UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Schedule
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment
No. )
Filed by
the Registrant þ
Filed by
a party other than the Registrant ☐
Check
the appropriate box:
☐
Preliminary Proxy Statement
☐ Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
☐ Definitive
Additional Materials
☐ Soliciting
Material under § 240.14a-12
CHINA
PHARMA HOLDINGS, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check all boxes that apply):
þ No
fee required
☐ Fee
paid previously with preliminary materials.
☐ Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a- 6(i)(1) and 0-11
China
Pharma Holdings, Inc.
2nd
Floor, No 17 Jinpan Road
Haikou,
Hainan Province
The
People’s Republic of China 570216
November
14, 2022
Dear
Stockholder:
On
behalf of the Board of Directors of China Pharma Holdings, Inc. (the “Company”), I invite you to attend our Annual Meeting
of Stockholders for the fiscal year ended December 31, 2021 (the “Annual Meeting”). We hope you can join us. The Annual Meeting
will be held at the following address:
|
At: |
Conference Room, 2nd Floor,
Jiahai Building |
|
|
No. 17 Jinpan Road, Haikou |
|
|
Hainan Province, China
570216 |
|
|
|
|
On: |
December 28, 2022 (local time), December
27, 2022 (Eastern Time) |
|
|
|
|
Time: |
9:00 a.m. local time, 8:00
p.m. Eastern Time |
The
Notice of Annual Meeting of Stockholders, the Proxy Statement, the annual report and the proxy card accompany this letter.
At
the Annual Meeting we will report on important activities and accomplishments of our company and review our financial performance and
business operations. You will have an opportunity to ask questions and gain an up-to-date perspective on our company and its activities,
and to meet certain of our directors and key executives.
As
discussed in the enclosed Proxy Statement, the Annual Meeting will be devoted to the election of our independent directors, the amendment
of our 2010 Long-Term Incentive Plan, the authorization of the Company’s reverse stock split of its outstanding common stock at
a ratio of up to 1:10, the increase of the Company’s authorized shares of common stock from 95,000,000 shares to 500,000,000 shares,
and any other business matters properly brought before the Annual Meeting.
We
know that many of our stockholders will be unable to attend the Annual Meeting. We are soliciting proxies so that each stockholder has
an opportunity to vote on all matters that are scheduled to come before the stockholders at the Annual Meeting. Whether or not you plan
to attend, please take the time now to read the Proxy Statement and vote via the Internet or, if you prefer, submit by mail a paper copy
of your proxy or voter instructions card, so that your shares are represented at the meeting. You may also revoke your proxy or voter
instructions before or at the Annual Meeting. Regardless of the number of our shares you own, your presence in person or by proxy is
important for quorum purposes and your vote is important for proper corporate action.
Thank
you for your continuing interest in China Pharma Holdings, Inc. We look forward to seeing you at the Annual Meeting.
If
you have any questions about the Proxy Statement, please contact us at China Pharma Holdings, Inc., 2nd Floor, No. 17 Jinpan Road, Haikou,
Hainan Province, The People’s Republic of China 570216.
|
Sincerely, |
|
|
|
/s/ Zhilin
Li |
|
Zhilin Li |
|
Chairman of the Board |
CHINA
PHARMA HOLDINGS, INC.
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
to
be held on December 28, 2022
To
the Stockholders of China Pharma Holdings, Inc.:
Notice
is hereby given that the Annual Meeting of Stockholders for the fiscal year ended December 31, 2021 (the “Annual Meeting”)
of China Pharma Holdings, Inc., a Nevada corporation, will be held on Wednesday, December 28, 2022, at 9:00 a.m., local time (Tuesday,
December 27, 2022 at 8:00 p.m., Eastern Time), at Conference Room, 2nd Floor, Jiahai Building, No. 17 Jinpan Road, Haikou, Hainan Province,
China 570216, for the following purposes:
| 1. | To
elect three independent director nominees to our Board of Directors to serve until the next
annual meeting and until their successors are elected and qualified; |
| | |
| 2. | To
approve our Amended and Restated 2010 Long-Term Incentive Plan; |
| | |
| 3. | To
consider and approve an amendment to the Articles of Incorporation of the Company to effect
a reverse stock split at a ratio of up to 1:10, such that every holder of common stock, par
value $0.001 per share, of the Company (the “Common Stock”) shall receive one
share of Common Stock for up to every ten shares of Common Stock held (the “Reverse
Stock Split”); |
| | |
| 4. | To
approve an amendment to the Articles of Incorporation of the Company, to increase the number
of authorized shares of common stock from 95,000,000 shares to 500,000,000 shares, par value
US$0.001 per share; |
| | |
| 5. | To
transact such other business as may properly come before the Annual Meeting or any adjournment
thereof. |
Only
stockholders of record at the close of business on November 9, 2022 (the “Record Date”) are entitled to notice of, and to
vote at, the Annual Meeting and any adjournment or postponement thereof.
A
Proxy Statement describing the matters to be considered at the Annual Meeting is attached to this Notice.
It
is important that your shares are represented at the Annual Meeting. We urge you to review the attached Proxy Statement and, whether
or not you plan to attend the Annual Meeting in person, please vote your shares promptly by casting your vote via the Internet or, if
you receive a full set of proxy materials by mail or request one be mailed to you, and prefer to mail your proxy or voter instructions,
please complete, sign, date, and return your proxy or voter instructions card in the pre-addressed envelope provided, which requires
no additional postage if mailed in the United States. You may revoke your vote by submitting a subsequent vote over the Internet or by
mail before the Annual Meeting, or by voting in person at the Annual Meeting.
|
By Order of the Board of Directors, |
|
|
|
/s/ Zhilin
Li |
|
Zhilin
Li
Chairman
of the Board |
November
14, 2022
CHINA
PHARMA HOLDINGS, INC.
2nd
Floor, No. 17 Jinpan Road
Haikou,
Hainan Province
The
People’s Republic of China 570216
PROXY
STATEMENT
INFORMATION
CONCERNING SOLICITATION AND VOTING
This
Proxy Statement and the accompanying proxy are being furnished with respect to the solicitation of proxies by the Board of Directors
of China Pharma Holdings, Inc., a Nevada corporation (the “Company”, “we” or “us”), for our Annual
Meeting of Stockholders for the fiscal year ended December 31, 2021 (the “Annual Meeting”). The Annual Meeting will be held
on Wednesday, December 28, 2022, at 9:00 a.m., local time (Tuesday, December 27, 2022 at 8:00 p.m., Eastern Time), and at any adjournment(s)
or postponement(s) thereof, at Conference Room, 2nd Floor, Jiahai Building, No. 17 Jinpan Road, Haikou, Hainan Province, China 570216.
The
date on which the Proxy Statement and form of proxy card are intended to be sent to stockholders is November 14, 2022.
The
purpose of the Annual Meeting is for the election of our directors, and the amendment of our 2010 Long-Term Incentive Plan. We will also
transact such other business as may properly come before the Annual Meeting or any adjournment thereof.
Who
May Vote
Only
stockholders of record of our common stock, par value $.001 per share (“common stock”), as of the close of business on November
9, 2022 (the “Record Date”) are entitled to notice and to vote at the Annual Meeting and any adjournment or adjournments
thereof.
A
list of stockholders entitled to vote at the Annual Meeting will be available at the Annual Meeting and for ten days prior to the Annual
Meeting, during office hours, at our executive offices located at 2nd Floor, No. 17 Jinpan Road, Haikou, Hainan Province, The People’s
Republic of China 570216, by contacting the Secretary of the Board.
The
presence at the Annual Meeting of one-third of the outstanding shares of common stock as of the Record Date, in person or by proxy, is
required for a quorum. Should you submit a proxy or voter instructions, even though you abstain as to one or more proposals, or you are
not present in person at the Annual Meeting, your shares shall be counted for the purpose of determining if a quorum is present.
As of the Record Date, we
had issued and outstanding 51,642,530 shares of common stock. Each holder of our common stock on the Record Date is entitled to one vote
for each share then held on all matters to be voted at the Annual Meeting. No other class of voting securities was then outstanding.
Voting
Your Proxy
You
may vote by proxy via phone, fax, internet and mail by following the instructions provided in the Proxy Materials mailed to you or your
household. You may submit your vote over the Internet or mail until 11:59 p.m. (New York City time) on December 26, 2022.
You
may also vote in person at the Annual Meeting. If your shares are held through a broker, trust, bank, or other nominee, please refer
to the Proxy Materials and any other information forwarded to you by such holder of record to obtain a valid proxy from it. You will
need to bring this legal proxy with you to the Annual Meeting in order to vote in person.
The shares represented by
any proxy duly given will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions
are given, the shares will be voted FOR the election of the nominees to serve as our independent directors and FOR the approval of the
Company’s Amended and Restated 2010 Long-Term Incentive Plan. In addition, if other matters come before the Annual Meeting, the
persons named in the accompanying form of proxy will vote in accordance with their best judgment with respect to such matters.
Each share of our common stock
outstanding on the Record Date will be entitled to one vote on all matters. Assuming a quorum is present, a plurality of the votes cast
at the Annual Meeting by the stockholders entitled to vote in the election, either in person or by proxy, is required to elect the independent
director nominees.
Shares
which abstain or which are withheld from voting as to a particular matter, and shares held in “street name” by brokers or
nominees who indicate on their proxies that they do not have discretionary authority to vote such shares as to a particular matter, will
not be counted as votes in favor of such matter, and will also not be counted as shares voting on such matter. Accordingly, abstentions,
withheld votes, and “broker non-votes” will have no effect on the voting on matters that require the affirmative vote of
a plurality or a majority of the votes cast or the shares voting on the matter.
Stockholders
have no cumulative voting rights or dissenter’s or appraisal rights relating to the matters to be acted upon at the Annual Meeting.
Revoking
Your Proxy
Even
if you submit a proxy or voter instructions, you may revoke your proxy and change your vote. You may revoke your proxy or voter instructions
by submitting a new proxy or voter instructions over the Internet following the procedure to vote your shares online described in the
Notice of Internet Availability of Proxy Materials. You may also revoke your proxy by mail requesting a copy be mailed to you, executing
a subsequently-dated proxy or voter instructions card, and mailing it in the pre-addressed envelope, which requires no additional postage
if mailed in the United States. You may also revoke your proxy by your attendance and voting in person at the Annual Meeting. Mere attendance
at the meeting will not revoke a proxy or voter instructions. We will vote the shares in accordance with the directions given in the
last proxy or voter instructions submitted in a timely manner before the Annual Meeting. You may revoke your vote over the Internet until
11:59 p.m. (EST) on December 26, 2022. If you revoke your vote by mail, please be aware that we can recognize the revoked vote only if
we receive it by close of business of the day before the Annual Meeting.
If
the Annual Meeting is postponed or adjourned for any reason, at any subsequent reconvening of the Annual Meeting, all proxies will be
voted in the same manner as the proxies would have been voted at the original convening of the Annual Meeting (except for any proxies
that have at that time effectively been revoked or withdrawn), even if the proxies had been effectively voted on the same or any other
matter at a previous meeting.
You
are requested, regardless of the number of shares you own or your intention to attend the Annual Meeting, to vote your shares as described
above.
Solicitation
of Proxies
We
will pay for expenses of solicitation of proxies for the Annual Meeting. We may solicit proxies by mail, and our officers and employees
may solicit proxies personally or by telephone and will receive no extra compensation from such activities. We will reimburse brokerage
houses and other nominees for their expenses incurred in sending proxies and proxy materials to the beneficial owners of shares held
by them.
Delivery
of Proxy Materials to Households
Only
one copy of this Proxy Statement and/or other Proxy Materials, as applicable, will be delivered to an address where two or more stockholders
reside with the same last name or whom otherwise reasonably appear to be members of the same family based on the stockholders’
prior express or implied consent.
We
will deliver promptly upon written or oral request of a separate copy of the Annual Report on Form 10-K and this Proxy Statement, upon
such request. If you share an address with at least one other stockholder, currently receive one copy of our annual report and proxy
statement at your residence, and would like to receive a separate copy of our annual report and proxy statement for future stockholder
meetings of our company, please follow the instructions for requesting materials indicated on the proxy card sent to your residence and
specify this preference in your request.
If
you share an address with at least one other stockholder and currently receive multiple copies of our annual report and proxy statement,
and you would like to receive a single copy of annual report and proxy statement, please follow the instructions for requesting materials
indicated on the proxy card sent to you and specify this preference in your request.
Interest
of Officers and Directors in Matters to Be Acted Upon
None
of our officers or directors have any other interest in any of the matters to be acted upon at the Annual Meeting.
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth certain information as of March 22, 2022 with respect to the beneficial ownership of our common stock, the
sole outstanding class of our voting securities, by (i) any person or group owning more than 5% of each class of voting securities, (ii)
each director, (iii) each executive officer and (iv) all executive officers and directors as a group.
As
of March 22, 2022, an aggregate of 47,339,557 shares of our common stock were outstanding.
Name
and Address of Beneficial Owners(1)(2) |
|
Amount
and
Nature
of
Beneficial
Ownership |
|
|
Percent
of Class(3) |
|
Directors and Executive
Officers |
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhilin Li
President, Chief Executive Officer,
Interim Chief Financial Officer
and Chairman of the Board |
|
|
13,810,000 |
|
|
|
29.2 |
% |
Heung Mei Tsui
Director |
|
|
9,312,651 |
|
|
|
19.6 |
% |
Yingwen Zhang
Director |
|
|
0 |
|
|
|
* |
|
Gene Michael Bennett (4)
Director |
|
|
0 |
|
|
|
* |
|
Baowen Dong
Director |
|
|
0 |
|
|
|
* |
|
All
directors and executive officers as a group (5 persons) |
|
|
23,122,651 |
|
|
|
48.8 |
% |
* | Represents
less than 1%. |
(1) | Pursuant
to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of any securities
as to which such person, directly or indirectly, through any contract, arrangement, undertaking,
relationship or otherwise has or shares voting power and/or investment power or as to which
such person has the right to acquire such voting and/or investment power within 60 days. |
(2) |
Unless otherwise stated,
each beneficial owner has sole power to vote and dispose of the shares and the address of such person is c/o China Pharma Holdings,
Inc., 2nd Floor, No. 17 Jinpan Road, Haikou, Hainan Province, People’s Republic of China 570216. |
(3) |
In determining the percentage of common
stock owned by the beneficial owners, (a) the numerator is the number of shares of common stock beneficially owned by such owner,
including shares the owner may acquire, within 60 days of March 22, 2022, upon the exercise of the options or warrants, if any, held
by the owner; and (b) the denominator is the sum of (i) the total 47,339,557 shares of common stock outstanding as of March 22, 2022,
and (ii) the number of shares underlying any options or warrants, which such owner has the right to acquire upon the exercise of
such options or warrants within 60 days of March 22, 2022 (for those who have options or warrants). |
(4) | Pursuant
to the terms of his engagement letters, Mr. Bennett is entitled to receive warrants to purchase
an aggregate of 70,000 shares of our common stock (5,000 shares in each of year between 2008
to 2021 fiscal years). As of the date of this Proxy Statement no such warrants were issued. |
EXECUTIVE
COMPENSATION
Summary
of Executive Compensation
The
following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to our principal executive
officer and principal financial officer during the last two fiscal years in all capacities to our Company and our subsidiaries. No other
executive officer received compensation in excess of $100,000 during the fiscal year ended December 31, 2021.
SUMMARY
COMPENSATION TABLE
Name and
principal position | |
Year
Ended | |
Salary
($) | | |
Bonus
($) | | |
Stock
Awards ($) | | |
Option
Awards ($) | | |
Non-Equity
Incentive Plan Compensation ($) | | |
Nonqualified
Deferred Compensation Earnings ($) | | |
All
Other Compensation ($) | | |
Total
($) | |
| |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Zhilin Li | |
2021 | |
| 225,600 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 16,000 | | |
| 241,600 | |
Chairman,
Chief | |
2020 | |
| 225,600 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 16,000 | | |
| 241,600 | |
Executive
Officer | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
President
and interim Chief Financial Officer | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Employment
Agreements
Zhilin
Li. Hainan Helpson Medical & Biotechnology Co., Ltd., our wholly-owned subsidiary and operating entity in the PRC (“Helpson”),
entered into an employment agreement with Ms. Zhilin Li, our Chairman of the Board and Chief Executive Officer. Upon the expiration of
the original agreement, Helpson renewed the agreement with Ms. Li on the same terms as the original agreement. The new employment agreement
will expire on June 30, 2025. Pursuant to the terms of the new employment agreement, Ms. Li agreed to continue to serve as Helpson’s
Chief Executive Officer for a term of five years at an annual salary of RMB800,000. Helpson may adjust Ms. Li’s compensation based
upon her production and operating achievement and her technical ability and working performance. Ms. Li’s total annual cash compensation
for the fiscal year ended December 31, 2021, when aggregated with her compensation from our U.S. holding company level, was $241,600.
