UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Exchange Act of 1934
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Definitive Proxy Statement |
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Soliciting Material Pursuant to
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Gulf Resources, Inc.
(Name of Registrant as Specified in Its Charter)
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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 November 30, 2021
___________________________
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 November 30, 2021,
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. |
To
elect seven directors, consisting of Ming Yang, Xiaobin Liu, Naihui
Miao, Shengwei Ma, 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. |
To
ratify the appointment of WWC, P.C. Certified Public Accountants,
independent public accountants, as the auditor of the Company for
the fiscal year 2021; |
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3 |
To
amend the Company’s 2019 Omnibus Equity Incentive Plan to increase
the number of shares of Common Stock authorized for issuance under
the plan by 900,000 shares; |
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4 |
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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5 |
To
transact any other business as may properly be presented at the
Annual Meeting or any adjournment thereof. |
Stockholders of record of the Company’s Common Stock at the close
of business on September 30, 2021 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: October 12, 2021
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 November 30, 2021
___________________________
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 November 30, 2021,
at 10:00 a.m. (local time) Beijing Standard Time (9:00 p.m. Eastern
Standard Time, November 29, 2021) (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. |
To
elect seven directors, consisting of Ming Yang, Xiaobin Liu, Naihui
Miao, Shengwei Ma, 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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|
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2. |
To
ratify the appointment of WWC, P.C. Certified Public Accountants,
independent public accountants, as the auditor of the Company for
the fiscal year 2021; |
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|
|
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3 |
To
amend the Company’s 2019 Omnibus Equity Incentive Plan to increase
the number of shares of Common Stock authorized for issuance under
the plan by 900,000 shares; |
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|
|
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4 |
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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|
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5 |
To
transact any other business as may properly be presented at the
Annual Meeting or any adjournment thereof. |
The Board of Directors set September 30, 2021 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 October 19, 2021, 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 10,469,477 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 in the
mail. 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 November 29, 2020 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. |
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.
Proposal 3 shall be approved upon the vote of a majority of shares
present in person or represented by proxy at the meeting.
Abstentions and broker non-votes will have the effect of a vote
“AGAINST” such proposal.
The advisory vote pursuant to Proposal 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 4.
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 WWC, P.C. Certified
Public Accountants to serve as the Company’s independent auditors
for the 2021 fiscal year. The Company elects to have its
stockholders ratify such appointment.
Proposal No. 3: NASDAQ Stock Market require corporations to
obtain stockholder approval to amend equity incentive plans to
increase shares authorized for issuance under such plans.
Proposal No. 4: 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.
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 September 30, 2021, there were 10,469,477
shares of the Company’s Common Stock outstanding.
| Name of Beneficial Owner (1) |
|
Number of Shares |
Percent of Class |
| Ming Yang (Chairman) |
|
|
2,810,622 |
|
(2) |
|
|
|
26.8 |
% |
| Xiaobin Liu (CEO) |
|
|
218,115 |
|
(3) |
|
|
|
2.1 |
% |
| Min
Li (CFO) |
|
|
218,115 |
|
(3) |
|
|
|
2.1 |
% |
| Naihui Miao (COO) |
|
|
218,115 |
|
(3) |
|
|
|
2.1 |
% |
| Shengwen Ma (Director) |
|
|
2,000 |
|
(4) |
|
|
|
* |
|
| Yang
Zou (Director) |
|
|
2,000 |
|
(5) |
|
|
|
* |
|
| Shi
Tong Jiang (Director) |
|
|
2,000 |
|
(6) |
|
|
|
* |
|
| Tengfei Zhang (Director) |
|
|
2,000 |
|
(7) |
|
|
|
* |
|
| All
Directors and Executive Officers as a Group (eight
persons) |
|
|
3,472,967 |
|
|
|
|
|
33.2 |
% |
| Wenxiang Yu |
|
|
1,015,945 |
|
(8) |
|
|
|
9.7 |
% |
| Shandong Haoyuan Industry Group Ltd. |
|
|
824,947 |
|
(8) |
|
|
|
7.9 |
% |
_____________
* 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 634,770 shares owned by Ming Yang, 1,015,945 shares
owned by Ms. Wenxiang Yu, the wife of Mr. Yang, 334,960 shares
owned by Mr. Zhi Yang, Mr. Yang’s son, and 824,947 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 218,115sharesheld by each individual..
