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
Filed by the Registrant
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Check the appropriate box:
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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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Gulf Resources, Inc.
(Name of Registrant as Specified
in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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GULF RESOURCES, INC.
Level 11, Vegetable Building, Industrial
Park of the East City,
Shouguang City, Shandong Province 262700
The People’s Republic of China
___________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on June 21, 2018
___________________________
TO THE STOCKHOLDERS OF Gulf Resources, Inc.:
The Annual Meeting
of the stockholders of Gulf Resources, Inc., a Nevada corporation (“Company”), will be held on June 21, 2018, at 10:00
a.m. (local time), at the company’s headquarters located at Level 11, Vegetable Building, Industrial Park of the East City,
Shouguang City, Shandong Province 262700, the People’s Republic of China, for the following purposes:
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1.
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To elect seven directors, consisting of Ming Yang, Xiaobin Liu, Naihui Miao, Nan Li, Yang Zou, Shi Tong Jiang and Tengfei Zhang, to hold office for a one-year term or until their successors are elected and qualified;
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2.
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To ratify the appointment of Morison Cogen LLP, independent public accountants, as the auditor of the Company for the fiscal year 2018;
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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;
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To conduct an advisory vote to approve the frequency of advisory votes on 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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Stockholders of record
of the Company’s Common Stock at the close of business on April 26, 2018 are entitled to notice of, and to vote at, the Annual
Meeting or any adjournment or postponement thereof.
Your attention is directed
to the Proxy Statement accompanying this Notice for a more complete statement of matters to be considered at the Annual Meeting.
All stockholders
are cordially invited to attend the meeting. Whether or not you expect to attend, you are respectfully requested by
the Board of Directors to sign, date and return the enclosed proxy promptly, or follow the instructions contained in the Notice
of Availability of Proxy Materials to vote on the Internet. Stockholders who execute proxies retain the right to revoke
them at any time prior to the voting thereof. If you received this proxy statement in the mail, a return envelope is
enclosed for your convenience.
YOUR VOTE IS IMPORTANT.
YOU ARE REQUESTED TO CAREFULLY READ THE PROXY STATEMENT. PLEASE VOTE ON THE INTERNET. IF THIS PROXY STATEMENT WAS MAILED TO YOU,
COMPLETE, DATE, SIGN AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE. YOU MAY ALSO ATTEND THE MEETING TO VOTE IN PERSON.
By Order of the Board of Directors,
/s/ Ming Yang
Ming Yang
Chairman of the Board of Directors
Dated: April 30, 2018
GULF RESOURCES, INC.
Level 11, Vegetable Building, Industrial
Park of the East City,
Shouguang City, Shandong Province 262700
The People’s Republic of China
___________________________
PROXY STATEMENT
for
Annual Meeting of Stockholders
to be held on June 21, 2018
___________________________
INTRODUCTION
Your proxy is solicited
by the Board of Directors of Gulf Resources, Inc., a Nevada corporation (the “
Company,
” “
we,
”
“
us
” or “
our
”), for use at the Annual Meeting of Stockholders to be held on June
21, 2018, at 10:00 a.m. (local time) Beijing Standard Time (the “
Annual Meeting
”), at the company’s headquarters
located at Level 11, Vegetable Building, Industrial Park of the East City, Shouguang City, Shandong Province 262700, the People’s
Republic of China, for the following purposes:
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1.
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To elect seven directors, consisting of Ming Yang, Xiaobin Liu, Naihui Miao, Nan Li, Yang Zou, Shi Tong Jiang and Tengfei Zhang, to hold office for a one-year term or until their successors are elected and qualified;
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2.
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To ratify the appointment of Morison Cogen LLP, independent public accountants, as the auditor of the Company for the fiscal year 2018;
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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;
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4.
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To conduct an advisory vote to approve the frequency of advisory votes on executive compensation; and
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5.
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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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The Board of Directors
set April 26, 2018 as the record date (the “
Record Date
”) to determine those holders of common stock of the
Company (the “
Common Stock
”), who are entitled to notice of, and to vote at, the Annual Meeting. A list of the
stockholders entitled to vote at the meeting may be examined at the Company’s office at Level 11, Vegetable Building, Industrial
Park of the East City, Shouguang City, Shandong Province 262700, the People’s Republic of China.
On or about May
7, 2018, the Company shall mail to all stockholders of record, as of the Record Date, a Notice of Availability of Proxy Materials
(the “
Notice
”). Please carefully review the Notice for information on how to access the Notice of Annual Meeting,
Proxy Statement, proxy card and Annual Report on
www.proxyvote.com
, in addition to instructions on how you may request to
receive a paper or email copy of these documents. There is no charge to you for requesting a paper copy of these documents.
GENERAL INFORMATION ABOUT VOTING
Who can vote?
You can vote your shares
of Common Stock if our records show that you owned the shares on the Record Date. As of the close of business on the Record Date,
a total of 46,803,791 shares of Common Stock are entitled to vote at the Annual Meeting. Each share of Common Stock
is entitled to one vote on matters presented at the Annual Meeting.
