UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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| ☐ | Soliciting Material Pursuant to §240.14a-12 | |
| CHINA GREEN AGRICULTURE, INC. |
| (Name of Registrant as Specified In Its Charter) |
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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May 18, 20174, 2018
Dear Stockholder:
On behalf of the Board of Directors of China Green Agriculture, Inc. (the “Company” or “we”), I invite you to attend our Annual Meeting of Stockholders, to be held on June 29, 20172018 at 10:00 a.m. Beijing Time (the “Annual Meeting”). We hope you can join us. The Annual Meeting will be held:
| At: | Shaanxi Techteam Jinong Humic Acid Product Co., Ltd. Xi’an Office, 3F, Borough A, Block A No. 181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065 |
| On: | June 29, |
| Time: | 10:00 a.m., Beijing Time |
The Notice of Annual Meeting of Stockholders, the proxy statement, the proxy card, and our 20162017 Annual Report accompany this letter.
At the Annual Meeting, we will report on important activities and accomplishments of the Company and review the Company’s financial performance and business operations. You will have an opportunity to ask questions and gain an up-to-date perspective on the Company and its activities, and to meet certain directors and key executives of the Company.
As discussed in the enclosed proxy statement, the Annual Meeting will also be devoted to (i) the election of directors, (ii) ratification of the approval of our independent registered public accountants, and (iii) the consideration of any other business matters properly brought before the Annual Meeting.
We know that many of our stockholders will be unable to attend the Annual Meeting. We are soliciting proxies so that each stockholder has an opportunity to vote on all matters that are scheduled to come before the stockholders at the Annual Meeting. Whether or not you plan to attend, please take the time now to read the proxy statement and vote via the Internet or, if you prefer, submit by mail a paper copy of your proxy or voter instructions card, so that your shares are represented at the meeting. You may also revoke your proxy or voter instructions before or at the Annual Meeting. Regardless of the number of Company shares you own, your presence in person or by proxy is important for quorum purposes and your vote is important for proper corporate action.
Thank you for your continuing interest in China Green Agriculture, Inc. We look forward to seeing you at the Annual Meeting.
If you have any questions about the proxy statement, please contact us at China Green Agriculture, Inc., 3rd Floor, Borough A, Block A. No. 181, South Taibai Road, Xian, Shaanxi Province, People’s Republic of China 710065.
| Sincerely, | |
| /s/ | |
| Chief Executive Officer |
TABLE OF CONTENTS
CHINA GREEN AGRICULTURE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on
June 29, 2017,2018, 10:00 a.m. Beijing Time
To the Stockholders of CHINA GREEN AGRICULTURE, INC.:
Notice is hereby given that the Annual Meeting of Stockholders (the “Annual Meeting”) of China Green Agriculture, Inc., a Nevada corporation (the “Company”), will be held on Thursday,Friday, June 29, 2017,2018, at 10:00 a.m., Beijing time, at the headquarters of our wholly-owned subsidiary Shaanxi Techteam Jinong Humic Acid Product Co., Ltd. at 3F, Borough A, Block A, No. 181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China, 710065, for the following purposes:
1. | To elect five persons to the Board of Directors of the Company, each to serve until the next annual meeting of stockholders of the Company or until such person shall resign, be removed or otherwise leave office; | |
| 2. | To ratify the appointment of KSP Group, Inc. (“KSP”) as our independent registered public accounting firm for the fiscal year ending June 30, |
| 3. | To transact such other business as may properly come before the Annual Meeting or any adjournment thereof. |
Only stockholders of record at the close of business on May 12, 20174, 2018 (the “Record Date”), are entitled to notice and to vote at the Annual Meeting and any adjournment or postponement thereof. In accordance with the rules of the Securities and Exchange Commission, we will post our proxy materials on the Internet beginning on May 18, 2017, __, 2018, the date we will mail Notices of Internet Availability of Proxy Materials (and, to the extent required or appropriate, full sets of proxy materials) to the holders of record and beneficial owners of our common stock as of the close of business on the Record Date.
A proxy statement describing the matters to be considered at the Annual Meeting is attached to this Notice. Our 20162017 Annual Report accompanies this notice, but it is not deemed to be part of the proxy statement.
It is important that your shares are represented at the Annual Meeting. We urge you to review the attached proxy statement and, whether or not you plan to attend the Annual Meeting in person, please vote your shares promptly by casting your vote via the Internet or, if you receive a full set of proxy materials by mail or request one be mailed to you, and prefer to mail your proxy or voter instructions, please complete, sign, date, and return your proxy or voter instructions card in the pre-addressed envelope provided, which requires no additional postage if mailed in the United States. You may revoke your vote by submitting a subsequent vote over the Internet or by mail before the Annual Meeting, or by voting in person at the Annual Meeting.
If you plan to attend the meeting, please notify us of your intentions. This will assist us with meeting preparations. If your shares are not registered in your own name and you would like to attend the Annual Meeting, please follow the instructions contained in the Notice of Internet Availability of Proxy Materials and any other information forwarded to you by your broker, trust, bank, or other holder of record to obtain a valid proxy from it. This will enable you to gain admission to the Annual Meeting and vote in person.
| By Order of the Board of Directors, | |
| /s/ | |
Chairman of the Board |
May 18, 2017
2018
CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No. 181
South Taibai Road, Xi’an, Shaanxi Province
People’s Republic of China 710065
| PROXY STATEMENT |
INFORMATION CONCERNING SOLICITATION AND VOTING
This proxy statement and the accompanying proxy are being furnished with respect to the solicitation of proxies by the Board of Directors of China Green Agriculture, Inc., a Nevada corporation (the “Company” or “we”), for our Annual Meeting of Stockholders for fiscal year ended June 30, 20162017 (the “Annual Meeting”). The Annual Meeting will be held on Thursday,Friday, June 29, 2017,2018, at 10:00 a.m. Beijing time, and at any adjournment(s) or postponement(s) thereof, at the headquarters of our wholly-owned subsidiary, Shaanxi Techteam Jinong Humic Acid Product Co., Ltd. located at 3F, Borough A, Block A, No. 181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China, 710065.
The date on which the proxy statement and form of proxy card are intended to be sent or made available to stockholders is May 18, 2017.2018.
The purposes of the Annual Meeting are to seek stockholder approval of the following proposals: (i) electing five (5) directors to our Board of Directors (the “Board”), and (ii) ratification of the selection of KSP Group, Inc. (“KSP”) as our independent registered public accounting firm for the fiscal year ending June 30, 2017.2018. We will also transact such other business as may properly come before the Annual Meeting or any adjournment thereof.
Who May Vote
Only stockholders of record of our common stock, par value $.001 per share, as of the close of business on May 12, 20174, 2018 (the “Record Date”) are entitled to notice and to vote at the Annual Meeting and any adjournment or adjournments thereof.
A list of stockholders entitled to vote at the Annual Meeting will be available at the Annual Meeting and for ten days prior to the Annual Meeting, during office hours, at our executive offices located at 3rd Floor, Borough A, Block A. No. 181, South Taibai Road, Xian, Shaanxi Province, People’s Republic of China, 710065, by contacting our Chief Financial Officer.
Consistent with our bylaws, the presence, in person or by proxy, of at least a one-third of the shares entitled to vote at the meeting will constitute a quorum for purposes of voting on a particular matter at the meeting. Once a share is represented for any purpose at the meeting, it is deemed present for quorum purposes for the remainder of the meeting and any adjournment thereof unless a new record date is set for the adjournment. Shares held of record by stockholders or their nominees who do not vote by proxy or attend the meeting in person will not be considered present or represented and will not be counted in determining the presence of a quorum. Signed proxies that withhold authority or reflect abstentions and “broker non-votes” will be counted for purposes of determining whether a quorum is present. “Broker non-votes” are proxies received from brokerage firms or other nominees holding shares on behalf of their clients who have not been given specific voting instructions from their clients with respect to non-routine matters. Assuming the presence of a quorum at the meeting:
The election of directors will be determined by a plurality of the votes cast at the meeting. This means that the five nominees receiving the highest number of “FOR” votes will be elected as directors. Withheld votes and broker non-votes, if any, are not treated as votes cast, and therefore will have no effect on the proposal to elect directors.
The ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of a majority of the votes cast at the meeting. Withheld votes and broker non-votes, if any, are not treated as votes cast, and therefore will have no effect on this proposal.
With respect to “routine” matters, such as the ratification of the selection of our independent registered public accounting firm, a bank, brokerage firm, or other nominee has the authority (but is not required) under the rules governing self-regulatory organizations, or SRO rules, including the NYSE MKT, on which our common stock is listed, to vote its clients’ shares if the clients do not provide instructions. When a bank, brokerage firm, or other nominee votes its clients’ shares on routine matters without receiving voting instructions, these shares are counted both for establishing a quorum to conduct business at the meeting and in determining the number of shares voted FOR, AGAINST or ABSTAINING with respect to such routine matters.
While the election of directors is a non-routine matter, directors are elected by a plurality of the votes cast, which means that the five nominees receiving the highest number of votes will be elected. As a result, broker non-votes have no effect on the election.
As of May 12, 2017,4, 2018, we had issued and outstanding 38,551,26538,896,945 shares of our common stock. Each record holder of our common stock on the Record Date is entitled to one vote for each share then held on all matters to be voted at the Annual Meeting. No other class of voting securities was then outstanding.
Voting Your Proxy
You may vote by proxy over the Internet by following the instructions provided in the Notice of Internet Availability of Proxy Materials mailed to you or your household. If you have received printed copies of the proxy materials by mail, or if you request printed copies of the proxy materials by mail by following the instructions on the Notice of Internet Availability of Proxy Materials, you can also vote by mail by completing, dating, and signing the proxy or voter instructions card and mailing it in the pre-addressed envelope provided, which requires no additional postage if mailed in the United States. You may submit your vote over the Internet until 11:59pm, ET, on June 27, 2017.2018. If you vote by mail, please be aware that we can recognize your vote only if we receive it by close of business on the day before the Annual Meeting.
You may also vote in person at the Annual Meeting. If your shares are held through a broker, trust, bank, or other nominee, please refer to the Notice of Internet Availability of Proxy Materials and any other information forwarded to you by such holder of record to obtain a valid proxy from it. You will need to bring this legal proxy with you to the Annual Meeting in order to vote in person.