Payments
upon Termination or Change-in-Control
PRC
Law. Under the applicable laws of the PRC, we must pay severance to all employees who are Chinese nationals and who are terminated
with or without cause, or whose employment agreement with us expires and we choose not to 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. Except as described above, our executive officer does not
have any other agreement or arrangement under which she may be entitled to severance payments upon termination of employment.
Outstanding
Equity Awards at Fiscal Year-End
None.
Discussion
of Summary Compensation and Grants of Plan-based Awards Tables
A
summary of certain material terms of our existing compensation plans and arrangements is set forth below.
On
November 15, 2010, our Board of Directors adopted, and on December 22, 2010 our stockholders approved the 2010 Long-Term Incentive Plan
(the “2010 Incentive Plan”). On October 17, 2019, the Board of Directors approved the First Amendment to the 2010 Incentive
Plan (the “Amendment”), pursuant to which the term of the 2010 Incentive Plan shall be extended to December 31, 2029. The
Amendment was adopted by the stockholders on December 19, 2019. The 2010 Incentive Plan gave us the ability to grant stock options, restricted
stock, stock appreciation rights and performance units to employees, directors and consultants, or those who will become employees, directors
and consultants of our company and/or our subsidiaries. The 2010 Incentive Plan currently allows for equity awards of up to 5,000,000
shares of common stock. As of March 22, 2022, 4,000,000 shares of restricted stock were outstanding, and no options were outstanding.
Director
Compensation
The
following table sets forth information concerning cash and non-cash compensation earned by or paid to our directors during the year ended
December 31, 2021.
DIRECTOR
COMPENSATION |
|
Name | |
Fees
Earned or Paid in Cash ($) | | |
Stock
Awards ($) | | |
Option
Awards ($) | | |
Non-Equity
Incentive Plan Compensation ($) | | |
Non-Qualified
Deferred Compensation Earnings ($) | | |
All
Other Compensation ($) | | |
Total
($) | |
Heung
Mei Tsui | |
| 16,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 16,000 | |
Gene
Michael Bennett | |
| 16,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 16,000 | |
Yingwen
Zhang | |
| 5,799 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 5,799 | |
Baowen
Dong | |
| 5,799 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 5,799 | |
Our
directors will also be reimbursed for all of their out-of-pocket expenses in traveling to and attending meetings of our Board of Directors
and committees on which they serve.
Ms.
Zhilin Li, our Chairman, President and Chief Executive Officer, was also compensated for serving on our board of directors as set forth
in the Summary Compensation Table appearing earlier on page 4.
Engagement
Letters
On
December 29, 2020 we renewed the engagement letters with each of our three independent directors. Pursuant to the renewed engagement
letters, entered into on the same terms and conditions as the previous engagement letters and for a term of one year, each of Mr. Zhang
and Mr. Dong is entitled to receive annual compensation of RMB40,000 (approximately $5,799), payable quarterly and Mr. Bennett is entitled
to receive annual compensation of $16,000, payable quarterly, and a warrant to purchase 5,000 shares of common stock at an exercise price
of $0.44 per share. As of the date of this Proxy Statement, no warrants have been issued to Mr. Bennett.
Compensation
Committee Interlocks and Insider Participation
The
members of the Nominating and Compensation Committee of our Board of Directors during fiscal 2021 were Messrs. Gene Michael Bennett,
Baowen Dong and Yingwen Zhang. During fiscal 2021:
|
● |
none of the members of
the Nominating and Compensation Committee of our Board of Directors was an officer (or former officer) or employee of our company
or any of its subsidiaries; |
|
● |
none of the members of
the Nominating and Compensation Committee had a direct or indirect material interest in any transaction in which we were a participant
and the amount involved exceeded $120,000; |
|
● |
none of our executive officers
served on the compensation committee (or another board committee with similar functions or, if none, the entire Board of Directors)
of another entity where one of that entity’s executive officers served on our Nominating and Compensation Committee; |
|
● |
none of our executive officers
was a director of another entity where one of that entity’s executive officers served on our Nominating and Compensation Committee;
and |
|
● |
none of our executive officers
served on the compensation committee (or another board committee with similar functions or, if none, the entire Board of Directors)
of another entity where one of that entity’s executive officers served as a director on our Board of Directors. |
Independent
Public Accountants
The
Audit Committee, in accordance with its charter and authority delegated to it by the Board, has appointed B
F Borgers CPA PC to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2022. Our
auditors will not be present, by phone or in person, at the Annual Meeting.
Principal
Accountant Fees and Services
Audit
Fees
The
aggregate fees billed by B F Borgers CPA PC, our principal accountant , for professional
services rendered for the audit of our annual financial statements included in our Annual Reports on Form 10-K, for the reviews of the
financial statements included in our Quarterly Reports on Form 10-Q, and for services in connection with statutory and regulatory filings
or engagements were approximately $100,000 for the fiscal year ended December 31, 2021, and $100,000 for the fiscal year ended December
31, 2020.
Audit-Related
Fees
We
did not incur any audit-related fees during the fiscal years ended December 31, 2021 and 2020.
Tax
Fees
We
have engaged our principal accountant to render tax services to us in the year ended December 31, 2021 for $5,400.
All
Other Fees
We
did not engage our principal accountant to render services to us during the last two fiscal years, other than as reported above.
Pre-Approval
Policies and Procedures
Under
the Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by our auditors must be approved in advance by our Audit Committee
to assure that such services do not impair the auditors’ independence from us. In accordance with its policies and procedures,
the Audit Committee pre-approved the audit service performed by B F Borgers CPA PC, for
our consolidated financial statements as of and for the year ended December 31, 2021.
PROPOSAL
NO. 1
ELECTION
OF INDEPENDENT DIRECTORS
Our
amended and restated by-laws provide that the initial number of our directors shall be five and that the number of directors may be increased
or decreased from time to time by action of the stockholders or of the Board. Directors are divided into two classes, independent directors
and non-independent directors. Independent directors will hold office for a term of one (1) 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.
Non-independent directors will hold office for a term of three (3) years or when their respective successors shall have been elected
and shall qualify, or upon their prior death, resignation or removal. Directors may be re-elected for successive terms. The Board currently
consists of five members, three of whom are independent. All three independent directors are the nominees standing for re-election at
the Annual Meeting of Stockholders for the fiscal year ended December 31, 2021.
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. Upon the election, Messrs. Gene Michael Bennett, Yingwen Zhang and Baowen Dong,
the three independent directors will serve for a one-year term until the date of the next annual stockholders meeting and until their
successors are duly elected and qualified, or until their death, resignation or removal, whichever is earlier. We are not aware of any
nominee who will be unable or who will decline to serve as a director.
Independent
Director Nominees
The
following table sets forth a brief biographical description of each of our nominees for election as independent directors, all of whom
currently serve as our independent directors. This description includes the principal occupation of and other directorships held by each
director for at least the past five years, if any, as well as the specific experience, qualifications, attributes and skills that led
to the conclusion that each should serve as an independent member of the Board of Directors. This information is based on information
furnished to us by the nominees.
Name |
|
Age |
|
Biographical
Description |
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Gene Michael Bennett |
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Mr. Bennett has served
as our independent director since February 2008. Presently, Mr. Bennett is Chairman of the Board of Directors and Partner of Omana
Healthcare, Ltd, Mission Viejo, California, USA, and Chairman and Partner of Prescient Crossborder Business Consulting, Ltd, Shenzhen,
PRC. From 2013 through 2015 Mr. Bennett served as part-time CFO for Kang Jia Fu, Royal Traditional Health Investment Management Co.
Ltd, located in Wuxi, Jiangsu Province, China and advisor to Swiss Capital Asia, located in Hong Kong. From 2009 through 2013, Mr.
Bennett served as the CEO of American General Business Association, located in Beijing, China. Mr. Bennett was a partner of Nexis
Investment Consulting Corporation based in Beijing from 2004-2009. He was a partner of ProCFO Company based in California which provided
contract chief financial officer service for firms during 2000-2004. During 1998-2000, he was a basic law, accounting and tax professor
at University of Hawaii, and an accounting, tax and audit professor at Chaminade University of Honolulu, Hawaii, USA. In addition,
he previously served as the chief financial officer and member of the board of directors of Argonaut Computers in Southern California.
Mr. Bennett worked as an accounting and audit professor at Chapman University and an accounting, tax, and audit professor at California
State University at Fullerton. He also acted as chief financial officer and a board member of the National Automobile Club. Mr. Bennett
graduated from Michigan State University with an MBA in Finance and BA in Accounting. He obtained his CPA license from the State
of Colorado, which is currently inactive.. Mr. Bennett’s extensive background in accounting, financial management and reporting,
including SEC related reporting qualifies him to serve as an independent director of our company and the chairman of our audit committee. |
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Yingwen Zhang |
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Mr.
Zhang has served as our independent director since February 2008. He also currently serves as a consultant of Shanghai Listent Medical
Tech Co. Ltd., a medical device producer. He acted as Senior Consultant and Chairman of HSE (Health Safe and Environment) Committee
of SINOFERT Holdings Limited (HKG: 0297) of SINOCHEM Group from October 2005 to June 2009. He served as an independent director of
a public company, Chongqing New Energy Co., Ltd. (SH.600847), from 2007 to 2018. Additionally, Mr. Zhang was appointed as the Commercial
Counselor of the China Embassy in Malaysia from March 2000 through October 2005.
Prior
to that, from 1988 to 2000, Mr. Zhang was appointed as the Director-General to Sichuan Provincial Foreign Trade and Economic Cooperation
Bureau (the Commercial Bureau of Sichuan Province, China). In his early career he was a chemical engineer and senior economist, and
then became a senior manager for several chemical corporations in China. From 1983 to 1988, Mr. Zhang served as vice CEO and then
CEO of a large nature-gas chemical state-owned enterprise (SOE) in the PRC affiliated with the SINOPEC Group. Mr. Zhang graduated
from the Chemical Engineering Department of Tianjin University in 1967. Mr. Zhang’s extensive knowledge in areas of government
regulation and policies, his experience as director of a China listed company, as well as his vast experience in senior management
in SOE and the private sector, qualify him as an independent director of our company. |
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Baowen Dong |
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Mr.
Dong has served as our independent director since February 2008. Mr. Dong participated on the expert team of the Sichuan University
from 2003 to 2008, doing teaching evaluation and assessment work in Engineering and Medical Science faculty. In the past few years,
Mr. Dong has focused on the research of China’s Health Care Reform. Previously, he concentrated on biomedical and medical information
researches. Mr. Dong has had different roles in areas of teaching and research, including serving as a department head and a professor,
at Sichuan University from 1974 to 2001. Additionally, Mr. Dong was engaged in the field of communication technology from 1966 to
1974. Mr. Dong graduated from Xidian University in 1966. His strong academic background in science and research brings value to our
company in respect of research and development and qualifies him to serve as a director of our company. |
There
are no arrangements or understandings between any of our directors and any other person pursuant to which any director was selected to
serve as a director of our company. There are no family relationships among our directors and officers.
Each
of our independent director nominees has an established record of professional accomplishment in his chosen field, the ability to contribute
positively to the collaborative culture among our Board members, and professional and personal experiences and expertise that are valuable
to our company. They help develop and continue to oversee the long-term strategy, management structure, and corporate governance programs
that are in place today, and they provide a strong measure of stability and continuity to our company. In light of our corporate structure
and business, we believe that this stability positively impacts the performance of our Company.
Vote
Required and Board of Directors’ Recommendation
Assuming
a quorum is present, a plurality of the votes cast at the Annual Meeting by the stockholders entitled to vote in the election, either
in person or by proxy, is required to elect the director nominees. For purposes of the election of directors, abstentions and broker
non-votes will have no effect on the result of the vote.
The
Board of Directors recommends a vote “FOR” each nominee.
PROPOSAL
NO. 2
APPROVAL
OF THE AMENDED AND RESTATED 2010 LONG-TERM INCENTIVE PLAN
Our
Board of Directors, acting upon the recommendation of the Board of Directors’ Nominating and Compensation Committee (the “Compensation
Committee”), has approved the Amended and Restated Long-Term 2010 Incentive Plan (the “Plan”) to increase the number
of shares of the Common Stock, that are reserved thereunder by 5,000,000 shares from 9,000,000 shares to 14,000,000 shares (the “Amendment”).
The Board recommends the Amendment be approved and adopted by the Company’s stockholders and directs that such proposal be submitted
at the Annual Meeting.
As of the Record Date, we
had issued shares of restricted stock or stock options to purchase shares of common stock in an aggregate of approximately shares and
approximately 4,765,000 shares of common stock were available for issuance under the Plan. There were 4 participants of the Plan as of
the Record Date.
The
Compensation Committee has reviewed the Plan and determined that the Plan requires additional available shares for issuance to provide
flexibility with respect to stock-based compensation that the Compensation Committee believes is necessary to establish appropriate long-term
incentives to achieve our objectives. Our Board of Directors believes that it is advisable to increase the 9,000,000 share limit to 14,000,000
shares in order to attract and compensate employees, officers, directors and other eligible participants upon whose judgment, initiative
and effort we depend. The issuance of award under the Plan to these eligible participants is designed to align the interests of such
participants with those of our stockholders.
The
proposed Amendment to the Plan increases the number of shares of common stock that may be issued as awards under the Plan by 5,000,000
shares. As amended, the Plan will continue to provide that all of the shares authorized for issuance (including the increased shares)
may be granted as incentive stock options as long as other awards pursuant to the Plan and the Plan will also continue to provide for
appropriate adjustments in the number of shares in the event of a stock dividend, recapitalization, merger or similar transaction. A
copy of the Plan is attached hereto as Appendix A and is incorporated by reference herein.
The
summary below is qualified in its entirety by the terms of the Plan which is incorporated by reference to Appendix A to this proxy statement.
Administration
The
Board has delegated the administration of the Plan to the Compensation Committee (the “Committee”), and the Committee is
authorized to construe and interpret the Plan and to promulgate, amend and rescind rules and regulations relating to the implementation,
administration and maintenance of the Plan. Subject to the terms and conditions of the Plan, the Committee shall make all
determinations necessary or advisable for the implementation, administration and maintenance of the Plan.
Eligibility
Individuals
eligible for awards under the Plan shall consist of employees (including officers), directors and consultants, or those who will become
employees (including officers), directors and consultants, of the Company and/or its Subsidiaries whose performance or contribution,
in the sole discretion of the Committee, benefits or will benefit the Company or any subsidiary.
Term of
the Plan
The
Plan shall terminate automatically on December 31, 2029, except with respect to Awards then outstanding. No Awards may be granted under
the Plan after it is terminated.
Stock
Options
Stock
options granted under the Plan shall be in respect of Common Stock and may be in the form of Incentive Stock Options or Non-Qualified
Stock Options (sometimes referred to collectively herein as the “Stock Option(s))”. Stock Options may be granted
under the Plan in such form as the Committee may from time to time approve. Stock Options may be granted alone or in addition
to other Awards under the Plan or in tandem with Stock Appreciation Rights. Special provisions shall apply to Incentive Stock
Options granted to any employee who owns (within the meaning of Section 422(b)(6) of the Internal Revenue Code of 1986 (the “Code”))
more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or its parent corporation or any
subsidiary of the Company, within the meaning of Sections 424(e) and (f) of the Code (a “10% Stockholder”). The exercise
price per share of Common Stock subject to a Stock Option shall be determined by the Committee; provided, however, that the exercise
price of a Stock Option shall not be less than one hundred percent (100%) of the Fair Market Value of the Common Stock on the date of
the grant of such Stock Option; provided, further, however, that, in the case of a 10% Stockholder, the exercise price of an Incentive
Stock Option shall not be less than one hundred ten percent (110%) of the Fair Market Value (as defined below) of the Common Stock on
the date of grant. The term of each Stock Option shall be such period of time as is fixed by the Committee; provided, however, that the
term of any Incentive Stock Option shall not exceed ten (10) years (five (5) years, in the case of a 10% Stockholder) after the date
immediately preceding the date on which the Incentive Stock Option is granted.
