UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Confidential, for Use of the Commission Only
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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CHINA GENGSHENG MINERALS,
INC.
(Name of Registrant as Specified In Its Charter)
_______________________________________________________
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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Date Filed:
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China GengSheng Minerals, Inc.
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No.88 Gengsheng Road, Dayugou Town, Gongyi
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Henan, People’s Republic of China 451271
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September 14, 2012
Dear Stockholder:
On behalf of the Board of
Directors, I cordially invite you to attend the 2012 Annual Meeting of
Stockholders of China GengSheng Minerals, Inc., which will be held at No.88
Gengsheng Road, Dayugou Town, Gongyi, Henan, People’s Republic of China 451271,
on Thursday, October 18, 2012, commencing at 9:00 a.m., local time. The matters
to be acted upon at the meeting are described in the attached Notice of Annual
Meeting of Stockholders and Proxy Statement.
Your vote on the business to be
considered at the meeting is important, regardless of the number of shares you
own. Whether or not you plan to attend the meeting, please complete, sign and
date the accompanying proxy card and promptly return it in the enclosed prepaid
envelope prior to the meeting so that your shares may be represented at the
meeting. Returning the proxy card does not deprive you of your right to attend
the meeting and to vote your shares in person.
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Sincerely yours,
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/s/Shunqing Zhang
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Shunqing Zhang
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Chief Executive Officer
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1
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CHINA GENGSHENG MINERALS, INC.
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No. 88 Gengsheng Road
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Dayugou Town, Gongyi, Henan
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People’s Republic of China 451271
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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TO BE HELD ON THURSDAY, OCTOBER 18, 2012
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Notice is hereby given that the
Annual Meeting of Stockholders (“Annual Meeting”) of China GengSheng Minerals,
Inc., a Nevada corporation, will be held on Thursday, October 18, 2012, at 9:00
a.m., local time, at No.88 Gengsheng Road, Dayugou Town, Gongyi, Henan, People’s
Republic of China 451271, for the following purposes:
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1.
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To elect the Company’s Board of Directors to hold office
until the 2013 Annual Meeting of Stockholders and until their respective
successors are elected and qualified;
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2.
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To ratify the appointment of PKF Hong Kong, as the
Company’s independent registered public accounting firm; and
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To transact such other business as may properly come
before the meeting or any adjournment thereof.
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The Board of Directors has fixed
the close of business on September 13, 2012 as the record date for determining
the stockholders entitled to notice of, and to vote at, the Annual Meeting or
any adjournments. A list of such stockholders will be available for inspection
by any stockholder during ordinary business hours at our principal place of
business at No. 88 Gengsheng Road, Dayugou Town, Gongyi, Henan, People’s
Republic of China 451271, for the ten day period preceding the Annual Meeting.
The stockholder list also will be available for inspection by any stockholder at
the time and place of the Annual Meeting. Please mark, sign and date the
enclosed proxy card and mail it promptly in the accompanying envelope.
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By Order of the Board of Directors,
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/s/ Xiangyang Zhang
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Xiangyang Zhang
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Secretary
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Henan, People’s Republic of China
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September 14, 2012
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2
IMPORTANT
Whether or not you expect to
attend the Annual Meeting, please complete, sign and date the enclosed proxy
card and return it in the envelope provided. In the event you attend the Annual
Meeting, you may revoke your proxy and vote your shares in person.
Important Notice Regarding the
Availability of Proxy Materials for the Stockholder Meeting To Be Held on
October 18, 2012:
Our proxy statement, proxy
card and annual report to stockholders for the year ended December 31, 2011 are
available at
www.proxyvote.com.
Voting By Telephone or
Internet. Please call the toll-free telephone number on the proxy card
(800-690-6903) and follow the recorded instructions; or access our secure
website registration page through the Internet (at
www.proxyvote.com
) , as identified on the proxy card and
follow the instructions, using the unique control number printed on the proxy
card.
3
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CHINA GENGSHENG MINERALS, INC.
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No. 88 Gengsheng Road
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Dayugou Town, Gongyi, Henan
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People’s Republic of China
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(86) 371-64059818
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
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TO BE HELD ON THURSDAY, OCTOBER 18, 2012
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GENERAL INFORMATION
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The Board of Directors of China GengSheng Minerals, Inc., a Nevada corporation (the “Company”), is furnishing
this Proxy Statement to the holders of its Common Stock, in connection with its
solicitation of proxies for use at the Annual Meeting to be held at No.88
Gengsheng Road, Dayugou Town, Gongyi, Henan, People’s Republic of China 451271,
at 9:00 a.m., local time, on Thursday, October 18, 2012, and at any and all
adjournments thereof. You may obtain directions to the location of the Annual
Meeting by visiting www.gengsheng.com/2012AnnualMeeting.
Our principal executive offices
are located at No.88 Gengsheng Road, Dayugou Town, Gongyi, Henan, People’s
Republic of China 451271 and our telephone number is (86) 371-64059818.
Purpose of the Annual Meeting
At the Annual Meeting, the
stockholders of China GengSheng Minerals, Inc. will be asked to consider and
vote upon the following matters:
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1.
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To elect the Company’s Board of Directors to hold office
until the 2013 Annual Meeting of Stockholders and until their respective
successors are elected and qualified;
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2.
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To ratify the appointment of PKF Hong Kong, as the
Company’s independent registered public accounting firm; and
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To transact such other business as may properly come
before the meeting or any adjournment thereof.