The shares represented by any proxy duly given will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are given, the shares will be voted as follows:
(i) FOR the election of the nominees for the directors named in this proxy statement; and
(ii) IN FAVOR of ratification of the auditors.
In addition, if other matters come before the Annual Meeting, the person named in the accompanying form of proxy will vote in accordance with his best judgment with respect to such matters.
Stockholders have no cumulative voting rights or dissenter’s or appraisal rights relating to the matters to be acted upon at the Annual Meeting.
Revoking Your Proxy
Even if you submit a proxy or voter instructions, you may revoke your proxy and change your vote. You may revoke your proxy or voter instructions by submitting a new proxy or voter instructions over the Internet by using the procedure to vote your shares online described in the Notice of Internet Availability of Proxy Materials. You may also revoke your proxy by mail by requesting a copy be mailed to you, executing a subsequently dated proxy or voter instructions card, and mailing it in the pre-addressed envelope, which requires no additional postage if mailed in the United States. You may also revoke your proxy by your attendance and voting in person at the Annual Meeting. Mere attendance at the meeting will not revoke a proxy or voter instructions. We will vote the shares in accordance with the directions given in the last proxy or voter instructions submitted in a timely manner before the Annual Meeting. You may revoke your vote over the Internet until 11:59 pm, ET, on June 27, 2017.2018. If you revoke your vote by mail, please be aware that we can recognize the revoked vote only if we receive it by close of business on the day before the Annual Meeting.
If the Annual Meeting is postponed or adjourned for any reason, at any subsequent reconvening of the Annual Meeting, all proxies will be voted in the same manner as the proxies would have been voted at the original convening of the Annual Meeting (except for any proxies that have at that time effectively been revoked or withdrawn), even if the proxies had been effectively voted on the same or any other matter at a previous meeting.
You are requested, regardless of the number of shares you own or your intention to attend the Annual Meeting, to vote your shares as described above.
Solicitation of Proxies
We will pay the expenses relating to the solicitation of proxies. We may solicit proxies by mail, and our officers and employees may solicit proxies personally or by telephone and will receive no extra compensation from such activities. We will reimburse brokerage houses and other nominees for their expenses incurred in sending proxies and proxy materials to the beneficial owners of shares held by them.
Delivery of Proxy Materials to Households
Only one copy of the our 20162017 Annual Report, this proxy statement, and/or Notice of Internet Availability of Proxy Materials, as applicable, will be delivered to an address where two or more stockholders reside with the same last name or whom otherwise reasonably appear to be members of the same family based on the stockholders’ prior express or implied consent.
We will deliver promptly upon written or oral request a separate copy of the 20162017 Annual Report, this proxy statement, and/or Notice of Internet Availability of Proxy Materials, as applicable, upon such request. If you share an address with at least one other stockholder, currently receive one copy of our annual report, proxy statement, and/or Notice of Internet Availability of Proxy Materials at your residence, and would like to receive a separate copy of our annual report, proxy statement, and Notice of Internet Availability of Proxy Materials for our future stockholder meetings, please follow the instructions for requesting materials indicated on the Notice of Internet Availability of Proxy Materials sent to your residence and specify this preference in your request.
Interest of Officers and Directors in Matters to Be Acted Upon
None of our officers or directors has any interest in any of the matters to be acted upon at the Annual Meeting, except to the extent that a director is named as a nominee for election to the Board or a director.
ELECTION OF DIRECTORS
General
Our Bylaws provide that our Board of Directors shall be comprised of not less than one (1) director nor more than nine (9) directors, and directors are elected annually at the annual shareholders meeting. The Board of Directors is currently comprised of five (5) directors and will be comprised of five (5) directors effective immediately following the election if all the nominees are elected.
The Board of Directors has nominated for election five (5) persons as directors. Each nominee currently serves as one of our directors. All of the nominees have consented to serve as directors. If a nominee should not be available for election as contemplated, the proxyholder will vote for a substitute designated by the current Board of Directors. We are not aware of any nominee who will be unable or who will decline to serve as a director.
Directors Nominees
| Director Nominee | Position/Title | Age* | Director Since | |||
| Zhuoyu (“Richard”) Li | Chairman of the Board of Directors | 26 | 2017 | |||
| Ale Fan | Director | 38 | 2015 | |||
| Daqing Zhu | Director | 53 | 2017 | |||
| Chairman of the Audit Committee | ||||||
| Compensation Committee Member | ||||||
| Nominating Committee Member | ||||||
| Lianfu Liu | Director | 79 | 2007 | |||
| Chairman of the Nominating Committee | ||||||
| Audit Committee Member | ||||||
| Compensation Committee Member | ||||||
| Jinjun Lu | Director | 45 | 2017 | |||
| Chairman of the Compensation Committee | ||||||
| Audit Committee Member | ||||||
| Nominating Committee Member |
* As of the date of this proxy statement.
For information as to the shares of our common stock beneficially owned by each nominee, see the section “Securities Ownership of Certain Beneficial Owners and Management”, and as to other Board matters, see the section “Board Information.”
The following are biographical summaries for our nominees for election as directors:
TaoZhuoyu (“Richard”) Li, Chairman of the Board of Directors and Chief Executive Officer since 2017. Mr. Li was President of the Company until the death of his father, Tao Li, in December 2017, at which time he was appointed to serve as Chairman of the Board of Directors and President since December 26, 2007.Chief Executive Officer Mr. Li has five years of experience in agricultural industry. Prior to joining the Company, Mr. Li has served as Chief Operating Officer at the President and CEO of Shaanxi TechTeam Jinong Humic Acid ProductCompany’s affiliate, 900LH.com Food Co., Ltd., our wholly-owned subsidiary (“Jinong”900LH.com”), since 2000.January 2016. From January 2015 to January 2016, Mr. Li established Xi’an TechTeam Industry (Group) Co., Ltd.served as a senior manager at the international department of 900LH.com, where he helped to develop the international market. Richard served as a senior manager at the customer center of 900LH.com from March 2013 through January 2015. He studied business at the University of Auckland in 19962012. We believe Mr. Li’s practical experience from serving as President of the Company and established Jinong in 2000. Mr. Li is also currently the Chairman of Kingtone Wirelessinfo Solution Holding Ltd, a NASDAQ listed company. He graduated from Northwest Polytechnic University in Xi’an, China with a Master’s degree in heat and metal treatment. Mr. Li is the current Vice900LH.com qualify him to serve as Chairman of the China Green Food Association. Previously, he has held positions at the World Bank Loan OfficeBoard of China Education Commission, National Key Laboratory for Low Temperature Technology, and Northwest Polytechnic University. Mr. Li is active in Shaanxi Province business and trade organizations including as a memberDirectors of the CPPCC Shaanxi Committee, the Shaanxi Provincial Decision-Making Consultation Committee, Vice Chairman of the Shaanxi Provincial Federation of Industry and Commerce, Vice President of the Shaanxi Overseas Friendship Association, Vice Chairman of the Shaanxi Provincial Credit Association, Vice Chairman of the Shaanxi Provincial Youth Entrepreneurs Association, Vice Chairman of the Xi’an Municipal Federation of Industry and Commerce and Vice Chairman of the Xi’an Municipal Youth Entrepreneurs Association. Mr. Li, as the founder of our company, has been critical to our success and his experience brings to the board of directors an irreplaceable perspective with respect to our business and the industry in which we compete. These attributes make Mr. Li an ideal candidate to serve as our Chairman.Company.
Ale Fan, Director since 2015. Ms. Fan had served as the Director of Finance at Jinong since January 2013. She has also served as comptroller of the financial department at Jinong from September 2007 to December 2012. Prior to that, she worked as an accountant at Jinong from August 2003. Ms. Fan holds a degree in Accounting from Baoji University of Arts and Sciences. We believe that Ms. Fan’s knowledge of the Company’s history and day-to-day operations and her experience in accounting and finance in the PRC qualify her to serve a director of our company.
Jianlei ShenDaqing Zhu, Director, Chairman of Compensationthe Audit Committee, AuditCompensation Committee Member and Nominating Committee Member. Mr. ShenZhu has four yearsserved as the president of experienceShaanxi Aisuo Consulting Co. Ltd., a company specializing in onlineproviding professional management and finance services, since 2014. In 2004, Mr. Zhu founded Shaanxi Xintianyou Auto Dealership Co. Ltd, a dealership of auto sales of agriculture materials. He has been working on developing a national e-commerce transaction platform of fertilizer since 2011. He worked on integrating fertilizer producers with online financial service and distributors in order to help the fertilizer producers surviveservices for various brands, including BYD Auto, and transit with the developmenthad served as its CEO and Chairman of the e-commerce in the Chinese agriculture industry. PriorBoard until 2014. In addition to that,founding and developing commercial businesses, Mr. Shen was working in China Medical Instrument Company (CMIC), and he was in charge of the enterprise information-based construction, including the development of the national medical apparatus and instruments online sales platform. Before that, Mr. ShenZhu had also worked in the State Pharmaceutical Administration.public sector since the 1990s. His public administration experience includes working at various agencies and offices of the Shaanxi provincial government from 1990 to 2004. Earlier in his career, in the 1980’s, Mr. Shen also workedZhu was a corporate banking officer at Industrial and Commercial Bank of China in Xi’an. As the Ministrycorporate leader with responsibility for all aspects of Science and Technology from 1991 to 1997. He graduated with a Master’s degree in industrial engineering from Changchun University of Technology in 2000. We believebusiness management, Mr. Shen’s extensive e-commerceZhu has executive level experience in agriculture industry qualifies Mr. Shenfinancial management, internal control, marketing to serve as an independent director of our company.individuals and small businesses, sales, customer care, operations, product management, electronic commerce, financial services, executive compensation, strategic planning, technology, and mergers and acquisitions.
Lianfu Liu, Director, Chairman of Nominating Committee, Audit Committee Member and Compensation Committee Member. Mr. Liu has served as a director of our company since December 26, 2007. Mr. Liu has served as the Chairman of the China Green Food Association since 1998. From 1992 to 1998, Mr. Liu was a Director and Senior Engineer for the China Green Food Development Center. Prior to that, Mr. Liu was a Vice Director of the PRC Ministry of Agriculture. Mr. Liu graduated from Beijing Forestry University and studied soil conservation. We believe Mr. Liu’s experience in the agricultural industry in the PRC allows him to bring a unique perspective as an independent director of our company.