(4) Consists of 2,000 shares held by Mr. Ma.
(5) Consists of 2,000 shares held by Mr. Zou.
(6) Consists of 2,000 shares held by Mr. Jiang.
(7) Consists of 2,000 shares held by Mr. Zhang.
(8) The address of the shareholder 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.
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 |
|
Age |
|
Other
positions with Company; other directorships held in last five
years |
|
Has served
as Company director since |
| Ming Yang |
|
53 |
|
Chairman of the Board of
Director |
|
December 2006 |
| Xiaobin Liu |
|
52 |
|
Chief Executive Officer and
Director |
|
March 2009 |
| Naihui Miao |
|
52 |
|
Secretary, Chief Operating
Officer and Director |
|
January 2006 |
| Yang Zou (1)(3) |
|
49 |
|
Independent Director |
|
March 2011 |
| Shengwei Ma(1)(2) |
|
53 |
|
Independent Director |
|
December 2019 |
| Shitong Jiang (1)
(2)(3) |
|
52 |
|
Independent Director |
|
April 2008 |
| Tengfei Zhang (2)(3) |
|
53 |
|
Independent Director |
|
June 2011 |
(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
Holding Company 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 was
awarded as Honorary Entrepreneur in Weifang City in 1998.
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 the Director of Sanya Kangyangnian
Health Management Co. LTD since March, 2021. He has served as
Chairman of Chengdu Philosopher's Stone Culture Media Co. LTD since
August 2018. He served as Chairman of China Shouguang Vegetable
Industry Group (Cayman) Inc. from 2011 to 2017. He currently serves
as a director of China Shouguang Vegetable Industry Group (Cayman)
Inc. 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. He has
served as Supervisor of Chengdu Philosopher's Stone Culture Media
Co. LTD since August 2018.
Yang Zou, Independent Director – Mr. Zou was
appointed a director on March 2, 2011. Mr. Zou served as Vice
Director of Beijing Zhongtianhuamao Accounting Firm (General
Partnership) from July 1, 2017 to August 2018. 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.
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.
Shengwei Ma, Independent Director – Mr. Ma was
appointed a director on December 18, 2019. Mr. Ma has served as
Department Manager of Shouguang City Urban Construction and
Investment Group since March 2012. Mr. Ma holds a Senior
Accountant Certificate. Mr. Ma graduated from Central Broadcasting
and Television University with bachelor’s degree in accounting in
2004.
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. The Company believes that these arrangements
afford the 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 6 meetings during 2020. During 2020, 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
and director nominee 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.
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.
Shengwei Ma was appointed as a Director on December 18,
2019. Mr. Ma holds a Senior Accountant Certificate. Mr. Ma has
extensive experience in financial, accounting and management
related matters with PRC government departments.
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
5 times during 2020. Our Board of Directors has determined that
Messrs. Jiang, Zou and Ma 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, 2020, 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, 2020.
Shitong Jiang, Chair
Yang Zou
Shengwei Ma
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 Shengwei Ma 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 3 times in 2020.
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 2 times in
2020. 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.