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Revocation of Proxies
A proxy delivered pursuant to
this solicitation is revocable at the option of the person giving it at any time
before it is exercised. A proxy may be revoked, prior to its exercise, by
executing and delivering a later dated proxy, by delivering written notice of
the revocation of the proxy to the Secretary of China GengSheng Minerals, Inc.
prior to the Annual Meeting or by attending and voting at the Annual Meeting.
Attendance at the Annual Meeting, in and of itself, will not constitute a
revocation of a proxy. Unless previously revoked, the shares represented by the
enclosed proxy will be voted in accordance with the stockholder’s directions if
the proxy card is duly executed and returned prior to the Annual Meeting. If no
directions are specified, the shares will be voted “FOR ALL NOMINEES”
recommended by the Board of Directors and in accordance with the discretion of
the named proxies on other matters brought before the Annual Meeting.
This Proxy Statement and the
enclosed proxy card are first being released to stockholders on or about
September 14, 2012. A copy of the Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as
filed with the Securities and Exchange Commission (the “SEC”), is being mailed
with this Proxy Statement.
4
Dissenters’ Right of Appraisal
Holders of shares of our Common
Stock do not have appraisal rights under Nevada law or under the governing
documents of the Company in connection with this solicitation.
Solicitation of Proxies
China GengSheng Minerals, Inc.
will bear the expense of preparing, printing and mailing this Proxy Statement
and soliciting the proxies it is seeking. In addition to the use of the mails,
proxies may be solicited by officers, directors and employees of China GengSheng
Minerals, Inc., in person or by telephone, e-mail or facsimile transmission.
China GengSheng Minerals, Inc. also will request brokerage firms, banks,
nominees, custodians and fiduciaries to forward proxy materials to the
beneficial owners of the underlying shares as of the Record Date and will
reimburse the cost of forwarding the proxy materials in accordance with
customary practice. Your cooperation in promptly completing, signing and
returning the enclosed proxy card will help to avoid additional expense.
Outstanding Shares, Voting Rights and Quorum
China GengSheng Minerals, Inc.’s
Common Stock is the only class of securities entitled to vote at the Annual
Meeting. The close of business on September 13, 2012 has been fixed as the
Record Date for the determination of our stockholders entitled to notice of, and
to vote at, the Annual Meeting. Only stockholders of record at the close of
business on the Record Date will be entitled to notice of, and to vote at, the
Annual Meeting. As of the Record Date, we had outstanding 26,803,044 shares of
Common Stock. Each outstanding share of Common Stock entitles the holder to one
vote on all matters submitted to the stockholders. There is no cumulative
voting.
For each proposal to be
considered at the Annual Meeting, the holders of a majority of the shares of the
capital stock of the Company issued and outstanding and entitled to vote on such
matter at the meeting, present in person or by proxy, will constitute a quorum.
Both abstentions and “broker non-votes” will be treated as present for purposes
of determining a quorum. A “broker non-vote,” however, does not count as a vote
in favor of or against a particular proposal for which the broker has no
discretionary voting authority. “Broker non-votes” are votes that brokers
holding shares of record for their customers (i.e., in “street name”) are not
permitted to cast under applicable stock market regulations because the brokers
have not received instructions (or have received incomplete instructions) from
their customers as to certain proposals, and, therefore, the brokers have
advised us that they lack voting authority.
Required Votes for Each Proposal to Pass
Assuming the presence of a quorum at the Annual Meeting:
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Broker
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Discretionary
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Proposal
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Vote Required
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Vote Allowed
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Election of directors
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Plurality of the votes cast
(the five directors
receiving the most “For” votes)
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No
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Ratification of the Appointment of PKF Hong
Kong as the
Company’s Independent
Registered Public Accounting Firm
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A majority of the votes cast
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Yes
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5
With regard to Proposal One
(Election of Directors), votes may be cast for the nominees or may be withheld.
Each director nominee was recommended by the Board of Directors, and all
nominees are current directors, standing for re-election. The affirmative vote
of the holders of a plurality of the votes cast is required for approval of
Proposal One.
Votes that are withheld,
abstentions and broker non-votes are not considered “votes cast” and therefore
will have no effect on the outcome of Proposal One.
Voting Procedures
In voting by proxy with regard to
the election of directors, you may vote in favor of all nominees, withhold your
votes as to all nominees, or withhold your votes as to specific nominees. With
regard to other proposals, you may vote in favor of each proposal or against
each proposal, or in favor of some proposals and against others, or you may
abstain from voting on any or all of the proposals. You should specify your
respective choices on the accompanying proxy card or your vote instruction
form.
Delivery of Proxy Materials to Households
Only one copy of the Company’s
2011 Annual Report and this Proxy Statement will be delivered to an address
where two or more stockholders reside with the same last name or whom otherwise
reasonably appear to be members of the same family based on the stockholders’
prior express or implied consent.
We will deliver promptly upon
written or oral request a separate copy of the 2011 Annual Report 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 the Company,
please specify such request in writing and send such written request to China GengSheng Minerals, Inc., No.88 Gengsheng Road, Dayugou Town, Gongyi, Henan,
People’s Republic of China 451271, Attention: Secretary.
If you share an address with at
least one other stockholder and currently receive multiple copies of Annual
Report and Proxy Statement, and you would like to receive a single copy of
Annual Report and Proxy Statement, please specify such request in writing and
send such written request to China GengSheng Minerals, Inc., No.88 Gengsheng
Road, Dayugou Town, Gongyi, Henan, People’s Republic of China 451271, Attention:
Secretary.