Daqing ZhuJinjun Lu,, Director, Chairman of theCompensation Committee, Audit Committee, Compensation Committee Member and Nominating Committee Member. Mr. Zhu has served asLu, aged 44, is the presidentco-founder of Shaanxi Aisuo Consulting Co. Ltd., a company specializing in providing professional management and finance services, since 2014. In 2004, Mr. Zhu founded Shaanxi Xintianyou Auto DealershipJinfenghui Technology Co. Ltd a dealership(“Jinfenghui”) since he started in 2014. Drawing on years of auto sales and services for various brands, including BYD Auto, and had served as its CEO and Chairmanentrepreneurial experience, Mr. Lu plans to grow Jinfenghui into one of the Board until 2014. In additionlargest mobile terminal device manufacturers in northwestern China. At Jinfenghui, Mr. Lu oversees corporate growth plans, budgets capital expenditures, seeks investment funds, and designs marketing strategies for Jinfenghui products to penetrate target markets. Before founding and developing commercial businesses, Mr. Zhu had also workedJinfenghui, in the public sector since the 1990s. His public administration experience includes working at various agencies and offices of the Shaanxi provincial government from 1990 to 2004. Earlier1998 he founded Xinjiang Yongan Engineering Co. Ltd in his career, in the 1980’s, Mr. Zhu wasXinjiang Uyghur Autonomous Region, a corporate banking officer at Industrial and Commercial Bankprovincial-level autonomous region of China in Xi’an.the northwest of the country. Earlier in the 1990s, Mr. Lu began his entrepreneurship career as a distributor for Lining-branded garment products in Henan Province, which he grew into the largest wholesale venture for Lining in the region. As the corporate leader with responsibility for all aspectsa founder of business management,several enterprises and a seasoned entrepreneur, Mr. ZhuLu not only has executive level experience in financialstrategic management, internal control, marketing to individuals and small businesses, sales, customer care, operations, product management, electronic commerce, financial services, executive compensation, strategic planning,and technology, and mergers and acquisitions.but also brings his experience as a founder from different industries.
Vote Required and Board of Directors’ Recommendation
Assuming a quorum is present, the affirmative vote of a plurality of the votes cast at the Meeting, either in person or by proxy, is required for the election of a director. For purposes of the election of directors, abstentions and broker non-votes will have no effect on the result of the vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR THESE NOMINEES.
EXECUTIVE OFFICERS OF THE COMPANY
| Executive Officers | Position/Title | Age* | ||
| Chief Executive Officer | ||||
| Chief Financial Officer |
* As of the date of this proxy statement.
The following is the biographical summary of our executive officers, other than Mr. TaoZhuoyu Li’s biographical summary which is set forth above with the director nominees.
Mr. Zhuoyu “Richard” Li.Please see description of Mr. Li has four yearsunder “Election of experience in agricultural industry. Prior to joining the Company, Mr. Li has served as Chief Operating Officer at the Company’s affiliate, 900LH.com Food Co., Ltd. (“900LH.com”) since January 2016. From January 2015 to January 2016, Mr. Li served as a senior manager at the international department of 900LH.com, where he helped to develop the international market. Richard served as a senior manager at the customer center of 900LH.com from March 2013 through January 2015. He studied business at the University of Auckland in 2012. We believe Mr. Li’s practical experience from 900LH.com will be a great addition to the Company.Directors,” above.
Ken RenYongcheng Yang. Mr. RenYang has served as the Chief Financial Officer of our company since 2010. Prior to joining our company, he2017. He served as a capital market analystSenior Vice President of Finance since January 2016. Before that, Mr. Yang served as the chief financial officer of the Company’s wholly-owned subsidiary, Beijing Gufeng Chemical Products Co., Ltd. (“Gufeng”) since July 2010. Earlier, Mr. Yang had served various senior, and executive level positions in finance for the Federal Home Loan Bank of Des MoinesCompany and the Company’s affiliate, Xi’an Techteam Investment Holding (Group) Co., Ltd, since April 2009, where he analyzed, priced,2002. Mr. Yang started his career in accounting and assistedfinance at Shaanxi Weidong Chemistry Co., Ltd from 1989 to 2002. Mr. Yang graduated from Xi’an Jiaotong University in trading investments1989 with his Bachelor’s degree in accounting.
The Board has determined that Mr. Yang is qualified for the position considering his accounting education, career history, and issuing debt, conducted hedges and performed relative value analysismanagement experience in the bank’s capital market group. From earlier, Mr. Ren served as a senior investment associate at an asset management subsidiary of Wells Fargo, which provides money management services to institutional clients. Mr. Ren received a Ph.D. degree in Operations Research in 2006,company and a M.S. degree in Computational Finance in 2004, both from Purdue University. We believe Mr. Ren is a good fit to serve as our Chief Financial Officer, given his credentials mentioned above.industry.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of May 12, 2017,4, 2018, the record date, with respect to the beneficial ownership of our common stock, the sole outstanding class of our voting securities, by (i) any person or group owning more than 5% of each class of voting securities, (ii) each director, (iii) each executive officer and (iv) all executive officers and directors as a group.
As of May 12, 2017,4, 2018, an aggregate of 38,551,26538,896,945 shares of our common stock were outstanding.
| Title of Class | Name and Address of Beneficial Owners (1) | Amount and Nature of Beneficial Ownership | Percent of Class (2) | Name and Address of Beneficial Owners (1) | Amount and Nature of Beneficial Ownership | Percent of Class (2) | ||||||||||||||
| Greater Than 5% Shareholders | Greater Than 5% Shareholders | |||||||||||||||||||
| Common Stock | Tao Li | 10,565,308 | (3) | 27.5 | % | Zhuoyu (“Richard”) Li | 11,662,695 | (3) | 30.0 | % | ||||||||||
| Directors and Executive Officers | Directors and Executive Officers | |||||||||||||||||||
| Common Stock | Tao Li Chief Executive Officer and Chairman of the Board | 10,565,308 | 27.5 | % | Zhuoyu (“Richard”) Li Chief Executive Officer and Chairman of the Board | 11,662,695 | (3) | 30.0 | % | |||||||||||
| Common Stock | Zhuoyu “Richard” Li President | 1,097,387 | 2.7 | % | Daqing Zhu Director | 0 | — | * | ||||||||||||
| Common Stock | Ken Ren Chief Financial Officer | 1,080,000 | 2.7 | % | Jinjun Lu Director | 0 | — | * | ||||||||||||
| Common Stock | Daqing Zhu Director | 0 | — | * | Ale Fan Director | 0 | — | * | ||||||||||||
| Common Stock | Jianlei Shen Director | 40,000 | — | * | Lianfu Liu Director | 121,000 | — | * | ||||||||||||
| Common Stock | Ale Fan Director | 0 | — | * | ||||||||||||||||
| All executive officers and directors as a group | 30.3 | % | ||||||||||||||||||
| Common Stock | Lianfu Liu Director | 121,000 | — | * | ||||||||||||||||
| All executive officers and directors as a group | 11,483,695 | 31.1 | % | |||||||||||||||||
* Represents a percentage that is less than 1%.
| (1) | Unless otherwise stated, each beneficial owner has sole power to vote and dispose of the shares and the address of such person is c/o China Green Agriculture, Inc., 3rd Floor, Borough A, Block A. No. 181, South Taibai Road, Xian, Shaanxi Province, People’s Republic of China 710065. |
| (2) | In determining the percent of common stock owned by the beneficial owners, (a) the numerator is the number of shares of common stock beneficially owned by such owner, including shares the beneficial ownership of which may be acquired, within 60 days upon the exercise of the options, if any, held by the owner; and (b) the denominator is the sum of (i) the total |
| (3) | Includes |
Compensation Discussion and Analysis
Overview
This section contains a discussion of the material elements of compensation awarded to, earned by or paid to our principal executive officer, our principal financial officer, and our other executive officers whose total compensation exceeded $100,000 during the fiscal year ended June 30, 2016.2017. Accordingly, our “Named Executive Officers” arefor the fiscal year 2017 were i) Mr. Tao Li, our Chairman, and Chief Executive Officer, ii) Mr. Zhuoyu “Richard” Li, our President, and iii) Mr. Ken Ren, our Chief Financial Officer. Mr. Tao Li died in December of 2017 and Mr. Ren left our employment in November of 2017.
Our Board established the Compensation Committee to assist with the analysis and determination of the compensation structure for our executive officers. Our Compensation Committee, consisting of three independent directors, reviews and approves, or in some cases recommends for the approval of the full Board, the annual compensation for our executive officers. Typically, management recommends to the Compensation Committee compensation package proposals based on prevailing compensation standards in our industry, which in turn reviews and approves such proposals. Our Compensation Committee may consult with the executive officers to form consensus on such packages. Our executive officers may discuss any disagreements and needed amendment to such proposals with our Compensation Committee before such proposals are finalized and approved by the Compensation Committee.
Compensation Objectives
Our compensation objectives are as follows:
| ● | We strive to provide competitive executive compensation programs that will help to attract highly qualified |
| ● | Compensation and benefits are competitive with the local labor markets in which we compete, and focus also will be given to companies that operate in the agriculture, feed, and fertilizer industries. Peer companies will typically have annual revenues that are one-half to double that of us, for the purposes of compensation benchmarking. |
| ● | We provide an executive compensation package consisting of base salary, incentives (short term & long term), and benefits that are consistent with similar positions at our recognized competitors. Each component addresses individual and company performance with a focus on long-term profitable growth and shareholder return, competitive conditions, and our overall financial performance. |
| ● | All compensation programs are administered without regard to race, religion, national origin, color, sex, age, or disability, and adhere to all local laws and regulations. |
Elements of Compensation
Base Salary
Our approach is to pay our executives a base salary that is competitive with those of other executive officers in similar positions and with similar responsibilities in our peer group of competitive companies. We believe that a competitive base salary is a necessary element of any compensation program that is designed to attract and retain talented and experienced executives. We also believe that attractive base salaries can motivate and reward executives for their overall performance.
