KGJI [KINGOLD JEWELRY] DEF 14A: ​ November 18, 2019​ Dear Stockholder: You are

Ticker: KGJI, Company: KINGOLD JEWELRY, INC., Type: DEF 14A, Date: 2019-11-18
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​ November 18, 2019​ Dear Stockholder: You are invited to attend Kingold’s Annual Meeting of Stockholders at 10:00 AM, local time, on December 18, 2019, at the Kingold Jewelry Corporate Center, No. 8 Han Huang Road, Jiang’an District, Wuhan, China. Registration will begin at 9:00 AM, local time. Details of the business to be conducted at the Annual Meeting are



DEF 14A 1 tv532761-def14a.htm DEF 14A
(4)
Date Filed:

November 18, 2019​
Dear Stockholder:
You are invited to attend Kingold’s Annual Meeting of Stockholders at 10:00 AM, local time, on December 18, 2019, at the Kingold Jewelry Corporate Center, No. 8 Han Huang Road, Jiang’an District, Wuhan, China. Registration will begin at 9:00 AM, local time.
Details of the business to be conducted at the Annual Meeting are included in the attached Notice of Annual Meeting of Stockholders and Proxy Statement.
Whether or not you plan to attend in person, your vote is important and you are encouraged to vote promptly. If you received a paper copy of the proxy card by mail, you may sign, date and return the proxy card in the enclosed envelope. If you attend the Annual Meeting, you may revoke your proxy and vote in person.
Very truly yours,
[MISSING IMAGE: sg_zhihong-jia.jpg]
Zhihong Jia
Chairman of the Board of Directors
and Chief Executive Officer

KINGOLD JEWELRY, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 18, 2019
November 18, 2019​
TO THE STOCKHOLDERS OF KINGOLD JEWELRY, INC.:
You are cordially invited to attend the annual meeting of stockholders of Kingold Jewelry, Inc., a Delaware corporation (“we,” “us” or “Kingold”), to be held on December 18, 2019, at the Kingold Jewelry Corporate Center, No. 8 Han Huang Road, Jiang’an District, Wuhan, China, beginning each day at 10:00 AM, local time. At this year’s annual meeting, we are asking stockholders to:
1.
Elect five directors named in the attached Proxy Statement to serve for one-year terms to expire at the 2020 annual meeting of stockholders or until their respective successors are duly elected and qualified;
2.
Ratify the appointment of Friedman LLP as the independent registered public accounting firm of Kingold for the fiscal year ending December 31, 2019;
3.
Transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
This notice of meeting, Proxy Statement, proxy card and copy of the Annual Report to Stockholders for the year ended December 31, 2018, are being distributed on or about November 18, 2019. The foregoing items of business are more fully described in the attached Proxy Statement. Stockholders of record at the close of business on November 14, 2019, the record date, are entitled to notice of and to vote at the annual meeting and any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
[MISSING IMAGE: sg_zhihong-jia.jpg]
Zhihong Jia
Chairman of the Board and Chief Executive Officer
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIAL
FOR THE ANNUAL MEETING TO BE HELD ON DECEMBER 18, 2019
The Notice of Meeting, Proxy Statement, Proxy Card and Annual Report are available on the internet
at:http://www.iproxydirect.com/index.php/kgji