Interest of Officers and Directors in Matters to Be Acted
Upon
Except for the election to the
Board of the five nominees set forth herein, none of our officers or directors
has any 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
information regarding beneficial ownership of our common stock as of September
13, 2012 (i) by each person who is known by us to beneficially own more than 5%
of our common stock; (ii) by each of our officers and directors; and (iii) by
all of our officers and directors as a group.
Unless otherwise specified, the
address of each of the persons set forth below is in care of GengSheng
International, No. 88 Gengsheng Road, Dayugou Town, Gongyi, Henan, China 451271.
6
Name & Address of
Beneficial Owner
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Office, if Any
Officers and Directors
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Title of Class
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Amount &
Nature of
Beneficial
Ownership
(1)
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Percent of
Class
(2)
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Shunqing Zhang
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Chief Executive Officer,
Chairman of the Board
and President
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Common Stock, $0.001
par
value
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15,231,748
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56.83%
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Ningfang Liang
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Chief Financial Officer
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Common Stock, $0.001
par
value
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0
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*
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Ming He
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Independent Director
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Common Stock, $0.001
par
value
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10,000
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*
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Jingzhong Yu
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Independent Director
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Common Stock, $0.001
par
value
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0
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*
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Ningsheng Zhou
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Director
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Common Stock, $0.001
par
value
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0
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*
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Hsin-I Lin
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Independent Director
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Common Stock, $0.001
par
value
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0
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*
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All officers and directors
as a group
(6 persons
named above)
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Common Stock, $0.001
par
value
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15,241,748
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56.87%
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* Less than 1%
1
Beneficial ownership is determined in accordance
with the rules of the SEC and generally includes voting or investment power with
respect to securities. Each of the beneficial owners listed above has direct
ownership of and sole voting power and investment power with respect to the
shares of our Common Stock.
2
As of September 13, 2012, a total of 26,803,044
shares of our Common Stock are considered to be outstanding pursuant to SEC Rule
13d-3(d)(1). For each beneficial owner above, any options exercisable within 60
days have been included in the denominator.
Changes in Control
There are no arrangements known
to us, including any pledge by any person of our securities, the operation of
which may at a subsequent date result in a change in control of our Company.
PROPOSAL ONE:
ELECTION OF
DIRECTORS
Action will be taken at the
Annual Meeting for the election of five directors. Each director elected at the
Annual Meeting will serve until the 2013 Annual Meeting and until his successor
is elected and qualified. Proxies can be voted for five nominees.
The Board of Directors has no
reason to believe that any of the nominees for director will not be available to
stand for election as director. However, if some unexpected occurrence should
require the substitution by the Board of Directors of some other person or
persons for any one or more of the nominees, the proxies may be voted in
accordance with the discretion of the named proxies “FOR” such substitute
nominees.
7
The name, age, principal
occupation for the last five years, selected biographical information and period
of service as a director of China GengSheng Minerals, Inc. of the nominees for
election as directors are set forth below.
Nominees for Director
The following is a brief account
of the education and business experience during at least the past five years of
each director, executive officer and key employee of our Company and operating
subsidiary, indicating the person’s principal occupation during that period, and
the name and principal business of the organization in which such occupation and
employment were carried out.
Shunqing Zhang,
age 58.
Mr. Zhang became Chief Executive Officer and President of China GengSheng
Minerals, Inc. on April 25, 2007 and has served as Chairman of the Board since
May 3, 2007. Mr. Zhang was elected Chairman of the Board and Chief Executive
Officer of Henan Gengsheng in December, 2005. Prior to that, he served as
President of Henan Gengsheng for June 2002 to December 2005, and served as
Chairman of the Board and President of the Gengsheng Industry Group of Henan
Province, from 1997 to 2002. Prior to that, Mr. Zhang served as Director of the
Academy of the Ministry of Metallurgy Lofa Resistance Associated Experimental
Plant in Gongyi City, a refractories manufacturer, from 1986 to 1997. Mr. Zhang
holds an associate degree from China Central Radio and TV University. In
December of 2008, Mr. Zhang was awarded the title of "Gongyi City's Most
Influential Person in the 30 Years of Opening & Reform" by the City of
Gongyi in Henan Province. In naming Mr. Zhang, the city cited his achievements
in creating jobs in the local community, stimulating the rapid growth of
Gongyi's economy and setting excellent examples of taking social
responsibilities. As Chief Executive Officer of the Company, Mr. Zhang provides
the Board with an intimate understanding of the Company’s operations and
industry.
Ming He,
age 41
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Mr. He joined Shengkai Innovations, Inc. (NASDAQ: VALV) in March 2010 and
served as the Chief Financial Officer until April 2012. Between January 2007 and
February 2010, Mr. He served as Chief Financial Officer of Usunco Automotive
Limited / Equicap, Inc. From October 2004 until January 2007, Mr. He served as
the Senior Manager of SORL Auto Parts, Inc. (NASDAQ: SORL). Mr. He holds
designations of Chartered Financial Analyst and Illinois Certified Public
Accountant. He received his Master of Science degree in Accountancy in 2004 and
Master of Business Administration degree in Finance in 2003 from University of
Illinois at Urbana-Champaign. He also received his Bachelor of Arts degree from
Shanghai Institute of Foreign Trade in 1992. Mr. He serves as the chair of the
Audit Committee and is a member of the Compensation Committee and Nominating and
Corporate Governance Committee of the Board.
Jingzhong Yu
, Age 47.