Stock-Based Awards under the Equity Incentive Plan
In addition to base salary, the other key component of executive compensation we provide to our Named Executive Officers is equity-based compensation. In October 2009, our Board adopted our 2009 Equity Incentive Plan (the “Plan”), which was approved by our shareholders at our annual shareholders meeting in December 2009 and amended in December 2012, December 2013 and June 2015. The Plan gives us the ability to grant stock options, stock appreciation rights (SARs), restricted stock and other stock-based awards to employees or consultants of our company or of any subsidiary of our company and to non-employee members of our advisory board or our Board or the board of directors of any of our subsidiaries. The Board and the Compensation Committee believe the ability to grant restricted stock, stock options and make other stock-based awards under the Plan is an important factor in attracting, stimulating and retaining qualified and distinguished personnel with proven ability and vision to serve as employees, officers, consultants or members of the Board or advisory board of our company and our subsidiaries, and to chart our course towards continued growth and financial success.
During the year ended June 30, 2014, effective September 28, 2013, the Compensation Committee granted 480,000 shares of restricted stock to Mr. Tao Li, the Company’s CEO and 200,000 shares of restricted stock to Mr. Ken Ren, the CFO. In addition, the Compensation Committee granted 40,000 shares of restricted stock to Mr. Yizhao Zhang, 30,000 shares of restricted stock to Ms. Yiru Shi, and 20,000 shares of restricted stock to Mr. Lianfu Liu, each of whom was (or is) an independent director of the Company, and 980,000 shares of restricted stock to 420 employees (the “Stock Grants”). The Stock Grants are subject to time-based vesting schedules, vesting in various installments until March 31, 2014 for the CFO and the three independent directors, until March 31, 2015 for the CEO and until December 31, 2015 for the employees.
During the fiscal year ended June 30, 2016,2017, effective June 29,December 30, 2016, the Compensation Committee granted (i) 400,000 shares of restricted stock to Mr. Tao Li, then the Company’s CEO; (ii) 200,000 shares to Mr. Zhuoyu “Richard” Li, then the Company’s President, (iii) 200,000 shares to Mr. Ken Ren, then the Company’s Chief Financial Officer. Also, the Compensation Committee granted 30,000 shares to Ms. Yiru Shi, 20,000 shares to Mr. Jianlei Shen and 20,000 shares to Mr. Lianfu Liu, each of whom was or is an independent director of the Company. The Stock Grants were vested immediately for the CEO, CFO and the three independent directors.
On June 29, 2016, the Company granted (i) 400,000 shares of restricted stock to Mr. Tao Li, then the Company’s CEO; (ii) 200,000 shares of restricted stock to Mr. Ken Ren, the then CFO, and (iii) 30,000 shares of restricted stock to Ms. Yiru Shi, a former director. Also, the Compensation Committee granted 20,000 shares of restricted stock to Mr. Jianlei Shen, and 20,000 shares of restricted stock to Mr. Lianfu Liu, each of whom is or was an independent director of the Company. The Stock Grants were vested immediately for the CEO, CFO and threethe independent directors.
On October 3, 2015, the Company granted an aggregate of 1,000,000 shares of restricted stock under the 2009 Plan to certain key employees. The stock grants are subject to time-based vesting schedules, vesting in various installments until June 30, 2016. The value of the restricted stock awards was $1,660,000 and is based on the fair value of the Company’s common stock on the grant date.
On September 30, 2014, the Company granted an aggregate of 1,750,000 shares of restricted stock under the 2009 Plan to certain executive officers, directors and employees, among which were(i) 240,000 shares of restricted stock to Mr. Tao Li, the CEO andthen CEO; (ii) 100,000 shares of restricted stock to Mr. Ken Ren, the CFO. In addition, the Compensation Committee grantedthen CFO, (iii) 40,000 shares of restricted stock to Mr. Yizhao Zhang, 30,000 shares of restricted stock to Ms. Yiru Shi, and 20,000 shares of restricted stock to Mr. Lianfu Liu, each of whom is or was (or is) an independent director of the Company,Company; and (iv) 1,320,000 shares of restricted stock to key employees. The stock grants wereare subject to time-based vesting schedules, vesting in various installments until March 31, 2015 for the CFO and the three independent directors, until June 30, 2015 for the CEO and until December 31, 2016 for the employees.
Employee Stock Purchase Plan
On August 9, 2012, the Board adopted the Company’s 2012 Employee Stock Purchase Plan (the “ESPP”), which became effective as of such date. The Board adopted the Company’s Third Amended and Restated Employee Stock Purchase Plan (the “Restated ESPP”) on May 15, 2015. The Restated ESPP reserved a total of 3,750,000 shares of Common Stock; such reserved amount of shares were increased byStock, including 1,250,000 shares of Common Stock from previouslythat was increased the third time. Shareholder approval is not required with respect to the issuance under the ESPP pursuant to Sections 303A.08 or 312.03 of the NYSE Listed Company Manual.Manuel. The ESPP has been delegated to be administered by the Compensation Committee since October 19, 2012. Any employee of the Company or any parent (if any) and subsidiary corporation of the Company (the “Affiliate”), who is not a natural person resident in the United States, who has been in the employ of the Company or any Affiliate for such continuous period as required by the Board preceding the grant of rights under the ESPP is eligible to participate in the ESPP during the applicable offering period, subject to administrative rules established by the Compensation Committee.
The ESPP is implemented by sequential offerings, the commencement and duration of which are determined by the Compensation Committee. The purchase price at which each share of Common Stock may be acquired in an offering period upon the exercise of all or any portion of a purchase right are established by the Compensation Committee. However, the purchase price on each purchase date shall not be less than the fair market value of a share of Common Stock on the purchase date.
During the fiscal year ended June 30, 2014, the Company first issued 118,778 shares of common stock at the market price of $4.42 per share to Mr. Tao Li ($525,000 in total), the Company’s Chairman and Chief Executive Officer under the ESPP on September 26, 2013. The Company thenalso issued 533,165 shares of common stock at the market price of $2.35 per share to certain employees enrolled in the ESPP ($1,252,938 in total) on May 26, 2014. During the year ended June 30, 2015, the Company issued 1,362,495 shares of common stock to its employees under the ESPP for cash of $2,946,746 and the Company issued 326,483 shares of common stock to its Chairman, Mr. Li, for cash proceeds of $626,847 under the ESPP.
Retirement or Pension Benefits
Currently, we do not provide any company sponsored retirement benefits to any employee, including the Named Executive Officers.
Deferred Compensation
We do not have any qualified or nonqualified deferred compensation plans.
Perquisites
Historically, we have provided our Named Executive Officers with minimal perquisites and other personal benefits that we believe are reasonable. We do not view perquisites as a significant component of compensation, but do believe they can be useful in attracting, motivating and retaining the executive talent for which we compete. We believe that these additional benefits assist our Named Executive Officers in performing their duties and provide time efficiencies for them. It is expected that our historical practices regarding perquisites will continue and will be subject to periodic review by our Board.
Summary Compensation Committee Report on Executive Compensation
The following report has been submitted by the Compensation Committee of our Board of Directors:
The Compensation Committee of our Board of Directors has reviewed and discussed our Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in our definitive proxy statement on Schedule 14A for our annual meeting for fiscal year endedTable— Fiscal Years Ended June 30, 2017, 2016 as filed with the Commission.and 2015
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The foregoing Compensation Committee Report does not constitute soliciting material or to be “filed” with the Commission or subject to Regulation 14A or 14C (17 CFR 240.14a-1 through 240.14b-2 or 240.14c-1 through 240.14c-101), other than as provided in Item 407 of Regulation S-K, or to the liabilities of section 18 of the Exchange Act (15 U.S.C. 78r) and shall not be deemed filed or incorporated by reference into any other filing of our company under the Securities Act or the Exchange Act, except to the extent we specifically incorporate this Compensation Committee Report by reference therein.
Summary of Executive Compensation
The following table sets forth information concerning cash and non-cash compensation we and/or Jinong paid to our principal executive officersofficer and our other most highly paid executive officersofficer (the “named executive officers”) for services rendered in all capacities during the noted periods. No other executive officers received total annual salary and bonus compensation in excess ofmore than $100,000 during each of the three fiscal years ended June 30, 2017, 2016, 2015 and 2014.2015.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year Ended | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||
| Tao Li Chief Executive | June 30, 2016 | $ | 200,000 | $ | 24,000 | $ | 536,000 | — | — | — | — | $ | 760,000 | |||||||||||||||||||||
| Officer, and Chairman | June 30, 2015 | $ | 300,000 | $ | 36,000 | $ | 504,400 | — | — | — | — | $ | 840,000 | |||||||||||||||||||||
| of the Board (1) | June 30, 2014 | $ | 300,000 | $ | 36,000 | $ | 2,054,400 | — | — | — | — | $ | 2,390,400 | |||||||||||||||||||||
| Zhuoyu “Richard” Li | June 30, 2016 | 100,000 | 12,000 | — | — | — | — | — | $ | 112,000 | ||||||||||||||||||||||||
| President (2) | June 30, 2015 | — | — | — | — | — | — | — | $ | — | ||||||||||||||||||||||||
| June 30, 2014 | — | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||||
| Ken Ren | June 30, 2016 | $ | 160,000 | $ | 16,800 | $ | 268,000 | — | — | — | — | $ | 444,800 | |||||||||||||||||||||
| Chief Financial | June 30, 2015 | $ | 160,000 | $ | 16,800 | $ | 210,000 | — | — | — | — | $ | 386,800 | |||||||||||||||||||||
| Officer | June 30, 2014 | $ | 160,000 | $ | 16,800 | $ | 856,000 | — | — | — | — | $ | 1,032,800 | |||||||||||||||||||||
| Nonqualified | ||||||||||||||||||||||||||||||||||||
| Name | Non-Equity | Deferred | ||||||||||||||||||||||||||||||||||
| and | Stock | Option | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||||||||||
| Principal | Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||||
| Position | Year Ended | ($) | ($) | (1)($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||
| Tao Li (2 | ||||||||||||||||||||||||||||||||||||
| Chief Executive | June 30, 2017 | $ | 200,000 | $ | 102,000 | $ | 480,000 | — | — | — | — | $ | 782,000 | |||||||||||||||||||||||
| Officer, and Chairman | June 30, 2016 | $ | 200,000 | $ | 24,000 | $ | 536,000 | — | — | — | — | $ | 760,000 | |||||||||||||||||||||||
| of the Board (2) | June 30, 2015 | $ | 300,000 | $ | 36,000 | $ | 504,400 | — | — | — | — | $ | 840,000 | |||||||||||||||||||||||
| Zhuoyu “Richard” Li | June 30, 2017 | 100,000 | 44,000 | 240,000 | — | — | — | — | $ | 384,000 | ||||||||||||||||||||||||||
| President (2) | June 30, 2016 | 100,000 | 12,000 | — | — | — | — | — | $ | 112,000 | ||||||||||||||||||||||||||
| June 30, 2015 | — | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||||||
Ken Ren (3) Chief | June 30, 2017 | $ | 160,000 | $ | 61,600 | $ | 240,000 | — | — | — | — | $ | 461,600 | |||||||||||||||||||||||
| Financial Officer | June 30, 2016 | $ | 160,000 | $ | 16,800 | $ | 268,000 | — | — | — | — | $ | 444,800 | |||||||||||||||||||||||
| June 30, 2015 | $ | 160,000 | $ | 16,800 | $ | 210,000 | — | — | — | — | $ | 386,800 | ||||||||||||||||||||||||
| (1) | The amounts reported in this column reflect the fair value on the grant date of the restricted stock awards granted to our Named Executive Officers. These values are determined by multiplying the number of shares granted by the closing price of our common stock on the trading day immediately preceding the grant date. The dollar amounts do not necessarily reflect the dollar amounts of compensation |
| (2) | Mr. Tao Li |
| (3) | Mr. Ken Ren resigned in November 2017. |
The Company has not used a compensation consultant to determine or recommend the amount or form of executive or director compensation but its management believes that its executive officer compensation package is comparable to similar businesses in our location of operations.
Grants of Plan-Based Awards
The following table sets forth information regarding grants of awards to Named Executive Officers during the year ended June 30, 2016:2017:
GRANTS OF PLAN-BASED AWARDS
| All | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | All | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock | Other | Grant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Awards: | Option | Date | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number | Awards: | Exercise | Fair | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| of | Number | or | Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Estimated Future Payouts | Estimated Future Payouts | Shares | of | Base | of Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Under | Under | of | Securities | Price of | and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-Equity Incentive Plan Awards | Equity Incentive Plan Awards | Stock or | Underlying | Option | Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 Stock or | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Grant Date Fair Value of Stock and Option | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Units | Options | Awards | Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum ($) | Units (#) | Options (#) | Awards ($ /Sh) | Awards ($)(1) | Date | ($) | ($) | ($) | (#) | (#) | ($) | (#) | (#) | ($ /Sh) | ($)(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tao Li | June 29, 2016 | — | — | — | — | — | — | 400,000 | — | $ | 1.34 | $ | 536,000 | December 30, 2016 | — | — | — | — | — | — | 400,000 | — | $ | 1.20 | $ | 480,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Zhuoyu Li | December 30, 2016 | — | — | — | — | — | — | 200,000 | — | $ | 1.20 | $ | 240,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ken Ren | June 29, 2016 | — | — | — | — | — | — | 200,000 | — | $ | 1.34 | $ | 268,000 | December 30, 2016 | — | — | — | — | — | — | 200,000 | — | $ | 1.20 | $ | 240,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | With respect to the restricted stock awards, the grant date fair value is calculated by multiplying the number of shares granted by the closing price on the trading day immediately preceding the grant date. |
NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE AND GRANTS OFPLAN-BASED AWARDS TABLENarrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Employment Agreements
The following is a summary of the material terms of the written employment by and between Jinong and Messrs. Tao Li and Zhuoyu “Richard” Li.
Tao Li.Pursuant to an employmentEmployment agreement between Jinong and Mr. Tao Li dated January 16, 2008, Mr. Li was employed by Jinong as its Chairman of the Board and Chief Executive Officer for a term of five years. Upon the expiration of the initial term in 2013, the agreement by its terms was automatically renewed on the same terms and conditions for an additionala five-year period, and it automatically renews forwas subject to successive five year termsadditional five-year periods unless either party provides written notice of termination at least 60 days prior to the end of any five-year term. The agreement iswas terminable immediately, or upon 30-days prior written notice, upon the occurrence of certain events. The agreement provided for an annual salary of RMB 60,000 (approximately $8,508). Mr Tao Li’s current annual base salary iswas $200,000, with a bonus of up to 40% for serving as the Company’s Chairman of the Board and Chief Executive Officer. Mr. Tao Li passed away in December 2017.
Zhuoyu “Richard” Li.Li According. Pursuant to his employmentan Employment agreement between the Company and Zhuoyu (“Richard”) Li when he was appointed by the Board of Directors effective May 19, 2016, Mr. Li will receivereceived an annual base salary of $100,000 and a bonus of $12,000up to 40% for serving as the Company’s President, effective May 19, 2016.President. In addition, Mr. Li will receivereceives stock awards to be determined when the Company grants the awards to directors and officers under the Company’s 2009 Equity Incentive Plan, as amended. The initial term of the employment agreement is one year, which is automatically extended for additional one-year terms unless either party provides written notice of termination sixty (60) days prior to the end of the prior term. On December 18, 2017, following the death of Tao Li, the Company’s Board of Directors appointed the Company’s President, Mr. Zhuoyu Li, as its new Chairman and CEO. For serving as the Company’s Chairman and CEO, Mr. Zhuoyu Li receives the same compensation of Mr. Tao Li. In total, Mr. Zhuoyu Li receives an annual base salary of $300,000 with a bonus of up to 40% and stock awards under the Company’s 2009 Equity Incentive Plan.
Yongcheng Yang. Subsequent to the periods covered by this Report, on December 19, 2017, the Company entered into an Employment Agreement with Mr. Yongcheng Yang effective as of December 19, 2017. Pursuant to the terms of the Employment Agreement, Mr. Yang will serve as our Chief Financial Officer for a term of one year at an annual salary of $180,000. Mr. Yang is eligible for a yearly bonus at the discretion of our Board of Directors. The Employment Agreement will be automatically extended for additional one-year terms unless either party provides a written notice of termination sixty (60) days prior to the end of the prior term. Either party may terminate the Employment Agreement upon thirty (30) days written notice, or, at our discretion, we may terminate the Employment Agreement immediately and substitute thirty (30) days salary in lieu of written notice. In the event of a breach of the Employment Agreement by Mr. Yang, or in the event Mr. Yang is terminated for “cause” (as defined therein), the Employment Agreement may be terminated immediately without notice and without further payments.
Description of Plan Based Awards
The equity incentive awards reported in the above table entitled “Grants of Plan Based Awards” were granted under, and are subject to, the terms of our 2009 Equity Incentive Plan, as amended (the “Plan”). The Plan is administered by the Compensation Committee. The Compensation Committee has authority to interpret the plan provisions and make all required determinations under the Plan.
With respect to all restricted stock grants disclosed herein, if we terminate the grantee’s employment or affiliation with us for any reason, all unvested portions of such restricted stock grants are forfeited. Any shares of restricted stock that do not vest for failure to meet the requisite performance targets will also be forfeited.
With respect to all non-qualified stock option grants disclosed herein, if we terminate the grantee’s employment or affiliation with us for any reason, all unvested options are forfeited. If the grantee’s employment or affiliation with us is terminated voluntarily by the grantee or by us for cause, all vested options are also terminated. In the event we terminate the grantee’s employment or affiliation with us without cause, the grantee has the lesser of ninety (90) days or the remaining term of the option to exercise any vested options. If we terminate the grantee’s employment or affiliation with us due to death or disability, the grantee has the lesser of twelve (12) months or the remaining term of the option to exercise any vested options. In the case of non-qualified options subject to performance based vesting, any options which do not vest for failure to meet the requisite performance targets will be forfeited.
Outstanding Equity Awards at Fiscal Year End
The following table provides information on all restricted stock and stock option awards held by our Named Executive Officers as of June 30, 2016.2017.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||||||
| Incentive | ||||||||||||||||||||||||||||||||||||
| Equity | Plan | |||||||||||||||||||||||||||||||||||
| Incentive | Awards: | |||||||||||||||||||||||||||||||||||
| Plan | Market | |||||||||||||||||||||||||||||||||||
| Awards: | or | |||||||||||||||||||||||||||||||||||
| Equity | Number | Payout | ||||||||||||||||||||||||||||||||||
| Incentive | Number | Market | of | Value of | ||||||||||||||||||||||||||||||||
| Plan | of | Value of | Unearned | Unearned | ||||||||||||||||||||||||||||||||
| Awards: | Shares | Shares | Shares, | Shares, | ||||||||||||||||||||||||||||||||
| Number of | Number of | Number of | or Units | or Units | Units or | Units or | ||||||||||||||||||||||||||||||
| Securities | Securities | Securities | of Stock | of Stock | Other | Other | ||||||||||||||||||||||||||||||
| Underlying | Underlying | Underlying | That | That | Rights | Rights | ||||||||||||||||||||||||||||||
| Unexercised | Unexercised | Unexercised | Option | Have | Have | That | That | |||||||||||||||||||||||||||||
| Options | Options | Unearned | Exercise | Option | Not | Not | Have Not | Have Not | ||||||||||||||||||||||||||||
| (#) | (#) | Options | Price | Expiration | Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||||
| Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||||
| Tao Li | — | — | — | — | — | — | $ | — | — | $ | — | |||||||||||||||||||||||||
| Zhuoyu Li | — | — | — | — | — | — | $ | — | — | $ | — | |||||||||||||||||||||||||
| Ken Ren | — | — | — | — | — | — | $ | — | — | $ | — | |||||||||||||||||||||||||
Option Exercises and Stock Vested During the Fiscal Year
The following table provides information on all option exercises and stock vested by our Named Executive Officers during the fiscal year ended June 30, 2016.OPTION EXERCISES AND STOCK VESTED DURING THE FISCAL YEAR
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||
| Number of | Number of | |||||||||||||||||||||||||||||
| Shares | Value | Shares | Value | |||||||||||||||||||||||||||
| Acquired on | Realized | Acquired | Realized | |||||||||||||||||||||||||||
| Option Awards | Stock Awards | Exercise | on Exercise | on Vesting | on Vesting | |||||||||||||||||||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | (#) | ($) | (#) | ($) | ||||||||||||||||||||||
| Tao Li | — | — | 400,000 | $ | 536,000 | (1) | 400,000 | 480,000 | (1) | |||||||||||||||||||||
| Zhuoyu Li | 200,000 | 240,000 | (2) | |||||||||||||||||||||||||||
| Ken Ren | — | — | 200,000 | $ | 268,000 | (2) | 200,000 | 240,000 | (3) | |||||||||||||||||||||
| (1) | Represents the vesting of 400,000 shares of restricted stock on |
| (2) | Represents the vesting of 200,000 shares of restricted stock on |
| (3) | Represents the vesting of 200,000 shares of restricted stock on December 30, 2017 with a market value of $1.20 per share on such date. |
Securities Authorized for Issuance Under Equity Compensation Plans
As of June 30, 2016,2017, there were no outstanding options to purchase any shares of common stock granted under the Plan. Options granted in the future under the Plan are within the discretion of our Board or our compensation committee. The following table summarizes the number of shares of our common stock authorized for issuance under our equity compensation plans as of June 30, 2016. 2017.
| Number of | |||||||||||||||
| securities | |||||||||||||||
| remaining | |||||||||||||||
| available for | |||||||||||||||
| Number of | future | ||||||||||||||
| securities to | issuance | ||||||||||||||
| be issued | Weighted- | under | |||||||||||||
| upon | average | equity | |||||||||||||
| exercise | exercise | compensation | |||||||||||||
| of | price of | plans | |||||||||||||
| outstanding | outstanding | (excluding | |||||||||||||
| options, | options, | securities | |||||||||||||
| warrants | warrants | reflected in | |||||||||||||
| and rights | and rights | column (a)) | |||||||||||||
| Plan category | (a) | (b) | (c) | ||||||||||||
| Equity compensation plans approved by security holders | — | $ | — | ||||||||||||
| Equity compensation plans not approved by security holders | — | — | — | ||||||||||||
| Total | — | $ | — | ||||||||||||
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee during the fiscal year ended June 30, 2017 were Mr. Yiru Shi and Messrs. Jianlei Shen, Daqing Zhu, and Lianfu Liu. During the fiscal year ended June 30, 2017:
| none of the members of the Compensation Committee was an officer (or former officer) or employee of our company or any of its subsidiaries; |
| ☐ | none of the members of the Compensation Committee had a direct or indirect material interest in any transaction in which we were a participant and the amount involved exceeded $120,000; |
| ☐ | none of our executive officers served on the compensation committee (or another board committee with similar functions or, if none, the entire board of directors) of another entity where one of that entity’s executive officers served on our Compensation Committee; |
| ☐ | none of our executive officers was a director of another entity where one of that entity’s executive officers served on our Compensation Committee; and |
| ☐ | none of our executive officers served on the compensation committee (or another board committee with similar functions or, if none, the entire board of directors) of another entity where one of that entity’s executive officers served as a director on our Board. |
Payments upon Termination or Change-in-ControlChanges in Control
The following table reflects amounts payable to our Named Executive Officers (1) assuming their employment was terminated without cause on June 30, 2016,2017, and (2) assuming a change in control on June 30, 2016.2017.
| Termination | ||||||||||||||||
| Without | Change in | |||||||||||||||
| Name | Termination Without Cause(1) | Change in Control(2) | Cause(1) | Control(2) | ||||||||||||
| Tao Li | $ | 794 | $ | 536,000 | (3) | $ | 794 | — | ||||||||
| Ken Ren | $ | 0 | $ | 268,000 | (3) | |||||||||||
| (1) | Represents the |
| (2) | Amounts in this column reflect the value of unvested restricted stock that would be accelerated upon a change of control. The amounts are calculated based on the closing market price of a share of our common stock on June 30, |
Pursuant to the terms of Mr. Li’s employment agreement with Jinong, Jinong may terminate Mr. Li’s employment for any reason upon 30 days prior written notice, in which case no termination payment is due. Alternatively, Jinong may terminate his employment immediately upon the payment of one month’s salary. In the case of termination for cause as defined therein, we may terminate Mr. Li’s employment immediately without pay.
2009 Equity Incentive Plan Change in Control Provisions
In the event of a change in control of our company, and except as otherwise set forth in the applicable award agreement, all unvested portions of awards shall vest immediately. Awards, whether or not then vested, shall be continued, assumed, or have new rights as determined by our Compensation Committee or a committee of the Board designated to administer the Plan, and restrictions to which any shares of restricted stock or any other award granted prior to the change in control are subject shall not lapse. Awards shall, where appropriate at the discretion of the Committee, receive the same distribution of our common stock on such terms as determined by the Compensation Committee. Upon a change in control, the Committee may also provide for the purchase of any awards for an amount of cash per share of common stock issuable under the award equal to the excess of the highest price per share of our common stock paid in any transaction related to a change in control of our company over the exercise price of such award.
The following table sets forth information concerning cash and non-cash compensation we paid to our directors during the fiscal year ended June 30, 2016.2017.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||
| Yiru Shi (former director until April 18, 2017) | $ | 26,000 | $ | 40,200 | (2) | — | — | — | 0 | $ | 66,200 | $ | 26,000 | $ | 40,200 | (2) | — | — | — | 0 | $ | 66,200 | ||||||||||||||||||||||||||||||||||
| Lianfu Liu | $ | 26,000 | $ | 26,800 | (2) | — | — | — | 0 | $ | 52,800 | $ | 26,000 | $ | 26,800 | (2) | — | — | — | 0 | $ | 52,800 | ||||||||||||||||||||||||||||||||||
| Jianlei Shen | $ | 18,000 | $ | 26,800 | 0 | $ | 44,800 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Jianlei Shen (former director) | $ | 18,000 | $ | 26,800 | 0 | $ | 44,800 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Ale Fan | --- | --- | --- | --- | --- | --- | --- | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| (1) | The amounts reported in this column reflect the fair value on the grant date of the restricted stock awards granted to our directors. These values are determined by multiplying the number of shares granted by the closing price of our common stock on the trading day immediately preceding the grant date. The dollar amounts do not necessarily reflect the dollar amounts of compensation actually realized or that may be realized by our directors. |
| (2) | Represents 30,000, 20,000, 20,000 shares of restricted shares to three independent directors, respectively, which were granted by the Company on June 29, |
The directors are also reimbursed for all of their out-of-pocket expenses in traveling to and attending meetings of the Board and committees on which they serve.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee during the fiscal year ended June 30, 2016 were Ms. Yiru Shi, Messrs. Jianlei Shen and Lianfu Liu. During the fiscal year ended June 30, 2016:
Independence of the Board of Directors
Our Board is currently composed of five (5) members. Jianlei Shen,Jinjun Lu, Daqing Zhu and Lianfu Liu qualify as independent directors in accordance with the published listing requirements of the New York Stock Exchange (“NYSE”). The NYSE independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us. In addition, as further required by NYSE rules, our Board has made an affirmative determination as to each independent director that no relationships exist which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our directors reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities as they may relate to us and our management. Our directors hold office until their successors have been elected and qualified or their earlier death, resignation or removal.
Board Meetings
The Board held six meetings, by telephone, in the fiscal year ended June 30, 2016.2017. In addition, the Board unanimously approved ninetwelve written consents on matters between meetings. During the fiscal year ended June 30, 2016,2017, each incumbent director attended at least 75% of the aggregate number of meetings of the Board and applicable committee meetings (held during the period for which he or she was a director) on which he or she served. We do not have a formal policy regarding attendance by members of the Board at the annual meeting of stockholders, but we encourage all members of the Board to attend the meeting.
Promoters and Certain Control Persons
We did not have any promoters at any time during the past five fiscal years.
Except as set forth in our discussion above, none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
Board Committees
Our Board of Directors has established the following three standing committees which, pursuant to delegated authority, perform various duties on behalf of and report to the Board of Directors: (i) Audit Committee, (ii) Compensation Committee and (iii) Nominating Committee. From time to time, the Board of Directors may establish other committees.
Audit Committee
The Audit Committee is responsible for: (i) overseeing the corporate accounting and financial reporting practices; (ii) recommending the selection of our independent registered public accounting firm; (iii) reviewing the extent of non-audit services to be performed by the auditors; and (iv) reviewing the disclosures made in our periodic financial reports. The members of the Audit Committee are currently Messrs. Daqing Zhu, Jianlei Shen,Jinjun Lu, and Lianfu Liu, each of whom is an independent director within the meaning of the rules of the NYSE and Rule 10A-3 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, the Board has determined that Mr. Zhu qualifies as an Audit Committee Financial Expert under applicable SEC Rules. The Chairman of the Audit Committee is Mr. Zhu. The Audit Committee held four meetings during the fiscal year ended June 30, 2016.2017. The Audit Committee carries out its responsibilities in accordance with the terms of its Audit Committee Charter, a copy of which was attached as Annex A to our Definitive Proxy Statement on Schedule 14A for our 2010 Annual Meeting, filed with the SEC on October 28, 2010, and is also available on our website atwww.cgagri.com.
Compensation Committee
The Compensation Committee determines matters pertaining to the compensation of executive officers and other significant employees, and administers our stock and incentive plans. The members of the Compensation Committee are Messrs. Jianlei Shen,Jinjun Lu, Lianfu Liu and Mr. Daqing Zhu. The Chairman of the Compensation Committee is Mr. Shen.Lu. The Compensation Committee held two meetingsone meeting during the fiscal year ended June 30, 2016.2017. Each of the members of the Compensation Committee is a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, and an “outside director” within the meaning of Section 162(m) under the Internal Revenue Code. The Compensation Committee carries out its responsibilities pursuant to a written charter, a copy of which was attached as Annex C to our Definitive Proxy Statement on Schedule 14A for our 2009 annual meeting, filed with the SEC on October 28, 2009, and is also available on our website atwww.cgagri.com.
Nominating Committee
The Nominating Committee identifies and nominates candidates to serve on our Board. The members of the Nominating Committee are Messrs. Jianlei Shen,Jinjun Lu, Lianfu Liu and Mr. Daqing Zhu. The Chairman of the Nominating Committee is Mr. Liu. The Nominating Committee held one meeting during the fiscal year ended June 30, 2016.2017. A copy of our Nominating Committee Charter was attached as Annex B to our Definitive Proxy Statement on Schedule 14A for our 2010 annual meeting, filed with the SEC on October 28, 2010, and is also available on our website atwww.cgagri.com. See “Director Nominations” below for the procedures for the nomination of directors.
