tables, and narrative discussion, be, and hereby is, approved.
PLEASE NOTE: If your shares are held in street name, your broker,
bank, custodian, or other nominee holder cannot vote your shares on this proposal, unless you direct the holder how to vote, by
marking your proxy card or by following the instructions on the proxy card to vote.
OTHER INFORMATION
The Company’s 2018 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 Handong
Cheng, Chief Executive Officer, ChinaNet Online Holdings, Inc., No. 3 Min Zhuang Road, Building 6, Yu Quan Hui Gu Tuspark, Haidian
District, Beijing, PRC 100195
.
Other Matters to Be Presented at the Annual Meeting
The Company is not aware 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 2020 annual meeting must be received by Company within a reasonable time before the Company prints
and mails its proxy statement for the 2020 annual meeting, which is anticipated to occur on or about June 15, 2020.
|
By Order of the Board of Directors,
|
|
/s/ Handong Cheng
|
|
Handong Cheng
Chairman of the Board, Chief Executive Officer and President
|
|
|
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