Prof. Yu currently is an accounting professor at Zhongnan University of
Economics and Law and has served in such position since 1985. Prof. Yu also
served as an investment advisor from December 2003 to December 2007 to China
Wanke Co., Ltd., which is a residential property developer, 999 Group, which is
a pharmaceutical manufacturing company, Sanyi Group., Ltd., which is in the
equipment and machinery manufacturing business, and China National Salt Industry
Corporation, which is in the business of producing salt and salt chemicals. From
December 2003 to June 2008, Prof. Yu served as an investment advisor to China
Tobacco Group, which manufactures tobacco products. Prof. Yu serves as the chair
of the Compensation Committee and is a member of the Audit Committee and
Nominating and Corporate Governance Committee of the Board.
Ningsheng Zhou
, Age 53.
Prof. Zhou has been a professor and director of High Temperature Materials
Institute of Henan University of Science and Technology since 2004. From 2000 to
2004, he was a Vice President of Luoyang Institute of Refractories Research
(LIRR) in China. Mr. Zhou is an expert in refractories R&D and applications
with 30 years of experiences in the refractory industry. Mr. Zhou received his
Ph. D. degree from University of Montreal in Canada in 2000 and a Master of
Science degree in Inorganic Non-Metallic Materials from LIRR in 1987. He
received his Bachelor of Science degree in Refractories Technology from Wuhan
University of Science and Technology in 1982 and also worked as a visiting
scholar in Germany during 1991 and 1993.
Hsin-I Lin,
Age 59. Mr.
Lin has been with Rim Asia Capital Partners since 2004, where he served as
Partner. Prior to joining Rim Asia Capital Partners, he worked as a Partner at
SVO, from 2002-2004. Mr. Lin has approximately twenty years of experience in
business administration, direct investment, corporate finance, and investment
banking in the United States and China. Mr. Lin received his B.A. from Tamkang
University in Taiwan, his M.A. from Waseda University in Japan, his M.B.A from
Oklahoma City University in the United States and his PhD in economics from
Northwest University in China.
8
There are no family relationships
among our directors or officers.
Involvement in Certain Legal Proceedings
To our knowledge, during the last
ten years, none of our directors and executive officers (including those of our
subsidiaries) has:
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Had a bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time.
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Been convicted in a criminal proceeding or been subject to a pending
criminal proceeding, excluding traffic violations and other minor offenses.
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Been subject to any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities.
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Been found by a court of competent jurisdiction (in a civil action), the
SEC, or the Commodities Futures Trading Commission to have violated a federal
or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
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Been the subject to, or a party to, any sanction or order, not subsequently
reverse, suspended or vacated, of any self-regulatory organization, any
registered entity, or any equivalent exchange, association, entity or
organization that has disciplinary authority over its members or persons
associated with a member.
There are no material proceedings
to which any director and executive officers of the Company is a party adverse
to the Company or has a material interest adverse to the Company.
The Board of Directors
recommends a vote “FOR ALL NOMINEES” listed in Proposal One for election to the
Board of Directors.
EXECUTIVE OFFICERS
Our executive officers serve at
the pleasure of the Board of Directors. The following sets forth certain
information with respect to our executive officers. The biography of Mr. Shunqing Zhang is provided above under “Proposal One-Election of Directors.”
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Name
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Age
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Date of Appointment
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Position
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Shunqing Zhang
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59
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April 25, 2007
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Chief Executive Officer,
President and Chairman of the Board
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Ningfang Liang
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39
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July 7, 2011
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Chief Financial Officer
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Ningfang Liang,
age 39.
Mr. Liang became our Chief Financial Officer on July 7, 2011. Mr. Liang has over
17 years of finance and accounting experience, including over six years at U.S.
public companies, where he managed SEC reporting, internal control, GAAP
compliance, as well as internal auditing, financial analysis and management
reporting activities. Prior to joining the Company, Mr. Liang worked as Finance
Manager at White Mountains Re Ltd, the reinsurance subsidiary of White Mountains
Insurance Group, Ltd. from December 2008 to June 2011. Additionally, he has held
senior finance and accounting positions at American International Group, Inc.
from December 2006 to December 2008, Celgene Corporation from January 2005 to
December 2006, and China Construction Bank from July 1993 to May 2002. Mr. Liang
is a licensed CPA in the states of New Jersey and Illinois and is a member of
the American Institute of Certified Public Accountants. He holds a Bachelor’s
degree in finance from Shanghai University of Finance and Economics, and
an MBA from the University of Illinois Urbana-Champaign.
9
CORPORATE GOVERNANCE
We have established corporate
governance practices designed to serve the best interests of China GengSheng
Minerals, Inc. and our stockholders. We are in compliance with the current
corporate governance requirements imposed by the Sarbanes-Oxley Act of 2002, the
rules and regulations of the SEC and the listing standards of The NYSE MKT. Our
current Code of Business Conduct and Ethics and charters for certain committees
of the Board of Directors are available on our corporate website at
www.gengsheng.com
under the heading “Investor Relations.”
Set forth below is information
regarding the meetings of the Board of Directors during 2011, a description of
the Board’s standing committees and additional highlights of our corporate
governance policies and procedures.
Committees and Meetings of the Board of Directors
Board Composition.
The
Board of Directors presently consists of five members. The current members of
the Board of Directors are Shunqing Zhang, Hsin-I Lin, Ming He, Jingzhong Yu and
Ningsheng Zhou. The Board has determined that the following directors, who
constitute a majority of the Board (three), are independent in accordance with
the NYSE MKT and SEC rules governing director independence: Hsin-I Lin, Ming He
and Jingzhong Yu.
Meetings of the Board of
Directors.
During 2011, the Board of Directors met seven times. During that
period, each of the incumbent directors attended 100% of the aggregate number of
meetings held by the Board and by each of the committees on which such director
served.