How do I vote by proxy?
If you have received
a printed copy of these materials by mail, you may simply complete, sign and return your proxy card. If you did not
receive a printed copy of these materials by mail and are accessing them on the Internet, you may simply follow the instructions
below to submit your proxy on the Internet.
What if I received a Notice of Availability of proxy materials?
In accordance with
rules and regulations adopted by the Securities and Exchange Commission (the “
SEC
”), instead of mailing a printed
copy of our proxy materials to each stockholder of record, we may now furnish proxy materials to our stockholders on the Internet.
If you received a Notice by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice will instruct
you as to how you may access and review all of the important information contained in the proxy materials. The Notice also instructs
you as to how you may submit your proxy on the Internet. If you received a Notice by mail and would like to receive a printed copy
of our proxy materials, including a proxy card, you should follow the instructions for requesting such materials included in the
Notice.
If I am a stockholder of record, how do I cast my vote?
If you are a stockholder
of record, you may vote in person at the Annual Meeting. We will give you a ballot when you arrive.
If you do not wish
to vote in person or you will not be attending the Annual Meeting, you may vote by proxy. If you received a printed copy of these
proxy materials by mail, you may vote by proxy using the enclosed proxy card, complete, sign and date your proxy card and return
it promptly in the envelope provided.
If you received a Notice
by mail, you may vote by proxy over the Internet by going to
www.proxyvote.com
to complete an electronic proxy card.
If you vote by proxy,
your vote must be received by 5:00 p.m. U.S. Eastern Standard Time on June 20, 2018 to be counted.
We provide Internet
proxy voting to allow you to vote your shares on-line, with procedures designed to ensure the authenticity and correctness of your
proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage
charges from Internet access providers and telephone companies.
What if other matters come up at the Annual Meeting?
The matters described
in this proxy statement are the only matters we know of that will be voted on at the Annual Meeting. If other matters
are properly presented at the meeting, the proxy holders will vote your shares as they see fit.
Can I change my vote after I return my proxy card?
Yes. You can revoke
your proxy at any time before it is exercised at the Annual Meeting in any of three ways:
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by submitting written notice revoking your proxy card to the Secretary of the Company;
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by submitting another proxy via the Internet or by mail that is later dated and, if by mail, that is properly signed; or
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by voting in person at the Annual Meeting.
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Can I vote in person at the Annual Meeting rather than by
completing the proxy card?
Although we encourage
you to complete and return the proxy card or vote by proxy on the Internet to ensure that your vote is counted, you can attend
the Annual Meeting and vote your shares in person.
How are votes counted?
We will hold the Annual
Meeting if holders representing a majority of the shares of Common Stock issued and outstanding and entitled to vote in person
or by proxy either sign and return their proxy cards, submit their proxy on the Internet, or attend the meeting. If
you sign and return your proxy card, or submit your proxy on the Internet, your shares will be counted to determine whether we
have a quorum even if you abstain or fail to vote on any of the proposals listed on the proxy card.
The election of directors
under Proposal 1 will be by the affirmative vote of a plurality of the shares of Common Stock, represented in person or by proxy
at the Annual Meeting.
Proposal 2 shall be
approved upon the vote of a majority of shares present in person or represented by proxy at the meeting. An abstention with respect
to Proposal 2, will have the effect of a vote “AGAINST” such proposal.
The advisory vote pursuant
to Proposals 3 and 4 is not binding on the Company, the Board of Directors or management. A majority of votes cast is necessary
for approval of executive compensation. Abstentions and broker non-votes have no effect on Proposals 3.
Who pays for this proxy solicitation?
We do. In
addition to sending you these materials and posting them on the Internet, some of our employees may contact you by telephone, by
mail, by fax, by email, or in person. None of these employees will receive any extra compensation for doing this. We
may reimburse brokerage firms and other custodians for their reasonable out-of-pocket costs in forwarding these proxy materials
to stockholders.
Why are we seeking stockholder approval for these proposals?
Proposal No. 1
: The
Nevada Revised Statutes, as amended and the NASDAQ Stock Market require corporations to hold elections for directors each year.
Proposal No. 2
:
The Company appointed Morison Cogen LLP to serve as the Company’s independent auditors for the 2018 fiscal year. The
Company elects to have its stockholders ratify such appointment.
Proposal No. 3
:
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), provides an advisory
vote by stockholders to approve the compensation paid to the Company’s named executive officers.
Proposal No. 4
:
The Dodd-Frank Act also enables the Company’s stockholders to indicate how frequently they believe the Company should seek
an advisory vote on the compensation of the Company’s named executive officers, such as Proposal 3 above.
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 26, 2018, there were 46,803,791 shares of the Company’s
Common Stock outstanding.
Name of Beneficial Owner (1)
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Number of Shares
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Percent of Class
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Ming Yang (Chairman)
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13,391,454
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(2)
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28.6
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%
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Xiaobin Liu (CEO)
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190,575
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(3)
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*
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Min Li (CFO)
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190,575
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(3)
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*
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Naihui Miao (COO)
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190,575
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(3)
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*
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Nan Li (Director)
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37,500
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(4)
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*
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Yang Zou (Director)
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25,000
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(5)
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*
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Shi Tong Jiang (Director)
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37,500
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(6)
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*
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Tengfei Zhang (Director)
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37,500
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(7)
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*
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All Directors and Executive Officers as a Group (eight persons)
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14,100,679
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30.1
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%
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Chen Weijie
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6,068,011
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(8)
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13.0
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%
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________________
* Less than
1%.
(1) The address of each director and executive
officer is c/o Gulf Resources, Inc., Level 11, Vegetable Building, Industrial Park of the East City, Shouguang City , Shandong
Province, 262700, the People’s Republic of China.
(2) Consists of 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) Consists of 100,000 shares issuable
upon exercise of options held by such beneficial owner.
(4) Consists of 37,500 shares issuable upon exercise of
options held by Mr. Li.
(5) Consists of 25,000 shares issuable upon exercise of options
held by Mr. Zou.
(6) Consists of 37,500 shares issuable upon exercise of
options held by Mr. Jiang.
(7) Consists of 37,500 shares issuable upon exercise of options
held by Mr. Zhang.
(8) Based on Schedule 13D filed on August 12, 2015.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees of the Board of Directors
The Board of Directors
has nominated seven (7) 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 of Directors 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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Ming Yang
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50
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Chairman of the Board of Director
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December 2006
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Xiaobin Liu
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49
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Chief Executive Officer and Director
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March 2009
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Naihui Miao
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49
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Secretary, Chief Operating Officer and Director
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January 2006
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Yang Zou (1)(3)
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46
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Independent Director
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March 2011
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Nan Li (1) (2)
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43
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Independent Director
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November 2010
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Shitong Jiang (1) (2)(3)
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49
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Independent Director
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April 2008
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Tengfei Zhang (2)(3)
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50
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Independent Director
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June 2011
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(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 Vegetable Industry Group, Inc. since 2013. In addition, he
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 December 2007. He has served as Chairman of Shouguang Vegetable Industry Group, Inc. since 2011.
Before he joined the Company, Mr. Liu served as project manager of Shenzhen Guangshen Accounting Firm from January 2007 to November
2007; the department manager of Hainan Zhongou Accounting Firm from January 2003 to December 2006; the CFO (equivalent of Vice
President) of Dasheng Real Estate Development Company, which is the subsidiary of Saige Dasheng Co., Ltd from May 2002 to November
2002; the CFO of Shenzhen Securities Department of Hainan Saige International Trust Investment Company from May 2000 to August
2004; and the financial manager of Hainan Wanquanyuan Hot Spring Tourism Development Co., Ltd from 1995 to 2000. During this time,
he also was the CFO of Qionghai City Guantang Hotspring Leisure Center, the CFO of Qionghai City Wanquanhe Agricultural Development
Co., Ltd, the CFO of Qionghai Wanquanhe Hotspring Tourist Development Property Management Co., Ltd, and the CFO of Qionghai Guantangyuzhuang
Resort Co., Ltd. Prior to that, Mr. Liu worked in the financial department of Hainan Jinyuan Industrial Co., Ltd, which is a subsidiary
of Chinese Black Metal Limited Company Northwest Branch from 1992 to 1995, and the financial department of Shanxi Aircraft Manufacturing
Company from 1988 to 1992. Mr. Liu earned a master 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.
Yang Zou
,
Independent Director
–
Mr. Zou was appointed a director on March 2, 2011. Mr. Zou has served as Vice Director of Beijing Zhongtianhuamao Accounting
Firm (General Partnership) since July 1, 2017. He is a Certified Public Accountant of China and holds the certificate
of Certified Internal Auditor. From March 2003 to September 2009, Mr. Zou was chief financial officer of Bohua Ziguang
Zhiye Co., Ltd. From July 2001 to January 2003, Mr. Zou was the audit department manager of financial center of Beijing
Hengji Weiye Electronic Products Co., Ltd., where he was in charge of internal audit, financial budget management, and coordination
with external audit. From July 1999 to June 2001, Mr. Zou was manager of finance and audit department of Zhonglian Online Information
Development Co., Ltd. From September 1993 to June 1999, Mr. Zou had served as assistant auditor, auditor, and head of project audit
of Hainan Zhongou Certified Public Accountants Co., Ltd. From July 1991 to August 1993, Mr. Zou was an accountant of department
of finance of Hunan Department Store Co., Ltd. Mr. Zou graduated from Beijing University with bachelor’s degree
in finance.