Restricted
Shares
Restricted
Shares may be granted alone or in addition to any other Awards under the Plan. Subject to the terms of the Plan, the Committee
shall determine the number of Restricted Shares to be granted to a Participant and the Committee may provide or impose different terms
and conditions on any particular Restricted Share grant made to any Participant. With respect to each Participant receiving
an Award of Restricted Shares, there shall be issued a stock certificate (or certificates) in respect of such Restricted Shares. Such
stock certificate(s) shall be registered in the name of such Participant, shall be accompanied by a stock power duly executed by such
Participant, and shall bear, among other required legends, the following legend:
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“THE
TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING,
WITHOUT LIMITATION, FORFEITURE EVENTS) CONTAINED IN THE CHINA PHARMA HOLDINGS, INC. 2010 AMENDED AND RESTATED LONG-TERM INCENTIVE
PLAN AND AN AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER HEREOF AND CHINA PHARMA HOLDINGS, INC. (THE “COMPANY”). COPIES
OF SUCH PLAN AND AWARD AGREEMENT ARE ON FILE AT THE PRINCPAL EXECUTIVE OFFICES OF THE COMPANY. THE COMPANY WILL FURNISH
TO THE RECORDHOLDER OF THIS CERTIFICATE, WITHOUT CHARGE AND UPON WRITTEN REQUEST AT ITS PRINCIPAL EXECUTIVE OFFICES, A COPY OF SUCH
PLAN AND AWARD AGREEMENT. THE COMPANY RESERVES THE RIGHT TO REFUSE TO RECORD THE TRANSFER OF THIS CERTIFICATE UNTIL ALL
SUCH RESTRICTIONS ARE SATISFIED, ALL SUCH TERMS ARE COMPLIED WITH AND ALL SUCH CONDITIONS ARE SATISFIED.” |
Stock
Appreciation Rights
A
Stock Appreciation Right is an Award granted with respect to a specified number of shares of Common Stock entitling a Participant to
receive an amount equal to the excess of the Fair Market Value of a share of Common Stock on the date of exercise over the Fair Market
Value of a share of Common Stock on the date of grant of the Stock Appreciation Right, multiplied by the number of shares of Common Stock
with respect to which the Stock Appreciation Right shall have been exercised. A Stock Appreciation Right may be granted in addition
to any other Award under the Plan or in tandem with or independent of a Non-Qualified Stock Option. In respect of any Stock Appreciation
Right granted under the Plan, unless otherwise (a) determined by the Committee (in its sole discretion) at any time and from time to
time in respect of any such Stock Appreciation Right, or (b) provided in the Award Agreement, a Stock Appreciation Right may be exercised
by a Participant, in accordance with and subject to all of the procedures established by the Committee, in whole or in part at any time
and from time to time during its specified term. The Committee may also provide, as set forth in the relevant Award Agreement
and without limitation, that some Stock Appreciation Rights shall be automatically exercised and settled on one or more fixed dates specified
therein by the Committee. Upon exercise of a Stock Appreciation Right, payment may be made in cash, in Restricted Shares or in shares
of unrestricted Common Stock, or in any combination thereof, as the Committee, in its sole discretion, shall determine and provide in
the relevant Award Agreement.
Performance
Units
A
Performance Unit is an Award of units (with each unit representing such monetary amount as is designated by the Committee in the Award
Agreement) granted to a Participant, subject to such terms and conditions as the Committee deems appropriate, including, without limitation,
the requirement that the Participant forfeit such units (or a portion thereof) in the event certain performance criteria or other conditions
are not met within a designated period of time. Performance Units may be granted alone or in addition to any other Awards under the Plan. Subject
to the terms of the Plan, the Committee shall determine the number of Performance Units to be granted to a Participant and the Committee
may impose different terms and conditions on any particular Performance Units granted to any Participant. Participants receiving a grant
of Performance Units shall only earn into and be entitled to payment in respect of such Awards if the Company and/or the Participant
achieves certain performance goals (the “Performance Goals”) during and in respect of a designated performance period (the
“Performance Period”). The Performance Goals and the Performance Period shall be established by the Committee,
in its sole discretion. The Committee shall establish Performance Goals for each Performance Period prior to, or as soon as
practicable after, the commencement of such Performance Period. The Committee shall also establish a schedule or schedules
for Performance Units setting forth the portion of the Award which will be earned or forfeited based on the degree of achievement, or
lack thereof, of the Performance Goals at the end of the relevant Performance Period. In setting Performance Goals, the Committee
may use, but shall not be limited to, such measures as total stockholder return, return on equity, net earnings growth, sales or revenue
growth, cash flow, comparisons to peer companies, individual or aggregate Participant performance or such other measure or measures of
performance as the Committee, in its sole discretion, may deem appropriate. Such performance measures shall be defined as
to their respective components and meaning by the Committee (in its sole discretion). During any Performance Period, the Committee
shall have the authority to adjust the Performance Goals and/or the Performance Period in such manner as the Committee, in its sole discretion,
deems appropriate at any time and from time to time. With respect to each Performance Unit, the Participant shall, if the applicable
Performance Goals have been achieved, or partially achieved, as determined by the Committee in its sole discretion, by the Company and/or
the Participant during the relevant Performance Period, be entitled to receive payment in an amount equal to the designated value of
each Performance Unit times the number of such units so earned. Payment in settlement of earned Performance Units shall be
made as soon as practicable following the conclusion of the respective Performance Period in cash, in unrestricted Common Stock, or in
Restricted Shares, or in any combination thereof, as the Committee in its sole discretion, shall determine and provide in the relevant
Award Agreement.
Fair Market
Value
“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 such date and shall mean (i) the closing price quoted on the national securities exchange or national securities association
that is the principal market for the Common Stock, or (ii) if the Common Stock is not so listed, the last or closing price on the relevant
date quoted on the OTC Bulletin Board Service or by Pink Sheets LLC or a comparable service as determined in the Committee’s sole
discretion; or (iii) if the Common Stock is not listed or quoted by any of the above, the average of the closing bid and asked prices
on the relevant date furnished by a professional market maker for the Common Stock selected by the Committee in its sole discretion.
Amendment
and Termination of the Plan
The
Board may suspend or terminate the Plan (or any portion thereof) at any time and may amend the Plan at any time and from time to time
in such respects as the Board may deem advisable to insure that any and all Awards conform to or otherwise reflect any change in applicable
laws or regulations, or to permit the Company or the Participants to benefit from any change in applicable laws or regulations, or in
any other respect the Board may deem to be in the best interests of the Company or any Subsidiary. No such amendment, suspension
or termination shall (x) materially adversely affect the rights of any Participant under any outstanding Stock Options, Stock Appreciation
Rights, Performance Units, or Restricted Share grants, without the consent of such Participant, or (y) increase the number of shares
available for Awards under the Plan or increase the maximum yearly awards under the Plan.
Federal
Tax Consequences
The
following is a brief and general summary of some United States federal income tax consequences applicable to the Plan. The
summary does not reflect any provisions of the income tax laws of any state, local or foreign taxing jurisdiction. Because
the tax consequences of events and transactions under the Plan depend upon various factors, including an individual’s own tax status,
each participant who receives an award under the Plan should consult a tax advisor.
Incentive
Stock Options. Stock options granted under the Plan may be incentive stock options (within the meaning of Section 422
of the Code) or non-qualified stock options. Upon the grant of an incentive stock option, the optionee will not recognize
any income. Generally, no income is recognized by the optionee upon the exercise of an incentive stock option. The
optionee must increase his or her alternative minimum taxable income for the taxable year in which he or she exercised the incentive
stock option by the amount that would have been ordinary income had the option not been an incentive stock option.
Upon
the subsequent disposition of shares acquired upon the exercise of an incentive stock option, the federal income tax consequences will
depend upon when the disposition occurs and the type of disposition. If the shares are disposed of by the optionee after the
later to occur of (i) the end of the two-year period beginning the day after the day the incentive stock option is awarded to the optionee,
or (ii) the end of the one-year period beginning on the day after the day the shares are issued to the optionee (the later of (i) or
(ii) being the “ISO Holding Period”), any gain or loss realized upon such disposition will be long-term capital gain or loss,
and the Company (or a subsidiary) will not be entitled to any income tax deduction in respect of the option or its exercise. For
purposes of determining the amount of such gain or loss, the optionee’s tax basis in the shares will be the option price.
Generally,
if the shares are disposed of by the optionee in a taxable disposition within (i) the two-year period beginning on the day after the
day the option was awarded to the optionee, or (ii) the one-year period beginning on the day after the day the shares are issued to the
optionee, the excess, if any, of the amount realized (up to the fair market value of the shares on the exercise date) over the option
price will be compensation taxable to the optionee as ordinary income, and the Company generally will be entitled to a deduction (subject
to the provisions of Section 162(m) of the Code discussed below under the caption “Limits on Deductions”) equal to the amount
of ordinary income realized by the optionee. Any amount realized upon such a disposition by the optionee in excess of the
fair market value of the shares on the exercise date will be capital gain.
If
an optionee has not remained an employee of the Company during the period beginning with the grant of an incentive stock option and ending
on the day three months (one year if the optionee becomes disabled) before the date the option is exercised (other than in the case of
the optionee’s death), the exercise of such option will be treated as the exercise of a non-qualified stock option with the tax
consequences described below.
Non-Qualified
Stock Options. In general, upon the grant of a non-qualified stock option, an optionee will not recognize any income. At
the time a nonqualified option is exercised, the optionee will recognize compensation taxable as ordinary income, and the Company generally
will be entitled to a deduction (subject to the provisions of Section 162(m) of the Code discussed below under the caption “Limits
on Deductions”), in an amount equal to the difference between the fair market value on the exercise date of the shares acquired
pursuant to such exercise and the option price. Upon a subsequent disposition of the shares, the optionee will recognize long-
or short-term capital gain or loss, depending upon the holding period of the shares. For purposes of determining the amount
of such gain or loss, the optionee’s tax basis in the shares will be the fair market value of such shares on the exercise date.
Effect
of Share-for-Share Exercise. If an optionee elects to tender shares of Common Stock in partial or full payment
of the option price for shares to be acquired through the exercise of an option, generally the optionee will not recognize any gain or
loss on such tendered shares. However, if the shares tendered in connection with any share-for-share exercise were previously
acquired upon the exercise of an incentive stock option, and such share-for-share exercise occurs during the ISO Holding Period for such
shares, then there will be a taxable disposition of the tendered shares with the tax consequences described above for the taxable dispositions
during the ISO Holding Period of the shares acquired upon the exercise of an incentive stock option.
If
the optionee tenders shares upon the exercise of a nonqualified option, the optionee will recognize compensation taxable as ordinary
income and the Company generally will be entitled to a deduction (subject to the provisions of Section 162(m) of the Code discussed below
under the caption “Limits on Deductions”) in an amount equal only to the fair market value of the number of shares received
by the optionee upon exercise which is in excess of the number of tendered shares, less any cash paid by the optionee.
Restricted
Shares. A participant will not recognize any income upon the award of restricted shares unless the participant makes
an election under Section 83(b) of the Code in respect of such grant, as described below. Unless a participant has made an election under
Section 83(b) of the Code in respect of any restricted shares, any dividends received by the participant with respect to restricted shares
prior to the date the participant recognizes income with respect to such award (as described below) must be treated by the participant
as compensation taxable as ordinary income, and the Company will be entitled to a deduction, in an amount equal to the amount of ordinary
income recognized by the participant. After the terms and conditions applicable to the restricted shares are satisfied, or
if the participant has made an election under Section 83(b) of the Code in respect of the restricted shares, any dividends received
by the participant in respect of such award will be treated as a dividend taxable as ordinary income, and the Company will not be entitled
to a deduction in respect of any such dividend payment.
Unless
the participant has made an election under Section 83(b) of the Code (as described below), at the time the terms and conditions applicable
to the restricted shares are satisfied, a participant will recognize compensation taxable as ordinary income, and the Company generally
will be entitled to a deduction, in an amount equal to the then fair market value of the shares of Common Stock for which
the terms and conditions applicable to the restricted share award have been satisfied. The participant’s tax basis for
any such shares of Common Stock would be the fair market value on the date such terms and conditions are satisfied.
A
participant may irrevocably elect under Section 83(b) of the Code to recognize compensation taxable as ordinary income, and the Company
will be entitled to a corresponding deduction, in an amount equal to the fair market value of such restricted shares (determined without
regard to any restrictions thereon) on the date of grant. Such an election must be made by the participant not later than
30 days after the date of grant. If such an election is made, no income would be recognized by the participant (and the Company
will not be entitled to a corresponding deduction) at the time the applicable terms and conditions are satisfied. The participant’s
tax basis for the restricted shares received and for any shares of Common Stock subsequently held in respect thereof would be the fair
market value of the restricted shares (determined without regard to any restrictions thereon) on the date of grant. If a participant
makes such an election and subsequently all or part of the award is forfeited, the participant will not be entitled to a deduction as
a result of such forfeiture.
The
holding period for capital gain or loss purposes in respect of the Common Stock underlying an award of restricted shares shall commence
when the terms and conditions applicable to the restricted shares are satisfied, unless the participant makes a timely election under
Section 83(b) of the Code. In such case, the holding period will commence immediately after the grant of such restricted shares.
Performance
Units. A participant will not recognize any income upon the award of a performance unit. If the performance goals
applicable to the performance unit are achieved during the applicable performance period and such performance units are earned, a participant
will recognize compensation taxable as ordinary income when he or she receives payment with respect to such performance unit, and at
such time the Company will be entitled to a deduction equal to the amount of cash or the then fair market value of unrestricted Common
Stock received by the participant in payment of the performance units. The participant’s tax basis for any such shares of Common
Stock would be the fair market value on the date such unrestricted shares are transferred to the participant. If all or a
portion of the performance units are paid in restricted shares, see “Restricted Shares” above for a discussion of the applicable
tax treatment.
Limits
on Deductions. Under Section 162(m) of the Code, the amount of compensation paid to the chief executive officer
and the four other most highly paid executive officers of the Company in the year for which a deduction is claimed by the Company (including
its subsidiaries) is limited to $1,000,000 per person in any year, except that qualified performance-based compensation will be excluded
for purposes of calculating the amount of compensation subject to this $1,000,000 limitation. The ability of the Company to
claim a deduction for compensation paid to any other executive officer or employee of the Company (including its subsidiaries) is not
affected by this provision.
The
Company has structured the Plan so that the Company may claim a deduction in connection with (i) the exercise of non-qualified stock
options and/or SARs, (ii) the disposition during the ISO Holding Period by an optionee of shares acquired upon the exercise of incentive
stock options, and (iii) the payment of any performance units, provided that, in each case, the requirements imposed on qualified performance-based
compensation under Section 162(m) of the Code and the regulations thereunder are satisfied with respect to such awards. Restricted
share awards under the Plan that vest solely upon the passage of time will not be qualified performance-based compensation under Section
162(m) of the Code. Any deduction the Company may claim upon the lapse of any restrictions on such restricted share awards will be subject
to the limitations on deductibility under Section 162(m).
Additional
Information. The recognition by an employee of compensation income with respect to a grant or an award under the
Plan will be subject to withholding for federal income and employment tax purposes. If an employee, to the extent permitted
by the terms of a grant or award under the Plan, uses shares of Common Stock to satisfy the federal income and employment tax withholding
obligation, or any similar withholding obligation for state and local tax obligations, the employee will recognize a capital gain or
loss, short-term or long-term, depending on the tax basis and holding period for such shares of Common Stock.