Board Committees.
Our
Board of Directors currently has three standing committees: the Audit Committee,
the Compensation Committee and the Nominating Committee. The principal functions
and the names of the directors currently serving as members of each of those
committees are set forth below. In accordance with applicable NYSE MKT and SEC
requirements, the Board of Directors has determined that each director serving
on the Audit, Compensation and Nominating committees is an independent
director.
Audit Committee
. The Audit
Committee assists the Board in fulfilling its oversight responsibilities with
respect to our financial matters. The Audit Committee operates under a written
charter, a copy of which is available on our website at
www.gengsheng.com
under the heading “Investor Relations.” Under the charter, the committee’s
principal responsibilities include reviewing our financial statements, reports
and releases; reviewing with the independent auditor all critical accounting
policies and alternative treatments of financial information under generally
accepted accounting principles; and appointing, compensating, retaining and
overseeing the work of the independent auditor.
The Audit Committee met three times
during 2011. The current members of the Audit Committee are Ming He (Chairman),
Jingzhong Yu and Hsin-I Lin. The Board of Directors has determined that Mr. He
is an “audit committee financial expert,” as that term is defined in the listing
rules of AMEX MKT.
Compensation Committee
. The
Compensation Committee has the primary authority to determine our compensation
philosophy and to establish compensation for our executive officers. The
Compensation Committee operates under a written charter, a copy of which is
available on our website at
www.gengsheng.com
under the heading “Investor
Relations.” Under the charter, the committee’s principal responsibilities
include making recommendations to the Board on the Company’s compensation
policies, determining the compensation of senior management, making
recommendations to the Board on the compensation of independent directors and
approving performance-based compensation.
10
The Compensation Committee did not meet
during 2011. The current members of the Compensation Committee are Jingzhong Yu
(Chairman), Ming He and Hsin-I Lin.
Nominating Committee
. The
Nominating Committee provides for the nomination of persons to serve on our
Board. The qualifications of recommended candidates also will be reviewed and
approved by the full Board. The Committee considered the following factors when
qualifying candidates: current composition of the Board and the characteristics
of each candidate under consideration, including that candidate’s competencies,
experience, reputation, integrity, independence, potential for conflicts of
interest and other appropriate qualities. When considering a director standing
for re-election, in addition to the factors described above, the Committee
considers that individual’s past contribution and future commitment to the
Company. The independent directors evaluate all candidates, regardless of the
source from which the candidate was first identified, based upon the totality of
the merits of each candidate and not based upon minimum qualifications or
attributes. The Nominating Committee operates under a written charter, a copy of
which is available on our website at
www.gengsheng.com
under the heading
“Investor Relations.”
The Nominating Committee did not meet
during 2011. The current members of the Nominating Committee are Hsin-I Lin
(Chairman), Ming He and Jingzhong Yu.
Corporate Governance Policies
In addition to corporate
governance matters described throughout this Proxy Statement, some additional
highlights of our corporate governance policies and procedures are set forth
below:
Board Leadership Structure.
Our Board of Directors does not have a policy regarding the separation of
the roles of Chief Executive Officer and Chairman of the Board, as the Board of
Directors believes it is in the best interest of the Company to make that
determination based on the position and direction of the Company and the
membership of the Board.
Risk Management.
The
Company’s management is responsible for day-to-day risk management of the
company. Management reports to the Board of Directors on the material risks the
Company faces when management determines that the Company’s risk profile
materially changes. The Board of Directors uses management’s reports to evaluate
the Company’s exposure to risks in light of the Company’s business plan and
growth strategies. The Board of Directors primarily focuses on risks in the
areas of operations, liquidity and regulatory changes and compliance, which the
Board of Directors believes are the areas most likely to have a potential impact
on the Company in a material way.
Consideration and
Determination of Executive and Director Compensation.
The Compensation
Committee has the primary authority to determine our compensation philosophy and
to establish compensation for our executive officers. In establishing executive
officer compensation, the Compensation Committee uses its subjective evaluation
of the executives’ performance and responsibilities, our overall performance and
the Chief Executive Officer’s recommendations. The Compensation Committee has
not used any compensation consultant in setting executive salaries, or in
determining other components of executive compensation, nor does it seek
formally to benchmark the compensation of our executive officers against
compensation paid by other companies to their executives.
Management plays a significant
role in the compensation-setting process. The most significant aspects of
management’s role are:
-
evaluating employee performance;
-
preparing information for Compensation Committee meetings;
-
establishing business performance targets and objectives;
-
providing background information regarding the Company’s strategic
objectives; and
-
recommending salary levels and equity awards.
11
Risk Management related to
Compensation Policies and Practices.
We do not believe that our compensation
policies and practices encourage excessive and unnecessary risk-taking, and that
the level of risk that they do encourage is not reasonably likely to have a
material adverse effect on the Company. The design of our compensation policies
and practices encourages our employees to remain focused on both our short- and
long-term goals.
Code of Ethics
. Our Code
of Business Conduct and Ethics (the “Code of Ethics”) applies to all of our
directors, executive officers and employees. The Code of Ethics is available on
our website at
www.gengsheng.com
under the heading “Investor Relations.”
We intend to disclose any amendments to our Code of Ethics, and any waiver from
a provision of the Code of Ethics granted to our Chief Executive Officer, Chief
Financial Officer or Controller, on our website within four business days
following such amendment or waiver.