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
2020, 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. 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 two fiscal
years in the period ended December 31, 2020.
| FISCAL YEAR 2020 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 |
|
|
2019 |
|
|
|
104,467 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
104,467 |
|
| CEO |
|
|
2020 |
|
|
|
51,205 |
|
|
|
— |
|
|
|
500,000(1) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
551,205 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Min
Li |
|
|
2019 |
|
|
|
104,467 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
104,467 |
|
| CFO |
|
|
2020 |
|
|
|
104,456 |
|
|
|
— |
|
|
|
500,000(1) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
604,456 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Naihui Miao |
|
|
2019 |
|
|
|
104,467 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
104,467 |
|
| COO |
|
|
2020 |
|
|
|
104,456 |
|
|
|
— |
|
|
|
500,000(1) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
604,456 |
|
(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 “Compensation of
Directors,” 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 100,000 shares of our Common Stock to each of
our named executive officers, under Company’s 2019 Omnibus Equity
Incentive Plan, during fiscal year 2020.
| FISCAL YEAR 2020 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
|
|
September 21, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
|
|
|
500,000 |
|
|
Min Li,
CFO
|
|
September 21, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
|
|
|
500,000 |
|
|
Naihui Miao,
COO
|
|
September 21, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
|
|
|
500,000 |
|
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 June 1, 2019 with a
term of three years. Xiaobin Liu is also a member of the Board of
Directors. Pursuant to the agreement, Xiaobin Liu is entitled to
receive annual compensation equal to approximately $104,454,
subject to changes in the foreign exchange rate and market
conditions. On September 1, 2021, Mr. Liu and the Company entered
into an agreement, pursuant to which Mr. Liu shall refund to the
Company all of the cash compensation he earned for his services
with the Company from January 2010 to June 2021, considering that
the Company has not performed well in recent years. As of the date
hereof, the full amount of approximately $597,480 was refunded to
the Company by Mr. Liu. Effective from July 1, 2020, Mr. Liu’s
service shall be compensated in the Company's shares only under the
Company’s equity incentive plan.
Min Li
The employment agreement for Min Li to serve as Chief Financial
Officer of the Company was renewed on January 1, 2021 with a term
of one year. Pursuant to the agreement, Mr. Li is entitled to
receive annual compensation equal to approximately $104,454,
subject to changes in the foreign exchange rate and market
conditions. On September 1, 2021, Min Li and the Company mutually
agreed that Mr. Li shall return a portion of the cash compensation
he earned for his services with the Company from January 2010 to
June 2021, considering that the Company has not performed well in
recent years. As of date hereof, the full amount of approximately
$386,629 was refunded to the Company by Mr. Li. Effective from July
1, 2021, Mr. Li shall receive annual cash compensation equal to
approximately $18,500 subject to changes in the foreign exchange
rate and market conditions and be compensated in the Company’s
shares under the Company’s equity incentive plan.
Naihui Miao
The employment agreement for Naihui Miao to serve as Chief
Operating Officer of the Company was renewed on June 1, 2019 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 $104,454 subject
to changes in the foreign exchange rate and market conditions. On
September 1, 2021, Naihui Miao and the Company mutually agreed that
Mr. Miao will return a portion of the cash compensation he earned
for his services with the Company from January 2010 to June 2021
considering that the Company has not performed well in recent
years. As of date hereof, the full amount of approximately $386,629
was refunded to the Company by Mr. Miao. Effective July 1, 2021,
Mr. Miao shall receive annual cash compensation equal to
approximately $18,500 subject to changes in the foreign exchange
rate and market conditions, and be compensated in the Company’s
shares under the Company’s equity incentive plan.
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, 2020, 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 |
|
$0 |
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth, for each named
executive officer, information regarding unexercised stock options,
unvested stock awards, and equity incentive plan awards outstanding
as of December 31, 2020.
| OUTSTANDING EQUITY AWARDS AT 2020 FISCAL YEAR
END |
| OPTION
AWARDS |
|
STOCK
AWARDS |
| Name |
|
Number of
Securities Underlying Unexercised Options (#)
Exercisable |
|
Number of
Securities Underlying Unexercised Options (#)
Unexercisable |
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#) |
|
Option Exercise
Price ($) |
|
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 |
|
20,000(1) |
|
— |
|
— |
|
7.27 |
|
August 22, 2021 |
|
— |
|
— |
|
— |
|
— |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Min Li, CFO |
|
20,000(1) |
|
— |
|
— |
|
7.27 |
|
August 22, 2021 |
|
— |
|
— |
|
— |
|
— |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Naihui Miao, COO |
|
20,000(1) |
|
— |
|
— |
|
7.27 |
|
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 and are adjusted to
reflect the 1-for-5 reverse stock split of our common stock
completed on January 27, 2020. |
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 2020.
| FISCAL YEAR 2020 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 |
|
|
— |
|
|
|
— |
|
|
|
100,000 |
|
|
|
500,000 |
|
| Min
Li, CFO |
|
|
— |
|
|
|
— |
|
|
|
100,000 |
|
|
|
500,000 |
|
| Naihui Miao, COO |
|
|
— |
|
|
|
— |
|
|
|
100,000 |
|
|
|
500,000 |
|
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 2020.
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 2020.
| FISCAL YEAR 2020 DIRECTOR
COMPENSATION |
| Name |
|
Fees Earned or Paid in Cash ($) |
|
Stock
Awards
($)(l)
|
|
Option
Awards
$
|
|
Non-Equity Incentive Plan Compensation
($) |
|
Change in Pension Value and Nonqualified Deferred
Compensation Earnings ($) |
|
All Other Compensation
($) |
|
Total ($) |
| Ming Yang |
|
|
104,454 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
104,454 |
|
| Shitong Jiang |
|
|
— |
|
|
|
5,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
|
| Yang
Zou |
|
|
— |
|
|
|
5,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
|
| Tengfei Zhang |
|
|
— |
|
|
|
5,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
|
| Shengwei Ma |
|
|
— |
|
|
|
5,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
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(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, receive 1,000 shares of our restricted
common stock on an annual basis. The grant of restricted common
stock is contingent upon the director’s continued service with the
Company. We do not pay any cash compensation to the independent
directors.
On September 1, 2021, Ming Yang and the Company mutually agreed
that he will return all of the cash compensation he received from
the Company from January 2010 to June 2021 considering that the
Company has not performed well in recent years. As of the date
hereof, the full amount of approximately $454,833 was refunded to
the Company by Mr. Yang. Mr. Yang will not receive any cash
compensation annually.
Compensation Committee Interlocks and Insider
Participation
We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.
Certain Relationships and Related Transactions
During the fiscal year 2020 and 2019, the Company borrowed $0
and $419,995 and Nil, 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.
Our policy is that a contract or transaction either between the
Company and a director, or between a director and another company
in which he is financially interested is not necessarily void or
void-able if the relationship or related party transactions are
approved or ratified by the Audit Committee.
Director Independence
The Board of Directors has determined that Yang Zou, Shitong Jiang,
Tengfei Zhang and Shengwei Ma 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 WWC, P.C. Certified Public
Accountants (“WWC”) as independent accountants for fiscal
2021. Representatives of WWC 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.
On June 30, 2021, the Company was notified by Morison Cogen LLP
(“MC”) that the firm resigned as the Company’s independent
registered public accounting firm, which resignation was effective
on June 30, 2021.
The audit reports of MC on the financial statements of the Company
as of and for the years ended December 31, 2020 and 2019 did not
contain any adverse opinion or disclaimer of opinion, nor was it
qualified or modified as to uncertainty, audit scope, or accounting
principles.
There were no disagreements with MC on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedures, from the time of MC’s engagement up
to the date of resignation which disagreements that, if not
resolved to MC’s satisfaction, would have caused MC to make
reference in connection with its opinion to the subject matter of
the disagreement. None of “reportable events”, as that term is
described in Item 304(a)(1)(v)(A)-(D)of Regulation S-K occurred
within the two fiscal years of the Company ended December 31, 2020
and 2019 and subsequently up to the date of resignation. A copy of
MC’s letter addressed to the SEC relating to the aforesaid
statements made by the Company was attached to the Company’s
Current Report on Form 8-K filed with the SEC on July 7, 2021.