Nan Li
,
Independent Director
–
Mr. Li was appointed a director on November 8, 2010. Mr. Li currently serves as Financial Controller at Global Pharm
Holdings Group, Inc., an OTC Bulletin Board listed company. He holds an Intermediate Accountant Certificate and
is a Certified Public Accountant of China. From 2005 to 2010, Mr. Li was audit manager and divisional manager at Shenzhen
Tianhua Accounting Firm, where he participated or been responsible for auditing various Chinese large-scale financial institutions,
securities companies, and listed companies, as well as acting as auditor or financial consultant to many U.S.-listed companies. From
March 2002 to July 2004 and from July 2004 to February 2005, he worked as an auditor in the internal control department
of two Hong Kong listed companies, Suncorptech and Vision Grande Group, respectively. Mr. Li holds a master’s
degree in International Accountancy.
Shitong 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.
Tengfei Zhang, Independent Director
–
Mr. Zhang was appointed a director on June 30, 2011. Mr. Zhang has served as Director of Shenzhen Kaili Industrial
Co., Ltd. since January 1, 2017. Prior to this position, he was the Chairman of the Board of Supervisors of Shenzhen Kaili
Industrial Co., Ltd. He is a Certified Public Accountant in China. From July 2000 to December 2004 , Mr. Zhang was Supervisor
of Shenzhen Kaili Industrial Co., Ltd. and Director of Finance of Changsha Kaili Real Estate Development Co., Ltd. From January
to June 2000, he was Manager of Financial Department of Shenzhen Kaili Industrial Co., Ltd. Mr. Zhang graduated from
Economics and Management Department of Hunan Business School with a college degree in 1989.
Executive Officers and Significant Employees
Min Li, Chief Financial Officer –
was appointed a director on October 30, 2007 and resigned from the position on June 22, 2009. He has served as Chief
Financial Officer since December 2006 and as Chief Financial Officer for Shouguang City Haoyuan Chemical Company Limited. From
2004 to 2006, Mr. Li served as Manager of Financial and Asset Management Department for Shouguang City Yuxin Chemical Company Limited.
From 2000 to 2004, Mr. Li served as Manager of the Accounting Department for the Yang Kou Branch of the China Construction Bank. From
1998 to 1999, Mr. Li worked at China Construction Bank Shandong branch and in 2000 Mr. Li worked at the Yangkou Office as the accounting
manager. Mr. Li has a bachelor degree in accounting from Weifang College.
Family Relationships
There are no family relationships among
our executive officers, directors and significant employees.
Involvement in Certain Legal Proceedings
To the best of our
knowledge, there have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or
decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person
of our Company during the past ten years.
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 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 well as the independent committees, 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
held 4 meetings during 2017. During 2017, no director attended fewer than 75% of the meetings of the Board of Directors and Board
committees of which the director was a member.
Director Qualifications
The Company seeks directors
with established strong professional reputations and experience in areas relevant to the strategy and operations of our 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.
Ming Yang
is the founder of the
company and has been in the chemical industry for more than ten years. Mr. Yang has contributed to the Board’s strong leadership
and vision for the development of the Company.
Xiaobin Liu
was appointed as Chief
Executive Officer and Director on March 10, 2009. Mr. Liu has years of experience in capital markets, financial and business management,
and strategic planning and development.
Naihui 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 the Company. He is in charge of sales, human resource and business management. Mr. Miao has years
of experience in the chemical industry, business operations and management, and strategic planning and development.
Yang Zou
was appointed as a Director
on March 2, 2011. Mr. Zou has served as the Vice Director of Beijing Zhongtianhuamao Accounting Firm (General Partnership) since
July 1, 2016. He is a Certified Public Accountant and holds the certificate of Certified Internal Auditor. Mr.
Zou has extensive experience in auditing and accounting related matters.
Nan Li
was appointed as a Director
on November 8, 2010. Mr. Li currently serves as Financial Controller at Global Pharm Holdings Group, Inc., an OTC Bulletin Board
listed company. He holds an Intermediate Accountant Certificate and is a Certified Public Accountant. Mr.
Li has extensive experience in financial, auditing and management related matters with publicly listed companies.
Shitong Jiang
was appointed as a
Director on April 23, 2008. Mr. Jiang is Chief of the Shouguang City Audit Bureau, Shandong Province. He has been with
the audit bureau since 1990. Mr. Jiang has many years of auditing and management experience with PRC government departments.
Tengfei Zhang
was appointed as a
Director on June 30, 2011. Mr. Zhang has served as Director of Shenzhen Kaili Industrial Co., Ltd. He is a Certified Public Accountant.
Mr. Zhang has many years of experience in management, finance, business strategy and audit related matters.
Code of Ethics
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.com.
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.com.
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. Li is the Audit Committee Financial Expert and Mr. Jiang is the chair
of the Audit Committee. Our Audit Committee met 4 times during 2017. Our Board of Directors has determined that Messrs. Li, Zou
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, 2017, the Audit Committee has:
|
·
|
reviewed and discussed the audited financial statements with management;
|
|
·
|
discussed with Company’s independent accountants the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board; 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 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 31, 2017.
Shitong Jiang, Chair
Yang Zou
Nan Li
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 Tengfei Zhang, Shitong Jiang and Nan Li are members of the Compensation Committee. The Compensation Committee
operates under a written charter. Mr. Zhang is the Chairman of Compensation Committee. The Compensation Committee met 6 times in
2017.
Tengfei Zhang, Chair
Shitong Jiang
Nan Li
Nominating and Corporate Governance Committee
Our Board of Directors
established a Nominating 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 Tengfei Zhang, Shitong
Jiang and Yang Zou 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 met once in 2017. 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., Level 11, Vegetable Building, Industrial Park of the East City, Shouguang City , Shandong Province, the
People’s Republic of China. 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. 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.
Shitong Jiang, Chair
Yang Zou
Tengfei Zhang
Stockholder Communications
Stockholders can mail
communications to the Board of Directors, c/o Secretary, Gulf Resources, Inc., Level 11, Vegetable Building, Industrial Park of
the East City, Shouguang City , Shandong Province, the People’s Republic of China 262700, 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
2017, all such reports were filed timely.
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.
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, 2017.
FISCAL 2017 COMPENSATION TABLE
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
Bonus($)
|
|
Stock
Awards($)
|
|
Option Awards$(1)
|
|
Non-Equity Incentive Plan Compensation ($)
|
|
Nonqualified Deferred Compensation Earnings ($)
|
|
All Other Compensation ($)
|
|
Total ($)
|
Xiaobin Liu, CEO
|
|
2015
2016
2017
|
|
48,198
82,088
107,327
|
|
—
—
|
|
—
—
|
|
60,467
—
63,933
|
|
—
—
|
|
—
—
|
|
—
—
|
|
109,665
82,088
171,260
|
Min Li,
CFO
|
|
2015
2016
2017
|
|
32,196
75,837
107,327
|
|
—
—
|
|
—
—
|
|
60,467
—
63,933
|
|
—
—
|
|
—
—
|
|
—
—
|
|
92,663
75,837
171,260
|
Naihui Miao, COO
|
|
2015
2016
2017
|
|
32,196
75,837
107,327
|
|
—
—
|
|
—
—
|
|
60,467
—
63,933
|
|
—
—
|
|
—
—
|
|
—
—
|
|
92,663
75,837
171,260
|
(1) Represents the dollar amount
recognized for financial statement reporting purposes in accordance with Financial Accounting Standards Board Accounting
Standards Codification (FASB ASC) 718 – “Compensation - Stock Compensation.”
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 insurance or medical
reimbursement plans covering our officers and directors. 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 Company granted option to purchase 100,000
shares of our Common Stock to each of our named executive officers, under Company’s Amended and Restated 2007 Equity Incentive
Plan, during fiscal 2017.
FISCAL
2017 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
|
Name
|
|
Grant
Date
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Stocks
or Units
|
|
Underlying
Options
|
|
Option
Award($)
|
|
and
Options
|
Xiaobin
Liu,
CEO
|
|
August
23,
2017
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100,000
|
|
|
$
|
1.454
|
|
|
$
|
63,933
|
|
Min
Li,
CFO
|
|
August
23,
2017
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100,000
|
|
|
$
|
1.454
|
|
|
$
|
63,933
|
|
Naihui
Miao,
COO
|
|
August
23,
2017
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100,000
|
|
|
$
|
1.454
|
|
|
$
|
63,933
|
|
Narrative Discussion
The following employment
agreements were entered into by the Company and the named executive officers:
Xiaobin Liu
The employment agreement
for Xiaobin Liu to serve as Chief Executive Officer of the Company was renewed on March 12, 2018 with a term of three years. Xiaobin
Liu is also a member of the Board of Directors. Pursuant to the agreement, Mr. Liu is entitled to receive annual compensation equal
to approximately $107,327, subject to changes in the foreign exchange rate and market conditions.
Min Li
The employment agreement
for Min Li to serve as Chief Financial Officer of the Company was renewed on January 1, 2018 with a term of one year. Pursuant
to the agreement, Mr. Li is entitled to receive annual compensation equal to approximately $107,327, subject to changes in the
foreign exchange rate and market conditions.
Naihui Miao
The employment agreement
for Naihui Miao to serve as Chief Operating Officer of the Company was renewed on July 10, 2015 with a term of three years. Mr.
Miao is also a member of the Board of Directors. Pursuant to the agreement, Mr. Miao is entitled to receive annual compensation
equal to approximately $107,327 subject to changes in the foreign exchange rate and market conditions.
In addition, each of
our named executive officers 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 was to be terminated without cause or for good reason or in the event of change
in control, as of December 31, 2017, the following individuals would have been entitled to payments in the amounts set forth opposite
to their name in the below table:
Name
|
|
Cash Payment
|
Xiaboin Liu
|
|
$0
|
Min Li
|
|
$0
|
Naihui Miao
|
|
$0
|
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth,
for each named executive officer, information regarding unexercised stock options, unvested stock awards, and equity incentive
plan awards outstanding as of December 31, 2017.