In
the event of a change of control, certain compensation payments or other benefits received by “disqualified individuals”
(as defined in Section 280G(c) of the Code) under the Plan or otherwise may cause or result in “excess parachute payments”
(as defined in Section 280G(b)(I) of the Code). Pursuant to Section 280G of the Code, any amount that constitutes an excess
parachute payment is not deductible by the Company. In addition, Section 4999 of the Code generally imposes a 20% excise tax
on the amount of any such excess parachute payment received by such a disqualified individual, and any such excess parachute payments
will not be deductible by the Company (or a subsidiary).
Vote
Required and Board of Directors’ Recommendation
Assuming a quorum is present,
a majority of the affirmative votes cast at the Annual Meeting by the stockholders entitled to vote, either in person or by proxy, is
required to pass the proposal to approve our Amended and Restated 2010 Long-Term Incentive Plan. For purposes of the this proposal, abstentions
and broker non-votes will have no effect on the result of the vote.
The
Board of Directors recommends a vote “FOR” the approval of the Amended and Restated 2010 Long-Term Incentive Plan.
Proposal
No. 3
AUTHORIZE
THE BOARD OF DIRECTORS TO EFFECT A REVERSE STOCK SPLIT
Purpose
and Background of the Reverse Stock Split
To
consider and approve to amend the Articles of Incorporation of the Company to effect a reverse stock split at a ratio of up to 1:10,
such that every holder of common stock, par value $0.001 per share, of the Company (the “Common Stock”) shall receive one
share of Common Stock for up to every ten shares of Common Stock held (the “Reverse Stock Split”).
The
following paragraphs (the “Reverse Split Charter Amendment”) shall be added to the end of the Section 1 of the Article IV
of the Amended and Restated Articles of Incorporation, subject to the approval of Amended and Restated Articles of Incorporation by the
stockholders of the Company:
“As
of the close of business on [effective date](“Effective Time), each [ten (10)] shares of the Corporation’s Common Stock,
par value $0.001 per share, issued and outstanding immediately prior to the Effective Time (the “Old Common Stock”), will
automatically and without any action on the part of the respective holders thereof be combined, reclassified and changed into one (1)
share of Common Stock, par value $0.001 per share, of the Corporation (the “New Common Stock”) (the “Reverse Stock
Split”). Notwithstanding the immediately preceding sentence, provided, however, no fractional shares of Common Stock shall be issued
in connection with the Reverse Stock Split, and instead, the Corporation shall issue one full share of post-Reverse Split Common Stock
to any stockholder who would have been entitled to receive a fractional share of Common Stock as a result of the Reverse Split.
Each
holder of Common Stock will hold the same percentage of the outstanding Common Stock immediately following the Reverse Stock Split as
that stockholder did immediately prior to the Reverse Stock Split, except for minor adjustments due to the additional net share fraction
that will need to be issued as a result of the treatment of fractional shares.”
On
September 26, 2022, the Company received notification (the “Deficiency Letter”) from the NYSE AMERICAN LLC (“NYSE American”)
informing it that the Company is not in compliance with certain NYSE American continued listing standards (the “Listing Standards”).
The
Deficiency Letter indicated that the Company’s securities had been selling for a low price per share for a substantial period of
time and most recently the average price of the Company’s common stock had been below $0.20 on a 30-day average price as of September
22, 2022. Pursuant to Section 1003(f)(v) of the NYSE American Company Guide, the NYSE American staff determined that the Company’s
continued listing is predicated on it effecting a reverse stock split of its common stock or otherwise demonstrating sustained price
improvement within a reasonable period of time, which the staff determined to be no later than March 26, 2023. The Company remains subject
to the conditions set forth in the NYSE American’s letter dated June 15, 2022 for stockholders’ equity noncompliance, as
previously reported on the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 22, 2022. The Company
intends to regain compliance with the Listing Standards by undertaking a measure or measures that are for the best interests of the Company
and its stockholders.
In
light of the factors mentioned above, our Board of Directors approved this proposal as a potential means of maintaining the price of
our Common Stock in compliance with NYSE American’s Listing Standards.
Potential
Affected Investor Interest
In
approving this proposal, the Board of Directors considered that the Company’s Common Stock may not appeal to brokerage firms that
are reluctant to recommend lower priced securities to their clients. Investors may also be dissuaded from purchasing lower priced stocks
because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks. Moreover, the analysts
at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower priced stocks.
By
approving this proposal, stockholders will approve the Board of Directors to effect a Reverse Stock Split which it deems in the best
interests of the Company and its stockholders.
Principal
Effects of the Reverse Stock Split
If
implemented, the Reverse Stock Split will be effected simultaneously for all issued and outstanding shares of Common Stock. The Reverse
Stock Split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interests
in the Company, except to the extent that the Reverse Stock Split would otherwise result in any of our stockholders owning a fractional
share (in which case the fractional amount will be rounded up to the next whole share). The Reverse Stock Split will not affect the Company
continuing to be subject to the periodic reporting requirements of the Exchange Act. The Reverse Stock Split is not intended to be, and
will not have the effect of, a “going private transaction” covered by Rule 13e-3 under the Exchange Act.
The
Reverse Stock Split may result in some stockholders owning “odd-lots” of less than 100 shares. Brokerage commissions and
other costs of transactions in odd-lots are generally higher than the costs of transactions in “round-lots” of even multiples
of 100 shares.
Following
the effectiveness of such Reverse Stock Split approved by the stockholders and implementation by the Board of Directors, current stockholders
will hold fewer shares of Common Stock, but the rights and ownership percentages will remain the same.
IF
THIS PROPOSAL IS NOT APPROVED, WE MAY BE UNABLE TO MAINTAIN THE LISTING OF OUR COMMON STOCK ON NYSE AMERICAN, WHICH COULD ADVERSELY AFFECT
THE LIQUIDITY AND MARKETABILITY OF OUR COMMON STOCK.
Fractional
Shares
No
fractional shares will be issued in connection with the Reverse Stock Split. Instead, we will issue one full share after Reverse Stock
Split to any stockholder who would have been entitled to receive a fractional share as a result of the Reverse Stock Split. Each stockholder
will hold the same percentage of the outstanding shares immediately following the Reverse Stock Split as that stockholder did immediately
prior to the Reverse Stock Split, except for minor adjustments due to the additional net share fractions that will need to be issued
as a result of the treatment of fractional shares.
Risks
Associated with the Reverse Stock Split
There
are risks associated with the Reverse Stock Split. Stockholders should note that the effect of the Reverse Stock Split, if any, upon
the market price for our Common Stock cannot be accurately predicted. In particular, we cannot assure you that prices for shares of our
Common Stock after the Reverse Stock Split will be the number of times equals exactly to the ratio multiplied by the prices for
shares of our Common Stock immediately prior to the Reverse Stock Split. Furthermore, even if the market price of our Common Stock does
rise following the Reverse Stock Split, we cannot assure you that the market price of our Common Stock immediately after the proposed
Reverse Stock Split will be maintained for any period of time. Even if an increased per-share price can be maintained, the Reverse Stock
Split may not achieve the desired results that have been outlined above. Moreover, because some investors may view the Reverse Stock
Split negatively, we cannot assure you that the Reverse Stock Split will not adversely impact the market price of our Common Stock.
The
market price of our Common Stock will also be based on our performance and other factors, some of which are unrelated to the Reverse
Stock Split or the number of shares outstanding. If the Reverse Stock Split is effected and the market price of our Common Stock declines,
the percentage declines as an absolute number and as a percentage of our overall market capitalization may be greater than would occur
in the absence of a Reverse Stock Split. The total market capitalization of our Common Stock after implementation of the Reverse Stock
Split, when and if implemented, may also be lower than the total market capitalization before the Reverse Stock Split. Furthermore, the
liquidity of our Common Stock could be adversely affected by the reduced number of shares that would be outstanding after the Reverse
Stock Split.
While
we believe that the Reverse Stock Split will be sufficient to maintain our listing on NYSE American, it is possible that, even if the
Reverse Stock Split results in a closing price for our Common Stock that exceeds $1.00 per share, we may not be able to continue to satisfy
other criteria for continued listing of our Common Stock on NYSE American. Although we believe that we will continue satisfying all of
the other continued listing criteria, we cannot assure you that this will be the case.
Vote
Required and Board of Directors’ Recommendation
Assuming a quorum is present,
a majority of the affirmative votes cast at the Annual Meeting by the stockholders entitled to vote, either in person or by proxy, is
required to approve of this proposal to authorize the Board of Directors to effect a Reverse Stock Split. For purposes of this proposal,
abstentions and broker non-votes will have no effect on the result of the vote.
The
Board of Directors recommends a vote “FOR” the approval to authorize the Board of Directors to effect a Reverse Stock Split.
Proposal
No.4
AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE
AUTHORIZED SHARES OF COMMON STOCK
Purpose and Background of the Amendment to the
Articles
To approve an amendment to our
Articles of Incorporation, as amended, to increase the number of authorized shares of common stock from 95,000,000 shares to 500,000,000
shares, par value US$0.001 per share, such that the first paragraph of the Section 1 of the Article IV of the Articles of Incorporation
will read as follows:
“The aggregate number
of shares of Common Stock which the Corporation shall have authority to issue is 500,000,000 at a par value of $0.001 per share. All stock,
when issued shall be fully paid and non-assessable, shall be of the same class and have the same rights and preferences.”.
A copy of the proposed Amended
and Restated Articles of Incorporation containing the amendment above (the “Authorized Shares Increase Amendment”) is attached
hereto as Annex A, and we urge you to read Annex A in its entirety before casting your vote. The Board has unanimously approved, and recommended
that our stockholders approve, the Authorized Shares Increase Amendment.
The purpose of the proposed Authorized
Shares Increase Amendment is to provide the Company with a sufficient number of shares of common stock available (i) to issue in connection
with raising equity capital, (ii) to give us sufficient authorized shares of common stock to generally support our growth and to provide
flexibility for future corporate needs, and (iii) to issue in connection with the exercise of stock options and warrants, and (iv) for
potential future increases in the number of shares of common stock reserved for issuance under the Plan.
Accordingly, the Board has declared
the proposed Authorized Shares Increase Amendment to be advisable and in the best interests of the Company and our stockholders and is
submitting the Authorized Shares Increase Amendment to a vote of our stockholders.
Reasons to Approve the Authorized Shares Increase
Amendment and Increase Our Authorized Common Stock
The Board believes that the proposed
Authorized Shares Increase Amendment and increase in the number of authorized shares of our common stock is desirable to enhance our flexibility
in taking possible future actions, such as raising additional equity capital, exchanging equity for debt or other transactions that have
a similar effect, financings, stock-based acquisitions, stock splits, equity incentive awards, potential strategic transactions, including
mergers, acquisitions, and business combinations, as well as other general corporate transactions.
Additionally, by approving the
increase to the Company’s authorized shares of common stock now, we will be able to act in a timely manner when such a need arises
or when the Board believes it is in the best interests of the Company and our stockholders to take action, without the risk, delay, and
expense that would be required at that time to obtain stockholder approval of such an increase at a special meeting of stockholders.
Effect of the Increase in Authorized Shares of
Common Stock
Increasing the number of authorized
shares of common stock will not alter the number of shares of common stock presently issued and outstanding or reserved for issuance,
and will not change the relative rights of holders of any shares. The additional authorized shares of common stock, if and when issued,
would have the same rights and privileges as the shares of common stock previously authorized, issued and outstanding. Those rights do
not include preemptive rights with respect to the future issuance of any additional shares.
The increase in our authorized
shares of common stock would not have any immediate dilutive effect on the proportionate voting power or other rights of our existing
stockholders. However, any subsequent issuance, or the possibility of such issuance, of shares of common stock (including the exercise
of stock options and warrants, and the issuance of shares of our common stock under the Plan) would reduce each stockholder’s proportionate
interest in the Company, and may depress the market price of our common stock.
Except as set forth in the Amendment
and Authorized Shares Increase Amendment, all of the remaining provisions of the existing Articles of Incorporation will remain in full
force and effect without change.
Anti-takeover Effects
SEC rules and regulations require
disclosure of the possible anti-takeover effects of an increase in authorized capital stock and other charter and bylaw provisions that
could have an anti-takeover effect. Although the Board has not proposed the Amendment and the increase in the number of authorized shares
of common stock with the intent of using the additional shares to prevent or discourage any actual or threatened takeover of the Company,
under certain circumstances, such shares could have an anti-takeover effect. The additional shares of common stock could be issued to
dilute the stock ownership or voting rights of persons seeking to obtain control of the Company or could be issued to persons allied with
the Board or management and, thereby, have the effect of making it more difficult to remove directors or members of management by diluting
the stock ownership or voting rights of persons seeking to effect such a removal. Accordingly, if the proposed Authorized Shares Increase
Amendment and authorized common stock increase is approved, the additional shares of authorized common stock may render more difficult
or discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of common stock, or the
replacement or removal of the Board or management.
This proposal is not prompted
by any specific effort or takeover threat currently perceived by the Board or management.
Timing of the Proposed Authorized Shares Increase
Amendment
If our stockholders approve Proposal
4 at the Annual Meeting, we will file an Amended and Restated Articles of Incorporation containing the Authorized Shares Increase Amendment
with the office of the Secretary of State of Nevada to implement the increase in the authorized number of shares of common stock as soon
as practicable following the Annual Meeting. Upon approval and following such filing with the Secretary of State of Nevada, the Authorized
Shares Increase Amendment will become effective on the date it is filed.
Vote Required and Board of Directors’ Recommendation
Assuming a quorum is present,
a majority of the affirmative votes cast at the Annual Meeting by the stockholders entitled to vote, either in person or by proxy, is
required to approve of this proposal to increase authorized shares of Common Stock. For purposes of this proposal, abstentions and broker
non-votes will have no effect on the result of the vote.
The Board of Directors recommends a vote “FOR”
the approval to increase authorized shares of Common Stock.
CORPORATE
GOVERNANCE
Board
Composition
Our
Board of Directors is comprised of five members. Directors are divided into two classes, independent directors and non-independent directors.
Independent directors will hold office for a term of one (1) 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. Non-independent directors will
hold office for a term of three (3) years or when their respective successors shall have been elected and shall qualify, or upon their
prior death, resignation or removal. Ms. Zhilin Li, our President and Chief Executive Officer, is the Chairman of the Board and a non-independent
director. Ms. Heung Mei Tsui, an affiliate of the company, is a non-independent director. Messrs. G. Michael Bennett, Yingwen Zhang and
Baowen Dong are our independent directors and serve as members of the Audit and Nominating and Compensation Committees.
Director
Independence
Our
Board has determined that Messrs. Gene Michael Bennett, Baowen Dong and Yingwen Zhang satisfy the criteria for independence under NYSE
American and SEC rules for independence of directors and of committee members.
Board
Leadership Structure
The
Board believes that the combined role of Chief Executive Officer and Chairman is most suitable for our company because Ms. Li, serves
as our company’s President and Chief Executive Officer since 2005, is the individual most familiar with our business and industry,
including the regulatory structure and other industry-specific matters, as well as being the person most capable of effectively identifying
strategic priorities and leading the discussion and execution of strategy. Independent directors and management have different perspectives
and roles in strategy development. The Chief Executive Officer brings company-specific experience and expertise, while the Company’s
independent directors bring experience, oversight, and expertise from outside the Company and its industry. The Board believes that the
combined role of Chief Executive Officer and Chairman of the Board promotes the development and execution of our strategy and facilitates
the flow of information between management and the Board, which is essential to effective corporate governance. The Board believes the
combined role of Chief Executive Officer and Chairman, together with our independent directors, is in the best interest of stockholders
because it provides the appropriate balance between independent oversight of management and development of strategy.
Risk
Management
The
Board is involved in the oversight of risks that could affect the Company. This oversight is conducted primarily through committees of
the Board, but the full Board retains responsibility for general oversight of risks. The Nominating and Compensation Committee is responsible
for overseeing the management of risks related to the Company’s executive compensation plans and arrangements, and also for managing
risks associated with the independence of the Board of Directors and potential conflicts of interest. The Audit Committee oversees management
of financial risks, including risks related to liquidity, credit, operations and regulatory compliance, among others, and the processes
in place to monitor and control such exposures. Our Board and its committees have access at all times to the Company’s management
to discuss any matters of interest, including matters bear risks. We believe that our Board leadership structure enables senior management
to communicate identified risks to our Board and its committees, and affords a free flow of communications regarding risk identification
and mitigation.