On July 1, 2021, the Company engaged WWC to serve as its
independent auditor. The decision to engage WWC as the Company’s
principal independent accountant was approved by the Audit
Committee of the Company on July 1, 2021. During the two fiscal
years of the Company ended December 31, 2020 and 2019, and through
the date of WWC’s engagement, the Company did not consult WWC
regarding either: (i) the application of accounting principles to a
specified transaction (either completed or proposed), or the type
of audit opinion that might be rendered on the Company’s financial
statements; or (ii) any matter that was either the subject of a
“disagreement” or “reportable event” within the meaning set forth
in Regulation S-K, Item 304 (a)(1)(iv) or (a)(1)(v).
Services and Fees of Independent Accountants
The aggregate fees billed to the Company by MC, its former
principal accountant, for the last two fiscal years were as
follows:
|
Fees |
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2020 |
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2019 |
|
Audit Fees |
|
$ |
245,500 |
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$ |
233,000 |
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Audit Related Fees |
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$ |
— |
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$ |
— |
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Tax Fees |
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$ |
9,000 |
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$ |
9,000 |
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liu Other Fees |
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$ |
— |
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$ |
— |
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Total |
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$ |
254,500 |
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$ |
242,000 |
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. There were no
such fees incurred by the Company in the years ended December 31,
2020 and 2019.
Tax Fees
The tax fee of $9,000 relate to tax compliance services rendered in
each of the years ended December 31, 2020 and 2019.
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 present in person or by proxy 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
RATIFICATION OF AMENDMENT TO 2019 OMNIBUS EQUITY INCENTIVE
PLAN
Summary and Purpose of the Amended Equity Participation
Plan
The Board of Directors has voted to amend the 2019 Omnibus Equity
Incentive Plan (the “Plan”) to increase the number of shares of
Common Stock authorized for issuance under the Plan by 900,000
shares.
Increase in Number of Authorized Shares
The Plan has been in place since 2019. Currently, there are
2,068,398 shares of Common Stock authorized for issuance under the
Plan, which has reflected the 1-for-5 reverse stock split of our
common stock completed on January 27, 2020. However, as of the date
hereof, the Company only has 159,248 shares of Common Stock
available for future issuance under the Plan. The Board of
Directors believes that the Company’s success depends in large part
on its ability to attract, retain, and motivate its executive
officers and other key personnel and that grants of awards under
the Plan may be a significant element of compensation for such
persons. The Board of Directors believes that the proposed increase
in the number of shares of Common Stock available for issuance as
provided in the Plan will provide the Compensation Committee with
greater flexibility in the administration of the Plan and is
appropriate in light of the growth of the Company in order to
attract and retain key individuals. Following the proposed
increase, the number of shares for which may be granted in the
future under the Plan (1,059,248 shares) shall represent
approximately 10% of the issued and outstanding shares of Common
Stock of the Company as of the date hereof.
A full copy of the Plan in its current form is attached as Exhibit
A to the Company’s 2019 Proxy Statement filed with the SEC on
November 1, 2019. The amendment to the Plan is attached as Appendix
A to this Proxy Statement.
Awards to be Granted to Certain Individuals and Groups
As of the date hereof, the Company cannot determine the benefits or
amounts that will be received by or allocated to any individual or
group resulting from the approval of the amendment to the Plan.
Equity Compensation Plan Information
The following table provides information as of December 31, 2020
about our equity compensation plans and arrangements.
|
Plan category |
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
Number of securities remaining
available for future issuance under equity compensation plans
(excluding securities reflected in column (a)) |
| |
(a) |
(b) |
(c) |
| Equity compensation plans
approved by security holders |
121,600 |
$7.09 |
515,648 |
| Equity compensation plans not approved by
security holders |
— |
— |
— |
| Total |
121,600 |
$7.09 |
515,648 |
A majority of votes cast is required to amend the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE
AMENDMENT TO THE PLAN TO INCREASE THE NUMBER OF AWARDS AVAILABLE
FOR FUTURE ISSUANCE.
PLEASE NOTE: If your shares are held in street name,
your broker, bank, custodian, or other nominee holder cannot vote
your shares to amend the Plan, unless you direct the holder how to
vote, by marking your proxy card, or by following the instructions
on the proxy card to vote on the Internet.