OUTSTANDING EQUITY AWARDS
AT 2017 FISCAL YEAR END
|
OPTION AWARDS
|
|
STOCK AWARDS
|
Name
|
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
|
|
Option Exercise Price ($)
|
|
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 ($)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
|
Xiaobin Liu, CEO
|
|
|
100,000
|
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
1.454
|
|
|
August 22, 2021
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Min Li, CFO
|
|
|
100,000
|
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
1.454
|
|
|
August 22, 2021
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Naihui Miao, COO
|
|
|
100,000
|
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
1.454
|
|
|
August 22, 2021
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(1) Represents
an option to purchase shares of Common Stock granted on August 23, 2017, which vested and became exercisable beginning on August
23, 2017.
Option Exercises and Stock Vested
The following table sets forth aggregate
information with respect to each named executive officer regarding the exercise of stock options, stock appreciation rights, and
similar instruments and the vesting of restricted stock, restricted stock units and similar instruments, for fiscal 2017.
FISCAL 2017 OPTION EXERCISES AND STOCK VESTED
|
|
|
|
OPTION AWARDS
|
|
|
|
STOCK AWARDS
|
|
Name
|
|
|
Number of Shares Acquired on Exercise (#)
|
|
|
|
Value Realized on Exercise ($)
|
|
|
|
Number of Shares Acquired on Vesting (#)
|
|
|
|
Value Realized on Vesting ($)
|
|
Xiaobin Liu, CEO
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Min Li, CFO
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Naihui Miao, COO
|
|
|
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
officers had any non-qualified defined contribution or other plan that provides for the deferral of compensation, for fiscal 2017.
Compensation of Directors
The following table sets forth information
regarding compensation of each director, excluding our executive directors, Xiaobin Liu and Naihui Miao, who do not receive compensation
in their capacity as executive directors, for fiscal 2017.
FISCAL 2017 DIRECTOR COMPENSATION
|
Name
|
|
Fees Earned or Paid in Cash ($)
|
|
Stock Awards
($)
|
|
Option Awards
$(l)
|
|
Non-Equity Incentive Plan Compensation
($)
|
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)
|
|
All Other Compensation
($)
|
|
Total ($)
|
Ming Yang
|
|
|
35,628
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
35,628
|
|
Nan Li
|
|
|
—
|
|
|
|
—
|
|
|
|
4,350
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,350
|
|
Shitong Jiang
|
|
|
—
|
|
|
|
—
|
|
|
|
5,700
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,700
|
|
Yang Zou
|
|
|
—
|
|
|
|
—
|
|
|
|
9,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,000
|
|
Tengfei Zhang
|
|
|
—
|
|
|
|
—
|
|
|
|
4,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,500
|
|
(1) Represents the dollar amount recognized for financial statement
reporting purposes in accordance with FASB ASC 718 – “Compensation – Stock Compensation.”
Pursuant to the terms of their director agreements, each of
our independent directors, Nan Li, Shitong Jiang, Yang Zou, and Tengfei Zhang, receive options to purchase 12,500 shares
of our Common Stock on an annual basis with exercise prices not less than the closing market price of our Common Stock on the
dates of grant. The grant of future options is contingent upon the director’s continued service with the Company. We do
not pay any cash compensation to the independent directors.
Compensation Committee Interlocks and Insider Participation
Members of our Compensation
Committee of the Board of Directors during 2017 were Tengfei Zhang, Nan Li, and Shitong Jiang. No member of our Compensation Committee
was, or has been, an officer or employee of the Company or any of our subsidiaries. No member of the Compensation Committee has
a relationship that would constitute an interlocking relationship with executive officers or directors of the Company or another
entity.
Certain Relationships and Related Transactions
During the fiscal year
2017 and 2016, the Company borrowed $450,000 and $655,369, and fully repaid later during the same period, from Jiaxing Lighting
Appliance Company Limited (Jiaxing Lighting”), in which Mr. Ming Yang, a shareholder and the Chairman of the Company, has
a 100% equity interest. The amounts due to Jiaxing Lighting were unsecured, interest free and repayable on demand.
Director Independence
The Board of Directors
has determined that Nan Li, Yang Zou, Shitong Jiang and Tengfei Zhang are independent under Rule 5605(a)(2) of the NASDAQ Listing
Rules. In addition, under applicable rules and regulations, and as determined by the Board, all of the members of the Audit, Compensation,
and Nominating and Corporate Governance Committees are “independent” directors.
Directors are elected
by a plurality of votes cast.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE “
FOR
” THE ELECTION OF THE BOARD OF DIRECTORS’ NOMINEES.
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT
ACCOUNTANTS
The Audit Committee
has appointed Morison Cogen LLP (“
MC
”) as independent accountants for fiscal 2018, subject to the ratification
by stockholders. Representatives of MC 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, MC declines or the Audit Committee terminates the engagement,
or MC 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.