Executive Sessions of
Independent Directors
. The Board of Directors is responsible for scheduling
regular executive sessions of our independent directors. At executive sessions,
our independent directors meet without management or any non-independent
directors present. The independent directors are responsible for establishing
the agenda at executive sessions. The Board believes that executive sessions
foster open and frank communication among the independent directors, which will
ultimately add to the effectiveness of the Board, as a whole. In 2011, the
independent directors held three executive sessions.
Committee Authority to Retain
Independent Advisors
. Each of the Audit Committee, the Compensation
Committee and Nominating Committee has the authority to retain independent
advisors and consultants, with all fees and expenses to be paid by China
GengSheng Minerals, Inc.
Accounting Complaint
Policy
. The Audit Committee has established procedures for the treatment of
complaints regarding accounting, internal accounting controls or auditing
matters, including procedures for confidential and anonymous submission by our
employees of concerns regarding questionable accounting, internal accounting
controls or auditing matters.
No Executive Loans
. We do
not extend loans to executive officers or directors except for the loan
disclosed under “Related Party Transactions” on page 15, and we currently have
no such loans outstanding.
Policy for Director Attendance
at Annual Meetings.
It is the policy of China GengSheng Minerals, Inc. and
our Board of Directors that all directors attend the Annual Meeting of
Stockholders and be available for questions from stockholders, except in the
case of unavoidable conflicts. All members of the then incumbent Board of
Directors attended our 2011 Annual Meeting of Stockholders.
Process for Security Holders
to Send Communications to the Board.
We encourage security holder
communication with the Board of Directors. Any security holder who wishes to
communicate with the Board or with any particular director, including any
independent director, may send a letter to the Secretary of China GengSheng
Minerals, Inc. at our principal executive offices. Any communication should
indicate that you are a China GengSheng Minerals, Inc. security holder and
clearly specify whether it is intended to be made to the entire Board or to one
or more particular director(s).
Policy for Consideration of
Director Candidates Recommended by Security Holders.
We welcome
recommendations for director candidates from security holders. In order to make
a recommendation, a security holder should submit the following information to
the Board of Directors:
-
a resume for the candidate detailing the candidate’s work experience and
academic credentials;
-
written confirmation from the candidate that he or she (1) would like to
be considered as a candidate and would serve if nominated and elected, (2)
consents to the disclosure of his or her name, (3) has read our Code of Ethics
and that during the prior three years has not engaged in any conduct that, had
he or she been a director, would have violated the Code of Ethics or required
a waiver, (4) is, or is not, “independent” as that term is defined by Nasdaq
and SEC rules, and (5) has no plans to change or influence the control of
China GengSheng Minerals, Inc.;
12
-
the name of the recommending stockholder as it appears in our books, the
number of shares of Common Stock that is owned by the stockholder and written
confirmation that the stockholder consents to the disclosure of his or her
name (if the recommending person is not a stockholder of record, he or she
should provide proof of share ownership);
-
personal and professional references, including contact information; and
-
any other information relating to the candidate required to be disclosed
in a proxy statement for election of directors under Regulation 14A of the
Securities Exchange Act of 1934, as amended.
This information should be sent
to the Board of Directors, c/o Secretary at our principal executive offices, who
will forward it to the Board of Directors. The Board of Directors does not
necessarily respond to security holder recommendations.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Securities
Exchange Act of 1934, as amended, requires our directors and executive officers,
and persons who beneficially own more than 10% of any class of our equity
securities, who collectively we generally refer to as insiders, to file with the
SEC initial reports of beneficial ownership and reports of changes in beneficial
ownership of Common Stock and other equity securities of China GengSheng
Minerals, Inc.. Our insiders are required by SEC regulation to furnish us with
copies of all Section 16(a) reports they file. Based solely upon a review of the
copies of the forms furnished to us, we believe that during the 2011 fiscal
year, our insiders complied with all applicable filing requirements.
REPORT OF AUDIT COMMITTEE
Notwithstanding anything to the contrary set forth in any of
China GengSheng Minerals, Inc.’s filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, that might
incorporate by reference this Proxy Statement, in whole or in part, the
following report shall not be incorporated by reference into any such
filings
.
The Audit Committee of the Board
of Directors is composed of three directors and operates under a written charter
adopted by the Board of Directors, a copy of which is available on our website
at
www.gengsheng.com
under the heading “Investor Relations.” The members
of the committee meet the independence requirements of SEC rules and NYSE MKT
listing standards.
Management is responsible for
China GengSheng Minerals, Inc.’s internal controls, financial reporting process
and compliance with laws, regulations and ethical business standards. The
independent auditors are responsible for performing an independent audit of
China GengSheng Minerals, Inc.’s consolidated financial statements in accordance
with generally accepted auditing standards and issuing a report thereon. The
Audit Committee’s responsibility is to monitor and oversee these processes and
to report its findings to the Board of Directors. The Audit Committee members
are not professional accountants or auditors, and their functions are not
intended to duplicate or to certify the activities of management and the
independent auditor, nor can the committee certify that the independent auditor
is “independent” under applicable rules. The committee serves a board-level
oversight role, in which it provides advice, counsel and direction to management
and the auditors on the basis of the information it receives, discussions with
management and the auditors and the experience of the committee’s members in
business, financial and accounting matters.
In this context, the Audit
Committee has met and held discussions with management and the independent
auditors. Management represented to the Audit Committee that China GengSheng
Minerals, Inc.’s audited consolidated financial statements were prepared in
accordance with accounting principles generally accepted in the United States,
and the Audit Committee has reviewed and discussed the consolidated financial
statements with management and the independent auditors. The Audit Committee
also discussed with the independent auditors the matters required to be
discussed under the standards of the Public Company Accounting Oversight Board
(“PCAOB”), including those specified by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended (AICPA, Professional Standards, Vol. 1,
AU section 380) as adopted by the PCAOB in Rule 3200T.