Audit
Committee
The
Audit Committee assists the Board in monitoring:
|
● |
our accounting, auditing,
and financial reporting processes; |
|
● |
the integrity of our financial
statements; |
|
● |
internal controls and procedures
designed to promote our compliance with accounting standards and applicable laws and regulations; and |
|
● |
the appointment and evaluation
of the qualifications and independence of our independent auditors. |
G.
Michael Bennett, Yingwen Zhang and Baowen Dong, all of whom are independent directors under SEC rules and the rules of NYSE American,
are currently serving as members of the Audit Committee. Mr. Bennett is the chairman of the Audit Committee and is an “audit committee
financial expert” as defined in Item 401(d)(5) of Regulation S-K promulgated under the Securities Act. The audit committee carries
out its responsibilities in accordance with the terms of its Audit Committee Charter, a copy of which is attached as Exhibit 99.1 to
our Annual Report on Form 10-K filed with the SEC on March 17, 2009 and available on our website at www.chinapharmaholdings.com.
Nominating
and Compensation Committee
The
functions of the Nominating and Compensation Committee are as follows:
|
● |
to assist our Board in
discharging its responsibilities with respect to compensation of our executive officers and directors; |
|
● |
to evaluate the performance
of our executive officers; |
|
● |
to assist our Board in
developing succession plans for executive officers; |
|
● |
to administer our stock
and incentive compensation plans and recommend changes in such plans to our Board as needed; |
|
● |
to identify qualified individuals
to become board members; |
|
● |
to determine the composition
of our Board and its committees; |
|
● |
to monitor the process
to assess Board effectiveness; and |
|
● |
to develop and implement
our corporate procedures and policies. |
The
current members of the Nominating and Compensation Committee are Messrs. Bennett, Zhang and Dong. Mr. Zhang is the chairman of the Nominating
and Compensation Committee, which carries out its responsibilities in accordance with the terms of the Nominating and Compensation Committee
Charter, a copy of which is attached as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on August 28, 2009 and available
on our website at www.chinapharmaholdings.com.
Board
and Committee Meetings
During
fiscal year ended December 31, 2021, we were in compliance with rule 802 (c) of NYSE American Listed Company Manual. Our Board of Directors
had meetings on at least a quarterly basis. In particular, our Board of Directors held 4 meetings and acted by unanimous written consent
2 times. Our independent directors also met on a regular basis as often as necessary to fulfill their responsibilities, including at
least annually in executive session without the presence of non-independent directors and management. In particular, our Audit Committee
held 5 meetings, of which 1 meeting was in executive session and our Nominating and Compensation Committee met 1 time, of which 1 meeting
was in executive session.
Director
Attendance at Annual Meetings
Ms.
Li was present at our annual meeting of stockholders for the fiscal year ended December 31, 2019. We do not currently have a policy with
regard to directors’ attendance at annual stockholder meetings.
Stockholder
Nominations for Director
Stockholders
may propose candidates for Board membership by writing to China Pharma Holdings, Inc., Second Floor, No. 17, Jinpan Road, Haikou, Hainan
Province, China 570216 so that the nomination is received by the Company by July 18, 2023 to be considered for the annual meeting of
stockholders for the fiscal year ended December 31, 2022. Any such proposal shall contain the name, holdings of our securities and contact
information of the person making the nomination; the candidate’s name, address and other contact information; any direct or indirect
holdings of our securities by the nominee; any information required to be disclosed about directors under applicable securities laws
and/or stock exchange requirements; information regarding related party transactions with our company and/or the stockholder submitting
the nomination; any actual or potential conflicts of interest; the nominee’s biographical data, current public and private company
affiliations, employment history and qualifications and status as “independent” under applicable securities laws and stock
exchange requirements. Nominees proposed by stockholders will receive the same consideration as other nominees.
Director
or Officer Involvement in Certain Legal Proceedings
To
our knowledge, our directors and executive officers were not involved in any legal proceedings as described in Item 401(f) of Regulation
S-K in the past ten years.
Related
Party Transactions
Ms.
Tsui, one of our directors, has made various loans to the Company. The balance of such loans from Ms. Tsui remained $1,354,567 as of
December 31, 2021 and 2020. The loans bear interest at a rate of 1% per annum and principal and interest were payable by December 31,
2021, pursuant to a loans extension confirmation letter executed by the Company and Ms. Tsui in 2020. We recognized interest expense
of $13,546 and $13,546 for the years ended December 31, 2021 and 2020, respectively.
The
Company received net advances totaling $1,425,123 and $779,861 from its Chairperson, Chief Executive Officer and Interim Chief Financial
Officer as of December 31, 2021 and 2020, respectively. On July 8, 2019 the Company entered into a loan agreement to borrow cash of RMB
4,770,000 ($691,459) with its Chairperson, Chief Executive Officer and Interim Chief Financial Officer. The loan bears interest at a
rate of 4.35% and is payable within one year of the loan agreement. Total interest expense related to the loan for the year ended December
31, 2021 was $77,164.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and persons who own more than 10%
a registered class of our equity securities (“Reporting Persons”), to file reports of ownership and changes in ownership
on Forms 3, 4 and 5 with the SEC. The Reporting Persons are also required by SEC rules to furnish us with copies of Section 16(a) forms
they file. Based upon a review of the filings made on their behalf during the fiscal year ended December 31, 2021 as well as an examination
of the SEC’s EDGAR system Form 3, 4, and 5 filings (including amendments to such forms) and our records, we believe that, during
the year ended December 31, 2021, the Reporting Persons met all applicable Section 16(a) filing requirements except that Ms. Zhilin Li
did not timely file a Form 4 to report her acquisition of 2,000,000 shares of the Company’s common stock on December 23, 2020,
which Form 4 was subsequently filed on January 8, 2021.
Code
of Ethics
On
July 8, 2008, we adopted a code of business conduct and ethics for all directors and employees (including officers) within the meaning
of the regulations adopted by the SEC under Section 406 of the Sarbanes-Oxley Act of 2002. The code has been designed to deter wrongdoing
and promote (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal
and professional relationships, (ii) full, fair, accurate, timely, and understandable disclosure in reports and documents that we file
with, or submit to, the SEC and in other public communications made by us, (iii) compliance with applicable governmental laws, rules
and regulations, (iv) the prompt internal reporting of violations of the code to an appropriate person or persons, and (v) accountability
for adherence to the code. The application of the code to the persons it applies to may only be waived by our Board of Directors in accordance
with SEC regulations and the Sarbanes-Oxley Act of 2002. A copy of the code is available on our website at www.chinapharmaholdings.com
or may be obtained by sending a written request to our corporate secretary at China Pharma Holdings, Inc., Second Floor, No. 17, Jinpan
Road, Haikou, Hainan Province, China 570216.
Stockholder
and Other Interested Party Communications With Directors
Any
stockholder or other interested party who desires to communicate with any member of our Board of Directors may do so by writing to: Board
of Directors, c/o China Pharma Holdings, Inc., Second Floor, No. 17, Jinpan Road, Haikou, Hainan Province, China 570216.
Depending
on the subject matter of your inquiry, management will forward the communication to the director or directors to whom it is addressed;
attempt to handle the inquiry directly, as might be the case if you request information about our company or if it is a stockholder related
matter; or not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.
At each board meeting, a member of management will present a summary of all communications received since the last meeting that were
not forwarded and makes those communications available to any requesting director.
STOCKHOLDER
PROPOSALS
Proposals
of stockholders intended for presentation at next year’s annual meeting of stockholders and intended to be included in our proxy
statement and form of proxy relating to that meeting must be received at our executive office by July 18, 2023 and comply with the requirements
of Rule 14a-8(e) promulgated under the Exchange Act. If a stockholder intends to submit a proposal at next year’s annual meeting
of stockholders, which proposal is not intended to be included in our proxy statement and form of proxy relating to that meeting, the
stockholder must provide appropriate notice to us not later than October 1, 2023 in order to be considered timely submitted within the
meaning of Rule 14a-4(c) of the Exchange Act. As to all such matters which we do not have notice on or prior to October 1, 2023, discretionary
authority shall be granted to the persons designated in our proxy related to the annual meeting of stockholders for the fiscal year ended
December 31, 2021 to vote on such proposal.
ANNUAL
REPORT ON FORM 10-K
We
will furnish without charge to each person whose proxy is being solicited, upon the request of such person, a copy of our Annual Report
on Form 10-K for the fiscal year ended December 31, 2021, including the financial statements and schedules thereto. Requests for copies
of such report should be directed to Ms. Diana Huang, China Pharma Holdings, Inc., Second Floor, No 17 Jinpan Road, Haikou, Hainan Province,
The People’s Republic of China 570216, +86-898-6681-1730.
OTHER
MATTERS
As
of the date of this Proxy Statement, the Board of Directors has no knowledge of any business which will be presented for consideration
at the Annual Meeting other than the election of directors and the adoption of the Amendment to the Plan. Should any other matters be
properly presented, it is intended that the enclosed proxy will be voted in accordance with the best judgment of the persons voting the
proxies.
It
is important that the proxies be returned promptly and that your shares be represented at the Annual Meeting. Stockholders are urged
to mark, date, execute and promptly return the accompanying proxy card in the enclosed envelope.
November 14, 2022 |
By Order of the Board of Directors |
|
|
|
/s/ Zhilin
Li |
|
Zhilin Li |
|
Chairman of the Board |
Appendix
A
CHINA
PHARMA HOLDINGS, INC.
AMENDED
AND RESTATED 2010 LONG-TERM INCENTIVE PLAN
1.
Purpose. The purpose of the China Pharma Holdings, Inc. Amended and Restated 2010 Long-Term Incentive Plan (the “Plan”)
is to further and promote the interests of China Pharma Holdings, Inc. (the “Company”), its Subsidiaries and its shareholders
by enabling the Company and its Subsidiaries to attract, retain and motivate employees (including officers), directors and consultants,
or those who will become employees, directors and consultants, and to align the interests of those individuals and the Company’s
shareholders. To do this, the Plan offers performance-based incentive awards and equity-based opportunities providing such employees,
directors and consultants with a proprietary interest in maximizing the growth, profitability and overall success of the Company and
its Subsidiaries. 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 Exchange Act.
2.
Definitions. For purposes of the Plan, the following terms shall have the meanings set forth below:
2.1
“Applicable Laws” means the requirements related to or implicated by the administration of the Plan under applicable
state corporate law, United States federal and state securities laws, the Code, any stock exchange or quotation system on which the shares
of Common Stock are listed or quoted, and the applicable laws of the PRC or any other country or jurisdiction where Awards are granted
under the Plan.
2.2
“Award” means an award or grant made to a Participant under Sections 6, 7, 8 and/or 9 of the Plan.
2.3
“Award Agreement” means the agreement executed by a Participant pursuant to Sections 3.2 and 15.7 of the Plan in connection
with the granting of an Award.
2.4
“Board” means the Board of Directors of the Company, as constituted from time to time.
2.5
“Code” means the Internal Revenue Code of 1986, as in effect and as amended from time to time, or any successor statute
thereto, together with any rules, regulations and interpretations promulgated thereunder or with respect thereto.
2.6
“Committee” means the committee of the Board established to administer the Plan, as described in Section 3 of the Plan.
2.7
“Common Stock” means the Common Stock, par value $.001 per share, of the Company or any security of the Company issued
by the Company in substitution or exchange therefor.
2.8
“Company” means China Pharma Holdings, Inc., a Nevada corporation, or any successor thereto.
2.9
“Exchange Act” means the Securities Exchange Act of 1934, as in effect and as amended from time to time, or any successor
statute thereto, together with any rules, regulations and interpretations promulgated thereunder or with respect thereto.
2.10
“Fair Market Value” with respect to a share of Company Stock on any relevant date shall be determined in accordance
with the following provisions:
(1)
If the Common Stock is publicly traded, “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 such date and shall mean (i) the closing price quoted on the national
securities exchange or national securities association that is the principal market for the Common Stock, or (ii) if the Common Stock
is not so listed, the last or closing price on the relevant date quoted on the OTC Bulletin Board Service or by Pink Sheets LLC or a
comparable service as determined in the Committee’s sole discretion; or (iii) if the Common Stock is not listed or quoted by any
of the above, the average of the closing bid and asked prices on the relevant date furnished by a professional market maker for the Common
Stock selected by the Committee in its sole discretion.
(2)
If Company Stock is not publicly traded, “Fair Market Value” shall be determined by the Board in its good faith best judgment
or by an independent appraisal that meets the requirements of Section 401(a)(28)(C) of the Code and the regulations thereunder as of
a date that is no more than twelve months before such date.
2.11
“Incentive Stock Option” means any stock option granted pursuant to the provisions of Section 6 of the Plan (and the
relevant Award Agreement) that is intended to be (and is specifically designated as) an “incentive stock option” within the
meaning of Section 422 of the Code.
2.12
“Non-Qualified Stock Option” means any stock option granted pursuant to the provisions of Section 6 of the Plan (and
the relevant Award Agreement) that is not (and is specifically designated as not being) an Incentive Stock Option.
2.13
“Participant” means any individual who is selected from time to time under Section 5 to receive an Award under the
Plan.
2.14
“Performance Units” means the monetary units granted under Section 9 of the Plan and the relevant Award Agreement.
2.15
“Plan” means the China Pharma Holdings, Inc. 2022 Long-Term Incentive Plan, as set forth herein and as in effect and
as amended from time to time (together with any rules and regulations promulgated by the Committee with respect thereto).
2.16
“PRC” means People’s Republic of China.
2.17
“Restricted Shares” means the restricted shares of Common Stock granted pursuant to the provisions of Section 8 of the
Plan and the relevant Award Agreement.
2.18
“Stock Appreciation Right” means an Award described in Section 7.2 of the Plan and granted pursuant to the provisions
of Section 7 of the Plan.
2.19
“Subsidiary(ies)” means any corporation (other than the Company) in an unbroken chain of corporations, including and
beginning with the Company, if each of such corporations, other than the last corporation in the unbroken chain, owns, directly or indirectly,
more than fifty percent (50%) of the voting stock in one of the other corporations in such chain, including without limitation, Onny
Investment Limited and Hainan Helpson Medical & Biotechnology Co., Ltd.
3.
Administration.
3.1
The Committee. The Plan shall be administered by the Committee. The Committee shall be appointed from time to time by the
Board and shall be comprised of not less than two (2) of the then members of the Board who are Non-Employee Directors (within the meaning
of SEC Rule 16b-3(b)(3)) of the Company. Consistent with the Bylaws of the Company, members of the Committee shall serve at the pleasure
of the Board and the Board, subject to the immediately preceding sentence, may at any time and from time to time remove members from,
or add members to, the Committee. If no such Committee is appointed, the Plan shall be administered by the Board.
3.2
Plan Administration and Plan Rules. The Committee is authorized to construe and interpret the Plan and to promulgate, amend
and rescind rules and regulations relating to the implementation, administration and maintenance of the Plan. Subject to the terms and
conditions of the Plan, the Committee shall make all determinations necessary or advisable for the implementation, administration and
maintenance of the Plan, including, without limitation, (a) selecting the Plan’s Participants, (b) making Awards in such amounts
and form as the Committee shall determine, (c) imposing such restrictions, terms and conditions upon such Awards as the Committee shall
deem appropriate, (d) determining the denomination of any Award, including U.S. Dollars, Chinese Renminbi or other local currency, and
(e) correcting any technical defect(s) or technical omission(s), or reconciling any technical inconsistency(ies), in the Plan and/or
any Award Agreement. The Committee also may modify the purchase price or the exercise price of any outstanding Award, provided,
however, if the modification effects a repricing, shareholder approval shall be required before the repricing is effective. The
Committee may designate persons other than members of the Committee to carry out the day-to-day ministerial administration of the Plan
under such conditions and limitations as it may prescribe, except that the Committee shall not delegate its authority with regard to
the selection for participation in the Plan and/or the granting of any Awards to Participants. The Committee’s determinations under
the Plan need not be uniform and may be made selectively among Participants, whether or not such Participants are similarly situated.