Services and Fees of Independent Accountants
The aggregate fees billed to the Company
by MC for the last two fiscal years were as follows:
Fees
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2017
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2016
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Audit Fees
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$
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265,000
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$
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303,000
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Audit Related Fees
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$
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0
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$
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0
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Tax Fees
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$
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7,000
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$
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13,000
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All Other Fees
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$
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0
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$
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0
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Total
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$
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272,000
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$
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316,000
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Audit Fees
This category consists
of fees for the audit of our annual financial statements, review of the financial statements included in our quarterly reports
on Form 10-Q and services that are normally provided by the independent registered public accountants in connection with statutory
and regulatory filings or engagements for those fiscal years.
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.
Tax Fees
The tax fee of $7,000
and $13,000 relate to tax compliance services rendered in the year ended December 31,2017 and 2016, respectively.
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.
A majority of votes
cast is required to ratify appointment of the independent accountants.
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
We are submitting to stockholders 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 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 in 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 of Regulation S-K, compensation tables, and narrative discussion, be, and hereby is, approved.
PROPOSAL 4
ADVISORY VOTE TO APPROVE THE FREQUENCY
OF ADVISORY VOTES ON EXECUTIVE COMPENSATION
Rules pursuant to the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 enable the Company’s stockholders to indicate how frequently they believe the Company should
seek an advisory vote on the compensation of the Company’s named executive officers, such as in Proposal 3 above.
Stockholders may indicate whether they would prefer an advisory vote on named executive officer compensation once every one, two,
or three years or you may abstain. The Board recommends that the Company’s stockholders select a frequency of
once every three years , with the next such stockholder advisory vote to be at the Company’s annual meeting for the
fiscal year 2021. At the Annual Meeting of Stockholders held in 2011, the stockholders voted that the frequency of the advisory
vote occur once a year.
Although the advisory vote is non-binding,
the Board will review and consider the voting results when making future decisions regarding the frequency of advisory votes on
executive compensation.
THE BOARD RECOMMENDS THAT YOU VOTE “
FOR
”
THE ADVISORY VOTE ON COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS TO BE HELD ONCE EVERY THREE YEARS.
OTHER INFORMATION
Important Notice Regarding Availability of Proxy Materials
Under rules adopted
by the SEC, the Company is making this Proxy Statement and the Company’s Annual Report available on the Internet instead
of mailing a printed copy of these materials to each shareholder. Shareholders who received a Notice of Internet Availability of
Proxy Materials (the “
Notice
”) by mail will not receive a printed copy of these materials other than as described
below. Instead, the Notice contains instructions as to how shareholders may access and review all of the important information
contained in the materials on the Internet, including how shareholders may submit proxies by telephone or over the Internet.
Stockholders' Proposals for Next Annual Meeting
A stockholder of record
may present a proposal for action at the next annual meeting provided that we receive the proposal at our executive office no later
than January 10, 2019. We anticipate that the 2018 Annual Meeting will be held in the second fiscal quarter of 2018. The proponent
may submit a maximum of one (1) proposal of not more than five hundred (500) words for inclusion in our proxy materials for a meeting
of security holders. At the Annual Meeting, management proxies will have discretionary authority, under Rule 14a-4 of the Securities
Exchange Act of 1934, to vote on stockholder proposals that are not submitted for inclusion in our proxy statement unless received
by us before January 10, 2019.
Other Business
The Board of Directors
knows of no business other than that set forth above to be transacted at the meeting, but if other matters requiring a vote of
the stockholders arise, the persons designated as proxies will vote the shares of Common Stock represented by the proxies in accordance
with their judgment on such matters. If a stockholder specifies a different choice on the proxy, his or her shares of Common Stock
will be voted in accordance with the specification so made.
Where You Can Find More Information
We file annual and
quarterly reports, proxy statements and other information with the SEC. Stockholders may read and copy any reports,
statements or other information that we file at the SEC’s public reference rooms in Washington, D.C., New York, New York,
and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information about the public reference rooms. Our
public filings are also available from commercial document retrieval services and at the Internet Web site maintained by the SEC
at
www.sec.gov
. The Company’s Annual Report on Form 10-K is available on our website at
www.gulfresourcesinc.cn.
STOCKHOLDERS SHOULD
RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROXY STATEMENT TO VOTE THEIR SHARES AT THE ANNUAL MEETING. NO ONE HAS
BEEN AUTHORIZED TO PROVIDE ANY INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY
STATEMENT IS DATED APRIL 30, 2018. STOCKHOLDERS SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE
AS OF ANY DATE OTHER THAN THAT DATE, UNLESS OTHERWISE DISCLOSED.
IT IS IMPORTANT THAT PROXIES BE RETURNED
PROMPTLY. WE URGE YOU TO FILL IN, SIGN AND RETURN THE FORM OF PROXY IN THE PREPAID ENVELOPE PROVIDED, NO MATTER HOW LARGE OR SMALL
YOUR HOLDINGS MAY BE
.
By Order of the Board of Directors,
/s/ Ming Yang
Ming Yang
Chairman of the Board of Directors
Dated: April 30, 2018
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GULF RESOURCES,INC.
Level 11, Vegetable Building
Industrial Park of the East City
Shouguang City, Shandong Province
Peoples Republic of China 262700
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VOTE
BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions
and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before
the cut-off date or meeting date. Have your proxy card in hand when you access the web
site and follow the instructions to obtain your records and to create an electronic voting
instruction form.
ELECTRONIC
DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce
the costs incurred by our company in mailing proxy materials, you can consent to receiving
all future proxy statements, proxy cards and annual reports electronically via e-mail
or the Internet. To sign up for electronic delivery, please follow the instructions above
to vote using the Internet and, when prompted, indicate that you agree to receive or
access proxy materials electronically in future years.
VOTE
BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions
up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have
your proxy card in hand when you call and then follow the instructions.
VOTE
BY MAIL
Mark, sign and date
your proxy card and return it in the postage-paid envelope we have provided or return
it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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Investor Address Line 1
Investor Address Line 2
Investor Address Line 3
Investor Address Line 4
Investor Address Line 5
John Sample
1234 ANYWHERE STREET
ANY CITY, ON A1A 1A1
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1
OF
2
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CONTROL # —> 0000000000000000
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NAME
THE COMPANY NAME INC. - COMMON
THE COMPANY NAME INC. - CLASS A
THE COMPANY NAME INC. - CLASS B
THE COMPANY NAME INC. - CLASS C
THE COMPANY NAME INC. - CLASS D
THE COMPANY NAME INC. - CLASS E
THE COMPANY NAME INC. - CLASS F
THE COMPANY NAME INC. - 401 K
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SHARES
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123,456,789,012.12345
123,456,789,012.12345
123,456,789,012.12345
123,456,789,012.12345
123,456,789,012.12345
123,456,789,012.12345
123,456,789,012.12345
123,456,789,012.12345
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PAGE
1 OF 2
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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x
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KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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For
All
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Withhold
All
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For All
Except
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To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
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The Board of Directors recommends you vote FOR the following:
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☐
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☐
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☐
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1.
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Election of Directors
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Nominees
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01 Ming Yang
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02 Xiabin Liu
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03 Naihui Miao
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04 Nan Li
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05 Yang Zou
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06 Shi Tong Jiang
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07 Tengfei Zhang
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The Board of Directors recommends you vote FOR proposals 2 and 3.
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For
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Against
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Abstain
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2.
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To ratify the appointment of Morison Cogen LLP, independent public accountants, as the auditor of the Company for the fiscal year 2018.
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☐
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☐
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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.
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☐
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☐
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☐
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The Board of Directors recommends you vote THREE YEARS on the following proposal:
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4
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To conduct an advisory vote to approve the frequency of advisory votes on executive compensation -------------- EVERY:
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☐ 1 YEAR ☐ 2 YEARS
☐ 3 YEARS
☐ ABSTAIN
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NOTE:
To transact any other business as may properly be presented at the Annual Meeting or any adjournment thereof.
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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. Joint owners should
each sign personally.
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Investor Address Line 1
Investor Address Line 2
Investor Address Line 3
Investor Address Line 4
Investor Address Line 5
John Sample
1234 ANYWHERE STREET
ANY CITY, ON A1A 1A1
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SHARES
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CUSIP #
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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JOB #
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Signature (Joint Owners)
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Date
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SEQUENCE #
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The Annual Meeting of the Stockholders
of Gulf Resources, Inc., a Nevada corporation
("Company"), will be held
on June 21, 2018, at 10:00 a.m. (local time), at the Company's
headquarters located at
Level 11, Vegetable Building, Industrial
Park of the East City, Shouguang City, Shandong
Province, 262700
People's Republic of China.
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting:
The Notice & Proxy Statement, 10-K is/are available at www.proxyvote.com
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF
DIRECTORS
PROXY FOR THE ANNUAL MEETING
OF STOCKHOLDERS
OF GULF RESOURCES, INC.
Gulf Resources, Inc.,
Annual Meeting of Stockholders
June 21, 2018 at 10:00 AM Local
Time
This proxy is solicited by the Board
Of Directors
The stockholders hereby appoints Ming Yang
and Xiaobin Liu, and each of them, each with full power of substitution, hereby are authorized to vote as specified on the reverse
side or, with respect to any matter not set forth on the reverse side, 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 2018 Annual Meeting of Stockholders and any adjournment thereof.
Unless otherwise specified, this proxy
will be voted FOR Proposals 1, 2, 3 and for THREE YEARS for Proposal 4. The Board of Directors recommends a vote FOR Proposals 1, 2,
3 and for THREE YEARS for Proposal 4.
Continued and to be signed on
reverse side
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