UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a)
of
the Securities Exchange Act of 1934
Filed
by
the Registrant
x
Filed
by
a Party other than the Registrant
o
Check
the
appropriate box:
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o
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Preliminary
Proxy Statement
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o
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Confidential,
for the use of the Commission only (as permitted by Rule
14a-6(e)(2))
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x
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Definitive
Proxy Statement
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o
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Definitive
Additional Materials
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o
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Soliciting
Material Pursuant to
§
240.14a-12
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(Name
of
Registrant as Specified in Its Charter)
(Name
(s)
of Person Filing Proxy Statement, if Other than Registrant)
Payment
of Filing Fee (Check the appropriate box):
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o
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was
determined):
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(4)
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Proposed
maximum aggregate value of
transaction:
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o
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Fee
paid previously with preliminary
materials:
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o
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-1l(a)(2) and identify the filing for which the offsetting fee
was paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its
filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement
No.:
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Zhongpin
Inc.
21
Changshe Road
Changge
City, Henan Province
People’s
Republic of China
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON THURSDAY, JUNE 26, 2008
May
12,
2008
To
the
stockholders of Zhongpin Inc.:
Notice
is
hereby given that the annual meeting of stockholders of Zhongpin Inc., a
Delaware corporation, will be held at our representative offices located
at Room
605A, Tower A, Raycom Info Tech Park, No. 2 Kexueyuan South Road, Haidian
District, Beijing, People’s Republic of China 100190 on Thursday, June 26, 2008
at 10:00 A.M., local time, for the following purposes:
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1.
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To
elect five directors to our board of directors for the next year
and until
their successors are elected;
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2.
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To
approve and ratify an amendment to our Amended and Restated 2006
Equity
Incentive Plan to increase the number of shares of our common stock
issuable thereunder by 700,000
shares;
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3.
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To
ratify the appointment of
BDO
Shenzhen Dahua Tiancheng CPAs,
independent
registered public accountants, as our independent auditors for
our
fiscal year ending December 31, 2008;
and
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4.
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To
consider and act upon such other business as may properly come
before the
meeting.
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The
foregoing items of business are more fully described in the proxy statement
accompanying this notice. Our board of directors has fixed the close of business
on Monday, April 28, 2008 as the record date for the determination of
stockholders entitled to notice of and to vote at the annual meeting and
at any
adjournment or postponement thereof.
Whether
or not you plan to attend the annual meeting, you should complete, sign,
date
and promptly return the enclosed proxy card to ensure that your shares will
be
represented at the meeting. If you attend the annual meeting and wish to
vote in
person, you may withdraw your proxy and vote in person. You should not send
any
certificates representing stock with your proxy card.
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Sincerely,
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Xianfu
Zhu
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Chairman
of the Board
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Zhongpin
Inc.
21
Changshe Road
Changge
City, Henan Province
People’s
Republic of China
PROXY
STATEMENT
Date,
Time and Place of the Annual Meeting
This
proxy statement is furnished to the stockholders of Zhongpin Inc. in connection
with the solicitation, by order of our board of directors, of proxies to
be
voted at the annual meeting of stockholders to be held on Thursday, June
26,
2008 at 10:00 A.M., local time, at our representative offices located at
Room
605A, Tower A, Raycom Info Tech Park, No. 2 Kexueyuan South Road, Haidian
District, Beijing, People’s Republic of China 100190, and at any adjournment or
adjournments thereof. The accompanying proxy is being solicited on behalf
of our
board of directors. We intend to release this proxy statement and the enclosed
proxy card to our stockholders on or about Monday, May 12, 2008.
Purpose
of the Annual Meeting
At
the
annual meeting, you will be asked to consider and vote upon the following
matters:
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1.
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To
elect five directors to our board of directors for the next year
and until
their successors are elected;
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2.
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To
approve and ratify an amendment to our Amended and Restated 2006
Equity
Incentive Plan to increase the number of shares of our common stock
issuable thereunder by 700,000
shares;
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3.
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To
ratify the appointment of
BDO
Shenzhen Dahua Tiancheng CPAs,
independent
registered public accountants, as our independent auditors for
our
fiscal year ending December 31, 2008;
and
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4.
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To
consider and act upon such other business as may properly come
before the
meeting.
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Voting
and Revocation of Proxies; Adjournment
All
of
our voting securities represented by valid proxies, unless the stockholder
otherwise specifies therein or unless revoked, will be voted
FOR
each of
the director nominees set forth herein,
FOR
the
proposal to amend our Amended and Restated 2006 Equity Incentive Plan,
FOR
the
ratification of BDO Shenzhen Dahua Tiancheng CPAs as our independent auditors
and at the discretion of the proxy holders on any other matters that may
properly come before the annual meeting. Except as set forth above, our board
of
directors does not know of any matters to be considered at the annual
meeting.
If
a
stockholder has appropriately specified how a proxy is to be voted, it will
be
voted accordingly. Any stockholder has the power to revoke such stockholder’s
proxy at any time before it is voted. A stockholder may revoke a proxy by
delivering a written statement to our corporate secretary stating that the
proxy
is revoked, by submitting a subsequent proxy signed by the same person who
signed the prior proxy, or by voting in person at the annual
meeting.
As
of
April 28, 2008, we had a total of 26,274,470 shares of common stock outstanding
and 3,125,000 shares of Series A convertible preferred stock outstanding.
Each
outstanding share of our Series A convertible preferred stock entitles the
holder to one vote on all matters presented to the stockholders for a vote.
A
plurality of the votes cast at the annual meeting by the stockholders entitled
to vote in the election is required to elect the director nominees and a
majority of the votes cast by the stockholders entitled to vote at the annual
meeting is required to approve the amendment to our Amended and Restated
2006
Equity Incentive Plan and to take any other action, including the approval
of
our independent auditors. For purposes of determining whether a proposal
has
received the required vote, abstentions will be included in the vote totals,
with the result being that an abstention will have the same effect as a negative
vote. In instances where brokers are prohibited from exercising discretionary
authority for beneficial holders who have not returned a proxy (so-called
“broker non-votes”), those shares will not be included in the vote totals and,
therefore, will also have the same effect as a negative vote. Shares that
abstain or for which the authority to vote is withheld on certain matters
will,
however, be treated as present for quorum purposes on all matters.
In
the
event that sufficient votes in favor of any of the matters to come before
the
meeting are not received by the date of the annual meeting, the persons named
as
proxies may propose one or more adjournments of the annual meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of the holders of a majority of the shares of common stock
present in person or by proxy at the annual meeting. The persons named as
proxies will vote in favor of any such proposed adjournment or adjournments.
Under Delaware law, stockholders will not have appraisal or similar rights
in
connection with any proposal set forth in this proxy statement.
Solicitation
The
solicitation of proxies pursuant to this proxy statement will be primarily
by
mail. In addition, certain of our directors, officers or other employees
may
solicit proxies by telephone, telegraph, mail or personal interviews, and
arrangements may be made with banks, brokerage firms and others to forward
solicitation material to the beneficial owners of shares held by them of
record.
No additional compensation will be paid to our directors, officers or other
employees for such services. We will bear the cost of the solicitation of
proxies related to the annual meeting.
Quorum
and Voting Rights
Our
board
of directors has fixed Monday, April 28, 2008, as the record date for the
determination of stockholders entitled to notice of and to vote at the annual
meeting. Holders of record of shares of our common stock and Series A
convertible preferred stock at the close of business on the record date will
be
entitled to one vote for each share held. The presence, in person or by proxy,
of the holders of a majority of the outstanding voting securities entitled
to
vote at the annual meeting is necessary to constitute a quorum at the annual
meeting.
VOTING
SECURITIES AND PRINCIPAL HOLDERS THEREOF
The
following table sets forth, as of April 1, 2008, the names, addresses and
number
of shares of our common stock beneficially owned by all persons known to
us to
be beneficial owners of more than 5% of the outstanding shares of our common
stock, and the names and number of shares beneficially owned by all of our
directors and all of our executive officers and directors as a group (except
as
indicated, each beneficial owner listed exercises sole voting power and sole
dispositive power over the shares beneficially owned). As of April 1, 2008,
we
had a total of 26,274,470 shares of common stock outstanding.
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Name
of Beneficial Owner
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Number of Shares
and Nature
of Beneficial
Ownership
(1)
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Percent of
Common
Stock
Outstanding
(2)
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Xianfu Zhu
c/o
Zhongpin Inc.
21
Changshe Road
Changge
City, Henan Province
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The
People’s Republic of China
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6,367,506
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(3)
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24.2
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%
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Entities
and/or persons having securities managed by
Barry M.
Kitt
4965
Preston Park Blvd
Suite
240
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Plano,
TX 75093
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3,646,294
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(4)
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13.9
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%
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Chaoyang
Liu
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619,874
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(5)
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2.4
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%
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Baoke
Ben
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838,125
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(6)
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3.2
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%
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Yuanmei
Ma
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—
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(7)
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—
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Min
Chen
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—
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—
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Raymond
Leal
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—
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(8)
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—
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Yaoguo
Pan
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—
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—
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All
directors and executive officers as a group (seven
persons)
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7,825,505
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29.8
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%
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(1)
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A
person is considered to beneficially own any shares: (i) over which
such
person, directly or indirectly, exercises sole or shared voting
or
investment power, or (ii) of which such person has the right to
acquire
beneficial ownership at any time within 60 days (such as through
exercise
of stock options or warrants). Unless otherwise indicated, voting
and
investment power relating to the shares shown in the table for
our
directors and executive officers is exercised solely by the beneficial
owner or shared by the owner and the owner’s spouse or children.
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(2)
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For
purposes of this table, a person or group of persons is deemed
to have
“beneficial ownership” of any shares of common stock that such person has
the right to acquire within 60 days after the date of this prospectus.
For
purposes of computing the percentage of outstanding shares of our
common
stock held by each person or group of persons named above, any
shares that
such person or persons has the right to acquire within 60 days
after the
date of this prospectus is deemed to be outstanding, but is not
deemed to
be outstanding for the purpose of computing the percentage ownership
of
any other person. The inclusion herein of any shares listed as
beneficially owned does not constitute an admission of beneficial
ownership.
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(3)
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Does
not include 120,000 shares of common stock that are issuable upon
exercise
of unvested stock options granted to Mr. Zhu.
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(4)
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Pinnacle
Advisers, L.P. (“Advisers”) is the general partner of The Pinnacle Fund,
L.P. ("Pinnacle"), which owned 2,060,828 shares of our common stock.
Pinnacle Fund Management, LLC ("Management") is the general partner
of
Advisers. Mr. Barry Kitt is the sole member of Management. Mr. Kitt
may be deemed to be the beneficial owner of the shares of common
stock beneficially owned by Pinnacle. Mr. Kitt expressly disclaims
beneficial ownership of all shares of common stock beneficially
owned by
Pinnacle China.
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Mr.
Kitt is the manager of Kitt China Management, LLC (“China
Manager”). China Manager is the manger of Pinnacle China
Management, LLC (“China Management”). China Management is the
general partner of Pinnacle China Advisers, L.P. (“China
Advisers”). China Advisers is the general partner of Pinnacle
China Fund, L.P. ("Pinnacle China"). Pinnacle China is the owner of
1,579,466 shares of our common stock and shares of our Series A
convertible preferred stock that are convertible into an aggregate
of
1,450,000 shares of common stock. The Series A convertible preferred
stock contains provisions known as “exercise caps,” which prohibit the
holder of the shares of Series A convertible preferred stock (and
its
affiliates) from converting such shares to the extent that giving
effect
to such conversion, such holder would beneficially own in excess
of 9.999%
of our outstanding common stock. In the absence of such caps,
Pinnacle China would have the right to fully convert the Series
A
convertible preferred stock issuable as a result thereof. This
would
result in Pinnacle China owning, if such conversion were to occur
as of
April 1, 2008 (and was based on the outstanding amount disclosed
above as
of April 1, 2008, in which case assuming conversion in full of
the Series
A convertible preferred stock owned by Pinnacle China, we would
have a
total of 27,724,470 shares of our common stock outstanding), 10.9%
of our
common stock. Mr. Kitt may be deemed to be a beneficial owner of
the
shares of common stock beneficially owned by Pinnacle China. Mr.
Kitt
expressly disclaims beneficial ownership of all shares of common
stock
beneficially owned by Pinnacle China.
An
aggregate of 6,000 shares of our common stock are held by children
of Mr.
Kitt. Mr. Kitt may be deemed to be the beneficial owner of the
shares of common stock beneficially owned by his children. Mr. Kitt
expressly disclaims beneficial ownership of all shares of common
stock
beneficially owned by his children.
Each
of Pinnacle and Pinnacle China expressly disclaim beneficial ownership
of
all shares of our common stock owned by the other as well as those
shares
owned by the children of Mr. Kitt.
In
the absence of any “exercise caps” on the Series A convertible preferred
stock owned by Pinnacle China, when aggregating all of the shares
of our
common stock issued or issuable to Mr. Kitt’s children, Pinnacle and
Pinnacle China, respectively, Mr. Kitt could be deemed to own 5,096,294
shares of our common stock or 18.40% of the shares of our common
stock
outstanding. Mr. Kitt expressly disclaims beneficial ownership
of all
shares of our common stock beneficially owned by his children,
Pinnacle
and Pinnacle China, respectively.
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(5)
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Does
not include 100,000 shares of common stock that are issuable upon
the
exercise of unvested stock options granted to Mr. Liu.
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(6)
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Does
not include 100,000 shares of common stock that are issuable upon
the
exercise of unvested stock options granted to Mr. Ben.
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(7)
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Does
not include 100,000 shares of common stock that are issuable upon
the
exercise of unvested stock options granted to Ms. Ma.
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(8)
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Does
not include 30,000 shares of common stock that are issuable upon
the
exercise of unvested stock options granted to Mr. Leal.
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From
time
to time, the number of our shares held in the “street name” accounts of various
securities dealers for the benefit of their clients or in centralized securities
depositories may exceed 5% of the total shares of our common stock outstanding.
ELECTION
OF DIRECTORS
(Proxy
Item 1)
Our
amended and restated by-laws provide that the number of our directors shall
be
not more than seven nor less than two, as fixed from time to time in our
by-laws
or by our board of directors. The board currently consists of five members,
all
of whom are standing for re-election. The term of office of the directors
is one
year, expiring on the date of the next annual meeting, or when their respective
successors shall have been elected and shall qualify, or upon their prior
death,
resignation or removal.