Any determination, decision or action of the Committee in connection with the construction, interpretation, administration, implementation
or maintenance of the Plan shall be final, conclusive and binding upon all Participants and any person(s) claiming under or through any
Participants. The Company shall effect the granting of Awards under the Plan, in accordance with the determinations made by the Committee,
by execution of written agreements and/or other instruments in such form as is approved by the Committee. The Committee may, in its sole
discretion, delegate its authority to one or more senior executive officers for the purpose of making Awards to Participants who are
not subject to Section 16 of the Exchange Act.
3.3
Liability Limitation. Neither the Board nor the Committee, nor any member of either, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection with the Plan (or any Award Agreement), and the members
of the Board and the Committee shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage
or expense (including, without limitation, attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law
and/or under any directors and officers liability insurance coverage which may be in effect from time to time.
3.4
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 alternatives versions shall increase the share limitations contained within Section
4.2 of the Plan. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that
would violate Applicable Laws, including, without limitation, the laws of the United States and the PRC.
4.
Term of Plan/Common Stock Subject to Plan.
4.1
Term. The Plan shall terminate on December 31, 2029, except with respect to Awards then outstanding. After such date no further
Awards shall be granted under the Plan.
4.2
Common Stock. The maximum number of shares of Common Stock in respect of which Awards may be granted or paid out under the
Plan, subject to adjustment as provided in Section 13.2 of the Plan, shall not exceed 14,000,000 shares, all of which may be issued as
Awards, including, but not limited to, Incentive Stock Options. In the event of a change in the Common Stock of the Company that is limited
to a change in the designation thereof to “Capital Stock” or other similar designation, or to a change in the par value thereof,
or from par value to no par value, without increase or decrease in the number of issued shares, the shares resulting from any such change
shall be deemed to be the Common Stock for purposes of the Plan. Common Stock which may be issued under the Plan may be either authorized
and unissued shares or issued shares which have been reacquired by the Company (in the open-market or in private transactions) and which
are being held as treasury shares. No fractional shares of Common Stock shall be issued under the Plan.
4.3
Computation of Available Shares. For the purpose of computing the total number of shares of Common Stock available for Awards
under the Plan, there shall be counted against the limitations set forth in Section 4.2 of the Plan the maximum number of shares of Common
Stock potentially subject to issuance upon exercise or settlement of Awards granted under Sections 6 and 7 of the Plan, the number of
shares of Common Stock issued under grants of Restricted Shares pursuant to Section 8 of the Plan and the number of shares of Common
Stock potentially issuable under grants or payments of Performance Units pursuant to Section 9 of the Plan, in each case determined as
of the date on which such Awards are granted. If any Awards expire unexercised or are forfeited, surrendered, cancelled, terminated or
settled in cash in lieu of Common Stock, the shares of Common Stock which were theretofore subject (or potentially subject) to such Awards
shall again be available for Awards under the Plan to the extent of such expiration, forfeiture, surrender, cancellation, termination
or settlement of such Awards.
5.
Eligibility. Individuals eligible for Awards under the Plan shall consist of employees (including officers), directors and
consultants, or those who will become employees (including officers), directors and consultants, of the Company and/or its Subsidiaries
whose performance or contribution, in the sole discretion of the Committee, benefits or will benefit the Company or any Subsidiary.
6.
Stock Options.
6.1
Terms and Conditions. Stock options granted under the Plan shall be in respect of Common Stock and may be in the form of Incentive
Stock Options or Non-Qualified Stock Options (sometimes referred to collectively herein as the “Stock Option(s))”. Such Stock
Options shall be subject to the terms and conditions set forth in this Section 6 and any additional terms and conditions, not inconsistent
with the express terms and provisions of the Plan, as the Committee shall set forth in the relevant Award Agreement.
6.2
Grant. Stock Options may be granted under the Plan in such form as the Committee may from time to time approve. Stock Options
may be granted alone or in addition to other Awards under the Plan or in tandem with Stock Appreciation Rights. Special provisions shall
apply to Incentive Stock Options granted to any employee who owns (within the meaning of Section 422(b)(6) of the Code) more than ten
percent (10%) of the total combined voting power of all classes of stock of the Company or its parent corporation or any subsidiary of
the Company, within the meaning of Sections 424(e) and (f) of the Code (a “10% Shareholder”).
6.3
Exercise Price. The exercise price per share of Common Stock subject to a Stock Option shall be determined by the Committee;
provided, however, that the exercise price of a Stock Option shall not be less than one hundred percent (100%) of the Fair
Market Value of the Common Stock on the date of the grant of such Stock Option; provided, further, however, that,
in the case of a 10% Shareholder, the exercise price of an Incentive Stock Option shall not be less than one hundred ten percent (110%)
of the Fair Market Value of the Common Stock on the date of grant.
6.4
Term. The term of each Stock Option shall be such period of time as is fixed by the Committee; provided, however,
that the term of any Incentive Stock Option shall not exceed ten (10) years (five (5) years, in the case of a 10% Shareholder) after
the date immediately preceding the date on which the Incentive Stock Option is granted.
6.5
Method of Exercise. A Stock Option may be exercised, in whole or in part, by giving written notice of exercise to the Secretary
of the Company, or the Secretary’s designee, specifying the number of shares to be purchased. Such notice shall be accompanied
by payment in full of the exercise price in cash, by certified check, bank draft, or money order payable to the order of the Company,
if permitted by the Committee in its sole discretion, by delivery of shares of Common Stock satisfying such requirements as the Committee
shall establish, or through such other mechanism as the Committee shall permit, in its sole discretion. Payment instruments shall be
received by the Company subject to collection. The proceeds received by the Company upon exercise of any Stock Option may be used by
the Company for general corporate purposes. Any portion of a Stock Option that is exercised may not be exercised again.
6.6
Tandem Grants. If Non-Qualified Stock Options and Stock Appreciation Rights are granted in tandem, as designated in the relevant
Award Agreements, the right of a Participant to exercise any such tandem Stock Option shall terminate to the extent that the shares of
Common Stock subject to such Stock Option are used to calculate amounts or shares receivable upon the exercise of the related tandem
Stock Appreciation Right.
7.
Stock Appreciation Rights.
7.1
Terms and Conditions. The grant of Stock Appreciation Rights under the Plan shall be subject to the terms and conditions set
forth in this Section 7 and any additional terms and conditions, not inconsistent with the express terms and provisions of the Plan,
as the Committee shall set forth in the relevant Award Agreement.
7.2
Stock Appreciation Rights. A Stock Appreciation Right is an Award granted with respect to a specified number of shares of
Common Stock entitling a Participant to receive an amount equal to the excess of the Fair Market Value of a share of Common Stock on
the date of exercise over the Fair Market Value of a share of Common Stock on the date of grant of the Stock Appreciation Right, multiplied
by the number of shares of Common Stock with respect to which the Stock Appreciation Right shall have been exercised.
7.3
Grant. A Stock Appreciation Right may be granted in addition to any other Award under the Plan or in tandem with or independent
of a Non-Qualified Stock Option.
7.4
Date of Exercisability. In respect of any Stock Appreciation Right granted under the Plan, unless otherwise (a) determined
by the Committee (in its sole discretion) at any time and from time to time in respect of any such Stock Appreciation Right, or (b) provided
in the Award Agreement, a Stock Appreciation Right may be exercised by a Participant, in accordance with and subject to all of the procedures
established by the Committee, in whole or in part at any time and from time to time during its specified term. The Committee may also
provide, as set forth in the relevant Award Agreement and without limitation, that some Stock Appreciation Rights shall be automatically
exercised and settled on one or more fixed dates specified therein by the Committee.
7.5
Form of Payment. Upon exercise of a Stock Appreciation Right, payment may be made in cash, in Restricted Shares or in shares
of unrestricted Common Stock, or in any combination thereof, as the Committee, in its sole discretion, shall determine and provide in
the relevant Award Agreement.
7.6
Tandem Grant. The right of a Participant to exercise a tandem Stock Appreciation Right shall terminate to the extent such
Participant exercises the Non-Qualified Stock Option to which such Stock Appreciation Right is related.
8.
Restricted Shares.
8.1
Terms and Conditions. Grants of Restricted Shares shall be subject to the terms and conditions set forth in this Section 8
and any additional terms and conditions, not inconsistent with the express terms and provisions of the Plan, as the Committee shall set
forth in the relevant Award Agreement. Restricted Shares may be granted alone or in addition to any other Awards under the Plan. Subject
to the terms of the Plan, the Committee shall determine the number of Restricted Shares to be granted to a Participant and the Committee
may provide or impose different terms and conditions on any particular Restricted Share grant made to any Participant. With respect to
each Participant receiving an Award of Restricted Shares, there shall be issued a stock certificate (or certificates) in respect of such
Restricted Shares. Such stock certificate(s) shall be registered in the name of such Participant, shall be accompanied by a stock power
duly executed by such Participant, and shall bear, among other required legends, the following legend:
“THE
TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING, WITHOUT
LIMITATION, FORFEITURE EVENTS) CONTAINED IN THE CHINA PHARMA HOLDINGS, INC. AMENDED AND RESTATED 2010 LONG-TERM INCENTIVE PLAN AND AN
AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER HEREOF AND CHINA PHARMA HOLDINGS, INC. (THE “COMPANY”). COPIES
OF SUCH PLAN AND AWARD AGREEMENT ARE ON FILE AT THE PRINCPAL EXECUTIVE OFFICES OF THE COMPANY. THE COMPANY WILL FURNISH TO THE RECORDHOLDER
OF THIS CERTIFICATE, WITHOUT CHARGE AND UPON WRITTEN REQUEST AT ITS PRINCIPAL EXECUTIVE OFFICES, A COPY OF SUCH PLAN AND AWARD AGREEMENT.
THE COMPANY RESERVES THE RIGHT TO REFUSE TO RECORD THE TRANSFER OF THIS CERTIFICATE UNTIL ALL SUCH RESTRICTIONS ARE SATISFIED, ALL SUCH
TERMS ARE COMPLIED WITH AND ALL SUCH CONDITIONS ARE SATISFIED.”
Such
stock certificate evidencing such shares shall, in the sole discretion of the Committee, be deposited with and held in custody by the
Company until the restrictions thereon shall have lapsed and all of the terms and conditions applicable to such grant shall have been
satisfied.
8.2
Restricted Share Grants. A grant of Restricted Shares is an Award of shares of Common Stock granted to a Participant, subject
to such restrictions, terms and conditions as the Committee deems appropriate, including, without limitation, (a) restrictions on the
sale, assignment, transfer, hypothecation or other disposition of such shares, (b) the requirement that the Participant deposit such
shares with the Company while such shares are subject to such restrictions, and (c) the requirement that such shares be forfeited upon
termination of employment for specified reasons within a specified period of time or for other reasons (including, without limitation,
the failure to achieve designated performance goals).
8.3
Restriction Period. In accordance with Sections 8.1 and 8.2 of the Plan and unless otherwise determined by the Committee (in
its sole discretion) at any time and from time to time, Restricted Shares shall only become unrestricted and vested in the Participant
in accordance with such vesting schedule relating to such Restricted Shares, if any, as the Committee may establish in the relevant Award
Agreement (the “Restriction Period”). During the Restriction Period, such stock shall be and remain unvested and a Participant
may not sell, assign, transfer, pledge, encumber or otherwise dispose of or hypothecate such Award. Upon satisfaction of the vesting
schedule and any other applicable restrictions, terms and conditions, the Participant shall be entitled to receive payment of the Restricted
Shares or a portion thereof, as the case may be, as provided in Section 8.4 of the Plan.
8.4
Payment of Restricted Share Grants. After the satisfaction and/or lapse of the restrictions, terms and conditions established
by the Committee in respect of a grant of Restricted Shares, a new certificate, without the legend set forth in Section 8.1 of the Plan,
for the number of shares of Common Stock which are no longer subject to such restrictions, terms and conditions shall, as soon as practicable
thereafter, be delivered to the Participant. In the event the shares are not registered with the U.S. Securities and Exchange Commission,
the new certificate shall bear a standard legend pursuant to Securities Act of 1933 as in effect and as amended from time to time.
8.5
Shareholder Rights. A Participant shall have, with respect to the shares of Common Stock underlying a grant of Restricted
Shares, all of the rights of a shareholder of such stock, including the right to receive all dividends or other distributions made or
paid in respect of such Restricted Shares and the right to vote Restricted Shares at regular or special meetings of the stockholders
of the Corporation (except as such rights are limited or restricted under the Plan or in the relevant Award Agreement). Any stock dividends
paid in respect of unvested Restricted Shares shall be treated as additional Restricted Shares and shall be subject to the same restrictions
and other terms and conditions that apply to the unvested Restricted Shares in respect of which such stock dividends are issued.
9.
Performance Units.
9.1
Terms and Conditions. Performance Units shall be subject to the terms and conditions set forth in this Section 9 and any additional
terms and conditions, not inconsistent with the express provisions of the Plan, as the Committee shall set forth in the relevant Award
Agreement.
9.2
Performance Unit Grants. A Performance Unit is an Award of units (with each unit representing such monetary amount as is designated
by the Committee in the Award Agreement) granted to a Participant, subject to such terms and conditions as the Committee deems appropriate,
including, without limitation, the requirement that the Participant forfeit such units (or a portion thereof) in the event certain performance
criteria or other conditions are not met within a designated period of time.
9.3
Grants. Performance Units may be granted alone or in addition to any other Awards under the Plan. Subject to the terms of
the Plan, the Committee shall determine the number of Performance Units to be granted to a Participant and the Committee may impose different
terms and conditions on any particular Performance Units granted to any Participant.
9.4
Performance Goals and Performance Periods. Participants receiving a grant of Performance Units shall only earn into and be
entitled to payment in respect of such Awards if the Company and/or the Participant achieves certain performance goals (the “Performance
Goals”) during and in respect of a designated performance period (the “Performance Period”). The Performance Goals
and the Performance Period shall be established by the Committee, in its sole discretion. The Committee shall establish Performance Goals
for each Performance Period prior to, or as soon as practicable after, the commencement of such Performance Period. The Committee shall
also establish a schedule or schedules for Performance Units setting forth the portion of the Award which will be earned or forfeited
based on the degree of achievement, or lack thereof, of the Performance Goals at the end of the relevant Performance Period. In setting
Performance Goals, the Committee may use, but shall not be limited to, such measures as total shareholder return, return on equity, net
earnings growth, sales or revenue growth, cash flow, comparisons to peer companies, individual or aggregate Participant performance or
such other measure or measures of performance as the Committee, in its sole discretion, may deem appropriate. Such performance measures
shall be defined as to their respective components and meaning by the Committee (in its sole discretion). During any Performance Period,
the Committee shall have the authority to adjust the Performance Goals and/or the Performance Period in such manner as the Committee,
in its sole discretion, deems appropriate at any time and from time to time.
9.5
Payment of Units. With respect to each Performance Unit, the Participant shall, if the applicable Performance Goals have been
achieved, or partially achieved, as determined by the Committee in its sole discretion, by the Company and/or the Participant during
the relevant Performance Period, be entitled to receive payment in an amount equal to the designated value of each Performance Unit times
the number of such units so earned. Payment in settlement of earned Performance Units shall be made as soon as practicable following
the conclusion of the respective Performance Period in cash, in unrestricted Common Stock, or in Restricted Shares, or in any combination
thereof, as the Committee in its sole discretion, shall determine and provide in the relevant Award Agreement.
10.
Reserved.
11.
Dividend Equivalents. In addition to the provisions of Section 8.5 of the Plan, Awards of Stock Options, and/or Stock Appreciation
Rights, may, in the sole discretion of the Committee and if provided for in the relevant Award Agreement, earn dividend equivalents.
In respect of any such Award which is outstanding on a dividend record date for Common Stock, the Participant shall be credited with
an amount equal to the amount of cash or stock dividends that would have been paid on the shares of Common Stock covered by such Award
had such covered shares been issued and outstanding on such dividend record date. The Committee shall establish such rules and procedures
governing the crediting of such dividend equivalents, including, without limitation, the amount, the timing, form of payment and payment
contingencies and/or restrictions of such dividend equivalents, as it deems appropriate or necessary.
