ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION
OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
Effective retrospectively May 11, 2016, the Company entered
into a second amended and restated employment agreement (the “2016 Employment Agreement”) dated August 4, 2016 with
Mr. David (Xiaoying) Gao, the Company’s Chief Executive Officer, to renew Mr. Gao’s employment agreement with the Company
(the “2014 Employment Agreement”) dated May 11, 2014, which expired on May 11, 2016. The 2016 Employment Agreement
has substantially similar terms to the 2014 Employment Agreement, including without limitation, Mr. Gao’s position as the
Company’s Chief Executive Officer and his base salary per annum. The 2016 Employment Agreement has a term of one year and
allows for an automatic renewal of another year if the parties do not notify each other of their intention to terminate the Employment
Agreement by April 11, 2017, in which case the Employment Agreement will expire on May 11, 2018. The description of the terms of
the 2016 Employment Agreement herein is qualified in its entirety by the provisions of the employment agreement filed as Exhibit
10.3 to this Current Report on Form 8-K.
On August 4, 2016, the Company’s board of directors (the
“Board”), acting upon the recommendation of the compensation committee of the Board (the “Compensation Committee”),
approved and authorized the issuance of an aggregate of up to 514,000 shares of restricted stock under the 2008 Equity Incentive
Plan to employees of the Company, including:
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150,000 shares of the Company’s
restricted stock to Mr. David (Xiaoying) Gao, Chief Executive Officer and Chairman of the Board;
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45,000 shares of the Company’s restricted
stock to Mr. Ming Yang, Chief Financial Officer;
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30,000 shares of the Company’s restricted
stock to Mr. Ming Yin, Senior Corporate Vice President;
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30,000 shares of the Company’s restricted
stock to Mr. Gang Yang, Corporate Vice President and the General Manager of Guizhou Taibang Biological Products Co., Ltd., a majority-owned
subsidiary of the Company;
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7,500 shares of the Company’s restricted
stock to Ms. Zhijing Liu, Corporate Vice President;
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an aggregate of up to 156,900 shares
of the
Company’s restricted stock to other employees; and
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an aggregate of up to 94,600 shares of
the Company’s restricted stock (the “CEO Award”) to employees to be identified with extraordinary performance
in 2016 (the “CEO Award Grantees”), in the sole discretion of Chief Executive Officer.
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The restricted stock granted to each of
the employees will vest annually over a 4-year period in four equal portions, with the first portion vesting on the one year anniversary
of the grant date.
Additionally, the Board, acting upon the
recommendation of the Compensation Committee, approved and authorized the issuance of an aggregate of 47,000 shares of the Company’s
restricted stock to non-executive directors, of which 6,000 shares of the Company’s restricted stock to Mr. Wenfang Liu,
9,000 shares of the Company’s restricted stock to Mr. Yungang Lu, 10,000 shares of the Company’s restricted stock to
Mr. Sean Shao, 6,000 shares of the Company’s restricted stock to Mr. Zhijun Tong, 6,000 shares of the Company’s restricted
stock to Mr. Albert (Wai Keung) Yeung, 5,000 shares of the Company’s restricted stock to Mr. Joseph Chow and 5,000 shares
of the Company’s restricted stock to Mr. David Hui Li. The restricted stock granted to each of the non-executive directors
will vest annually over a 2-year period in two equal portions, with the first portion vesting on the one year anniversary of the
grant date.
The Company entered into a restricted stock
grant agreement with each of the aforementioned grantees other than the CEO Award Grantees on August 4, 2016. The Company will
enter into a restricted stock grant agreement with each of the CEO Award Grantees as and when authorized by Chief Executive Officer.
There is no family relationship between
any directors or executive officers of the Company named above. In addition, there has been no transaction, nor is there any currently
proposed transaction, between the Company and any of the directors or executive officers of the Company named above that would
require disclosure under Item 404(a) of Regulation S-K.