KINGOLD JEWELRY, INC.
No. 8 Han Huang Road
Jiang’an District
Wuhan, Hubei Province, PRC 430023
PROXY STATEMENT
2019 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement and accompanying proxy was first mailed to stockholders on or about November 18, 2019, in connection with the solicitation of proxies by the Board of Directors (“Board”) of Kingold Jewelry, Inc., a Delaware corporation (“we,” “us”, the “Company,” or “Kingold”), for use at the annual meeting of stockholders to be held at 10:00 AM, local time, on December 18, 2019, at the Kingold Jewelry Corporate Center, No. 8 Han Huang Road, Jiang’an District, Wuhan, China, or at any adjournment or postponement thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders (the “Annual Meeting”). Our telephone number at our principal executive offices is +86 27 65694977.
INFORMATION CONCERNING SOLICITATION AND VOTING
Record Date and Share Ownership
Stockholders of record at the close of business on November 14, 2019, which date is referred to herein as the record date, are entitled to notice of and to vote at the Annual Meeting. As of the record date, 11,020,744 shares of our common stock were issued and outstanding and held of record by approximately 79 stockholders of record.
A list of these stockholders will be available for inspection during ordinary business hours at our principal executive offices, at No. 8 Han Huang Road, Jiang’an District, Wuhan, Hubei Province, PRC 430023 for at least ten days prior to the annual meeting. The list will also be available for inspection at the annual meeting.
Voting, Solicitation and Revocability of Proxy
Registered stockholders can vote by mail. If your shares are held in the name of a bank, broker or other nominee, follow the voting instructions on the form you receive from your bank, broker or other nominee.
In order to ensure that your vote is counted, please return your proxy card, properly signed, and the shares represented will be voted in accordance with your directions. You can specify your choices by marking the appropriate boxes on the proxy card. If your proxy card is signed and returned without specifying choices, the shares will be voted in line with the Board’s recommendations for Proposal Nos. 1 through 3.
You may revoke your proxy at any time before it is voted at the Annual Meeting by executing a later-voted proxy by mail, by voting by ballot at the Annual Meeting, or by providing written notice of the revocation to our Secretary at our principal executive offices.
IMPORTANT:   All stockholders are cordially invited to attend the annual meeting in person. To assure your representation at the annual meeting, you are urged to vote your shares by signing and returning the enclosed proxy card as promptly as possible in the enclosed self-addressed envelope. Any stockholder attending the annual meeting may vote in person even if he or she returned a proxy. However, if a stockholder’s shares are held of record by a broker, bank or other nominee and the stockholder wishes to vote at the annual meeting, the stockholder must obtain from the record holder a proxy issued in his or her name.
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Your vote is important. Accordingly, regardless of whether you plan to attend the Annual Meeting, you are urged to vote by signing and returning the accompanying proxy card.
Attendance at the Annual Meeting is generally limited to our stockholders and their authorized representatives. All stockholders must bring an acceptable form of identification, such as a passport or driver’s license, in order to attend the Annual Meeting in person. In addition, if you hold shares of common stock in “street name” and would like to attend the Annual Meeting, you will need to bring an account statement or other acceptable evidence of ownership of shares as of the close of business on the record date; however, those who hold shares in “street name” cannot vote their shares at the meeting. If your shares are held in “street name” in a brokerage account by a bank, broker or by another nominee, you are considered the “beneficial owner” of those shares. As the beneficial owner of those shares, you have the right to direct your broker, bank or nominee how to vote and you also are invited to attend the Annual Meeting. However, because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the meeting unless you obtain a legal proxy from the bank, broker, or nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting.
If you do attend, you may vote by ballot at the Annual Meeting, thereby canceling any proxy previously given. However, attendance at the Annual Meeting will not revoke a proxy unless you actually vote in person at the Annual Meeting.
In the event that any matter not described in this Proxy Statement properly comes before the Annual Meeting, the proxy holders named in the accompanying proxy will vote the shares represented by the proxy in their discretion. As of the date of this Proxy Statement, we are not aware of any other matter that might be presented at the Annual Meeting.
Each share of common stock outstanding on the record date is entitled to one vote. The holders of a majority of the shares of our common stock entitled to vote at the meeting as of the record date, present in person or represented by proxy, shall constitute a quorum for the transaction of business at the Annual Meeting. Stockholders may withhold authority to vote for one or more of the nominees for director and may abstain on one or more of the other matters that may come before the Annual Meeting. If, however, a quorum is not present or represented, the Chairman of the meeting or the holders of a majority of the shares of common stock present, either in person or represented by proxy, have the power to adjourn the Annual Meeting from time to time, without notice other than announcement at the Annual Meeting, until a quorum is present or represented.
Assuming a quorum is present, the election of directors shall be determined by a plurality of the votes cast, and all other matters shall be determined by a majority of the votes cast affirmatively or negatively on the matter.
The inspector of election appointed for the Annual Meeting will determine the existence of a quorum and will tabulate the votes cast at the Annual Meeting. For purposes of determining the presence of a quorum, abstentions and broker “non-votes” (shares held by a bank, broker or other nominee that does not have the authority, either express or discretionary, to vote on a particular matter) will be counted by us as present at the Annual Meeting. Abstentions and broker non-votes, however, do not technically constitute a “vote cast” (affirmatively or negatively) on any matter and thus will be disregarded in the calculation of votes cast and whether stockholder approval of the matter has been obtained. Therefore, an abstention or broker non-vote will not have the effect of a vote for or against the proposal and will not be counted in determining the number of votes required for approval, though they will be counted as present at the Annual Meeting in determining the presence of a quorum.