PROPOSAL 4
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.
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 June 21, 2022. We anticipate that
the 2022 Annual Meeting will be held in the third fiscal quarter of
2021. 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 June 21, 2022.
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. 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 OCTOBER 12,
2021. 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: October 12, 2021
APPENDIX A
AMENDMENT TO GULF RESOURCES, INC.
2019 OMNIBUS EQUITY INCENTIVE PLAN
Section 5.1 of the Gulf Resources, Inc. 2019 Omnibus Equity
Incentive Plan shall be deleted and replaced in its entirety to
read as follows:
“5.1 Authorized
Shares and Award Limits. The Committee may from time to time
grant Awards to one or more Employees, Directors and/or Consultants
determined by it to be eligible for participation in the Plan in
accordance with the provisions of Article VI. Subject to
Article XV, the aggregate number of Shares that may be issued under
the Plan shall not exceed 2,968,398 Shares inclusive of awards
previously issued and outstanding under the Gulf Resources, Inc.
Equity Incentive Stock Plan (the “2007 Plan”). Upon adoption
of this Plan, the 2007 Plan shall be frozen, no new awards shall be
granted thereunder, and outstanding awards thereunder shall
continue to be governed by the terms and condition of the 2007 Plan
and applicable award agreement. Shares shall be deemed to have been
issued under the Plan solely to the extent actually issued and
delivered pursuant to an Award. To the extent that an Award lapses,
expires, is canceled, is terminated unexercised or ceases to be
exercisable for any reason, or the rights of its Holder terminate,
any Shares subject to such Award shall again be available for the
grant of a new Award. Notwithstanding any provision in the Plan to
the contrary, the maximum number of Shares that may be subject to
Awards of Options under Article VII and/or Stock Appreciation
Rights under Article XIV, in either or both cases granted to any
one person during any calendar year, shall be One Million
(1,000,000) Shares (subject to adjustment in the same manner as
provided in Article XV with respect to Shares subject to Awards
then outstanding).”
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*** Exercise Your Right to
Vote *** |
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| Important Notice Regarding the Availability of
Proxy Materials for the |
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2021 |
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GULF RESOURCES, INC. |
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Meeting Type: Annual
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For holders as of: September
30, 2020 |
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Date: November 30,
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Location: Gulf Resources,
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Level 11, Vegetable
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Industrial Park of East
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GULF RESOURCES, INC.
Level 11, Vegetable
Building
Industrial Park of the East
City
Shouguang City, Shandong
Province
People’s Republic of China
262700
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You are receiving this communication because you hold shares in the
above named company.
This is not a ballot. You cannot use this notice to vote these
shares. This communication presents only an overview of the more
complete proxy materials that are available to you on the Internet.
You may view the proxy materials online at www.proxyvote.com
or easily request a paper copy (see reverse side).
We encourage you to access and review all of the important
information contained in the proxy materials before voting.