12.
Non-transferability of Awards. Unless otherwise provided in the Award Agreement, no Award under the Plan or any Award Agreement,
and no rights or interests herein or therein, shall or may be assigned, transferred, sold, exchanged, encumbered, pledged, or otherwise
hypothecated or disposed of by a Participant or any beneficiary(ies) of any Participant, except by testamentary disposition by the Participant
or the laws of intestate succession. No such interest shall be subject to execution, attachment or similar legal process, including,
without limitation, seizure for the payment of the Participant’s debts, judgments, alimony, or separate maintenance. Unless otherwise
provided in the Award Agreement, during the lifetime of a Participant, Stock Options and Stock Appreciation Rights are exercisable only
by the Participant.
13.
Changes in Capitalization and Other Matters.
13.1
No Corporate Action Restriction. The existence of the Plan, any Award Agreement and/or the Awards granted hereunder shall
not limit, affect or restrict in any way the right or power of the Board or the shareholders of the Company to make or authorize (a)
any adjustment, recapitalization, reorganization or other change in the Company’s or any Subsidiary’s capital structure or
its business, (b) any merger, consolidation or change in the ownership of the Company or any Subsidiary, (c) any issue of bonds, debentures,
capital, preferred or prior preference stocks ahead of or affecting the Company’s or any Subsidiary’s capital stock or the
rights thereof, (d) any dissolution or liquidation of the Company or any Subsidiary, (e) any sale or transfer of all or any part of the
Company’s or any Subsidiary’s assets or business, or (f) any other corporate act or proceeding by the Company or any Subsidiary.
No Participant, beneficiary or any other person shall have any claim against any member of the Board or the Committee, the Company or
any Subsidiary, or any employees, officers, shareholders or agents of the Company or any subsidiary, as a result of any such action.
13.2
Recapitalization Adjustments. In the event that the Board determines that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Common Stock or other securities of the Company, or
other corporate transaction or event affects the Common Stock such that an adjustment is determined by the Board, in its sole discretion,
to be necessary or appropriate in order to prevent dilution or enlargement of benefits or potential benefits intended to be made available
under the Plan, the Board may, in such manner as it in good faith deems equitable, adjust any or all of (i) the number of shares of Common
Stock or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted,
(ii) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or property) subject
to outstanding Awards, and (iii) the exercise price with respect to any Stock Option, or make provision for an immediate cash payment
to the holder of an outstanding Award in consideration for the cancellation of such Award.
13.3
Mergers. If the Company enters into or is involved in any merger, reorganization, recapitalization, sale of all or substantially
all of the Company’s assets, liquidation, or business combination with any person or entity (such merger, reorganization, recapitalization,
sale of all or substantially all of the Company’s assets, liquidation, or business combination to be referred to herein as a “Merger
Event”), the Board may take such action as it deems appropriate, including, but not limited to, replacing such Stock Options and/or
Stock Appreciation Rights with substitute stock options and/or stock appreciation rights in respect of the shares, other securities or
other property of the surviving corporation or any affiliate of the surviving corporation on such terms and conditions, as to the number
of shares, pricing and otherwise, which shall substantially preserve the value, rights and benefits of any affected Stock Options or
Stock Appreciation Rights granted hereunder as of the date of the consummation of the Merger Event. Notwithstanding anything to the contrary
in the Plan, if any Merger Event occurs, the Company shall have the right, but not the obligation, to cancel each Participant’s
Stock Options and/or Stock Appreciation Rights and to pay to each affected Participant in connection with the cancellation of such Participant’s
Stock Options and/or Stock Appreciation Rights, an amount equal to the excess of the Fair Market Value, as determined by the Board, of
the Common Stock underlying any unexercised Stock Options or Stock Appreciation Rights (whether then exercisable or not) over the aggregate
exercise price of such unexercised Stock Options and/or Stock Appreciation Rights.
Upon
receipt by any affected Participant of any such substitute stock options, stock appreciation rights (or payment) as a result of any such
Merger Event, such Participant’s affected Stock Options and/or Stock Appreciation Rights for which such substitute options and/or
stock appreciation rights (or payment) were received shall be thereupon cancelled without the need for obtaining the consent of any such
affected Participant.
14.
Amendment, Suspension and Termination.
14.1
In General. The Board may suspend or terminate the Plan (or any portion thereof) at any time and may amend the Plan at any
time and from time to time in such respects as the Board may deem advisable to insure that any and all Awards conform to or otherwise
reflect any change in Applicable Laws or regulations, or to permit the Company or the Participants to benefit from any change in Applicable
Laws or regulations, or in any other respect the Board may deem to be in the best interests of the Company or any Subsidiary. No such
amendment, suspension or termination shall (x) materially adversely effect the rights of any Participant under any outstanding Stock
Options, Stock Appreciation Rights, Performance Units, or Restricted Share grants, without the consent of such Participant, or (y) increase
the number of shares available for Awards pursuant to Section 4.2, without shareholder approval; provided, however, that
the Board may amend the Plan, without the consent of any Participants, in any way it deems appropriate to satisfy Code Section 409A and
any regulations or other authority promulgated thereunder, including any amendment to the Plan to cause certain Awards not to be subject
to Code Section 409A. Notwithstanding anything herein to the contrary, no amendment shall be effective unless approved by the shareholders
of the Company to the extent shareholder approval is necessary to satisfy any Applicable Laws. At the time of such amendment, the Board
shall determine, upon advice from counsel, whether such amendment will be contingent on shareholder approval.
14.2
Award Agreement Modifications. The Committee may (in its sole discretion) amend or modify at any time and from time to time
the terms and provisions of any outstanding Stock Options, Stock Appreciation Rights, Performance Units, or Restricted Share grants,
in any manner to the extent that the Committee under the Plan or any Award Agreement could have initially determined the restrictions,
terms and provisions of such Stock Options, Stock Appreciation Rights, Performance Units, and/or Restricted Share grants, including,
without limitation, changing or accelerating (a) the date or dates as of which such Stock Options or Stock Appreciation Rights shall
become exercisable, (b) the date or dates as of which such Restricted Share grants shall become vested, or (c) the performance period
or goals in respect of any Performance Units. No such amendment or modification shall, however, materially adversely affect the rights
of any Participant under any such Award without the consent of such Participant; provided, however, that the Committee
may amend an Award without the consent of the Participant, in any way it deems appropriate to satisfy Code Section 409A and any regulations
or other authority promulgated thereunder, including any amendment to or modification of such Award to cause such Award not to be subject
to Code Section 409A.
15.
Miscellaneous.
15.1
Forfeiture Events. The Board may specify in an Award Agreement that the Participant’s rights, payments and benefits
with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events,
in addition to applicable vesting conditions of an Award. Such events may include, without limitation, breach of non-competition, non-solicitation,
confidentiality, or other restrictive covenants that are contained in the Award Agreement or otherwise applicable to the Participant,
a termination of the Participant’s employment by or service to the Company for cause, or other conduct by the Participant that
is detrimental to the business or reputation of the Company and/or its affiliates.
15.2
Clawback. Notwithstanding any other provisions in this Plan, the Company may cancel any Award, require reimbursement of any
Award by a Participant, and effect any other right of recoupment of equity or other compensation provided under the Plan in accordance
with any Company policies that may be adopted and/or modified from time to time (“Clawback Policy”). In addition, a Participant
may be required to repay to the Company previously paid compensation, whether provided pursuant to the Plan or an Award Agreement, in
accordance with the Clawback Policy. By accepting an Award, the Participant is agreeing to be bound by the Clawback Policy, as in effect
or as may be adopted and/or modified from time to time by the Company in its discretion (including, without limitation, to comply with
Applicable Law or stock exchange listing requirements).
15.3
Tax Withholding. The Company shall have the right to deduct from any payment or settlement under the Plan, including, without
limitation, the exercise of any Stock Option or Stock Appreciation Right, or the delivery, transfer or vesting of any Common Stock or
Restricted Shares, any federal, state, local or other taxes of any kind, including without limitation, taxes required to be withheld
under the tax laws, rules, regulations and governmental orders of the PRC, which the Committee, in its sole discretion, deems necessary
to be withheld to comply with the Code and/or any other Applicable Law, rule or regulation. Shares of Common Stock may be used to satisfy
any such tax withholding. Such Common Stock shall be valued based on the Fair Market Value of such stock as of the date the tax withholding
is required to be made, such date to be determined by the Committee. In addition, the Company shall have the right to require payment
from a Participant to cover any applicable withholding or other employment taxes due upon any payment or settlement under the Plan.
15.4
No Right to Employment. Neither the adoption of the Plan, the granting of any Award, nor the execution of any Award Agreement,
shall confer upon any employee of the Company or any Subsidiary any right to continued employment with the Company or any Subsidiary,
as the case may be, nor shall it interfere in any way with the right, if any, of the Company or any Subsidiary to terminate the employment
of any employee at any time for any reason.
15.5
Unfunded Plan. The Plan shall be unfunded and the Company shall not be required to segregate any assets in connection with
any Awards under the Plan. Any liability of the Company to any person with respect to any Award under the Plan or any Award Agreement
shall be based solely upon the contractual obligations that may be created as a result of the Plan or any such award or agreement. No
such obligation of the Company shall be deemed to be secured by any pledge of, encumbrance on, or other interest in, any property or
asset of the Company or any Subsidiary. Nothing contained in the Plan or any Award Agreement shall be construed as creating in respect
of any Participant (or beneficiary thereof or any other person) any equity or other interest of any kind in any assets of the Company
or any Subsidiary or creating a trust of any kind or a fiduciary relationship of any kind between the Company, any Subsidiary and/or
any such Participant, any beneficiary thereof or any other person.
15.6
Payments to a Trust. The Committee is authorized to cause to be established a trust agreement or several trust agreements
or similar arrangements from which the Committee may make payments of amounts due or to become due to any Participants under the Plan.
15.7
Other Company Benefit and Compensation Programs. Payments and other benefits received by a Participant under an Award made
pursuant to the Plan shall not be deemed a part of a Participant’s compensation for purposes of the determination of benefits under
any other employee welfare or benefit plans or arrangements, if any, provided by the Company or any Subsidiary unless expressly provided
in such other plans or arrangements, or except where the Board expressly determines in writing that inclusion of an Award or portion
of an Award should be included to accurately reflect competitive compensation practices or to recognize that an Award has been made in
lieu of a portion of competitive annual base salary or other cash compensation. Awards under the Plan may be made in addition to, in
combination with, or as alternatives to, grants, awards or payments under any other plans or arrangements of the Company or its Subsidiaries.
The existence of the Plan notwithstanding, the Company or any Subsidiary may adopt such other compensation plans or programs and additional
compensation arrangements as it deems necessary to attract, retain and motivate employees.
15.8
Listing, Registration and Other Legal Compliance. No Awards or shares of the Common Stock shall be required to be issued or
granted under the Plan unless legal counsel for the Company shall be satisfied that such issuance or grant will be in compliance with
all applicable federal, state or other securities laws and regulations and any other Applicable Laws or regulations. The Committee may
require, as a condition of any payment or share issuance, that certain agreements, undertakings, representations, certificates, and/or
information, as the Committee may deem necessary or advisable, be executed or provided to the Company to assure compliance with all such
Applicable Laws or regulations. Certificates for shares of the Restricted Shares and/or Common Stock delivered under the Plan may be
subject to such stock-transfer orders and such other restrictions as the Committee may deem advisable under the rules, regulations, or
other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock, or any depositary receipt
evidencing an interest in Common Stock, is then listed, and any applicable federal, state or other securities law. In addition, if, at
any time specified herein (or in any Award Agreement or otherwise) for (a) the making of any Award, or the making of any determination,
(b) the issuance or other distribution of Restricted Shares and/or Common Stock, or (c) the payment of amounts to or through a Participant
with respect to any Award, any law, rule, regulation or other requirement of any governmental authority or agency shall require either
the Company, any Subsidiary or any Participant (or any estate, designated beneficiary or other legal representative thereof) to take
any action in connection with any such determination, any such shares to be issued or distributed, any such payment, or the making of
any such determination, as the case may be, shall be deferred until such required action is taken. With respect to persons subject to
Section 16 of the Exchange Act, transactions under the Plan are intended to comply with all applicable conditions of SEC Rule 16b-3.
15.9
Award Agreements. Each Participant receiving an Award under the Plan shall enter into an Award Agreement with the Company
in a form specified by the Committee. Each such Participant shall agree to the restrictions, terms and conditions of the Award set forth
therein and in the Plan.
15.10
Designation of Beneficiary. Each Participant to whom an Award has been made under the Plan may designate a beneficiary or
beneficiaries to exercise any option or to receive any payment which under the terms of the Plan and the relevant Award Agreement may
become exercisable or payable on or after the Participant’s death. At any time, and from time to time, any such designation may
be changed or cancelled by the Participant without the consent of any such beneficiary. Any such designation, change or cancellation
must be on a form provided for that purpose by the Committee and shall not be effective until received by the Committee. If no beneficiary
has been designated by a deceased Participant, or if the designated beneficiaries have predeceased the Participant, the beneficiary shall
be the Participant’s estate. If the Participant designates more than one beneficiary, any payments under the Plan to such beneficiaries
shall be made in equal shares unless the Participant has expressly designated otherwise, in which case the payments shall be made in
the shares designated by the Participant.
15.11
Leaves of Absence/Transfers. The Committee shall have the power to promulgate rules and regulations and to make determinations,
as it deems appropriate, under the Plan in respect of any leave of absence from the Company or any Subsidiary granted to a Participant.
Without limiting the generality of the foregoing, the Committee may determine whether any such leave of absence shall be treated as if
the Participant has terminated employment with the Company or any such Subsidiary. If a Participant transfers within the Company, or
to or from any Subsidiary, such Participant shall not be deemed to have terminated employment as a result of such transfers.
15.12
Designated Participants.
15.12.1
Designation of Participant, Appointment of Trustee. 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 Company, 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 Company;
(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 the Plan; and
(iv)
after deducting its costs, fees and expenses as contemplated under subsection 15.12.4, 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.
15.12.2
Restrictions on Method of Exercise. Without limiting the scope of its authorities under the Plan, the Committee may at any
time impose restrictions on the method of exercise of Designated Award, such that upon exercise of the Designated Award, the Designated
Participant (or the Trustee action on the Designated Participant’s behalf) does not receive shares of Common Stock and receives
only cash, in the amount and denomination determined by the Committee.
15.12.3
Termination of Appointment of Trustee. An appointment of a Trustee pursuant to the terms of the Plan 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.
15.12.4
Trustee Expenses. The Trustee may deduct from the proceeds of sales or other transactions involving the Designated Award or,
as applicable, shares of Common Stock 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.
15.13
Code Section 409A. This Plan and all Awards hereunder are intended to comply with the requirements of Code Section 409A and
any regulations or other authority promulgated thereunder. Notwithstanding any provision of the Plan or any Award Agreement to the contrary,
the Board and the Committee reserve the right (without the consent of any Participant and without any obligation to do so or to indemnify
any Participant or the beneficiaries of any Participant for any failure to do so) to amend this Plan and/or any Award Agreement as and
when necessary or desirable to conform to or otherwise properly reflect any guidance issued under Code Section 409A after the date hereof
without violating Code Section 409A. In the event that any payment or benefit made hereunder would constitute payments or benefits pursuant
to a non-qualified deferred compensation plan within the meaning of Code Section 409A and, at the time of a Participant’s “separation
from service”, such Participant is a “specified employee” within the meaning of Code Section 409A, then any such payments
or benefits shall be delayed until the six-month anniversary of the date of such Participant’s “separation from service”.
Each payment made under this Plan shall be designated as a “separate payment” within the meaning of Code Section 409A.
15.14
Disqualifying Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424 of the Code)
of all or any portion of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two years from the grant date
of such Incentive Stock Option or within one year after the issuance of the shares of Common Stock acquired upon exercise of such Incentive
Stock Option (a “Disqualifying Disposition”) shall be required to immediately advise the Company in writing as to the occurrence
of the sale and the price realized upon the sale of such shares of Common Stock.