13
China GengSheng Minerals, Inc.’s
independent auditors also provided to the Audit Committee the written
disclosures and letter required by applicable requirements of the PCAOB, and the
Audit Committee discussed with the independent auditors that firm’s
independence.
Based upon the Audit Committee’s
discussions with management and the independent auditors and the Audit
Committee’s review of the representation of management and the report of the
independent auditors to the Audit Committee, the Audit Committee recommended
that the Board of Directors include the audited consolidated financial
statements in China GengSheng Minerals, Inc.’s Annual Report on Form 10-K for
the year ended December 31, 2011, filed with the SEC.
|
|
Ming He, Chairman
|
|
|
Hsin-I Lin
|
|
|
Yingzhong Yu
|
EXECUTIVE AND DIRECTOR COMPENSATION
Executive Compensation
The following table sets forth
information concerning all cash and non-cash compensation awarded to, earned by
or paid to the following persons for services rendered in all capacities during
the noted periods: Shunqing Zhang, our President and Chief Executive Office, and
Ningfang Liang, our Chief Financial Officer.
No executive officer’s salary and
bonus exceeded $100,000 in any of the applicable years. The following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted and certain other compensation, if any, whether paid or
deferred.
Summary Compensation Table
|
Name and Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Stock Awards
|
|
|
Total
|
|
|
|
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Shunqing Zhang, Chairman, Chief Executive
Officer, President
|
|
2011
|
|
|
77,450
|
|
|
-
|
|
|
-
|
|
|
77,450
|
|
|
|
|
2010
|
|
|
55,588
|
|
|
-
|
|
|
-
|
|
|
55,588
|
|
|
Ningfang Liang
,
Chief Financial
Officer
|
|
2011
|
|
|
45,000
|
|
|
-
|
|
|
-
|
|
|
45,000
|
|
|
|
|
2010
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
In accordance with PRC law, we
contribute specified amounts to government-managed benefit plans for our
employees. Benefits include pension, medical insurance, disability and
unemployment. The amounts of our contributions are specified by the PRC
government based on each employee’s compensation and length of service, up to a
maximum required contribution. The PRC government is responsible for the payment
of benefits to employees.
Bonuses and Deferred Compensation
We do not have any bonus, deferred
compensation or retirement plans.
Outstanding Equity Awards at Fiscal Year End
None.
14
Director Compensation
On November 18, 2009, we
appointed Mr. Ming He and Mr. Jingzhong Yu as our independent directors, with
engagement term to be one year. On July 15, 2011, we appointed Mr. Ningsheng
Zhou as our director. On October 5, 2011, we appointed Mr. Hsin-I Lin as our
independent director, with engagement term to be one year. Our board consists of
five members, including the Chief Executive Officer, Mr. Shunqing Zhang, sits as
the Chairman of the Board, Mr. Ningsheng Zhou, and along with the three
independent directors. During the 2011 fiscal year, we did not pay Mr. Shunqing
Zhang any compensation for his services as our director. For their function as
directors, we paid Mr. Zhou, Mr. He, Mr. Yu and Mr. Lin in the amount of $18,588
(RMB 120,000), $25,000, $7,745 (RMB 50,000) and $6,250 respectively. We do
reimburse our directors for reasonable travel expenses related to duties as a
director.
Employment Agreements with Executive Officers
As required by applicable PRC
law, we have entered into employment agreements with most of our officers,
managers and employees. Our subsidiary Henan Gengsheng Refractories Co., Ltd.
has employment agreements with the following named executive officers:
Shunqing Zhang
. Mr. Zhang’s preliminary employment
agreement became effective as of January 1, 2007 and expired on December 31,
2009. We have renewed his employment agreement in January 2010 and 2012, which
will expire on December 31, 2013, and we expect that this agreement will be
renewed by the parties upon its expiration. Mr. Zhang is receiving an annual
salary of approximately $78,700 under the agreement.
Ningfang Liang.
Pursuant to employment agreement that
the Company and Mr. Liang entered into on June 30, 2011, Mr. Liang will be
entitled to an annual salary of $90,000. The employment agreement has an initial
term (the “Initial Term”) commencing as of June 27th, 2011 and expiring on June
26th, 2012, and continuing on a year-to-year basis thereafter unless terminated
by either party on not less than thirty (30) days’ notice prior to the
expiration of the Initial Term or any one-year extension.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has
reviewed the Compensation Discussion and Analysis required by Item 402(b) of
Regulation S-K and discussed that analysis with management. Based on its review
and discussions with management, the Compensation Committee recommended to the
Board that the Compensation Discussion and Analysis be included in this Proxy
Statement and incorporated by reference into the Company’s annual report on Form
10-K for the fiscal year ended December 31, 2011. This report is provided by the
following independent directors, who comprise the Compensation Committee:
|
|
Jingzhong Yu, Chair
|
|
|
Hsin-I Lin
|
|
|
Ming He
|
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The Compensation Committee
consists of Messrs. Yu, Lin and He. None of the members of the Compensation
Committee is a current or former officer or employee of China GengSheng
Minerals, Inc. or any of our subsidiaries. There are no compensation committee
interlocks or insider participation in compensation decisions that are required
to be disclosed in this Proxy Statement.