Board Leadership Structure and Board’s Role in the Oversight of Risk Management
Our Board believes it is important to select our Chairman and our Chief Executive Officer in the manner it considers in the best interests of our company at any given point in time. Due to Mr. Li’s substantial experience in the industry, our Board has determined that the most effective leadership structure for our company is for Mr. Li to serve as both our Chairman and Chief Executive Officer. Our Board benefits from the Chairman having direct knowledge of the operations of, and opportunities and challenges facing, our business on a regular and company-wide basis. Mr. Li’s combined role as Chairman and Chief Executive Officer fosters greater communication between the Board and management and provides unified leadership for carrying out our company’s strategic initiatives and business plans.
To counterbalance the potential for ineffective Board oversight, we have adopted a governance structure that includes: (i) a designated lead independent director; (ii) annual elections of directors by a majority of votes cast at the annual meeting of shareholders; (iii) committees composed entirely of independent directors; and (iv) established corporate governance and ethics guidelines. Our Board has appointed Liu Lianfu to serve as the Board’s lead independent director. The lead independent director acts as an intermediary between the Board and senior management. Among other things, the lead independent director is responsible for facilitating communication among directors and between the Board and the Chief Executive Officer, working with the Chief Executive Officer to provide an appropriate information flow to the Board, and chairing executive sessions of the independent directors. Executive sessions of our independent directors occur following regularly scheduled quarterly audit committee meetings, and at such other times as the independent directors deem appropriate. However, the Board recognizes that circumstances may change over time and as they do, changes to the leadership structure may be warranted.
The Board has an active role, directly and through its committees, in the oversight of our risk management efforts. The Board carries out this oversight role through several levels of review. The Board regularly reviews and discusses with members of management information regarding the management of risks inherent in the operations of our businesses and the implementation of our strategic plan, including our risk mitigation efforts.
In accordance with corporate governance standards of the NYSE, the Audit Committee charter assigns to that committee the responsibility to review our policies and practices with respect to risk assessment and risk management, including major financial risk exposures, and the steps management has taken to monitor and control such exposures. Additionally, each of the Board’s committees also oversees the management of our risks that are under each committee’s areas of responsibility. For example, the Audit Committee oversees management of accounting, auditing, external reporting, internal controls, and cash investment risks. The Nominating Committee oversees our compliance policies, Code of Conduct, conflicts of interests, director independence and corporate governance policies. The Compensation Committee oversees risks arising from compensation practices and policies. In this manner the Board is able to coordinate its risk oversight.
Director Nominations
The Nominating Committee recommends director candidates and will consider for such recommendation director candidates proposed by management, other directors and stockholders. All director candidates will be evaluated based on the criteria identified below, regardless of the identity of the individual or the entity or person who proposed the director candidate.
The selection of director nominees includes consideration of factors deemed appropriate by the Corporate Governance and Nominating Committee and the Board. We may engage a firm to assist in identifying, evaluating, and conducting due diligence on potential board nominees. Factors will include integrity, achievements, judgment, intelligence, personal character, any prior contact or relationship between a candidate and a current or former director or officer of our company, the interplay of the candidate’s relevant experience with the experience of other Board members, the willingness of the candidate to devote adequate time to Board duties and the likelihood that he or she will be willing and able to serve on the Board for a sustained period. The Corporate Governance and Nominating Committee will consider the candidate’s independence, as defined by the rules of the SEC and the NYSE. In connection with the selection, due consideration will be given to the Board’s overall balance of diversity of perspectives, backgrounds, and experiences. Experience, knowledge, and skills to be represented on the Board include, among other considerations, financial expertise (including an “audit committee financial expert” within the meaning of the SEC’s rules), financing experience, related industry experience, strategic planning, business development, and community leadership.
Code of Ethics
We have adopted a Code of Ethics that applies to all of our employees and officers, and the members of our Board of Directors, which was amended and restated in 2010. The Amended and Restated Code of Ethics (the “Code of Ethics”) is available on our website atwww.cgagri.com. Printed copies are available upon request without charge. Any amendment to or waiver of the Code of Ethics will be disclosed on our website promptly following the date of such amendment or waiver.
Corporate Governance Guidelines
We have adopted a Code of Ethics that applies to all of our employees and officers, and the members of the Board, which was amended and restated in 2010. The Amended and Restated Code of Ethics (the “Code of Ethics”) is available on our website atwww.cgagri.com. Printed copies are available upon request without charge. Any amendment to or waiver of the Code of Ethics will be disclosed on our website promptly following the date of such amendment or waiver.
Certain Relationships and Related Transactions
As of June 30, 20162017 and 2015,2016, the amount due to related parties was $2,473,004$3,071,102 and $2,068,102,$2,473,004, respectively. As of June 30, 2017 and 2016, $1,051,652 and 2015, $1,092,243, and $1,184,643, respectively were amounts that Gufeng borrowed from a related party, Xi’an Techteam Science & Technology Industry (Group) Co. Ltd., a company controlled by Mr. TaoZhuoyu Li, Chairman and CEO of the Company, representing unsecured, non-interest bearing loans that are due on demand. These loans are not subject to written agreements.
At the end of December 2015, Yuxing entered into a sales agreement with the Company’s affiliate, 900LH.com Food Co., Ltd. (“900LH.com”, previously announced as Xi’an Gem Grain Co., Ltd) pursuant to which Yuxing is to supply various vegetables to 900LH.com for its incoming seasonal sales at the holidays and year ends (the “Sales Agreement”). The contingent contracted value of the Sales Agreement is RMB25,500,000 (approximately $3,965,250)(approximately $3,965,250). For the year endedUp to June 30, 2016,2017, Yuxing has sold approximately $1,383,787 $2,472,165of products to 900LH.com.
Our principal executive offices are located at Third floor, Borough A, Block A. No. 181, South Taibai Road, Xi’an, Shaanxi Province, PRC 710065. The office space is approximately 360 square meters (3,875 square feet). It is leased from Xi’an Kingtone Information Technology Co., Ltd. (“Kingtone Information”), for a term of two years from July 1, 2016 at monthly rent of RMB25,723 (approximately $4,000) for 612 square meters (approximately 6,588 square feet) of office space. Mr. Tao Li, Chairman and CEO of the Company isduring the periods covered by this Report, was Chairman of Kingtone Information.
Procedures for Approval of Related Party Transactions
In November 2010, we adopted a written Related Party Transactions Policy (the “Policy”). According to the Policy, a “Related Party Transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we (including any of our subsidiaries) are, were or will be a participant and the amount involved exceeds $120,000, and in which any related party had, has or will have a direct or indirect “material” interest. The Policy’s definition of a “Related Party” is in line with the definition set forth in the instructions to Item 404(a) of Regulation S-K promulgated by the SEC.
Under the Policy, our Chief Financial Officer is responsible for determining whether a proposed transaction, as submitted by a Related Party is a Related Party Transaction that requires the consideration and discussion of the Audit Committee. The Audit Committee is responsible for evaluating and assessing a proposed transaction based on the facts and circumstances including those listed in the Policy, including comparing the terms of the proposed transaction and the terms available to unrelated third parties or to employees generally. The Policy states that the Audit Committee shall approve only those Related Party Transactions that are in, or are not inconsistent with, the best interests of our company and our stockholders. No member of the Audit Committee shall participate in any review, consideration or approval of any Related Party Transaction in which he or she or any immediate family member directly or indirectly is involved.
In the event that we become aware of a Related Party Transaction that has not been previously approved under the Policy, such transaction will be presented to the Audit Committee. A Related Party Transaction entered into without pre-approval of the Audit Committee shall not be deemed to violate the Policy, or be invalid or unenforceable, so long as the transaction is brought to the Audit Committee as promptly as reasonably practical after it is entered into and is subsequently ratified by the Audit Committee.
Procedures for Approval of Related Party Transactions
In November 2010, we adopted a written Related Party Transactions Policy (the “Policy”). According to the Policy, a “Related Party Transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we (including any of our subsidiaries) are, were or will be a participant and the amount involved exceeds $120,000, and in which any related party had, has or will have a direct or indirect “material” interest. The Policy’s definition of a “Related Party” is in line with the definition set forth in the instructions to Item 404(a) of Regulation S-K promulgated by the SEC.
Under the Policy, our Chief Financial Officer is responsible for determining whether a proposed transaction, as submitted by a Related Party is a Related Party Transaction that requires the consideration and discussion of the Audit Committee. The Audit Committee is responsible for evaluating and assessing a proposed transaction based on the facts and circumstances including those listed in the Policy, including comparing the terms of the proposed transaction and the terms available to unrelated third parties or to employees generally. The Policy states that the Audit Committee shall approve only those Related Party Transactions that are in, or are not inconsistent with, the best interests of our company and our stockholders. No member of the Audit Committee shall participate in any review, consideration or approval of any Related Party Transaction in which he or she or any immediate family member directly or indirectly is involved.
In the event that we become aware of a Related Party Transaction that has not been previously approved under the Policy, such transaction will be presented to the Audit Committee. A Related Party Transaction entered into without pre-approval of the Audit Committee shall not be deemed to violate the Policy, or be invalid or unenforceable, so long as the transaction is brought to the Audit Committee as promptly as reasonably practical after it is entered into and is subsequently ratified by the Audit Committee.
Family Relationships
There is no family relationship among any of our officers or directors except that Mr. TaoZhuoyu Li, the CEO and Chairman of the Board of the Company isduring the periods covered, was the father to Mr. Zhuoyu “Richard” Li, the Presidentcurrently Chairman and Chief Executive Officer of the Company.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers was involved in any legal proceedings during the last 10 years as described in Item 401(f) of Regulation S-K.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities (“Reporting Persons”), to file reports of ownership and changes in ownership with the SEC. The Reporting Persons are also required to furnish us with copies of all such reports. Based solely on our review of the reports received by us, we believe that, during the year ended June 30, 2016,2017, our directors, executive officers and holders of ten percent (10%) or more of our common stock complied with Section 16(a) filing requirements applicable to them.