15.15
Governing Law. The Plan and all actions taken thereunder shall be governed by and construed in accordance with the laws of
the State of New York, without reference to the principles of conflict of laws thereof. Any titles and headings herein are for reference
purposes only, and shall in no way limit, define or otherwise affect the meaning, construction or interpretation of any provisions of
the Plan.
15.16
Effective Date. The Plan shall be effective upon its approval by the Board and adoption by the Company, subject to the approval
of the Plan by the Company’s shareholders in accordance with Section 422 of the Code.
IN
WITNESS WHEREOF, this Plan was adopted by the Company on November 12, 2010, was subsequently amended on December 20, 2019, and December
27, 2021, and is amended and restated as the China Pharma Holdings, Inc. Amended and Restated 2010 Long-Term Incentive Plan, on December
28, 2022.
|
CHINA PHARMA HOLDINGS, INC. |
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|
|
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By: |
/s/
Zhilin Li |
|
Name: |
Zhilin Li |
|
Title: |
Chief Executive Officer |
AMENDED
AND RESTATED
ARTICLES
OF INCORPORATION
OF
CHINA
PHARMA HOLDINGS, INC.
(Pursuant
to NRS 78)
ARTICLE
I
The
name of the corporation (which is hereinafter referred to as the “Corporation”) is China Pharma Holdings, Inc.
ARTICLE
II
The
address of the registered office of the Corporation in the State of Nevada is 10 Bodie Drive, Carson City, NV 89706. The name of the
registered agent of the Corporation is Unisearch, Inc.
ARTICLE
III
The
purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the provisions of
Chapter 78 of the Nevada Revised Statutes.
ARTICLE
IV
SECTION
1. Common Stock. The aggregate number of shares of Common Stock which the Corporation shall have authority to issue is 500,000,000
at a par value of $0.001 per share. All stock, when issued shall be fully paid and non-assessable, shall be of the same class and have
the same rights and preferences.
Each
share of Common Stock shall be entitled to one vote at a stockholder’s meeting, either in person or by proxy. Cumulative voting
in elections of Directors and all other matters brought before stockholder meetings, whether they be annual or special, shall not be
permitted.
The
holders of the capital stock of the Corporation shall not be personally liable for the payment of the Corporation’s debts; and
the private property of the holders of the capital stock of the Corporation shall not be subject to the payment of debts of the Corporation
to any extent whatsoever.
Stockholders
of the Corporation shall not have any preemptive rights to subscribe for additional issues of stock of the Corporation except as may
be agreed upon from time to time by the Corporation and any such stockholder.
As
of the close of business on [effective date](“Effective Time), each [ten (10)] shares of the Corporation’s Common Stock,
par value $0.001 per share, issued and outstanding immediately prior to the Effective Time (the “Old Common Stock”), will
automatically and without any action on the part of the respective holders thereof be combined, reclassified and changed into one (1)
share of Common Stock, par value $0.001 per share, of the Corporation (the “New Common Stock”) (the “Reverse Stock
Split”). Notwithstanding the immediately preceding sentence, provided, however, no fractional shares of Common Stock shall
be issued in connection with the Reverse Stock Split, and instead, the Corporation shall issue one full share of post-Reverse Stock
Split Common Stock to any stockholder who would have been entitled to receive a fractional share of Common Stock as a result of
the Reverse Stock Split.
Each
holder of Common Stock will hold the same percentage of the outstanding Common Stock immediately following the Reverse Stock Split as
that stockholder did immediately prior to the Reverse Stock Split, except for minor adjustments due to the additional net share fraction
that will need to be issued as a result of the treatment of fractional shares.
SECTION
2. Preferred Stock. The aggregate number of shares of Preferred Stock which the Corporation shall have authority to issue is 5,000,000,
par value $0.001, which may be issued in series, with such designations, preferences, stated values, rights, qualifications or limitations
as determined solely by the Board of Directors of the Corporation. The Board of Directors is hereby vested with authority to fix such
designations, preferences and relative participating, optional or other special rights or qualifications, limitations, or restrictions
for each series, including, but not by way of limitation, the power to fix the redemption and liquidation preferences, the rate of dividends
payable and the time for and the priority of payment thereof and to determine whether such dividends shall be cumulative or not and to
provide for and fix the terms of conversion of such Preferred Stock or any series thereof into Common Stock of the Corporation and fix
the voting power, if any, of shares of Preferred Stock or any series thereof.
ARTICLE
V
SECTION
1. Number. Election and Terms of Directors. The members of the governing board of the Corporation shall be called Directors of
the Corporation. The number of the Directors of the Corporation shall be fixed from time to time by or pursuant to the By-Laws of the
Corporation, and shall initially be five. The name and address of the first Board of Directors are as follows:
Name |
|
Address |
Zhilin Li |
|
2nd Floor, No. 17 Jinpan
Road, Haikou, Hainan Province, People’s Republic of China 570216 |
Heung Mei Tsui |
|
2nd Floor, No. 17 Jinpan
Road, Haikou, Hainan Province, People’s Republic of China 570216 |
Yingwen Zhang |
|
2nd Floor, No. 17 Jinpan
Road, Haikou, Hainan Province, People’s Republic of China 570216 |
Gene Michael Bennett |
|
2nd Floor, No. 17 Jinpan
Road, Haikou, Hainan Province, People’s Republic of China 570216 |
Baowen Dong |
|
2nd Floor, No. 17 Jinpan
Road, Haikou, Hainan Province, People’s Republic of China 570216 |
SECTION
2. Newly Created Directorships and Vacancies. Newly created directorships resulting from any increase in the number of Directors
and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled
only by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board of
Directors, or by the sole remaining Director. No decrease in the number of Directors constituting the Board of Directors shall shorten
the term of any incumbent Director.
ARTICLE
VI
Any
action required or permitted to be taken by the stockholders of the Corporation may be effected by any consent in writing by such holders,
signed by holders of not less than that number of shares of Common Stock required to approve such action.
ARTICLE
VII
Subject
to any express provision of the laws of the State of Nevada or these Articles of Incorporation, the Board of Directors shall have the
power to make, alter, amend and repeal the By-Laws of the Corporation (except so far as By-Laws of the Corporation adopted by the stockholders
shall otherwise provide). Any By-Laws made by the Directors under the powers conferred hereby may be altered, amended or repealed by
the Directors or by the stockholders.
ARTICLE
VIII
Election
of Directors need not be by ballot unless the By-laws of the Corporation shall so provide.
ARTICLE
IX
SECTION
1. Elimination of Certain Liability of Directors. A Director of the Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the Director’s
duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) for the payment of distributions to stockholders in violation of Section 78.300 of the Nevada Revised
Statutes, or (iv) for any transaction from which the Director derived an improper personal benefit.
SECTION
2. Indemnification. The Corporation shall indemnify all Directors, officers, employees, and agents to the fullest extent permitted
by Nevada law as provided within NRS 78.7502 and NRS 78.751 or any other law then in effect or as it may hereafter be amended. The Corporation
shall indemnify each present and future Director, officer, employee or agent of the Corporation who becomes a party or is threatened
to be made a party to any suit or proceeding, whether pending, completed or merely threatened, and whether said suit or proceeding is
civil, criminal, administrative, investigative, or otherwise, except an action by or in the right of the Corporation, by reason of the
fact that he or she is or was a Director, officer, employee, or agent of the Corporation, or is or was serving at the request of the
Corporation as a Director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise,
against expenses, including, but not limited to, attorneys’ fees, judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him or her in connection with the action, suit, proceeding or settlement, provided such person acted in good faith
and in a manner which he or she reasonably believed to be in or not opposed to the best interest of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
The
expenses of Directors, officers, employees or agents of the Corporation incurred in defending a civil or criminal action, suit, or proceeding
may be paid by the Corporation as they are incurred and in advance of the final disposition of the action, suit, or proceeding, if and
only if the Director, officer, employee or agent undertakes to repay said expenses to the Corporation if it is ultimately determined
by a court of competent jurisdiction, after exhaustion of all appeals therefrom, that he or she is not entitled to be indemnified by
the Corporation. No indemnification shall be applied, and any advancement of expenses to or on behalf of any Director, officer, employee
or agent must be returned to the Corporation, if a final adjudication establishes that the person’s acts or omissions involved
a breach of any fiduciary duties, where applicable, intentional misconduct, fraud or a knowing violation of the law which was material
to the cause of action.
ARTICLE
X
The
Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in these Articles
of Incorporation, and other provisions authorized by the laws of the State of Nevada at the time in force may be added or inserted, in
the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders,
Directors or any other persons whomsoever by and pursuant to these Articles of Incorporation in its present form or as hereafter amended
are granted subject to the right reserved in this Article.
ARTICLE
XI
The
Corporation shall exist in perpetuity, from and after the date of filing of its original Articles of Incorporation with the Secretary
of State of the State of Nevada unless dissolved according to law.
ARTICLE
XII
The
provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes shall be inapplicable to the Corporation.
ARTICLE
XIII
The
name and address of the incorporator of the Corporation is:
Zhilin
Li, 2nd Floor, No. 17 Jinpan Road, Haikou, Hainan Province, People’s Republic of China 570216
IN
WITNESS WHEREOF, the undersigned incorporator has executed these Amended and Restated Articles of Incorporation of China Pharma Holdings,
Inc. on December 28, 2022.
|
/s/
Zhilin Li |
|
Name: Zhilin Li |
|
Title: President and Chief Executive Officer |
|
(principal executive officer) |
CHINA PHARMA HOLDINGS, INC. |
CONTROL ID: |
|
REQUEST ID: |
|
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
for the Annual Meeting of Stockholders |
|
DATE: |
Wednesday, december 28, 2022 |
|
TIME: |
9:00 A.m. local time |
|
LOCATION: |
conference room, 2nd
floor, jiahai buliding
no. 17 jinpan road, haikou
hainan province, china 570216 |
|
|
|
HOW TO REQUEST PAPER COPIES OF OUR MATERIALS |
|
|
|
|
PHONE:
Call toll
free
1-866-752-8683 |
FAX:
Send this
card to
202-521-3464 |
INTERNET:
https://www.iproxydirect.com/CPHI
and follow the on-screen instructions. |
EMAIL:
proxy@iproxydirect.com
Include your Control ID in your email. |
|
This communication represents a notice to access a more complete set of proxy materials available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. The proxy statement is available at: https://www.iproxydirect.com/CPHI |
|
If you want to receive a paper
copy of the proxy materials you must request one. There is no charge to you for requesting a copy. To facilitate timely delivery please
make the request, as instructed above, before december 14, 2022. |
|
you may enter your voting instructions at https://www.iproxydirect.com/CPHI
until 11:59 am eastern time December 27, 2022. |
|
The purposes of this meeting are as follows: |
|
|
1.
To elect three independent director
nominees to our Board of Directors to serve until the next annual meeting and until their successors are elected and qualified;
2.
To approve our Amended and Restated 2010 Long-Term Incentive Plan;
3.
To consider and approve an amendment to the Articles of Incorporation of the Company to effect a reverse
stock split at a ratio of up to 1:10, such that every holder of common stock, par value $0.001 per share, of the Company (the “Common
Stock”) shall receive one share of Common Stock for up to every ten shares of Common Stock held (the “Reverse Stock Split”);
4.
To approve an amendment to the Articles of Incorporation of the Company, to increase the number of authorized
shares of common stock from 95,000,000 shares to 500,000,000 shares, par value US$0.001 per share; AND
5. To transact such other business
as may properly come before the Annual Meeting or any adjournment thereof.
|
|
Pursuant
to Securities and Exchange Commission rules, you are receiving this Notice that the proxy materials for the Annual Meeting are available
on the Internet. Follow the instructions above to view the materials and vote or request printed copies.
The board of directors has fixed
the close of business on November 9, 2022 as the record date for the determination of stockholders entitled to receive notice of the Annual
Meeting and to vote the shares of our common stock, par value $.001 per share, they held on that date at the meeting or any postponement
or adjournment of the meeting. |
|
The Board of Directors recommends that you vote ‘for’ all proposals above. |
|
Please note - This is not a Proxy Card - you cannot vote by returning this card |
China Pharma Holdings, INC.
SHAREHOLDER SERVICES
1 Glenwood Avenue Suite 1001
Raleigh NC 27603 |
FIRST-CLASS MAIL
US POSTAGE
PAID
RALEIGH NC
PERMIT # 870 |
Time
Sensitive shareholder information enclosed
IMPORTANT
SHAREHOLDER INFORMATION
your
vote is important
CHINA PHARMA HOLDINGS, INC.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
annual
meeting OF STOCKHOLDERS – december 28, 2022 AT 9:00 AM LOCAL time |
|
|
CONTROL ID: |
|
REQUEST ID: |
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|
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This Proxy is Solicited on Behalf of the Board of Directors of China Pharma Holdings, Inc. The undersigned hereby appoints Zhilin Li as proxy, with full
power of substitution, to vote as designated below all of the shares the undersigned is entitled to vote at the Annual Meeting
of Stockholders to be held at the Conference Room, 2nd Floor, Jiahai Building, No. 17 Jinpan Road, Haikou, Hainan Province, China
570216 on Wednesday, December 28, 2022, at 9:00 a.m. local time (Tuesday, December 27, 2022 at 8:00 p.m., Eastern Time), and any adjournments
or postponements thereof, and otherwise to represent the undersigned at the meeting, with all powers possessed by the undersigned
if personally present at the meeting. |
|
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.) |
|
|
VOTING INSTRUCTIONS |
If you vote by phone, fax or internet, please DO NOT mail your proxy card. |
|
|
|
MAIL: |
Please mark, sign, date, and return this Proxy Card promptly using the enclosed envelope. |
|
FAX: |
Complete the reverse portion of this Proxy Card and Fax to 202-521-3464. |
|
INTERNET: |
https://www.iproxydirect.com/CPHI |
|
PHONE: |
1-866-752-VOTE(8683) |
|
|
|
|
|
|
ANNUAL MEETING OF THE STOCKHOLDERS OF
CHINA PHARMA HOLDINGS, INC.
|
PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: ☒ |
|
|
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS |
|
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|
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Proposal
1 |
|
→ |
FOR
|
|
WITHOLD |
|
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Election of independent directors |
|
|
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Gene
Michael Bennett
| |
☐ |
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☐ |
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Yingwen
Zhang
| |
☐ |
|
☐ |
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Control ID: |
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Baowen Dong |
|
☐ |
|
☐ |
|
|
|
REQUEST
ID: |
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Proposal
2 |
|
→ |
FOR
|
|
AGAINST |
|
ABSTAIN |
|
|
|
|
To approve our Amended and Restated 2010 Long-Term Incentive Plan. |
|
☐ |
|
☐ |
|
☐ |
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|
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Proposal 3 |
|
→ |
FOR
|
|
AGAINST |
|
ABSTAIN |
|
|
|
|
To consider and approve an amendment to the Articles of Incorporation
of the Company to effect a reverse stock split at a ratio of up to 1:10, such that every holder of common stock, par value $0.001 per
share, of the Company (the “Common Stock”) shall receive one share of Common Stock for up to every ten shares of Common Stock
held (the “Reverse Stock Split”). |
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Proposal 4 |
|
→ |
FOR |
|
AGAINST |
|
ABSTAIN |
|
|
|
|
To approve an amendment to the Articles of Incorporation of the Company,
to increase the number of authorized shares of common stock from 95,000,000 shares to 500,000,000 shares, par value US$0.001 per share. |
|
☐ |
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☐ |
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☐ |
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MARK “X”
HERE IF YOU PLAN TO ATTEND THE MEETING: ☐ |
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE ‘FOR’ THE ELECTION OF INDEPENDENT DIRECTORS AND ‘FOR’ FOR PROPOSALS 2, 3 AND 4.
|
|
|
|
MARK
HERE FOR ADDRESS CHANGE ☐ New
Address (if applicable):
____________________________
____________________________
____________________________
IMPORTANT:
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign
in partnership name by authorized person.
Dated:
________________________, 2022 |
|
|
(Print Name of Stockholder and/or Joint Tenant) |
|
(Signature of Stockholder) |
|
(Second Signature if held jointly) |
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