So
long
as the number of shares of our common stock issuable upon conversion of the
outstanding shares of our Series A convertible preferred stock is greater
than
10% of the number of our outstanding shares of common stock on a fully diluted
basis, t
he
holders of shares of our Series A convertible preferred stock, as a separate
class, are entitled to elect one member of our board of directors. Any director
elected by the holders of Series A convertible preferred stock may be removed
without cause only by the affirmative vote of the holders of our Series A
convertible preferred stock. The holders of our common stock and the holders
of
our Series A convertible preferred stock, voting together as a single class,
are
entitled to elect the balance of the total number of directors of our company.
The holders of our Series A convertible preferred stock have not yet nominated
or elected any person to serve on our board of directors.
Except
where the authority to do so has been withheld, it is intended that the persons
named in the enclosed proxy will vote for the election of the nominees to
our
board of directors listed below to serve until the date of the next annual
meeting and until their successors are duly elected and qualified. Although
our
directors have no reason to believe that the nominees will be unable or decline
to serve, in the event that such a contingency should arise, the accompanying
proxy will be voted for a substitute (or substitutes) designated by our board
of
directors.
Director
Nominees
The
following table sets forth certain information regarding our director nominees,
as furnished by the nominees as of April 1, 2008. All of the following
individuals currently serve as directors of our company.
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Name
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Age
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Principal
Occupation for Past Five Years and
Current
Public Directorships or Trusteeships
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Xianfu
Zhu
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45
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Chairman
of the Board and Chief Executive Officer of our company since January
2006; Chairman and Chief Executive Officer of our wholly-owned
subsidiary
and the predecessor to our company, Henan Zhongpin Food Share Co.,
Ltd.
(“Henan Zhongpin”), since its inception in 1993.
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Baoke
Ben
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45
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Director
since June 2007; Executive Vice President of our company since
January
2006; Executive Vice President of Henan Zhongpin since July 2002
and
Director of Technology of Henan Zhongpin from 1999 to July
2002.
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Min
Chen
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51
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Director
since October 2007; Managing Director for Asia-Pacific for Kongsberg
Driveline Systems, Inc., a manufacturer of automobile parts and
products,
since January 2008; Vice President of Corporate Business Development
for
Asia at Teleflex Inc., a diversified company with aerospace, automotive,
marine, industrial and medical businesses, from 1996 to December
2007.
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Raymond
Leal
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67
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Director
since June 2007; Adjunct Professor at Coastal Carolina University
and
Webster University since 1997; Financial Advisor to several regional
investment banks based in Atlanta, Georgia from 1990 to June
2002.
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Yaoguo
Pan
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52
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Director
since September 2007; Researcher at the Development Research Center,
a
policy research and consulting institution directly under the State
Council of the People’s Republic of China, since
1990.
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Vote
Required
Assuming
a quorum is present, a plurality of the votes cast at the annual meeting
of
stockholders by the stockholders entitled to vote in the election, either
in
person or by proxy, is required to elect the director nominees.
Our
board
of directors recommends a vote
FOR
election
of each of the nominees listed above.
DIRECTORS
AND OFFICERS
Biographical
information concerning our directors is set forth above under the caption
“Election of Directors - Director Nominees.”
Our
current executive officers are listed below.
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Name
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Age
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Title
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Xianfu
Zhu
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45
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Chairman
of the Board, Chief Executive Officer
and
President
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Baoke
Ben
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45
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Executive
Vice President
,
Secretary
and Director
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Yuanmei
Ma
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37
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Chief
Financial Officer, Vice President and Treasurer
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Chaoyang
Liu
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36
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Vice
President – Operations
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All
officers serve at the pleasure of our board of directors. There are no family
relationships among any of our officers and directors.
Information
regarding the principal occupations of Messrs. Zhu and Ben over the last
five
years is set forth above under the heading “Director Nominees.” Information
regarding the principal occupations of our other executive officers over
the
past five years is set forth below.
Yuanmei
Ma
.
Ms.
Ma
became our Vice President and Chief Financial Officer in January 2006 and
has
been a Vice President and Chief Financial Officer of Henan Zhongpin since
September 2005. From October 2004 to September 2005, Ms. Ma was Senior
Operations Manager, Investment Banking for Daton Securities Co., Ltd., an
investment banking firm based in the People’s Republic of China. From March 2002
to September 2004, Ms. Ma was an Accounting Manager with Neotek International
Corporation (USA), an automobile parts import and export company. From December
1998 to January 2002, Ms. Ma was an Operations Manager in the Asian Project
Department for Trans-Pacific Venture Investment, Inc., a financial consulting
firm based in the United States.
Chaoyang
Liu
.
Mr. Liu
became our Vice President - Operations in September 2007. Mr. Liu joined
Henan
Zhongpin in 1993 and has been responsible for several areas of its operations,
including product distribution, market research and product improvement.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
requires our directors and executive officers, and persons who own more than
ten
percent of a registered class of our equity securities (“10% Stockholders”), to
file with the Securities and Exchange Commission (the “Commission”) initial
reports of ownership and reports of changes in ownership of our common stock
and
other equity securities. Officers, directors and 10% Stockholders are required
by Commission regulation to furnish us with copies of all Section 16(a) forms
they file.
Based
solely on our review of the copies of such reports received by us, we believe
that for the fiscal year ended December 31, 2007, all Section 16(a) filing
requirements applicable to our officers, directors and 10% stockholders were
complied with, except as follows: Juanjuan Wang, Qinghe Wang and Jinyang
Tang
were each late in filing Initial Statements of Beneficial Ownership of
Securities on Form 3 disclosing their stockholdings. Baoke Ben, Chaoyang
Liu,
Qinghe Wang, Juanjuan Wang, Jinyang Tang and Xianfu Zhu were each late in
filing
Statements of Changes of Beneficial Ownership on Form 4 disclosing stock
options
granted to them pursuant to our Amended and Restated 2006 Equity Incentive
Plan.
The delays in filing were due to administrative errors.
Board
Meetings and Committees; Management Matters
Our
board
of directors held two meetings during the year ended December 31, 2007. Each
director attended at least 75% of the board of directors and committee meetings
of which he was a member during such time as he served as a director. From
time
to time, the members of our board of directors act by unanimous written consent
in accordance with Delaware law. During the year ended December 31, 2007,
our
board of directors took action by unanimous written consent on 15 occasions.
We
do not have a formal policy regarding attendance by members of our board
of
directors at our annual meetings of stockholders, but we encourage all members
of our board of directors to attend such meetings.
Our
board
of directors has a standing audit committee, nominating committee and
compensation committee. Each of these committees was formed by our board
of
directors in 2007. Prior to that time, o
ur
entire
board of directors was responsible for these functions.
Audit
Committee
.
The
Audit Committee, which currently is comprised of Messrs. Raymond Leal
(chairman), Min Chen and Yaoguo Pan, was formed in October 2007 and met one
time
during 2007. During the year ended December 31, 2007, the Audit Committee
also
took action by unanimous written consent on one occasion. Each member of
the
Audit Committee is independent as defined in the listing standards of
The
NASDAQ Stock Market, Inc. (“Nasdaq”)
.
The
Audit Committee assists the board in overseeing (i) our accounting and financial
reporting processes and principles, (ii) our disclosure controls and procedures
and internal control over financial reporting designed to promote compliance
with generally accepted accounting principles and applicable laws and
regulations, (iii) the preparation, presentation and integrity of our financial
statements, and (iv) the administration of an audit of our annual financial
statements by our independent auditor in accordance with generally accepted
accounting standards.
Compensation
Committee
.
The
Compensation Committee, which is currently comprised of Messrs. Pan (chairman),
Leal and Chen, was formed in October 2007 and did not meet during 2007. However,
the Compensation Committee took action by unanimous written consent one time
during 2007. The purpose of the Compensation Committee is to assist the board
in
discharging its responsibilities related to compensation of our executive
officers, to oversee all compensation programs involving the use of the our
stock and to produce an annual report on executive compensation for inclusion
in
our proxy statement for our annual meeting of stockholders.
Nominating
Committee
.
The
Nominating Committee, which is currently comprised of Messrs. Chen (chairman),
Leal and Pan, was formed in October 2007 and did not meet during 2007. The
purpose of the Nominating Committee is to (i) identify individuals who are
qualified to become members of our board of directors, (ii) select, or recommend
that the board of directors select, director nominees to be presented for
stockholder approval at the annual meeting, (iii) select, or recommend that
the
board of directors select, the composition of the committees of the board
of
directors and (iv) perform such other functions as the board of directors
may
from time to time request.
It
is a
policy of the Nominating Committee that candidates for director (i) be
determined to have unquestionable integrity and honesty, (ii) have the ability
to exercise sound, mature and independent business judgment that is in the
best
interests of the stockholders as a whole, (iii) have a background and experience
in fields that will compliment the talents of the other members of our board
of
directors, (iv) have the willingness and capability to take the time to actively
participate in board and committee meetings and related activities, (v) have
the
ability to work professionally and effectively with other members of our
board
of directors and our management, (vi) have the ability to remain on our board
of
directors long enough to make a meaningful contribution, and (vii) have no
material relationships with competitors or other third parties that could
create
a reasonable likelihood of a conflict of interest or other legal
issues.
When
considering potential director nominees, the Nominating Committee also will
consider the current composition of our board of directors and our evolving
needs, including expertise, diversity and balance of inside, outside and
independent directors. In compiling its list of possible candidates and
considering their qualifications, the Nominating Committee will make its
own
inquiries, solicit input from other directors on our board of directors,
and may
consult or engage other sources, such as a professional search firm, if it
deems
appropriate.
The
Nominating Committee will consider director candidates recommended by our
stockholders provided the stockholders follow the procedures set forth below.
The committee does not intend to alter the manner in which it evaluates
candidates, including the criteria set forth above, based on whether the
candidate is recommended by a stockholder or otherwise.
Stockholders
who wish to recommend individuals for consideration by the Nominating Committee
to become nominees for election to our board of directors at our 2009 annual
meeting of stockholders may do so by submitting a written recommendation
to the
Nominating Committee, care of Zhongpin Inc. at 21 Changshe Road, Changge
City,
Henan Province, People’s Republic of China, Attention: Mr. Baoke Ben, in
accordance with the procedures set forth below in this proxy statement under
the
heading “Stockholder Proposals.” For nominees for election to our board of
directors proposed by stockholders to be considered, the following information
concerning each nominee must be timely submitted in accordance with the required
procedures:
|
|
·
|
The
candidate’s name, age, business address, residence address, principal
occupation or employment, the class and number of shares of our
capital
stock the candidate beneficially owns, a brief description of any
direct
or indirect relationships with us, and the other information that
would be
required in a proxy statement soliciting proxies for the election
of the
candidate as a director.
|
|
|
·
|
A
signed consent of the nominee to being named as a nominee, to cooperate
with reasonable background checks and personal interviews and to
serve as
a director, if elected; and
|
|
|
·
|
As
to the stockholder proposing such nominee, that stockholder’s name and
address, the class and number of shares of our capital stock the
stockholder beneficially owns, a description of all arrangements
or
understandings between the stockholder and the candidate and any
other
person or persons (including their names) pursuant to which the
recommendation is being made, a list of all other companies to
which the
stockholder has recommended the candidate for election as a director
in
that fiscal year, and a representation that the stockholder intends
to
appear in person or by proxy at the meeting to nominate the person
named
in its notice.
|
Stockholder
Communications
Our
board
of directors has implemented a process for our stockholders to send
communications to our board of directors. Any stockholder desiring to
communicate with our board of directors, or with specific individual directors,
may do so by writing to Mr. Baoke Ben, Corporate Secretary, at Zhongpin Inc.,
21
Changshe Road, Changge City, Henan Province, People’s Republic of China. Our
Corporate Secretary has the authority to disregard any inappropriate
communications or take other appropriate actions with respect to any such
inappropriate communications. If deemed an appropriate communication, our
Corporate Secretary will submit a stockholder’s correspondence to our Chairman
of the Board or to any specific director to whom the correspondence is
directed.
Code
of Ethics
We
have
adopted a code of business conduct and ethics for our directors, officers and
employees, including our chief executive officer and chief financial officer.
In
addition, we have adopted a supplemental code of ethics for our financial
executives and all employees in our accounting department. The text of our
codes
are posted on our Internet website at
www.zpfood.com
.
We
intend to disclose any changes in or waivers from our codes of ethics that
are
required to be publicly disclosed by posting such information on our website
or
by filing with the Commission a Current Report on Form 8-K.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
Audit
Committee, on behalf of our board of directors, serves as an independent and
objective party to monitor and provide general oversight of the integrity of
our
financial statements, our independent registered public accounting firm’s
qualifications and independence, the performance of our independent registered
public accounting firm, our compliance with legal and regulatory requirements
and our standards of business conduct. The Audit Committee performs these
oversight responsibilities in accordance with its Audit Committee
Charter.
Our
management is responsible for preparing our financial statements and our
financial reporting process. Our independent registered public accounting firm
is responsible for expressing an opinion on the conformity of our audited
financial statements to generally accepted accounting principles in the United
States of America. The Audit Committee met with our independent registered
public accounting firm, with and without management present, to discuss the
results of their examinations and the overall quality of our financial
reporting.
In
this
context, the Audit Committee has reviewed and discussed our audited financial
statements for the year ended December 31, 2007 with management and with our
independent registered public accounting firm. The Audit Committee has discussed
with our independent registered public accounting firm the matters required
to
be discussed by Statement on Auditing Standards No. 61 (Communications with
Audit Committees), which includes, among other items, matters related to the
conduct of the audit of our annual financial statements.
The
Audit
Committee has also discussed with the independent registered public accounting
firm the issue of its independence from us and our management. In addition,
the
Audit Committee has considered whether the provision of non-audit services
by
our independent registered public accounting firm in 2007 was compatible with
maintaining our registered public accounting firm’s independence and has
concluded that it was.
Based
on
its review of the audited financial statements and the various discussions
noted
above, the Audit Committee recommended to our board of directors that our
audited financial statements be included in our Annual Report on Form 10-K
for
the year ended December 31, 2007.