Communications with the Board
Interested parties may communicate with any of our directors, our Board as a group, our independent directors as a group or any committees of the Board by sending an e-mail to Ting Shi, Secretary to the Board of Directors, attingshi@cgagri.com and indicating the intended recipient in the subject line, or by writing to Ms. Shi at China Green Agriculture, Inc., 3rd Floor, Borough A, Block A. No. 181, South Taibai Road, Xian, Shaanxi Province, People’s Republic of China 710065. The Board has given Ms. Shi, as Secretary to the Board of Directors, the discretion to distribute communications to the director or directors, after ascertaining whether the communications are appropriate to the duties and responsibilities of the Board. Communications that relate to ordinary business matters that are not within the scope of the Board’s responsibilities will be forwarded to the appropriate employee within our company. Solicitations, junk email and obviously frivolous or inappropriate communications will not be forwarded. You will receive a written acknowledgement from the Secretary to the Board upon receipt of your communication.
Audit Fees
The following are the fees billed to us by our auditors during fiscal years ended June 30, 20162017 and 2015:2016:
| Years Ended | ||||||||
| June 30, 2016 | June 30, 2015 | |||||||
| Audit Fees | $ | 370,000 | $ | 320,000 | ||||
| Audit related fees | 10,000 | 10,000 | ||||||
| Tax fees | - | - | ||||||
| All Other Fees | - | - | ||||||
| Total | $ | 380,000 | $ | 330,000 | ||||
Audit Fees
| Years Ended | ||||||||
| June 30, | June 30, | |||||||
| 2017 | 2016 | |||||||
| Audit Fees | $ | 280,000 | $ | 370,000 | ||||
| Audit related fees | 10,000 | |||||||
| Tax fees | — | — | ||||||
| All Other Fees | — | — | ||||||
| Total | $ | 280,000 | $ | 380,000 | ||||
The aggregate fees billed by Kabani &Company,& Company, Inc. for professional services rendered for the audit of our annual financial statements included in our Annual Reports on Form 10-K, for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q, for our Sarbanes-Oxley Act of 2002 compliance audit, and for services in connection with statutory and regulatory filings or engagements was $370,000 for the fiscal year ended June 30, 2016.
On April 19, 2017, Kabani & Company, Inc. resigned as independent registered public accounting firm for the Company. On April 20, 2017, the Company engaged KSP Group, Inc. ("KSP") as the Company's independent registered public accounting firm. The aggregate fees billed by KSP for professional services rendered for the audit of our annual financial statements included in our Annual Reports on Form 10-K, for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q, for our Sarbanes-Oxley Act of 2002 compliance audit, and for services regarding statutory and regulatory filings or engagements were $380,000 and $330,000$280,000 for the fiscal years ended June 30, 2016 and 2015, respectively.2017.
Audit-Related Fees
The aggregate fees billed by our principal accountants for audit-related services was $10,000$0 and $10,000 for the fiscal years ended June 30, 2016,2017, and 2015,2016, respectively.
Tax Fees
We did not engage our principal accountants to provide tax or related services during the last two fiscal years.
All Other Fees
We did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.above
Pre-Approval Policies and Procedures
Under the Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by our auditors must be approved in advance by our Audit Committee to assure that such services do not impair the auditors’ independence from us. In accordance with its policies and procedures, the Audit Committee pre-approved the audit service performed by KSP for our consolidated financial statements as of and for the year ended June 30, 2017.
The Company’s principal accountant, KSP Group, Inc., did not engage any other persons or firms other than the principal accountant’s full-time, permanent employees.
The Audit Committee of the Board is comprised of three non-employee directors, each of whom has been determined by the Board to be “independent” under the meaning of Rule 10A-3(b)(1) under the Exchange Act. Ms. Yiru Shi, who served on the Audit Committee as of the date of the report of the Audit Committee, qualified as a financial expert within the meaning of Item 401(h) of SEC Regulation S-K. The Audit Committee assists the Board’s oversight of the integrity of our financial reports, compliance with legal and regulatory requirements, the qualifications and independence of our independent registered public accounting firm, the audit process, and internal controls. The Audit Committee operates pursuant to a written charter adopted by the Board. The Audit Committee is responsible for overseeing our corporate accounting and financial reporting practices, recommending the selection of our independent registered public accounting firm, reviewing the extent of non-audit services to be performed by the auditors, and reviewing the disclosures made in our periodic financial reports. The Audit Committee also reviews and recommends to the Board that the audited financial statements be included in our Annual Report on Form 10-K.
The Audit Committee: (1) reviewed and discussed the audited financial statements for the year ended June 30, 2016,2017, with management; (2) discussed with the independent auditors the matters required to be discussed by SAS 61, as amended (AICPA,Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T; and (3) received the written disclosures and the letter from the independent accountants 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 its independence.
Based on the review and discussions referred to above, the Audit Committee had recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2016,2017, for filing with the SEC.
The foregoing report has been furnished on Oct 4, 2016,October 15, 2017, by the then members of the Audit Committee, being:
/s/ Yiru Shi,Daqing Zhu, Chairman of the Audit Committee
/s/ Jianlei Shen,Jinjun Lu, member of the Audit Committee
/s/ Lianfu Liu, member of the Audit Committee
The foregoing Audit Committee Report does not constitute soliciting material or to be “filed” with the Commission or subject to Regulation 14A or 14C (17 CFR 240.14a-1 through 240.14b-2 or 240.14c-1 through 240.14c-101), other than as provided in Item 407 of Regulation S-K, or to the liabilities of section 18 of the Exchange Act (15 U.S.C. 78r) and shall not be deemed filed or incorporated by reference into any other of our filings under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate this Audit Committee Report by reference therein.
CHANGE OF AUDITORS
On April 19, 2017, Kabani & Company, Inc. (“Kabani”) resigned as our independent registered public accounting firm.
The audit reports of Kabani on our consolidated financial statements for each of the two most recent fiscal years ended June 30, 2016 and June 30, 2015 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During our two most recent fiscal years ended June 30, 2016 and June 30, 2015 and during the subsequent interim period from July 1, 2016 through April 19, 2017, (i) there were no disagreements with Kabani on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures that, if not resolved to Kabani’s satisfaction, would have caused Kabani to make reference to the subject matter of the disagreement in connection with its reports, and (ii) there were no “reportable events” as defined in Item 304(a)(1)(v) of Regulation S-K.
On April 20, 2017, we engaged KSP Group, Inc. (“KSP”) as our independent registered public accounting firm for the fiscal year ending June 30, 2017. The decision to appoint KSP was approved by the Audit Committee of the Board of Directors.
During the two most recent fiscal years ended June 30, 2016 and June 30, 2015 and during the subsequent interim period from July 1, 2016 through April 19, 2017, neither we nor anyone on our behalf consulted KSP 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 our financial statements, and neither a written report nor oral advice was provided to us that KSP concluded was an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement” or a “reportable event,” each as defined in Regulation S-K Item 304(a)(1)(v), respectively.
22
PROPOSAL TWO: RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
We are asking you to ratify the Audit Committee’s appointment of KSP Group, Inc. (“KSP”) as our independent registered public accounting firm for fiscal 2017.2018. KSP was appointed as our independent registered public accounting firm in April 2017 by the Audit Committee. The members of the Audit Committee and the Board believe that the engagement of KSP to serve as our independent registered public accounting firm is in the best interests of the Company and its shareholders.
Although we are not required to seek shareholder ratification, we are doing so as a matter of good corporate governance. If the shareholders do not ratify the appointment of KSP, the Audit Committee will reconsider its decision. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that a change would be in the best interests of the Company and its shareholders.
We have invited a representative of KSP to attend the annual meeting. If such a representative attends, he or she will be given the opportunity to make a statement if so desired and to respond to appropriate questions.
The Board recommends a vote FOR Proposal Two.
Proposals of stockholders intended for presentation at next year’s annual meeting of stockholders and intended to be included in our proxy statement and form of proxy relating to that meeting must be received at our executive office by January 16, 2018,1, 2019, and comply with the requirements of Rule 14a-8(e) promulgated under the Exchange Act. If a stockholder intends to submit a proposal at next year’s annual meeting of stockholders, which proposal is not intended to be included in the our proxy statement and form of proxy relating to that meeting, the stockholder must provide appropriate notice to us not later than March 31, 2018,2019, in order to be considered timely submitted within the meaning of Rule 14a-4(c) of the Exchange Act. As to all such matters which we do not have notice on or prior to March 31, 2018,2019, discretionary authority shall be granted to the persons designated in our proxy related to the annual meeting of stockholders for the fiscal year ended June 30, 20172018 to vote on such proposal.
We will furnish without charge to each person whose proxy is being solicited, upon the request of such person, a copy of our Annual Report on Form 10-K for the fiscal year ended June 30, 2016,2017, including the financial statements and schedules thereto. Requests for copies of such report should be directed to Ms. Ting Shi,Mr Zhuoyu Li, China Green Agriculture, Inc., 3rd Floor, Borough A, Block A. No. 181, South Taibai Road, Xian, Shaanxi Province, People’s Republic of China, 710065, +86-29-88266368.
As of the date of this proxy statement, the Board of Directors has no knowledge of any business which will be presented for consideration at the Meeting other than as described herein. Should any other matters be properly presented, it is intended that the enclosed proxy will be voted in accordance with the best judgment of the person voting the proxies.
It is important that the proxies be returned promptly and that your shares be represented at the Meeting. Stockholders are urged to mark, date, execute and promptly return the accompanying proxy card in the enclosed envelope.
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Exhibit A
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â Please ensure you fold then detach and retain this portion of this Proxy â
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Exhibit B
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALSfor the Annual Meeting of Stockholders
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Pursuant to Securities and Exchange Commission rules, you are receiving this Notice that the proxy materials for the Annual Meeting are available on the Internet. Follow the instructions above to view the materials and vote or request printed copies.
The board of directors has fixed the close of business on May 12, 2017 as the record date for the determination of stockholders entitled to receive notice of the Annual Meeting and to vote the shares of our common stock they held on that date at the meeting or any postponement or adjournment of the meeting.
The Board of Directors recommends that you vote ‘for’ all proposals above.
Please note - This is not a Proxy Card - you cannot vote by returning this card
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Time Sensitive shareholder information enclosed
IMPORTANT SHAREHOLDER INFORMATION
your vote is important