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Investor Address Line 1
Investor Address Line 2
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John Sample
1234 ANYWHERE STREET
ANY CITY, ON A1A
1A1
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side of this notice to obtain proxy materials and voting
instructions. |
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—— Before You Vote ——
How to Access the Proxy Materials
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Proxy Materials Available to VIEW
or RECEIVE: |
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1. Notice & Proxy Statement
2. 10-K
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How to View Online: |
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Have the information that is printed
in the box marked by the arrow  (located
on the following page) and visit:
www.proxyvote.com. |
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How to Request and Receive a PAPER
or E-MAIL Copy: |
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If you want to receive a paper or
e-mail copy of these documents, you must request one. There is NO
charge for requesting a copy. Please choose one of the following
methods to make your request: |
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1) BY INTERNET:
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2) BY TELEPHONE:
1-800-579-1639 |
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3) BY E-MAIL*:
sendmaterial@proxyvote.com |
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* If requesting materials by e-mail,
please send a blank e-mail with the information that is printed in
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Requests, instructions and other
inquiries sent to this e-mail address will NOT be forwarded to your
investment advisor. Please make the request as instructed above on
or before [*] to facilitate timely delivery. |
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—— How To Vote ——
Please Choose One of the Following Voting Methods
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Vote In Person: Many
stockholder meetings have attendance requirements including, but
not limited to, the possession of an attendance ticket issued by
the entity holding the meeting. Please check the meeting materials
for any special requirements for meeting attendance. At the
meeting, you will need to request a ballot to vote these
shares. |
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Vote By Internet: To vote now
by Internet, go to www.proxyvote.com. Have the information
that is printed in the box marked by the arrow
available and follow the
instructions. |
Internal Use
Only
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Vote By Mail: You can vote by
mail by requesting a paper copy of the materials, which will
include a proxy card. |
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Voting items |
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The Board of Directors recommends
you
vote FOR the
following:
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1. |
Election of
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1a. |
Ming Yang |
1b. |
Xiaobin Liu |
1c. |
Naihui Miao |
1d. |
Shengwei Ma |
1e. |
Yang Zou |
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1f. |
Shi Tong Jiang |
1g. |
Tengfei Zhang |
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The Board of
Directors recommends you vote FOR proposals 2, 3 and
4. |
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To ratify the appointment of WWC, P.C. Certified
Public Accountants, independent public accountants, as the auditor
of the Company for the fiscal year 2021. |
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To amend the Company’s
2019 Omnibus Equity Incentive Plan to increase the number of shares
of Common Stock authorized for issuance under the plan by 900,000
shares. |
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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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NOTE: To transact any other business as may
properly be presented at the Annual Meeting or any adjournment
thereof. |
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THE COMPANY NAME INC. -
COMMON |
123,456,789,012.12345 |
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THE COMPANY NAME INC. - CLASS
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123,456,789,012.12345 |
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THE COMPANY NAME INC. - CLASS
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123,456,789,012.12345 |
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THE COMPANY NAME INC. - CLASS
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123,456,789,012.12345 |
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THE COMPANY NAME INC. - CLASS
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123,456,789,012.12345 |
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THE COMPANY NAME INC. - CLASS
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123,456,789,012.12345 |
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THE COMPANY NAME INC. - CLASS
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123,456,789,012.12345 |
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THE COMPANY NAME INC. -
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123,456,789,012.12345 |
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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
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CONTROL # —>
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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
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PAGE 1 OF
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| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK
INK AS FOLLOWS: |
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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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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1. |
Election of
Directors |
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Nominees |
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01 Ming Yang |
02 Xiaobin
Liu |
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03 Naihui
Miao |
04 Shengwei
Ma |
05 Yang
Zou |
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06 Shi Tong
Jiang |
07 Tengfei
Zhang |
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The Board of
Directors recommends you vote FOR proposals 2, 3 and
4. |
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For |
Against |
Abstain |
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2. |
To ratify the
appointment of WWC, P.C. Certified Public Accountants, independent
public accountants, as the auditor of the Company for the fiscal
year 2021. |
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3 |
To amend the
Company’s 2019 Omnibus Equity Incentive Plan to increase the number
of shares of Common Stock authorized for issuance under the plan by
900,000 shares. |
☐ |
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4 |
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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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] |
Date |
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JOB # |
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Signature (Joint Owners) |
Date |
SEQUENCE # |
The Annual Meeting of the Stockholders of Gulf Resources, Inc.,
a Nevada corporation
("Company"), will be held on November 30, 2021, 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 and10-K are available at www.proxyvote.com
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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
November 30, 2021 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 2021 Annual Meeting of Stockholders and
any adjournment thereof.
Unless otherwise specified, this proxy will be voted FOR
Proposals 1, 2, 3 and 4. The Board of Directors recommends a vote
FOR Proposals 1, 2, 3 and 4.
Continued and to be signed on reverse side
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Gulf Resources (NASDAQ:GURE)
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From Apr 2022 to May 2022
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From May 2021 to May 2022