Each
of
the members of the Audit Committee is independent as defined under the standards
of the Commission and Nasdaq, and meets all other requirements of Nasdaq and
of
such rules of the Commission.
|
|
Respectfully
submitted by the Audit Committee,
|
|
|
Raymond
Leal, Chairman
|
|
|
Min
Chen
|
|
|
Yaoguo
Pan
|
The
foregoing Audit Committee Report does not constitute soliciting material and
shall not be deemed filed or incorporated by reference into any other filing
of
our company under the Securities Act of 1933, as amended (the “Securities Act”),
or the Exchange Act, except to the extent we specifically incorporate this
Audit
Committee Report by reference therein.
EXECUTIVE
COMPENSATION
Summary
of Cash and Certain Other Compensation
The
following table sets forth, for the fiscal years indicated, all compensation
awarded to, earned by or paid to Mr. Xianfu Zhu, our Chairman of the Board
and
Chief Executive Officer, and Ms. Yuanmei Ma, our Vice President and Chief
Financial Officer. Mr. Zhu and Ms. Ma are our “Named Executive Officers.” None
of our other executive officers had total compensation in excess of $100,000
during 2007.
Executive
Officer
Compensation
Table
|
Name
and
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
(1)
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
Change
In
Pension
Value
Of Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All
other
Compensation
($)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Xianfu
Zhu
(2)
Chairman
and Chief Executive Officer
|
|
|
2007
2006
|
|
$
|
120,000
113,333
|
|
|
—
—
|
|
|
—
—
|
|
$
|
11,175
—
|
|
|
—
—
|
|
|
—
—
|
|
|
—
—
|
|
$
|
131,175
113,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yuanmei
Ma
(3)
Chief
Financial Officer
|
|
|
2007
2006
|
|
$
|
90,000
73,335
|
|
|
—
20,000
|
|
|
—
—
|
|
$
|
49,532
—
|
|
|
—
—
|
|
|
—
—
|
|
|
—
—
|
|
$
|
139,532
93,335
|
|
|
(1)
|
Represents
expense recognized with respect to stock options granted during 2007
in
accordance with SFAS 123R. See Note 15 in Notes to Consolidated Financial
Statements included in our Annual Report on Form 10-K for the fiscal
year
ended December 31, 2007 for the relevant assumptions we used to determine
the valuation of our stock option awards in
2007.
|
|
(2)
|
Mr.
Zhu was elected our Chairman of the Board and Chief Executive Officer
on
January 30, 2006.
|
|
(3)
|
Ms.
Ma was elected our Chief Financial Officer on January 30,
2006.
|
Compensation
Disclosure and Analysis
Our
executive compensation to date has been fairly simplistic and less structured
than a more mature U.S.-based corporation. As most of our executive officers
were founders of our principal operating subsidiary, their ownership in our
company has driven their philosophy to provide modest salaries and no annual
bonus. As a result, our management compensation primarily has been comprised
of
a cash base salary and, only recently and to a lesser degree, stock options.
The
amounts of such cash compensation were initially determined prior to our
becoming a public company and, given the stock ownership of our senior
management, were based upon our desire to balance the early stage of our
development and our need to conserve working capital, on the one hand, and
the
economic needs of our management, on the other hand. Since we became publicly
owned in January 2006, these considerations have continued to drive the
appropriate amount and type of compensation we have paid our executives.
However, in October 2007, as part of the process of listing our common stock
on
Nasdaq, our board of directors established the Compensation Committee to assist
with the analysis and determination of the compensation structure for our
executive officers. We expect that, in the future, the Compensation Committee
will work with our Chief Executive Officer and other senior executives in
determining management compensation.
Our
Compensation Committee’s goals in regards to executive compensation are
primarily to recruit, hire, retain, motivate and reward the most talented
executives possible by providing annual, short-term and long-term compensation
incentives to achieve our specified performance objectives, and to create
long-term value for our stockholders. We intend in the future to align the
interests of key executives with our stockholders by implementing compensation
plans that tie a substantial portion of our executive’s overall compensation to
key strategic, operational and financial goals, such as achievement of budgeted
levels of revenues and EBITDA, and other non-financial goals that our board
of
directors may deem important.
Our
Compensation Committee intends to adopt a more comprehensive approach to
evaluating our management compensation on an annual basis. We expect that our
board of directors and the Compensation Committee will evaluate individual
executive performance with a goal at setting compensation at levels that will
be
based on their general business and industry knowledge and experience and that
will be comparable with executives in other companies of similar size and stage
of development, while taking into account our relative performance and our
own
strategic goals. We plan to conduct an annual review of the aggregate level
of
our executive compensation as part of the annual budget review and annual
performance review processes, which we anticipate will include determining
the
operating metrics and non-financial elements used to measure our performance
and
to compensate our executive officers. This review is expected to be based on
our
knowledge of how other similarly-situated companies measure their executive
performance and on the key operating metrics that are critical in our effort
to
increase the value of our company.
We
are
still in the process of reexamining the structure of our management compensation
program. We are looking to the compensation programs of similarly-situated
companies and are considering other factors, such as performance, length of
service, peer evaluations, subjective and objective reviews and other factors.
Historically, our compensation structure was based upon prevailing norms in
the
People's Republic of China (the “PRC”), where it is somewhat unusual for
executive officers to make significantly more than middle management or
executives of subsidiaries in the United States. However, we believe we are
now
in a position to compensate our executives in cash amounts that better reflect
their efforts on behalf of our company and the progress our company has made
in
terms of revenue and earnings growth. Nevertheless, we believe the cash amounts
we intend to pay to our executive officers in fiscal 2008 is significantly
less
than that paid to executives in the United States for companies of similar
size
and with similar revenues and profits. This reflects management’s concern over
the fairness to our employees in the PRC and avoiding discrepancies between
our
executive pay and the pay of our middle management and other
employees.
We
also
expect that in the future our management and the Compensation Committee will
receive guidance from advisors and consultants in determining the best way
to
allocate total compensation between cash and equity-based compensation and
on
benchmarking our management compensation structure to a peer group of
similarly-situated companies, while considering the balance between short-term
and long-term incentives. We have not yet commenced the process of developing
our peer group, which is expected to consist primarily of U.S.-based meat
processing companies and other public companies with similar revenues. We also
have considered retaining one or more compensation consultants to assist us
with
information regarding market data for executive compensation in similar
industries and situations.
Consistent
with our historical practices, the fiscal 2008 compensation for our executive
officers was determined after due consideration of the input of our most senior
management. In April 2008, the Compensation Committee met with such management
and approved the following increases in the base salaries of the Named Executive
Officers for fiscal 2008:
|
|
|
|
|
2008 Increase
|
|
Base Salary
|
|
|
|
|
2007 Base Salary
|
|
Amount
|
|
Percentage
|
|
Effective
April 1, 2008
|
|
|
Xian
Zhu
|
|
$
|
120,000
|
|
$
|
60,000
|
|
|
50.0
|
%
|
$
|
180,000
|
|
|
Yuanmei
Ma
|
|
|
90,000
|
|
|
60,000
|
|
|
66.7
|
|
|
150,000
|
|
Stock-Based
Compensation
The
following table sets forth certain information with respect to grants of
plan-based awards for the year ended December 31, 2007 to the Named
Executive Officers.
Grants
of Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Stock
Awards:
Number of
|
|
All Other
Option
Awards:
Number of
|
|
Exercise or
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
Estimated Future Payouts Under
|
|
Shares of
|
|
Securities
|
|
Base Price
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards
|
|
Equity Incentive Plan Awards
|
|
Stock or
|
|
Underlying
|
|
of Option
|
|
|
|
|
Grant
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Units
|
|
Options
|
|
Awards
|
|
|
Name
|
|
Date
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#) (1)
|
|
($)(2)
|
|
(#)
|
|
(#)
|
|
($/Sh)
|
|
|
Xianfu Zhu
|
|
|
12/14/07
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|
N/A
|
|
$
|
719,795
|
|
|
—
|
|
|
—
|
|
$
|
11.76
|
|
|
Yuanmei
Ma
|
|
|
8/23/07
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|
N/A
|
|
|
417,210
|
|
|
—
|
|
|
—
|
|
|
9.20
|
|
|
(1)
|
All
options vest in three equal annual installments, beginning one year
following the grant date.
|
|
(2)
|
Estimated
future payout amount is calculated by using the Black-Scholes option
pricing model.
|
The
following table sets forth certain information with respect to the outstanding
equity awards held by the Named Executive Officers at December 31, 2007.
Outstanding
Equity Awards at Fiscal Year-End
|
|
|
Option
Awards
|
|
Stock
Awards
|
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
Equity Incentive Plan
Awards: Number of
Securities Underlying
Unexercised
Unearned
Options (#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number
of Shares
or Units
of Stock
That
Have
Not
Vested
(#)
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)
|
|
Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units,
or Other
Rights That
Have Not
Vested (#)
|
|
Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units,
or Other
Rights That
Have Not
Vested ($)
|
|
|
Xianfu
Zhu
(1)
|
|
|
—
|
|
|
—
|
|
|
120,000
|
|
$
|
11.76
|
|
|
12/14/12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Yuanmei
Ma
(2)
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
9.20
|
|
|
8/12/12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
Mr.
Zhu’s options have a term of five years and will vest over a three-year
period, with 33.3% of the shares vesting on December 14, 2008, 33.3%
of
the shares vesting on December 14, 2009 and 33.4% of the shares vesting
on
December 14, 2010.
|
|
(2)
|
Ms.
Ma’s options have a term of five years and will vest over a three-year
period, with 33.3% of the shares vesting on August 23, 2008, 33.3%
of the
shares vesting on August 23, 2009 and 33.4% of the shares vesting
on
August 23, 2010.
|
Severance
Benefits
Under
the
laws of the PRC, we must pay severance to all employees who are Chinese
nationals and who are terminated without cause, terminate their employment
with
us for good reason, or whose employment agreement with us expires and with
whom
we choose not continue their employment. The severance benefit
required to be paid under the laws of the PRC equals the average monthly
compensation paid to the terminated employee (including any bonuses or other
payments made in the 12 months prior to the employee’s termination) multiplied
by the number of years the employee has been employed with us, plus an
additional month’s salary if 30 days’ prior notice of such termination has not
been given. However, if the average monthly compensation to be
received by the terminated employee exceeds three times the average monthly
salary of the employee’s local area, as determined and published by the local
government, such average monthly compensation shall be capped at three times
the
average monthly salary of the employee’s local area. None of our
employees, including our executive officers, has any other agreement or
arrangement under which he or she may be entitled to severance payments upon
termination of employment.
Securities
Authorized for Issuance Under Equity Compensation Plans
On
January 30, 2006, our board of directors and stockholders adopted and approved,
and on February 27, 2007 our board of directors and stockholders approved
the amendment and restatement of, our Amended and Restated 2006 Equity
Incentive Plan (the “Incentive Plan”). The Incentive Plan allows for awards of
stock options, restricted stock grants and share appreciation rights for up
to
1,800,000 shares of common stock. On April 21, 2008, the Compensation Committee
of our board of directors approved an amendment to the Incentive Plan, subject
to stockholders approval, for the purpose of increasing the authorized shares
from 1,800,000 shares to 2,500,000 shares.
As
of
December 31, 2007, options to purchase 710,000 shares of common stock had been
granted under the Incentive Plan. Options granted in the future under the
Incentive Plan are within the discretion of our board of directors. The
following table summarizes the number of shares of our common stock authorized
for issuance under our equity compensation plans.
|
Plan
Category
|
|
(a)
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options
|
|
(b)
Weighted-
Average
Exercise Price
of Outstanding
Options
|
|
(c)
Number of
Securities
Remaining
Available
for Future
Issuance Under
Equity
Compensation
Plans (excluding
securities reflected
in column (a))
|
|
|
Equity
compensation plans approved by security holders
|
|
|
710,000
|
|
$
|
11.29
|
|
|
1,090,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not approved by security holders
|
|
|
0
|
|
|
N/A
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
710,000
|
|
$
|
11.29
|
|
|
1,090,000
|
|
Board
of Directors Compensation
Directors
who are employees of our company or of any of our subsidiaries receive no
additional compensation for serving on our board of directors or any of its
committees. All directors who are not employees of our company or of any of
our
subsidiaries are compensated at the rate of $30,000 per year and are reimbursed
for their expenses incurred in attending board and committee meetings.
The
following table provides compensation information for all of our non-employee
directors during 2007.
Director
Compensation
Table
|
Name
|
|
Fees
Earned
or
Paid
in
Cash
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
|
|
All
Other
Compensation
($)
|
|
Total
($)
|
|
|
Min
Chen
|
|
$
|
30,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
$
|
30,000
|
|
|
Raymond
Leal
|
|
|
45,000
|
(1)
|
|
—
|
|
$
|
44,579
|
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89,579
|
|
|
Yaoguo
Pan
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
(1)
|
Mr.
Leal receives $30,000 annual compensation for his service as a director
and $15,000 for his service as chairman of the Audit Committee of
our
board of directors.
|
|
(2)
|
Mr.
Leal was granted options to purchase 30,000 shares of common stock,
at an
exercise price of $9.20 per share, on August 23, 2007. The expense
recognized for this grant was determined in accordance with SFAS
123R. See
Note 15 in Notes to Consolidated Financial Statements included in
our
Annual Report on Form 10-K for the fiscal year ended December 31,
2007 for
the relevant assumptions we used to determine the valuation of our
stock
option awards in 2007.
|
Certain
Relationships And Related Transactions
Our
board
of directors is committed to maintaining the highest legal and ethical
obligations and recognizes that related party transactions can represent a
heightened risk of potential or actual conflicts of interest. The charter of
the
Audit Committee of our board of directors requires that members of the Audit
Committee, all of whom are independent directors, review, approve and publicly
disclose related party transactions for which such approval is required under
applicable law, including the rules of the Commission and of
Nasdaq.
REPORT
OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
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 2008
annual meeting, which is incorporated by reference in our Annual Report on
Form
10-K for the fiscal year ended December 31, 2007, each as filed with the
Commission.
|
|
Respectfully
submitted,
|
|
|
|
|
|
Yaoguo
Pan, Chairman
|
|
|
Min
Chen
|
|
|
Raymond
Leal
|
The
foregoing Compensation Committee Report does not constitute soliciting material
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.
Performance
Graph
The
following graph compares the cumulative total return on our common stock, the
Nasdaq Composite Index and a peer group over the period commencing on February
28, 2006 (the first date on which there was any significant trading of our
common stock following our acquisition of our existing business operations
on
January 30, 2006) and ending on December 31, 2007. The peer group is comprised
of companies that are engaged in the production and sale of meat products (SIC
Code 2011), and includes Diamond Ranch Foods Limited, Hormel Foods Corp. and
Tysons Foods Inc.
The
performance graph assumes the value of the investment in the common stock of
each index was $100 and that all dividends were invested.
Comparison
of Two-Year Cumulative Total Return
AMENDMENT
TO THE ZHONGPIN INC.
AMENDED
AND RESTATED 2006 EQUITY INCENTIVE PLAN
(Proxy
Item 2)
General
On
April
21, 2008, our board of directors voted to amend the Zhongpin Inc. Amended and
Restated 2006 Equity Incentive Plan (the “Incentive Plan”). The amendment is
solely to increase the number of shares authorized for issuance under the
Incentive Plan from 1,800,000 shares of common stock to 2,500,000 shares of
common stock. The Incentive Plan gives us the ability to grant stock options,
SARs and restricted stock (collectively, “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 of directors or the board of directors of
any
of our subsidiaries. Our board of directors believes that adoption of the
amendment to the Incentive Plan is in the best interests of our company and
our
stockholders because the ability to grant stock options and make other
stock-based awards under the Incentive 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 of directors or advisory board of our
company and our subsidiaries, and to chart our course towards continued growth
and financial success.
Therefore,
our board of directors believes the Incentive Plan will be a key component
of
our compensation program.
As
of
April 1, 2008, options to purchase an aggregate of 710,000 shares of our common
stock had been granted under the Incentive Plan and a total of 1,090,000 shares
of our common stock remained available for future grants under the Incentive
Plan. Our proposed amendment to the Incentive Plan would increase to 1,790,000
the shares of common stock remaining available for future issuance.
Summary
of the Provisions of the Incentive Plan
The
following summary briefly describes the material features of the Incentive
Plan
and is qualified, in its entirety, by the specific language of the Incentive
Plan, a copy of which is attached to this proxy statement as Annex
A.
Shares
Available
Our
board
of directors has authorized, subject to stockholder approval, increasing the
shares of our common stock available for issuance under the Incentive Plan
from
1,800,000 shares to 2,500,000 shares. In the event of any stock dividend, stock
split, reverse stock split, share combination, recapitalization, merger,
consolidation, spin-off, split-up, reorganization, rights offering, liquidation,
or any similar change event of or by our company, appropriate adjustments will
be made to the shares subject to the Incentive Plan and to any outstanding
Awards. Shares available for Awards under the Incentive Plan may be either
newly-issued shares or treasury shares.
In
certain circumstances, shares subject to an outstanding Award may again become
available for issuance pursuant to other Awards available under the Incentive
Plan. For example, shares subject to forfeited, terminated, canceled or expired
Awards will again become available for future grants under the Incentive Plan.
In addition, shares subject to an Award that are withheld by us to satisfy
tax
withholding obligations shall also be made available for future grants under
the
Incentive Plan.
Administration
The
Incentive Plan is administered by the Compensation Committee of our board of
directors. With respect to the participation of individuals who are subject
to
Section 16 of the Exchange Act, the Incentive Plan is administered in compliance
with the requirements of Rule 16b-3 under the Exchange Act. Subject to the
provisions of the Incentive Plan, the Compensation Committee determines the
persons to whom grants of options, SARs and shares of restricted stock are
to be
made, the number of shares of common stock to be covered by each grant and
all
other terms and conditions of the grant. If an option is granted, the
Compensation Committee determines whether the option is an incentive stock
option or a nonstatutory stock option, the option’s term, vesting and
exercisability, the amount and type of consideration to be paid to our company
upon the option’s exercise and the other terms and conditions of the grant. The
terms and conditions of restricted stock and SAR Awards are also determined
by
the Compensation Committee. The Compensation Committee has the responsibility
to
interpret the Incentive Plan and to make determinations with respect to all
Awards granted under the Incentive Plan. All determinations of the Compensation
Committee are final and binding on all persons having an interest in the
Incentive Plan or in any Award made under the Incentive Plan. The costs and
expenses of administering the Incentive Plan are borne by our
company.
Eligibility
Eligible
individuals include our and our subsidiaries’ employees (including our and our
subsidiaries’ officers and directors who are also employees) or consultants
whose efforts, in the judgment of the Compensation Committee, are deemed worthy
of encouragement to promote our growth and success. Non-employee directors
of
our board of directors are also eligible to participate in the Incentive Plan.
All eligible individuals may receive one or more Awards under the Incentive
Plan, upon the terms and conditions set forth in the Incentive Plan. At December
31, 2007, approximately 3,603 individuals were eligible to receive Awards under
the Incentive Plan. Of this total, approximately 3,600 individuals were
employees and three individuals were non-employee directors. There is no
assurance that an otherwise eligible individual will be selected by the
Compensation Committee to receive an Award under the Incentive Plan. Because
future Awards under the Incentive Plan will be granted in the discretion of
the
Compensation Committee, the type, number, recipients and other terms of such
Awards cannot be determined at this time.
Stock
Options and SARs
Under
the
Incentive Plan, the Compensation Committee is authorized to grant both stock
options and SARs. Stock options may be either designated as non-qualified stock
options or incentive stock options. Incentive stock options, which are intended
to meet the requirements of Section 422 of the Internal Revenue Code such that
a
participant can receive potentially favorable tax treatment, may only be granted
to employees. Therefore, any stock option granted to consultants and
non-employee directors are non-qualified stock options. The tax treatment of
incentive and non-qualified stock options is generally described later in this
summary. SARs may be granted either alone or in tandem with a stock option.
A
SAR entitles the participant to receive the excess, if any, of the fair market
value of a share on the exercise date over the strike price of the SAR. This
amount is payable in cash, except that the Compensation Committee may provide
in
an Award agreement that benefits may be paid in shares of our common stock.
In
general, if a SAR is granted in tandem with an option, the exercise of the
option will cancel the SAR, and the exercise of the SAR will cancel the option.
Any shares that are canceled will be made available for future Awards. The
Compensation Committee, in its sole discretion, determines the terms and
conditions of each stock option and SAR granted under the Incentive Plan,
including the grant date, option or strike price (which, in no event, will
be
less than the par value of a share), whether a SAR is paid in cash or shares,
the term of each option or SAR, exercise conditions and restrictions, conditions
of forfeitures, and any other terms, conditions and restrictions consistent
with
the terms of the Incentive Plan, all of which will be evidenced in an individual
Award agreement between us and the participant.
Certain
limitations apply to incentive stock options and SARs granted in tandem with
incentive stock options. The per share exercise price of an incentive stock
option may not be less than 100% of the fair market value of a share of our
common stock on the date of the option’s grant and the term of any such option
shall expire not later than the tenth anniversary of the date of the option’s
grant. In addition, the per share exercise price of any option granted to a
person who, at the time of the grant, owns stock possessing more than 10% of
the
total combined voting power or value of all classes of our stock must be at
least 110% of the fair market value of a share of our common stock on the date
of grant and such option shall expire not later than the fifth anniversary
of
the date of the option’s grant.
Options
and SARs granted under the Incentive Plan become exercisable at such times
as
may be specified by the Compensation Committee. In general, options and SARs
granted to participants become exercisable in five equal annual installments,
subject to the optionee’s continued employment or service with us. However, the
aggregate value (determined as of the grant date) of the shares subject to
incentive stock options that may become exercisable by a participant in any
year
may not exceed $100,000. If a SAR is granted in tandem with an option, the
SAR
will become exercisable at the same time or times as the option becomes
exercisable.
The
maximum term of options and SARs granted under the Incentive Plan is ten years.
If any participant terminates employment due to death or disability or
retirement, the portion of his or her option or SAR Awards that were exercisable
at the time of such termination may be exercised for one year from the date
of
termination. In the case of any other termination, the portion of his or her
option or SAR Awards that were exercisable at the time of such termination
may
be exercised for three months from the date of termination. However, if the
remainder of the option or SAR term is shorter than the applicable
post-termination exercise period, the participant’s rights to exercise the
option or SAR will expire at the end of the term. In addition, if a
participant’s service terminates due to cause, all rights under an option or SAR
will immediately expire, including rights to the exercisable portion of the
option or SAR. Shares attributable to an option or SAR that expire without
being
exercised will be forfeited by the participant and will again be available
for
Award under the Incentive Plan.
Unless
limited by the Compensation Committee in an Award agreement, payment for shares
purchased pursuant to an option exercise may be made (i) in cash, check or
wire
transfer, (ii) subject to the Compensation Committee’s approval, in shares
already owned by the participant (including restricted shares held by the
participant at least six months prior to the exercise of the option) valued
at
their fair market value on the date of exercise, or (iii) through
broker-assisted cashless exercise procedures.
Restricted
Stock
Under
the
Incentive Plan, the Compensation Committee is also authorized to make Awards
of
restricted stock. A restricted stock Award entitles the participant to all
of
the rights of a stockholder of our company, including the right to vote the
shares and the right to receive any dividends. However, the Compensation
Committee may require the payment of cash dividends to be deferred and if the
Compensation Committee so determines, re-invested in additional shares of
restricted stock. Before the end of a restricted period and/or lapse of other
restrictions established by the Compensation Committee, shares received as
restricted stock shall contain a legend restricting their transfer, and may
be
forfeited (i) in the event of termination of employment, (ii) if our company
or
the participant does not achieve specified performance goals after the grant
date and before the participant’s termination of employment or (iii) upon the
failure to achieve other conditions set forth in the Award
agreement.
An
Award
of restricted stock will be evidenced by a written agreement between us and
the
participant. The Award agreement will specify the number of shares of our common
stock subject to the Award, the nature and/or length of the restrictions, the
conditions that will result in the automatic and complete forfeiture of the
shares and the time and manner in which the restrictions will lapse, subject
to
the Award holder’s continued employment by us, and any other terms and
conditions the Compensation Committee shall impose consistent with the
provisions of the Incentive Plan. The Compensation Committee also determines
the
amount, if any, that the participant shall pay for the shares of restricted
stock. However, the participant must be required to pay at least the par value
for each share of restricted stock. Upon the lapse of the restrictions, any
legends on the shares of our common stock subject to the Award will be re-issued
to the participant without such legend.
Unless
the Compensation Committee determines otherwise in the Award or other agreement,
if a participant terminates employment for any reason, all rights to restricted
stock that are then forfeitable will be forfeited. Restricted stock that is
forfeited by the participant will again be available for Award under the
Incentive Plan.
Fair
Market Value
Under
the
Incentive Plan, fair market value means the fair market value of the shares
based upon (i) the closing selling price of a share of our common stock as
quoted on the principal national securities exchange on which the stock is
traded, if the stock is then traded on a national securities exchange, or (ii)
the closing bid price per share last quoted on that date by an established
quotation service for over-the-counter securities, if the common stock is not
then traded on a national securities exchange.
Transferability
Restrictions
Generally
and unless otherwise provided in an Award agreement, shares or rights subject
to
an Award cannot be assigned or transferred other than by will or by the laws
of
descent and distribution and Awards may be exercised during the participant’s
lifetime only by the participant or his or her guardian or legal representative.
However, a participant may, if permitted by the Compensation Committee, in
its
sole discretion, transfer an Award, or any portion thereof, to one or more
of
the participant’s spouse, children or grandchildren, or may designate in writing
a beneficiary to exercise an Award after his or her death.
Termination
or Amendment of the Incentive Plan
Unless
sooner terminated, no Awards may be granted under the Incentive Plan after
January 30, 2016. Our board of directors may amend or terminate the
Incentive Plan at any time, but our board of directors may not, without
stockholder approval, amend the Incentive Plan to increase the total number
of
shares of our common stock reserved for issuance of Awards. In addition, any
amendment or modification of the Incentive Plan shall be subject to stockholder
approval as required by any securities exchange on which our common stock is
listed. No amendment or termination may deprive any participant of any rights
under Awards previously made under the Incentive Plan.
Summary
of Federal Income Tax Consequences of the Incentive Plan
The
following summary is intended only as a general guide as to the federal income
tax consequences under current United States law with respect to participation
in the Incentive Plan and does not attempt to describe all possible federal
or
other tax consequences of such participation. Furthermore, the tax consequences
of awards made under the Incentive Plan are complex and subject to change,
and a
taxpayer’s particular situation may be such that some variation of the described
rules is applicable.
Options
and SARs
There
are
three points in time when a participant and our company could potentially incur
federal income tax consequences: date of grant, upon exercise and upon
disposition. First, when an option or a SAR is granted to a participant, the
participant does not recognize any income for federal income tax purposes on
the
date of grant. We similarly do not have any federal income tax consequences
at
the date of grant. Second, depending upon the type of option, the exercise
of an
option may or may not result in the recognition of income for federal income
tax
purposes. With respect to an incentive stock option, a participant will not
recognize any ordinary income upon the option’s exercise (except that the
alternative minimum tax may apply). However, a participant will generally
recognize ordinary income upon the exercise of a non-qualified stock option.
In
this case, the participant will recognize income equal to the difference between
the option price and the fair market value of shares purchased pursuant to
the
option on the date of exercise. With respect to the exercise of a SAR, the
participant must generally recognize ordinary income equal to the cash received
(or, if applicable, value of the shares received).
Incentive
stock options are subject to certain holding requirements before a participant
can dispose of the shares purchased pursuant to the exercise of the option
and
receive capital gains treatment on any income realized from the exercise of
the
option. Satisfaction of the holding periods determines the tax treatment of
any
income realized upon exercise. If a participant disposes of shares acquired
upon
exercise of an incentive stock option before the end of the applicable holding
periods (called a “disqualifying disposition”), the participant must generally
recognize ordinary income equal to the lesser of (i) the fair market value
of
the shares at the date of exercise of the incentive stock option minus the
exercise price or (ii) the amount realized upon the disposition of the shares
minus the exercise price. Any excess of the fair market value on the date of
such disposition over the fair market value on the date of exercise must be
recognized as capital gains by the participant. If a participant disposes of
shares acquired upon the exercise of an incentive stock option after the
applicable holding periods have expired, such disposition generally will result
in long-term capital gain or loss measured by the difference between the sale
price and the participant’s tax “basis” in such shares (generally, in such case,
the tax “basis” is the exercise price).
Generally,
we will be entitled to a tax deduction in an amount equal to the amount
recognized as ordinary income by the participant in connection with the exercise
of options and SARs. However, we are generally not entitled to a tax deduction
relating to amounts that represent capital gains to a participant. Accordingly,
if the participant satisfies the requisite holding period with respect to an
incentive stock option before disposition to receive the favorable tax treatment
accorded incentive stock options, we will not be entitled to any tax deduction
with respect to an incentive stock option. In the event the participant has
a
disqualifying disposition with respect to an incentive stock option, we will
be
entitled to a tax deduction in an amount equal to the amount that the
participant recognized as ordinary income.
Restricted
Stock Awards
A
participant will not be required to recognize any income for federal income
tax
purposes upon the grant of shares of restricted stock. With respect to Awards
involving shares or other property, such as restricted stock Awards, that
contain restrictions as to their transferability and are subject to a
substantial risk of forfeiture, the participant must generally recognize
ordinary income equal to the fair market value of the shares or other property
received at the time the shares or other property become transferable or are
no
longer subject to a substantial risk of forfeiture, whichever occurs first.
We
generally will be entitled to a deduction in an amount equal to the ordinary
income recognized by the participant. A participant may elect to be taxed at
the
time he or she receives shares (
e.g
.,
restricted stock) or other property rather than upon the lapse of
transferability restrictions or the substantial risk of forfeiture. However,
if
the participant subsequently forfeits such shares he or she would not be
entitled to any tax deduction or, to recognize a loss, for the value of the
shares or property on which he or she previously paid tax. Alternatively, if
an
Award that results in a transfer to the participant of cash, shares or other
property does not contain any restrictions as to their transferability and
is
not subject to a substantial risk of forfeiture, the participant must generally
recognize ordinary income equal to the cash or the fair market value of shares
or other property actually received. We generally will be entitled to a
deduction for the same amount.
Vote
Required
Assuming
a quorum is present, the affirmative vote of a majority of the votes cast at
the
annual meeting of stockholders, either in person or by proxy, is required for
approval of this proposal.
Our
board
of directors recommends a vote
FOR
approval
of the proposed amendment to our Amended and Restated 2006 Equity Incentive
Plan.
RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS
(Proxy
Item 3)
On
February 22, 2008, the Audit Committee of our board of directors recommended
and
approved the dismissal of Child Van Wagoner & Bradshaw, PLLC (“CVW&B”)
as our independent public accountants, effective upon the filing of our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2008.
CVW&B will complete its procedures regarding our unaudited financial
statements for the quarter ended March 31, 2008 and our Quarterly Report on
Form
10-Q in which such financial statements are included.
The
reports of CVW&B on our consolidated financial statements for the fiscal
years ended December 31, 2007 and December 31, 2006 did not contain an adverse
opinion or a disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principle.
During
the fiscal years ended December 31, 2007 and December 31, 2006, there were
no
disagreements with CVW&B on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which
disagreement(s), if not resolved to the satisfaction of CVW&B, would have
caused it to make reference to the subject matter of the disagreement(s) in
connection with its report on our financial statements for such years.
Additionally, there were no disagreements with CVW&B through the date of
this proxy statement. During the fiscal years ended December 31, 2007 and
December 31, 2006, and through the date of this proxy statement, there were
no
reportable events described under Item 304(a)(1)(v) of Regulation
S-K.
Also
on
February 22, 2008, following a selection process, the Audit Committee of our
board of directors recommended and approved the selection of BDO Shenzhen Dahua
Tiancheng (“BDO Shenzhen”) as our independent public accountants for our fiscal
year ending December 31, 2008. BDO Shenzhen’s engagement will commence with the
review of our unaudited financial statements for our fiscal quarter ending
June
30, 2008.
During
the fiscal years ended December 31, 2007 and December 31, 2006, and through
the
date of this proxy statement, neither we, nor anyone on our behalf, consulted
BDO Shenzhen 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 with respect to our financial statements; or (ii) any
matter that was either the subject of a disagreement (as defined in paragraph
304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable
event (as described in paragraph 304(a)(1)(v) of Regulation S-K).
In
the
event that ratification of this appointment of independent auditors is not
approved by the affirmative vote of a majority of votes cast on the matter,
the
appointment of our independent auditors will be reconsidered by our board of
directors. Unless marked to the contrary, proxies received will be voted for
ratification of the appointment of BDO Shenzhen as our independent auditors
for
the fiscal year ending December 31, 2008.
Representatives
of both BDO Shenzhen and CVW&B are expected to attend the annual meeting of
stockholders by telephone conference call, and each such representative will
have the opportunity to make a statement if he so desires and will be available
to respond to appropriate questions from stockholders.
Your
ratification of the appointment of BDO Shenzhen as our independent auditors
for
the fiscal year ending December 31, 2008 does not preclude our
board
of
directors
from
terminating its engagement of BDO Shenzhen and retaining a new independent
auditor, if it determines that such an action would be in our best interests.
Audit
Fees
Audit
Fees
The
aggregate fees billed by CVW&B for professional services rendered for the
audit of our annual financial statements for the last two fiscal years and
for
the reviews of the financial statements included in our Quarterly Reports on
Form 10-Q during the last two fiscal years was $142,500 and $84,000,
respectively.
Audit-Related
Fees
We
did
not engage our principal accountants to provide assurance or related services
during the last two fiscal years.
Tax
Fees
The
aggregate fees billed by our principal accountants for tax compliance, tax
advice and tax planning services rendered to us during the last two fiscal
years
was $11,400 and $11,400, respectively.
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.
Pre-Approval
Policies and Procedures
The
Audit
Committee of our board of directors has the sole authority to appoint or replace
our independent auditor. Our Audit Committee is directly responsible for the
compensation and oversight of the work of our independent auditor (including
resolution of disagreements between management and the independent auditor
regarding financial reporting) for the purpose of preparing or issuing an audit
report or related work. Our independent auditor is engaged by, and reports
directly to, our Audit Committee.
Our
Audit
Committee pre-approves all auditing services and permitted non-audit services
(including the fees and terms thereof) to be performed for us by our independent
auditor, subject to the
de
minimis
exceptions for non-audit services described in Section 10A(i)(1)(B) of the
Securities Exchange Act of 1934, all of which are approved by our board prior
to
the completion of the audit. Our Audit Committee has complied with the
procedures set forth above and all services reported above were approved in
accordance with such procedures.
Vote
Required and Board of Directors’ Recommendation
Assuming
a quorum is present, the affirmative vote of a majority of the votes cast at
the
annual meeting of stockholders, either in person or by proxy, is required for
approval of this proposal.
Our
board
of
directors
recommends a vote
FOR
ratification of the appointment of BDO Shenzhen as our independent auditors
for
the fiscal year ending December 31, 2008.
STOCKHOLDER
PROPOSALS
Proposals
of stockholders intended for presentation at our 2009 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 offices by
January 13, 2009 and comply with the requirements of
Rule
14a-8(e) promulgated under the Securities Exchange Act of 1934.
OTHER
BUSINESS
Other
than as described above, our board of directors knows of no matters to be
presented at the annual meeting, but it is intended that the persons named
in
the proxy will vote your shares according to their best judgment if any matters
not included in this proxy statement do properly come before the meeting or
any
adjournment thereof.
ANNUAL
REPORT
Our
Annual Report on Form 10-K for the year ended December 31, 2007, including
financial statements, is being mailed with this proxy statement. If, for any
reason, you do not receive your copy of the Annual Report, please contact Mr.
Baoke Ben, Secretary, Zhongpin Inc., 21 Changshe Road, Changge City, Henan
Province, People’s Republic of China, and another will be sent to
you.
By
Order
of the Board of Directors,
Xianfu
Zhu
Chairman
of the Board
Dated:
May
12,
2008
Changge
City, People’s
Republic
of China
ANNEX
A
AMENDED
AND RESTATED
2006
EQUITY INCENTIVE PLAN
OF
ZHONGPIN INC.
SECTION
1. Overview
1.1
Purpose
.
The
purpose of the Amended and Restated 2006 Equity Incentive Plan (the “Plan”) is
to advance and promote the interests of Zhongpin Inc. (the “Corporation”) and
its Subsidiaries by providing employees, consultants and advisors of the
Corporation or its Subsidiaries with an incentive to achieve corporate
objectives, to attract and retain employees, consultants and advisors of
outstanding competence and to provide such individuals with an equity interest
in the Corporation through the acquisition of Common Stock and by providing
for
payments to such individuals based on the appreciation in value or value of
such
Common Stock. The Plan is intended to be construed as an employee benefit plan
that satisfies the requirements for exemption from the restrictions of Section
16(b) of the Securities Exchange Act of 1934, as amended, pursuant to the
applicable rules promulgated thereunder.
1.2
Definitions
.
The
following definitions are applicable to the Plan:
(a)
“
Applicable
Laws
”
means
the legal requirements relating to the Plan and the Awards under applicable
provisions of the Code, the laws, rules, regulations and government orders
of
the United States and the PRC, the rules of any applicable share exchange or
national market system, and the laws and the rules of any jurisdiction
applicable to Awards granted to residents therein.
(b)
“
Award
”
means
Options, Restricted Stock, Stock Appreciation Rights (SARs) or any combination
thereof, granted under the Plan.
(c)
“
Award
Agreement
”
means
the written agreement by which an Award shall be evidenced.
(d)
“
Beneficiary
”
means
the beneficiary or beneficiaries designated in accordance with Section 5.8
hereof to receive the amount, if any, payable under the Plan upon the death
of a
Participant.
(e)
“
Board
”
means
the Board of Directors of the Corporation.
(f)
“Change
in Control” means the occurrence of any of the following (i) the sale, lease,
transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Corporation
to
any person or group; or (ii) a transaction or series of transactions pursuant
to
which any person or group (other than the Corporation or an affiliate thereof)
is or becomes the beneficial owner, directly or indirectly, of more than 50%
of
the voting shares of the Corporation, including by way of merger, consolidation
or otherwise.
(g)
“Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
(h)
“
Committee
”
means
the committee appointed pursuant to Section 1.3 hereof or if no such Committee
is appointed, the Board.
(i)
“
Common
Stock
”
means
the common stock, $.001 par value per share, of the Corporation.
(j)
“
Corporation
”
means
Zhongpin Inc.
(k)
“
Effective
Date
”
means
January 30, 2006.
(l)
“
Eligible
Individual
”
means
any Key Employee, consultant or advisor of the Corporation or any Subsidiary.
(m)
“
Exchange
Act
”
means
the Securities Exchange Act of 1934, as amended. References to a particular
section of, or rule under, the Exchange Act includes references to successor
provisions.
(n)
“
Fair
Market Value
”
shall
be determined as of the last business day for which the prices or quotes
discussed in this sentence are available prior to the Grant Date and shall
mean
(i) the closing selling price per share on that date of the Common Stock on
the
principal national securities exchange on which the Common Stock is traded,
if
the Common Stock is then traded on a national securities exchange; or (ii)
the
closing bid price per share last quoted on that date by an established quotation
service for over-the-counter securities, if the Common Stock is not then traded
on a national securities exchange.
(o)
“
Incentive
Stock Option
”
means
an Option to purchase Common Stock that qualifies as an incentive stock option
within the meaning of Section 422 of the Code.
(p)
“
Immediate
Family
”
means,
with respect to a particular Participant, the Participant’s spouse, children and
grandchildren.
(q)
“
Key
Employee
”
means
any employee of the Corporation or any of its Subsidiaries, including any
officer or director who is also an employee, who, in the judgment of the
Committee, is considered important to the future of the Corporation. Nothing
shall limit the Board from designating all or substantially all employees as
eligible for grants.
(r)
“
Mature
Shares
”
means
Shares for which the holder thereof has good title, free and clear of all liens
and encumbrances, and which such holder either (i) has held for at least six
(6)
months or (ii) has purchased from the open market.
(s)
“
Non-Employee
Director
”
means
a
member of the Board who qualifies as a “Non-employee Director” as defined in
Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted by
the
Board.
(t)
“
Non-qualified
Stock Option
”
means
an Option to purchase Common Stock that does not qualify as an Incentive Stock
Option.
(u)
“
Option
”
means
an Incentive Stock Option or a Non-qualified Stock Option.
(v)
“
Option
Price
”
means
the purchase price per Share of an Option.
(w)
“
Option
Term
”
means
the period beginning on the Grant Date of an Option and ending on the expiration
date of such Option, as specified in the Award Agreement for such Option and
as
may, in the discretion of the Committee, and consistent with the provisions
of
the Plan, be extended from time to time.
(x)
“
Participant
”
means
an Eligible Individual who has been granted an Award or a Permitted
Transferee.
(y)
“
Permitted
Transferee
”
means
a
person to whom an Award may be transferred or assigned in accordance with
Section 5.8 hereof.
(z)
“
Plan
”
means
this Amended and Restated 2006 Equity Incentive Plan of Zhongpin Inc., as the
same may be amended from time to time.
(aa)
“
PRC
”
means
the People’s Republic of China.
(bb)
“
Restricted
Stock
”
means
Shares which are subject to forfeiture if the Participant does not satisfy
the
Restrictions specified in the Award Agreement applicable to such Restricted
Stock.
(cc)
“
Restricted
Period
”
means
the period of time shares of Restricted Stock are subject to the Restrictions
specified in the Award Agreement applicable to such Restricted
Stock.
(dd)
“
Restrictions
”
means
those restrictions and conditions placed upon Restricted Stock as determined
by
the Board in accordance with Section 4.2 hereof.
(ee)
“
Rule
16b-3
”
means
Rule 16b-3 of the SEC under the Exchange Act, as amended from time to time,
together with any successor rule.
(ff)
“
SEC
”
means
the Securities and Exchange Commission.
(gg)
“
Section
16 Participant
”
means
a
Participant who is subject to potential liability under Section 16(b) of the
Exchange Act with respect to transactions involving equity securities of the
Corporation.
(hh)
“
Share
”
means
a
share of Common Stock.
(ii)
“
Stock
Appreciation Right
”
or
“
SAR
”
means
a
right granted under the Plan in connection with an Option, or separately, to
receive the appreciation in value of Shares.
(jj)
“
Subsidiary
”
means,
for purposes of grants of Incentive Stock Options, a corporation as defined
in
Section 424(f) of the Code (with the Corporation treated as the employer
corporation for purposes of this definition) and, for all other purposes, a
corporation or other entity with respect to which the Corporation (i) in the
case of a corporation, owns, directly or indirectly, fifty percent (50%) or
more
of the then outstanding common stock or (ii) in the case of any other entity,
has a fifty percent (50%) or more ownership interest.
(kk)
“
10%
Owner
”
means
a
person who owns capital stock (including stock treated as owned under Section
424(d) of the Code) possessing more than ten percent (10%) of the combined
voting power of all classes of capital stock of the Corporation or any
Subsidiary where “voting power” means the combined voting power of the then
outstanding securities of a corporation entitled to vote generally in the
election of directors.
1.3
Administration
.
The
Plan shall be administered by the Committee, which, unless otherwise determined
by the Board, shall consist of two or more directors of the Corporation, all
of
whom qualify as Non Employee Directors. The number of members of the Committee
shall from time to time be increased or decreased, and shall be subject to
such
conditions, in each case as the Board deems appropriate to permit transactions
in Shares pursuant to the Plan to satisfy such conditions of Rule 16b-3 as
then
in effect. In the event that the Compensation Committee of the Board (the
“Compensation Committee) meets the requirements set forth in this Section 1.3
hereof, such Compensation Committee shall be the Committee hereunder unless
otherwise determined by the Board.
A
majority of the members of the Committee shall constitute a quorum. The
Committee may act at a meeting, including a telephonic meeting, by action of
a
majority of the members present, or without a meeting by unanimous written
consent.
Subject
to the express provisions of the Plan, the Committee shall have full and final
authority and discretion as follows:
(i)
to
select
the Participants from Eligible Individuals;
(ii)
to
grant
Options and/or Restricted Stock to Participants in such combination and in
such
amounts as it shall determine and to determine the terms and conditions
applicable to each such Award, including the benefit payable under any SAR,
and
whether or not specific Awards shall be identifiable with other specific Awards,
and if so whether they shall be exercisable cumulatively with, or alternatively
to, such other specific Award;
(iii)
to
determine the amount, if any, that a Participant shall pay for Restricted Stock,
the nature of the Restrictions applicable to the Restricted Stock, and the
duration of the Restricted Period applicable to the Restricted
Stock;
(iv)
to
determine the actual amount earned by each Participant with respect to such
Awards, the terms and conditions of all Award Agreements (which need not be
identical) and with the consent of the Participant, to amend any such Award
Agreement at any time, among other things, to permit transfers of such Awards
to
the extent permitted by the Plan, except that consent of the Participant shall
not be required for any amendment which (A) does not adversely affect the rights
of the Participant or (B) is necessary or advisable (as determined by the
Committee) to carry out the purpose of the Award as a result of any change
in
applicable law;
(v)
to
determine consistent with the Code whether an Option that is granted to a
Participant is a Non-qualified Stock Option or an Incentive Stock Option, the
number of Shares to be covered by each such Option and the time or times when
and the manner in which each Option shall be exercisable;
(vi)
to
amend
any Incentive Stock Option with the consent of the Participant so as to make
it
a Non-qualified Stock Option;
(vii)
to
cancel, with the consent of the Participant, any outstanding Award(s) and to
grant new Award(s) in substitution therefor;
(viii)
to
grant
a SAR in connection with the grant of an Option or separately;
(ix)
to
accelerate the exercisability (including exercisability within a period of
less
than one year after the Grant Date) of, and to accelerate or waive any or all
of
the terms and conditions applicable to, any Award or any group of Awards for
any
reason and at any time, including in connection with a termination of employment
or consultancy;
(x)
subject
to the provisions of the Plan, to extend the time during which any Award or
group of Awards may be exercised;
(xi)
to
treat
all or any portion of any period during which a Participant is on military
leave
or on an approved leave of absence from the Corporation or a Subsidiary as
a
period of employment or service of such Participant by the Corporation or any
Subsidiary for purposes of accrual of his or her rights under his or her Awards;
(xii)
to
interpret the Plan and make all determinations necessary or advisable for the
administration of the Plan including the establishment, amendment or revocation
from time to time of guidelines or regulations for the administration of the
Plan, to cause appropriate records to be established, and to take all other
actions considered necessary or advisable for the administration of the Plan;
and
(xiii)
to
take
any other action with respect to any matters relating to the Plan for which
it
is responsible.
All
decisions, actions or interpretations of the Committee on all matters relating
to the Plan or any Award Agreement shall be final, binding and conclusive upon
all parties. No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any
Award.
1.4
Participation
.
The
Committee may, in its discretion, grant Awards to any Eligible Individual,
whether or not he or she has previously received an Award. Participation in
the
Plan shall be limited to those Key Employees, consultants and advisors who
have
received written notification from the Committee, or from a person designated
by
the Committee, that they have been selected to participate in the Plan. No
such
Eligible Individuals shall at any time have the right to be a Participant unless
selected by the Committee pursuant to the Plan. No Participant, having been
granted an Award, shall have the right to an additional Award in the future
unless such Award is granted by the Committee.
1.5
Maximum
number of Shares Available for Awards
.
Subject
to adjustment in accordance with Section 5.2 hereof, the maximum number of
Shares for which grants under the Plan shall be available is 2,500,000. In
addition, the Committee shall have the authority, in its sole discretion, to
grant additional Non--qualified Stock Options to a Participant who exercises
an
Option and pays the exercise price in Common Stock, in a quantity equal to
the
number of shares of Common Stock delivered to the Corporation upon such
exercise. In the event any Awards granted under the Plan shall be forfeited,
terminate or expire, the number of Shares subject to such Award, to the extent
of any such forfeiture, termination or expiration, shall thereafter again be
available for grant under the Plan. The Common Stock distributed under the
Plan
may be authorized and unissued shares, shares held in the treasury of the
Corporation, or shares purchased on the open market by the Corporation (at
such
time or times and in such manner as it may determine). The Corporation shall
be
under no obligation to acquire Common Stock for distribution to Participants
before such Common Stock is due and distributable.
1.6
Optional
Awards
.
In the
discretion of the Committee, American Depository Shares in an amount equal
to
the number of Shares that otherwise would be distributed pursuant to an Award
may distributed in lieu of Shares in settlement of any Award. If the number
of
Shares represented by an American Depository Share is other than on a one-to-one
basis, the limitations of Section 1.5 shall be adjusted to reflect the
distribution of American Depository shares in lieu of Shares. All allotments
and
issues of Shares will be subject to any necessary consents under Applicable
Law
and it shall be the responsibility of the Participant to comply with any
requirements to be fulfilled in order to obtain or obviate the necessity for
any
such consent.
1.7
Jurisdictional
Considerations
.
In
order to assure the viability of Awards granted to Participants employed in
various jurisdictions, the Committee may provide for such special terms as
it
may consider necessary or appropriate to accommodate differences in local law,
tax policy or custom applicable in the jurisdiction in which the Participant
resides or is employed. Moreover, the Committee may approve such supplements
to,
or amendments, restatements or alternative versions of, the Plan as it may
consider necessary or appropriate for such purposes without thereby affecting
the terms of the Plan as in effect for any other purpose; provided, however,
that no such supplements, amendments, restatements or alternative versions
shall
increase the Share limitations contained in Section 1.5 of the Plan.
Notwithstanding the foregoing, the Committee may not take any actions hereunder,
and no Awards shall be granted, that would violate any Applicable
Laws.
1.8
General
Conditions to Grants
.
The
Grant
Date of an Award shall be the date on which the Committee grants the Award
or
such later date as specified in advance by the Committee. All Awards shall
be
evidenced by an Award Agreement and any terms and conditions of an Award not
set
forth in the Plan shall be set forth in the Award Agreement related to that
Award or in the Participant’s employment or other agreement with the Corporation
or any Subsidiary.
SECTION
2. Options
2.1
Awards
of Options
.
Subject
to the provisions of the Plan, the Committee shall determine and designate
from
time to time those Eligible Individuals to whom Incentive Stock Options or
Non-qualified Stock Options, or both, shall be granted and the number of Shares
to be granted to each such Eligible Individual;
provided
,
however
,
that
only Key Employees may receive Incentive Stock Options and the aggregate fair
market value (determined at the time the Option is granted) of the shares with
respect to which any incentive stock options are exercisable for the first
time
by any Key Employee during any calendar year under all incentive stock option
plans of the Corporation and any Subsidiary shall not exceed one hundred
thousand dollars ($100,000) or such other limit set forth in Section 422 of
the
Code (the “Limitations of the Code”). If the aggregate fair market value of such
shares exceeds the Limitations of the Code, the excess Shares will be treated
as
Non-qualified Options under this Plan. In reducing the number of Incentive
Stock
Options to meet the Limitations of the Code, the most recently granted Incentive
Stock Options shall be reduced first. If a reduction of simultaneously granted
Options is necessary to meet the Limitations of the Code, the Committee may
designate which Shares are to be treated as Shares acquired pursuant to an
Incentive Stock Option. In the event that any Incentive Stock Options granted
under the Plan fail to meet the requirements for Incentive Stock Options as
set
forth in the Code, such Incentive Stock Options will be treated as Non-qualified
Stock Options under the Plan. In determining the Eligible Individuals who will
be granted Options under the Plan, the Committee may consider such individuals’
responsibilities, service, present and future value to the Corporation or any
Subsidiary and other factors it considers relevant.
2.2
Terms
and Conditions of Options
.
Except
as otherwise provided in a Participant’s employment or other agreement with the
Corporation or any Subsidiary or in an Award Agreement, each Option shall be
subject to the following express terms and conditions and to such other terms
and conditions as the Committee may deem appropriate as set forth in the Award
Agreement or the Participant’s employment or other agreement with the
Corporation or any Subsidiary:
(a)
Option
Term
.
Each
Option shall expire on the tenth (10
th
)
anniversary of the Grant Date (or in the case of an Incentive Stock Option
granted to a 10% Owner, on the fifth (5
th
)
anniversary of the Grant Date) or on such earlier date as may be specified
in
the Participant’s Award Agreement or employment or other agreement with the
Corporation or any Subsidiary. The Committee may extend such Option Term;
provided
,
however
,
that
(i) such extension shall not in any way disqualify the Option as an Incentive
Stock Option and (ii) the Option Term, including any such extensions, shall
not
exceed ten (10) years.
(b)
Option
Price
.
The
Option Price per Share shall be determined by the Committee no later than the
Grant Date of any Option;
provided
,
however
,
(i) the
Option Price shall not be less than the Fair Market Value of a Share on the
Grant Date, and (ii) in the case of an Incentive Stock Option granted to a
10%
Owner, the Option Price shall not be less than one hundred ten percent (110%)
of
the Fair Market Value of a Share on the Grant Date (but in no event less than
the par value of a Share). The Option Price may be denominated in U.S. Dollars,
Chinese Renminbi or other local currency as determined by the
Committee.
(c)
Exercise
of Option
.
The
exercisability of an Option shall be determined by the Committee. Subject to
acceleration or early expiration as provided elsewhere in the Plan or in a
Participant’s employment or other agreement with the Corporation or any
Subsidiary, the vesting of any Option granted under the Plan shall be subject
to
the Participant remaining in the employ of or maintaining a consultancy with
the
Corporation or any of its Subsidiaries and shall vest (i) in five (5) equal
installments of twenty percent (20%) of the amount granted, with the first
installment vesting on the December 31
st
next
following the Grant Date and each other installment vesting on each of the
next
four December 31
st
dates
thereafter or (ii) in such other amounts over such period of time after the
Grant Date as the Committee may designate.
(d)
Disqualifying
Disposition
.
The
Award Agreement shall require any Participant who is granted an Incentive Stock
Option to notify the Corporation of any disposition of such Shares issued upon
the exercise of such Incentive Stock Option under the circumstances described
in
Section 421(b) of the Code (relating to certain disqualifying dispositions)
(a
“Disqualifying Disposition”) within ten (10) business days after such
Disqualifying Disposition.
(e)
Payment
of Purchase Price upon Exercise
.
The
purchase price as to which an Option shall be exercised shall be paid to the
Corporation at the time of exercise either (i) in cash, certified check or
wire
transfer denominated in U.S. Dollars, Chinese Renminbi or other local currency,
(ii) in such other consideration as the Committee deems appropriate, including,
but not limited to, loans from the Corporation or a third party, (iii) subject
to the approval of the Committee, in Mature Shares already owned by the
Participant having a total fair market value, as determined by the Committee,
equal to the purchase price, or a combination of cash (denominated in U.S.
Dollars, Chinese Renminbi or other local currency) and Mature Shares having
a
total fair market value, as so determined, equal to the purchase price, (iv)
subject to the approval of the Committee, in its sole discretion, by delivering
a properly executed exercise notice in a form approved by the Committee,
together with an irrevocable notice of exercise and irrevocable instructions
to
a broker to promptly deliver to the Corporation the amount of applicable sale
or
loan proceeds sufficient to pay the purchase price for such Shares, together
with the amount of federal, state and local withholding taxes payable by
Participant by reason of such exercise, or (v) a combination of the
foregoing.
(f)
Exercise
in the Event of Termination
.
Unless
otherwise provided in a Participant’s employment or other agreement with the
Corporation or any Subsidiary or Award Agreement, the following provisions
shall
apply upon termination of a Participant’s employment or consultancy with the
Corporation or any Subsidiary:
(i)
Upon
Termination For Any Reason Other Than Due to Death
.
If a
Participant’s employment or consultancy with the Corporation or any Subsidiary
shall terminate for any reason other than by reason of his or her death, such
Participant may exercise his or her Options, to the extent that such Participant
shall have been entitled to do so on the date of such termination, at any time,
or from time to time, but not later than (x) the expiration date specified
in
Subsection 2.2(a) hereof or (y) three (3) months after the date of such
termination, whichever date is earlier and any portion of any Option granted
hereunder that is not vested and exercisable as of the date of the Participant’s
termination of employment shall automatically expire and be forfeited as of
such
date of termination.
(ii)
Upon
Termination Due to Death
.
In the
event a Participant’s employment or consultancy shall terminate by reason of his
or her death, such Participant’s Beneficiary, heirs or estate may exercise his
or her Options, to the extent that such Participant, if such Participant had
not
died, would have been entitled to do so within the calendar year following
such
Participant’s death, at any time, or from time to time, but not later than (x)
the expiration date specified in Subsection 2.2(a) hereof or (y) one year after
the date of death, whichever is earlier and any portion of any Option granted
hereunder that would not have vested and been exercisable within the calendar
year following such Participant’s death if such Participant had not died shall
automatically expire and be forfeited as of the date of such Participant’s
death.
(g)
Transferability
of Stock Options
.
No
Option granted under the Plan shall be transferable other than by will or by
the
laws of descent and distribution of the jurisdiction wherein the Participant
is
domiciled at the time of his or her death, and during the lifetime of the
Participant, shall be exercisable only by the Participant or his or her guardian
or legal representative.
(h)
Investment
Representation
.
Each
Award Agreement for an Option shall provide (or be deemed to provide) that,
upon
demand by the Committee for such a representation, the Participant (or any
person acting under Subsection 2.2(e) hereof) shall deliver to the Committee,
at
the time of any exercise of an Option or portion thereof, a written
representation that the Shares to be acquired upon such exercise are to be
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the delivery
of any Common Stock issued upon exercise of an Option and prior to the
expiration of the Option Term shall be a condition precedent to the right of
the
Participant or such other person to purchase any Common Stock. In the event
certificates for Common Stock are delivered under the Plan with respect to
which
such an investment representation has been obtained, the Committee may cause
a
legend or legends to be placed on such certificates to make appropriate
reference to such representations and to restrict transfer in the absence of
compliance with applicable federal, state or other governmental securities
laws.
(i)
Participants
to Have No Rights as Shareholders
.
No
Participant shall have any rights as a shareholder with respect to any Common
Stock subject to his or her Option prior to the date of issuance to him or
her
of such Common Stock.
(j)
Other
Option Provisions
.
The
Committee may require a Participant to agree, as a condition to receiving an
Option under the Plan, that part or all of any Options previously granted to
such Participant under the Plan or any prior plan of the Corporation be
terminated.
2.3
Exercise
of Options
.
An
Option
shall be exercised by the delivery to the Corporation during the Option Term
of
(x) written notice of intent to purchase a specific number of Shares subject
to
the Option and (y) payment in full of the Option Price of such specific number
of Shares.
SECTION
3. Stock Appreciation Rights
3.1
Award
of Stock Appreciation Rights
.
Subject
to the provisions of the Plan, the Committee shall determine and designate
from
time to time those Eligible Individuals to whom SARs shall be granted and the
number of Shares to be granted to each such Eligible Individual. When granted,
SARS may, but need not, be identified with a specific Option (including any
Option granted on or before the Grant Date of the SARs) in a number equal to
or
different from the number of SARs so granted. If SARs are identified with Shares
subject to an Option, then, unless otherwise provided in the applicable Award
Agreement, the Participant’s associated SARs shall terminate upon (x) the
expiration, termination, forfeiture or cancellation of such Option, or (y)
the
exercise of such Option.
3.2
Strike
Price
.
The
strike price (“Strike Price”) of any SAR shall equal, for any SAR that is
identified with an Option, the Option Price of such Option, or for any other
SAR, 100% of the Fair Market Value of a Share on the Grant Date of such SAR;
except that the Committee may (x) specify a higher Strike Price in the Award
Agreement or (y) provide that the benefit payable upon exercise of any SAR
shall
not exceed a percentage of Fair Market Value of a Share on such Grant Date
as
the Committee shall specify.
3.3
Vesting
of SARs
.
Unless
otherwise specified in the applicable Award Agreement or in the Participant’s
employment or other agreement with the Corporation or any Subsidiary, (x) each
SAR not identified with any other Award shall become exercisable with respect
to
20% of the Shares subject thereto on each of the first five December
31
st
dates
following the Grant Date of such SAR or in such other amounts and over such
other time period as may be determined by the Committee and (y) each SAR which
is identified with any other Award shall become exercisable as and to the extent
that the Option with which such SAR is identified may be exercised.
3.4
Exercise
of SARs
.
SARs
shall be exercised by delivery to the Corporation of written notice of intent
to
exercise a specific number of SARs. Unless otherwise provided in the applicable
Award Agreement or a Participant’s employment or other agreement with the
Corporation or any Subsidiary, the exercise of SARs that are identified with
Shares subject to an Option shall result in the cancellation or forfeiture
of
such Option, to the extent of such exercise and any such Shares so canceled
or
forfeited shall not thereafter again become available for grant under the Plan.
The benefit for each SAR shall be equal to (x) the Fair Market Value of the
Share on the date of such exercise, minus (y) the Strike Price of such SAR.
Such
benefit shall be payable in cash (subject to applicable withholding), except
that the Committee may provide in the applicable Award Agreement that benefits
may be paid wholly or partly in Shares.
3.5
No
Rights as Shareholders
.
No
Participant shall have any rights as a shareholder with respect to any Common
Stock subject to his or her SAR.
3.6
Exercise
in the Event of Termination
.
Unless
otherwise provided in a Participant’s employment or other agreement with the
Corporation or any Subsidiary or Award Agreement, the following provisions
shall
apply upon termination of a Participant’s employment or consultancy with the
Corporation or any Subsidiary:
(i)
Upon
Termination For Any Reason Other Than Due to Death
.
If a
Participant’s employment or consultancy with the Corporation or any Subsidiary
shall terminate for any reason other than by reason of his or her death, such
Participant may exercise his or her SARs, to the extent that such Participant
shall have been entitled to do so on the date of such termination, at any time,
or from time to time, but not later than (x) the expiration date specified
in
Subsection 2.2(a) hereof or (y) three (3) months after the date of such
termination, whichever date is earlier, and any SARs granted hereunder that
are
not vested and exercisable as of the date of the Participant’s termination of
employment shall automatically expire and be forfeited as of such date of
termination.
(ii)
Upon
Termination Due to Death
.
In the
event a Participant’s employment or consultancy shall terminate by reason of his
or her death, such Participant’s Beneficiary, heirs or estate may exercise his
or her SARs, to the extent that such Participant, if such Participant had not
died, would have been entitled to do so within the calendar year following
such
Participant’s death, at any time, or from time to time, but not later than (x)
the expiration date specified in Subsection 2.2(a) hereof or (y) one year after
the date of death, whichever is earlier and any SARs granted hereunder that
would not have vested and been exercisable within the calendar year following
such Participant’s death if such Participant had not died shall automatically
expire and be forfeited as of the date of such Participant’s death.
SECTION
4. Restricted Stock
4.1
Awards
of Restricted Stock
.
Restricted Stock awarded under the Plan shall be subject to certain Restrictions
as provided below. All Restrictions imposed on any such Award of Restricted
Stock shall be made by and at the discretion of the Committee, subject to the
provisions of the Plan, and are binding on the Corporation and the Participants,
their Beneficiaries and legal representatives.
4.2
Restricted
Period/Restrictions
.
At the
time each Award of Restricted Stock is granted, the Committee (i) shall
establish a Restricted Period within which Restricted Stock awarded to the
Participants may not be sold, assigned, transferred, made subject to gift,
or
otherwise disposed of, mortgaged, pledged or otherwise encumbered, if any and
(ii) may impose such other Restrictions on any Restricted Stock as it may deem
advisable.
4.3
Rights
as Stockholders
.
Except
for the conditions outlined in Section 4.2 hereof, and the forfeiture conditions
described in Section 4.5 hereof, each Participant shall have all rights of
a
holder of Common Stock, including the right to receive all dividends or other
distributions made or paid in respect of such Shares and the right to vote
such
Shares at regular or special meetings of the stockholders of the
Corporation.
4.4
Delivery
of Shares
.
The
certificates for any Restricted Stock awarded to an Eligible Individual under
the Plan shall be held (together with a stock power executed in blank by the
Eligible Individual) in escrow by the Secretary of the Corporation under the
Participant’s name in an account maintained by the Corporation until such Shares
of Restricted Stock become nonforfeitable or are forfeited. At the conclusion
of
the Restricted Period or the expiration or attainment of such other Restrictions
imposed on any Restricted Stock granted to a Participant, or upon the prior
approval of the Committee as described in Section 4.5 hereof, and subject to
the
satisfaction of the Corporation’s withholding obligations described in Section
5.7 hereof, certificates representing such Shares of Restricted Stock shall
be
delivered to the Participant, or the Beneficiary or legal representative of
the
Participant, free of the Restrictions set forth in the Award Agreement pursuant
to Section 4.2 hereof.
4.5
Termination
of a Participant’s Employment or Consultancy
.
Unless
otherwise provided in the Award Agreement or in the Participant’s employment or
other agreement with the Corporation or any Subsidiary, the following provisions
shall apply upon termination of a Participant’s employment or consultancy with
the Corporation or any Subsidiary:
(i)
Upon
Termination for any Reason other than Due to Death
.
If a
Participant’s employment or consultancy with the Corporation or any Subsidiary
is terminated, except termination due to death, all Restricted Stock awarded
under the Plan which are then subject to a Restricted Period or other
Restrictions will be forfeited and become the property of the Corporation on
the
date of such termination. However, the Committee may, if it, in its sole
discretion, determines that the circumstances warrant such action, approve
the
release of all or any part of the Restricted Stock that would otherwise be
forfeited pursuant to this Section, upon such conditions as it shall
determine.
(ii)
Upon
Termination Due to Death
.
If a
Participant’s employment or consultancy with the Corporation or a Subsidiary is
terminated due to death, all Shares of Restricted Stock awarded under the Plan
which are then subject to a Restricted Period or other Restrictions and which
would have been released, if the Participant had not died, within the calendar
year following the Participant’s death shall be released on the date of such
termination as if with respect to such Shares the Restricted Period had ended
and the other Restrictions had lapsed and certificates representing such Shares
of Restricted Stock shall be delivered to the Participant’s Beneficiary or legal
representative free from such Restrictions as soon as practicable following
such
termination and all other Shares of Restricted Stock that would not have been
released, if the Participant had not died, within the calendar year following
the Participant’s death will be forfeited and become the property of the
Corporation on the date of such termination.
4.6
Section
83(b) Elections
.
A
Participant who files an election permitted under Section 83(b) of the Code
with
the Internal Revenue Service to include the fair market value of any Restricted
Stock in gross income while they are still subject to a Restricted Period or
other Restrictions shall notify the Corporation of such election within ten
(10)
days of making such election and promptly furnish the Corporation with a copy
of
such election, together with the amount of any federal, state, local or other
taxes required to be withheld to enable the Corporation to claim an income
tax
deduction with respect to such election.
SECTION
5. General Provisions
5.1
General
Creditor Status
.
Participants shall have no right, title or interest whatsoever in or to any
investments which the Corporation may make to aid it in meeting its obligations
under the Plan. Nothing contained in the Plan, and no action taken pursuant
to
its provisions, shall create or be construed to create a trust of any kind,
or a
fiduciary relationship between the Corporation and any Participant, Beneficiary,
legal representative or any other person. To the extent that any person acquires
a right to receive payments from the Corporation under the Plan, such right
shall be no greater than the right of an unsecured general creditor of the
Corporation. All payments to be made hereunder shall be paid from the general
funds of the Corporation and no special or separate fund shall be established
and no segregation of assets shall be made to assure payment of such amounts
except as expressly set forth in the Plan;
provided
,
however
,
that in
its sole discretion, the Committee may authorize the creation of trusts or
other
arrangements to meet the obligations created under the Plan to deliver Common
Stock or pay cash;
provided
,
further
,
however
,
that,
unless the Committee otherwise determines with the consent of the affected
Participant, the existence of such trusts or other arrangements shall be
consistent with the “unfunded” status of the Plan.
5.2
Certain
Adjustments to Shares
.
In the
event of any change in the Common Stock by reason of any stock dividend,
recapitalization, reorganization, spin-off, split-off, merger, consolidation,
stock split, reverse stock split, combination or exchange of shares, or any
rights offering to purchase Common Stock at a price substantially below fair
market value, or of any similar change affecting the Common Stock of or by
the
Corporation, the number and kind of Shares available for Awards under the Plan
and the number and kind of Shares subject to a Restricted Period or other
Restrictions or subject to Options in outstanding Awards and the Option Price
or
purchase price per Share thereof shall be appropriately adjusted consistent
with
such change in such manner as the Committee may deem equitable to prevent
substantial dilution or enlargement of the rights granted to, or available
for,
the Participants hereunder. Any adjustment of an Incentive Stock Option pursuant
to this Section shall be made only to the extent not constituting a
“modification” within the meaning of Section 424(h)(3) of the Code, unless the
holder of such Option shall agree otherwise. The Committee shall give notice
to
each Participant of any adjustment made pursuant to this Section and, upon
notice, such adjustment shall be effective and binding for all purposes of
the
Plan.
5.3
Successor
Corporation
.
The
obligations of the Corporation under the Plan shall be binding upon any
successor corporation or organization resulting from the merger, consolidation
or other reorganization of the Corporation, or upon any successor corporation
or
organization succeeding to substantially all of the assets and business of
the
Corporation. The Corporation agrees that it will make appropriate provision
for
the preservation of Participants’ rights under the Plan in any agreement or plan
which it may enter into or adopt to effect any such merger, consolidation,
reorganization or transfer of assets.
5.4
No
Claim or Right Under the Plan
.
Neither
the Plan nor any action taken thereunder shall be construed as giving any
employee, consultant or advisor any right to be retained in the employ of or
by
the Corporation.
5.5
Awards
Not Treated as Compensation Under Benefit Plans
.
No Award
shall be considered as compensation under any employee benefit plan of the
Corporation, except as specifically provided in any such plan or as otherwise
determined by the Board.
5.6
Listing
and Qualification of Common Stock
.
The
Corporation, in its discretion, may postpone the issuance or delivery of Common
Stock upon any exercise of an Option or pursuant to an Award of Restricted
Stock
until completion of such stock exchange listing or other qualification of such
shares under any state, federal or other governmental law, rule or regulation
as
the Corporation may consider appropriate, and may require any Participant,
Beneficiary or legal representative to make such representations and furnish
such information as it may consider appropriate in connection with the issuance
or delivery of the shares in compliance with applicable laws, rules and
regulations.
5.7
Withholding
Taxes
.