Under the NASDAQ rules regulating banks, brokers or other nominees and under applicable rules of the U.S. Securities and Exchange Commission, or the Commission, brokers, banks or other nominees that have not received voting instructions from a customer ten days prior to the meeting date may only vote the customer’s shares in discretion of the bank, broker or other nominee on proposals regarding “routine” matters, which in most cases includes the ratification of the appointment of the independent registered public accounting firm. Accordingly, without your specific instructions, your bank, broker, or other nominee may only vote your shares with respect to Proposal No. 2 (the ratification of the appointment of Friedman LLP as our independent registered public accounting firm for fiscal 2019).
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The cost of soliciting proxies will be borne by us. In addition to the solicitation of proxies by mail, we may utilize some of the officers and employees (who will receive no compensation in addition to their regular salaries), to solicit proxies personally and by telephone. Currently, we do not intend to retain a solicitation firm to assist in the solicitation of proxies. We may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of the proxy materials to their principals and to request authority for the execution of proxies and will reimburse such persons for their expenses in so doing.
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MATTERS TO BE CONSIDERED AT
THE ANNUAL MEETING
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
General
Our amended and restated bylaws provide that our Board shall be fixed from time to time by the stockholders or by the Board pursuant to a resolution adopted by a majority of the total number of authorized directors. Our Board currently consists of five directors, each serving a one-year term. The existing directors are Messrs. Zhihong Jia, Guang Chen, Zhiyong Xia and Jun Wang, and Ms. Alice Io Wai Wu. At the Annual Meeting, the stockholders will vote on the reelection of each of them. All directors will hold office until our next annual meeting of stockholders, at which time stockholders will vote on the election and qualification of their successors.
All shares duly voted will be voted for the election of directors as specified by the stockholders. No proxy may be voted for more people than the number of nominees listed below. Unless otherwise instructed, the proxy holders will vote the proxies received by themFOR the election of each of the nominees named below, all of whom are presently directors. If any nominee is unable or declines to serve as a director at the time of the Annual Meeting, although we know of no reason to anticipate that this will occur, the proxies will be voted for any nominee designated by the present Board to fill the vacancy. There are no family relationships among any of our directors or executive officers. Stockholders do not have cumulative voting rights in the election of directors.
The following paragraphs set forth information regarding the current ages, positions, and business experience of the nominees.
Nominees for Directors
ZHIHONG JIA
Director Since: 2009 Age: 57
Mr. Jia has served as our Chief Executive Officer and Chairman of our Board since the consummation of our December 2009 reverse acquisition transaction. Mr. Jia also co-founded Wuhan Kingold Jewelry Company Limited (“Wuhan Kingold”), our contractually controlled affiliate and has served as its Chief Executive Officer and Chairman since its establishment in 2002. Mr. Jia has also served vice president of the Gems and Jewelry Trade Association of China since November 2005. Mr. Jia served in the rear supply service department of the People’s Liberation Army in Guangzhou and Wuhan, and was responsible for managing gold mines owned by the Army. Mr. Jia graduated from Wuhan University in 2004 with a graduate EMBA certificate.
Mr. Jia brings extensive operational and industry experience to our company. Furthermore, Mr. Jia’s committed service as our Chairman and Chief Executive Officer, along with his knowledge of and deep genuine interest in our company and industry led the Board to conclude that he should be nominated to serve another term as a director.
ALICE IO WAI WU*
Director Since: 2016 Age: 48
Ms. Wu has served as one of our directors since May 9, 2016. Ms. Wu has served as chairman of the Audit Committee and a member of the Compensation Committee and Nominating Committee of our Board since May 2016. Ms. Wu has been providing accounting, consulting and advisory services to public and private companies since September 2011 through her company Wu & Company, Inc. Ms. Wu was an independent director of Yulong Eco-materials Limited, a company listing on Nasdaq, from July 2015 to February 2017. From February 2015 to December 2015, she was the chief financial officer of The Future Education Group Inc., a Chinese company providing online and mobile education platforms and contents.
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Ms. Wu also has had extensive experience auditing the financial statements and internal controls of public and private companies, including as a partner at Anton & Chia, LLP from August 2013 to May 2014, a partner at Cacciamatta Accounting Corporation from January 2009 to July 2013, and as an audit manager of Moore Stephens Wurth Frazer and Torbet, LLP from January 2005 to May 2008. Ms. Wu graduated from California State University, Fullerton, with a bachelor’s degree in business administration with accounting concentration.
Ms. Wu’s financial and accounting expertise, including her qualifications as an Audit Committee financial expert, as well as her performance as one of our independent directors led the Board to conclude that she should be nominated to serve another term as a director.
ZHIYONG XIA*
Director Since: 2016 Age: 50
Mr. Xia served as one of our directors since August 2016. Mr. Xia served as chairman of the Compensation Committee and a member of the Audit Committee and the Nominating Committee of our Board since August 2016. Mr. Xia has been a partner of Hubei Zhongyou Law Firm since January 2009. Mr. Xia has worked at Hubei Zhongyou Law Firm since 2003 and has been licensed to practice law since May 2005. Mr. Xia has been providing legal services to various investment companies regarding litigation and transactional matters. Mr. Xia graduated from Wuhan City Construction College (now called Huazhong University of Science and Technology) in 1991, when he received his bachelor’s degree in agriculture.
Mr. