| Item 5.02 | | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On February 5, 2007, Deng Zhi Ren (Paul) resigned his position as the Chief Executive Officer of Great China International Holdings, Inc. (the “Company”), effective March 5, 2007.
Also on February 5, 2007, the Company’s Board of Directors appointed Mr. Jiang Fang, the Company’s former Chief Executive Officer and current Chairman of the Board and President, as the Company’s new Chief Executive Officer, effective March 5, 2007. Mr. Jiang, 52, has served for the past five years as the Chairman and a Director of the Company’s subsidiary Silverstrand International Holdings Limited and its subsidiary, Shenyang Maryland International Industry Company Limited, of which Mr. Jiang was the founder.
In 2003, Shenyang Maryland entered into a standard form employment agreement with Jiang Fang, the term of which runs from January 1, 2003 to December 31, 2007, which provides for annual compensation of $28,600, but does not contain any unusual severance or early termination provisions.
Mr. Jiang has been a party to a number of transactions involving the Company and its subsidiaries, as follows:
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| — | The Company’s subsidiary, Silverstrand International Holdings, acquired all of the share capital of Shenyang Maryland for $5,000,000, paid in five installments during 2005. Of the total amount: $4,350,000 was paid to Jiang Fang; $500,000 was paid to Jiang Peng, a former officer and director and the brother of Jiang Fang, $50,000 was paid to each of Duan Jing Shi and Wang Li Rong, each an officer and/ or director, and $50,000 was paid to Li Guang Hua, a former director. |
| — | Pursuant to a sale and purchase agreement dated December 8, 2005 and subsequently amended on December 28, 2005, the Company agreed to acquire, through Shenyang Maryland, 70% of the equity interest in Shenyang Xinchao Property Company Limited, a Sino-Foreign joint venture corporation that was formed for the purpose of owning and developing the Xita Project and owned approximately 66% of the land rights pertaining thereto. The interest in Shenyang Xinchao Property Company was acquired from Shenyang Yunfeng Real Estate Development Co., which was owned and controlled by Jiang Fang and Jiang Peng. Under the terms of the agreement as amended, the purchase price of the Shenyang Xinchao Development Co. interest was $8.7 million, which was paid through a cash payment of $5.0 million made in the first quarter of 2006 and by the assumption of the obligation of Shenyang Yunfeng Real Estate Development Co., to make additional contributions to the joint venture in the amount of $3.7 million. The remaining approximately 34% interest in the land rights to the Xita Project was held by Shenyang Yindu Property Company, also a Sino-Foreign joint venture. Pursuant to agreements dated December 28, 2005, Shenyang Maryland International agreed to acquire a 70% interest in Shenyang Yindu Property Company from Shenyang Yunfeng Real Estate Development Co. by assuming its obligation to make capital contributions to Shenyang Yindu Property Company, and Silverstrand International Holdings agreed to acquire a 30% interest in both Shenyang Yindu Property Company and Shenyang Xinchao Property Company from I.R.E. Corporation. As a result of these transactions the Company held through its subsidiaries 100 percent interest in the land comprising the Xita Project. |
| — | Shenyang Yunfeng Real Estate Development Co. owed the Company as at December 31, 2005 the sum of $4,443,422. This amount includes a refund of payments from the Shenyang City Planning and Land Resources Council because of a revision of the land use right cost for the Xita Project in the amount of $785,637 that was made to Shenyang Yunfeng Real Estate Development |
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