The
Corporation may make such provisions and take such steps as it may deem
necessary or appropriate for the withholding of all federal, state and local
taxes required by law to be withheld, including, without limitation, taxes
required to be withheld under the tax laws, rules and regulations and
governmental orders of PRC, with respect to Awards granted pursuant to the
Plan,
including, but not limited to, (i) accepting a remittance from the Participant
in cash, or in the Committee’s discretion in Mature Shares (ii) deducting the
amount required to be withheld from any other amount then or thereafter payable
by the Corporation or Subsidiary to a Participant, Beneficiary or legal
representative or from any Shares due to the Participant under the Plan, (iii)
requiring a Participant, Beneficiary or legal representative to pay to the
Corporation the amount required to be withheld as a condition of releasing
Common Stock or (iv) any combination of the foregoing. In addition, subject
to
such rules and regulations as the Committee shall from time to time establish,
Participants shall be permitted to satisfy federal, state and local taxes,
if
any, imposed upon the payment of Awards in Common Stock at a rate up to such
Participant’s maximum marginal tax rate with respect to each such tax by (i)
irrevocably electing to have the Corporation deduct from the number of Shares
otherwise deliverable in payment of an Award such number of Shares as shall
have
a value equal to the amount of tax to be withheld, (ii) delivering to the
Corporation such portion of the Common Stock delivered in payment of the Award
as shall have a value equal to the amount of tax to be withheld, or (iii)
delivering to the Corporation such number of Mature Shares or combination of
Mature Shares and cash as shall have a value equal to the amount of tax to
be
withheld.
5.8
Non-transferability/Designation
and Change of Beneficiary
.
(a)
An
Award
granted hereunder shall not be assignable or transferable other than by will
or
by the laws of descent and distribution of the jurisdiction wherein the
Participant is domiciled at the time of his or her death and may be exercised
during the Participant’s lifetime only by the Participant or his or her guardian
or legal representative.
(b)
Each
Participant shall file with the Committee a written designation of one or more
persons as the Beneficiary who shall be entitled to receive the amount, if
any,
payable under the Plan upon his or her death. A Participant may, from time
to
time, revoke or change his or her Beneficiary designation without the consent
of
any prior Beneficiary by filing a new designation with the Committee. The last
such designation received by the Committee shall be controlling;
provided
,
however
,
that no
designation, or change or revocation thereof, shall be effective unless received
by the Committee prior to the Participant’s death, and in no event shall it be
effective as of a date prior to such receipt.
5.9
Payments
to Persons Other Than A Participant
.
If the
Committee shall find that any person to whom any amount is payable under the
Plan is unable to care for his or her affairs because of illness or accident,
or
is a minor, or has died, then any payment due to such person or his or her
estate (unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so directs the Corporation, be paid to
his
or her spouse, a child, a relative, an institution maintaining or having custody
of such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Committee and
the
Corporation therefor.
5.10
Designated
Participants
.
(a)
If
the
Committee determines in its sole discretion that an appointment is necessary
or
desirable to comply with the regulatory requirements in the PRC, it may appoint
the Corporation, a Subsidiary or any other institution or organization
registered outside of the PRC (a “Trustee”) to hold the interest and exercise
the rights granted under the Plan of any Participant (a “Designated
Participant”) who either is a national of and ordinarily resident in the PRC or
is otherwise designated by the Committee as a Designated Participant. In
relation to any such appointment, the Trustee will undertake to do the following
for and on behalf of the Designated Participant, subject at all times to the
Committee’s supervision:
(i)
execute
the relevant Award Agreement with the Corporation;
(ii)
hold
the
Award (a “Designated Award”) for the benefit of the Designated
Participant;
(iii)
take
such
actions as the Designated Participant may instruct from time to time in
connection with the Designated Award or otherwise in relation to the Designated
Participant’s beneficial interest under the Plan or under the Award Agreement,
including taking such actions as may be necessary to exercise the Designated
Award under the terms of Section 2.2(c) of the Plan and making payment under
the
terms of Section 2.2(e) of the Plan; and
(iv)
after
deducting its costs, fees and expenses as contemplated under subsection 5.10(d),
hold, or at the Designated Participant’s direction remit to the Designated
Participant, the net proceeds of sales or other transactions involving the
Designated Award or, as applicable, shares of Common Stock underlying such
Award.
(b)
Without
limiting the scope of its authorities under Section 2.1 or any other provision
of the Plan, the Committee may at any time impose restrictions on the method
of
exercise of a Designated Award, such that upon exercise of the Designated Award,
the Designated Participant (or the Trustee acting on the Designated
Participant’s behalf) does not receive Shares and receives solely cash, in the
amount and denomination determined under Section 2.2(e).
(c)
An
appointment of a Trustee pursuant to the terms of this Section to hold the
interest and exercise the rights for the benefit of the Designated Participant
shall terminate at such time as the Committee determines in its sole discretion
that such appointment is no longer necessary or desirable in order to comply
with regulatory requirements in the PRC.
(d)
The
Trustee may deduct from the proceeds of sales or other transactions involving
the Designated Award or, as applicable, Shares underlying such Award, any costs,
fees and expenses of the Trustee in relation to its appointment under this
Section. The Trustee will, under no circumstances, otherwise require the
Designated Participant to compensate it for any of its costs, fees, expenses
or
losses.
5.11
No
Liability of Committee Members
.
No
member of the Committee shall be personally liable by reason of any contract
or
other instrument executed by such member or on his or her behalf in his or
her
capacity as a member of the Committee nor for any mistake of judgment made
in
good faith, and the Corporation shall indemnify and hold harmless each employee,
officer or director of the Corporation to whom any duty or power relating to
the
administration or interpretation of the Plan may be allocated or delegated,
against any cost or expense (including counsel fees) or liability (including
any
sum paid in settlement of a claim with the approval of the Board) arising out
of
any act or omission to act in connection with the Plan unless arising out of
such person’s own fraud or bad faith. The indemnification provided for in this
Section 5.11 shall be in addition to any rights of indemnification such
Committee member has as a director or officer pursuant to law, under the
Certificate of Incorporation or By-Laws of the Corporation.
5.12
Amendment
or Termination
.
Except
as to matters that in the opinion of the Corporation’s legal counsel require
stockholder approval, any provision of the Plan may be modified as to a
Participant by an individual agreement approved by the Committee. The Board
may,
with prospective or retroactive effect, amend, suspend or terminate the Plan
or
any portion thereof at any time;
provided
,
however
,
that
(i) no amendment that would materially increase the cost of the Plan to the
Corporation may be made by the Board without the approval of the stockholders
of
the Corporation and (ii) no amendment, suspension or termination of the Plan
shall deprive any Participant of any rights to Awards previously made under
the
Plan without his or her written consent. Subject to earlier termination pursuant
to the provisions of this Section, and unless the stockholders of the
Corporation shall have approved an extension of the Plan beyond such
date,
the
Plan
shall terminate and no further Awards shall be made under the Plan after the
tenth (10
th
)
anniversary of the Effective Date of the Plan.
5.13
Unfunded
Plan
.
The
Plan is intended to constitute an unfunded deferred compensation
arrangement.
5.14
Governing
Law
.
The
Plan
shall be governed by and construed in accordance with the laws of the State
of
Delaware, without reference to the principles of conflicts of law
thereof.
5.15
Non-uniform
Determinations
.
The
Committee’s determinations under the Plan need not be uniform and may be made by
the Committee selectively among persons who receive, or are eligible to receive,
Awards whether or not such persons are similarly situated. Without limiting
the
generality of the foregoing, the Committee shall be entitled, to enter into
non-uniform and selective Award Agreements as to (a) the identity of the
Participant, (b) the terms and provisions of Awards, and (c) the treatment
of
termination of employment or consultancies.
5.16
No
Illegal Transactions
.
The
Plan
and all Awards granted pursuant to it are subject to all applicable laws and
regulations. Notwithstanding any provision of the Plan or any Award,
Participants shall not be entitled to exercise or receive benefits under, any
Award, and the Corporation shall not be obligated to deliver any Shares or
deliver any benefits to a Participant, if such exercise or delivery would
constitute a violation by the Participant or the Corporation of any applicable
law or regulation.
5.17
Severability
.
If
any
part of the Plan is declared by any court of governmental authority to be
unlawful or invalid, such unlawfulness or invalidity shall not invalidate any
other part of the Plan. Any Section or part of a Section so declared to be
unlawful or invalid shall, if possible, be construed in a manner which will
give
effect to the terms of such Section to the fullest extent possible while
remaining lawful and valid.
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x
|
Votes
must be indicated
(x)
in Black or Blue ink.
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Mark,
Sign, Date and Return The Proxy Card Promptly Using the Enclosed
Envelope.
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Please
Mark
Here
for
Address
Change
or
Comments
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SEE REVERSE SIDE
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1.
Election of Directors
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Nominees:
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FOR
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AGAINST
|
ABSTAIN
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FOR
|
AGAINST
|
ABSTAIN
|
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FOR
|
AGAINST
|
ABSTAIN
|
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01
Xianfu Zhu,
as
a
Director
|
o
|
o
|
o
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04
Raymond Leal,
as
a
Director
|
o
|
o
|
o
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2.
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Approve
and ratify an amendment
to
our Amended and Restated 2006 Equity Incentive Plan to increase
the number
of shares of our common stock issuable thereunder by 700,000
shares.
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o
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o
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o
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FOR
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AGAINST
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ABSTAIN
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FOR
|
AGAINST
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ABSTAIN
|
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FOR
|
AGAINST
|
ABSTAIN
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02
Baoke Ben,
as
a
Director
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o
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o
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o
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05
Yaoguo Pan,
as
a
Director
|
o
|
o
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o
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3.
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Ratify
the appointment of BDO Shenzhen Dahua Taincheng CPAs, independent
registered public accountants, as the Comapny's Independent
Auditors for
the fiscal year ending December 31, 2008.
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o
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o
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o
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FOR
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AGAINST
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ABSTAIN
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03
Min Chen,
as
a
Director
|
o
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o
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o
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Mark
box at right if you wish to give a discretionary proxy to Messrs.
Xianfu
Zhu and Baoke Ben.
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|
|
o
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PLEASE VOTE, DATE AND SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
|
Please sign this Proxy
exactly as your name(s) appear(s) on the books of the transfer agent. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which
they sign, and where more than
one name appears, a majority must sign. If a corporation, this signature
should
be that of an authorized officer who should state his or her title.
FOLD
AND DETACH HERE
WE
ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE
VOTING,
BOTH
ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet
and telephone voting is available through 11:59 PM Eastern
Time
the
day prior to annual meeting day.
Your
Internet or telephone vote authorizes the named proxies to vote your shares
in
the same manner
as
if you marked, signed and returned your proxy card.
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INTERNET
http://www.eproxy.com/hogs
Use
the Internet to vote your proxy. Have your proxy card in hand
when you
access the web site.
|
OR
|
TELEPHONE
1-866-580-9477
Use
any touch-tone telephone to vote your proxy. Have your proxy
card in hand
when you call.
|
If
you
vote your proxy by Internet or by telephone, you do NOT need to mail back
your
proxy card.
To
vote
by mail, mark, sign and date your proxy card and return it in the enclosed
postage-paid envelope.
|
Choose
MLink
SM
for
fast, easy and secure 24/7 online access to your future proxy materials,
investment plan statements, tax documents and more. Simply log
on to
Investor
ServiceDirect
®
at
www.bnymellon.com/shareowner/isd
where step-by-step instructions
will prompt you through
enrollment.
|
ZHONGPIN
INC.
BNY
Mellon Shareowner Services
480
Washington Boulevard
Jersey
City, NJ 07310-1900
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned, a holder of record on April 28, 2008 of Common Stock or Series
A
Convertible Preferred Stock of Zhongpin Inc., hereby revokes all other proxies
and appoints Messrs. Xianfu Zhu and Baoke Ben, each with full power of
substitution, as proxy for the undersigned, to attend the Annual Meeting
of
Stockholders of Zhongpin Inc. (the “Meeting”), and at any adjournment or
postponement thereof, to cast in behalf of the undersigned all votes that
the
undersigned is entitled to cast in respect of the Common Stock or Series
A
Convertible Preferred Stock registered in the name of the undersigned at
the
Meeting and otherwise to represent the undersigned at the Meeting with all
powers possessed by the undersigned as if personally present at the Meeting.
This
Proxy, when properly signed and dated, will be voted in the manner directed
as
specified by the undersigned, but if no specification is made, the Proxy
will be
voted FOR items 1 through 3, and will be voted in the discretion of Messrs.
Xianfu Zhu and Baoke Ben on any other matters that may properly come before
the
Meeting or any adjournment or postponement thereof. A detailed
explanation
of the resolution within each of the items listed has been included with
this
Proxy.
This
form
of Proxy must be signed by you or your attorney duly authorized in writing
or,
in the case of a corporation, must either be under its common seal or under
the
hand of an officer or attorney duly authorized.
In
order
to be valid, this form of Proxy with the power of attorney or other authority,
if any, under which it is signed, must be deposited with the transfer agent
no
later than 4:00 p.m., New York time, on June 24, 2008 in order to be counted
in
the Annual Meeting on June 26, 2008. You may also vote your shares in person
at
the Meeting.
(Continued
and to be marked, dated and signed, on the other side)
|
Address
Change/Comments (Mark the corresponding box on the reverse
side)
|
|
|
FOLD
AND DETACH HERE
TO
THE HOLDERS OF
COMMON
STOCK AND
SERIES
A CONVERTIBLE
PREFERRED
STOCK OF
ZHONGPIN
INC.
BNY
Mellon Shareowner Services (the “transfer agent”) has received the advice that
the Annual Meeting of Stockholders of Zhongpin Inc. will be held in Beijing,
China on June 26, 2008 at 10:00 a.m. (Beijing time), for the purposes set
forth
in the enclosed Notice of Meeting.
If
you
are desirous of having Messrs. Xianfu Zhu and Baoke Ben, each with full power
of
substitution, to vote your shares of Common Stock or Series A Convertible
Preferred Stock for or against the Resolutions to be proposed, or any of
them,
at the Meeting, kindly execute and forward to The Bank of New York the attached
Proxy. The enclosed postage paid envelope is provided for this purpose. This
Proxy should be executed in such manner as to show clearly whether you desire
the Chairman of the Meeting to vote for or against the Resolutions or any
of
them, as the case may be. The Proxy MUST be forwarded in sufficient time
to
reach the transfer agent before 4:00 p.m., New York time, on June 24, 2008.
Only
the registered holders of record at the close of business on April 28, 2008
will
be entitled to execute the Proxy.
BNY
Mellon Shareowner Services
Dated:
May 12, 2008
Grafico Azioni Zhongpin Inc. (MM) (NASDAQ:HOGS)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Zhongpin Inc. (MM) (NASDAQ:HOGS)
Storico
Da Lug 2023 a Lug 2024