RELATED PARTY TRANSACTIONS
There were no material
transactions, or series of similar transactions, during our last two fiscal
years, or any currently proposed transactions, or series of similar
transactions, to which our Company or any of our subsidiaries was or is to be a party, in which the amount
involved exceeded the lesser of $120,000 or 1% of the average of our total
assets at year-end for the last two completed fiscal years and in which any
director, executive officer or any security holder who is known to us to own of
record or beneficially more than five percent of any class of our common stock,
or any member of the immediate family of any of the foregoing persons, had an
interest.
15
Procedures for Approval of Related Party
Transactions
The Board of Directors is charged
with reviewing and approving all potential related party transactions. All such
related party transactions must then be reported under applicable SEC rules. We
have not adopted other procedures for review, or standards for approval, of such
transactions, but instead review them on a case-by-case basis.
PROPOSAL TWO:
RATIFICATION OF APPOINTMENT OF PKF
HONG KONG
The Audit Committee of the Board
of Directors appointed PKF Hong Kong as the Company’s independent registered
public accounting firm. PKF Hong Kong currently audits the Company’s financial
statements annually. The affirmative vote of a majority of the votes cast is
necessary to appoint PKF. Representatives of PKF Hong Kong may be present at the
Annual Meeting and will have the opportunity to make a statement, if they desire
to do so, and to respond to appropriate questions. If the appointment of PKF
Hong Kong is not ratified by the stockholders, the Audit Committee may appoint
another independent registered public accounting firm or may decide to maintain
its appointment of PKF Hong Kong.
AUDITOR FEES
The Audit Committee has selected PKF, Hong Kong to serve as our independent registered public accounting firm for
the fiscal year ended December 31, 2011. We first engaged PKF, Hong Kong on
April 25, 2007, and it has served as our principal accounting firm since that
time. The fees paid or payable for services rendered by PKF for fiscal years
ended December 31, 2010 and 2011 were as follows:
Audit Fees
.
PKF Hong Kong, was paid aggregate fees of approximately $143,485 and
$136,160 for professional services rendered for the audit of our annual
financial statements and for the reviews of the financial statements for the
fiscal years ended December 31, 2011 and 2010.
Audit Related Fees.
PKF
Hong Kong, was not paid additional fees for the fiscal years December 31, 2011
and December 31, 2010 for assurance and related services reasonably related to
the performance of the audit or review of our financial statements.
Tax Fees
.
PKF Hong Kong, was not paid any fees for the fiscal years ended December 31,
2011 and December 31, 2010 for professional services rendered for tax
compliance, tax advice and tax planning. This service was not provided.
All Other Fees.
PKF
Hong Kong, was paid no other fees for professional services during the fiscal
years ended December 31, 2011 and December 31, 2010.
Our Audit Committee and Board of
Directors reviewed and approved all audit services provided by PKF Hong Kong,
and has determined that the firm's provision of such services to us during 2011
is compatible with and did not impair the independence of PKF Hong Kong. It is
the practice of our Audit Committee and Board of Directors to consider and
approve in advance all auditing services provided to us by our independent
auditors.
The Board of Directors
recommends that the stockholders vote “FOR” the ratification of appointment of
PKF Hong Kong.
16
STOCKHOLDER PROPOSALS
The deadline for submission of
stockholder proposals pursuant to Rule 14a-8 under the Securities Exchange Act
of 1934, as amended (“Rule 14a-8”), for inclusion in the Company’s proxy
statement for its 2013 Annual Meeting of Stockholders is May 16, 2013 which is
120 calendar days prior to the anniversary of the mailing date of this proxy
statement. After May 16, 2013, notice to the Company of a stockholder proposal
submitted other than pursuant to Rule 14a-8 is considered untimely, and the
persons named in proxies solicited by the Board of Directors of the Company for
the 2013 Annual Meeting may exercise discretionary voting power with respect to
any such proposal.
OTHER MATTERS
MANAGEMENT KNOWS OF NO OTHER
MATTERS TO COME BEFORE THE MEETING OTHER THAN THOSE REFERRED TO IN THE NOTICE OF
MEETING. HOWEVER, SHOULD ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING, THE
SHARES REPRESENTED BY THE PROXY SOLICITED HEREBY WILL, ON A POLL, BE VOTED ON
SUCH MATTERS IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS VOTING THE
SHARES REPRESENTED BY THE PROXY.
ANNUAL REPORT
Upon written request to our
Secretary, China GengSheng Minerals, Inc., No.88 Gengsheng Road, Dayugou Town,
Gongyi, Henan, People’s Republic of China 451271, Attention: Secretary, we will
provide without charge to each person requesting a copy of our 2011 Annual
Report, including the financial statements filed therewith. We will furnish a
requesting stockholder with any exhibit not contained therein upon specific
request. In addition, this Proxy Statement, as well as our 2011 Annual Report,
is available on our Internet website at
www.gengsheng.com
.
APPROVAL AND CERTIFICATION
The contents of this Proxy
Statement have been approved and this mailing has been authorized by the
Directors of the Company.
Where information contained in
this Proxy Statement rests specifically within the knowledge of a person other
than the Company, and that person has provided the information to the Company,
the Company has relied upon information furnished by such person.
The foregoing contains no untrue
statement of material fact and does not omit to state a material fact that is
required to be stated or that is necessary to make a statement not misleading in
the light of the circumstances in which it was made.
Dated this 14th day of September, 2012
BY ORDER OF THE BOARD OF DIRECTORS
|
/s/Shunqing Zhang
|
|
Shunqing Zhang
|
|
Chairman of the Board,
|
|
Chief Executive Officer and President
|
17
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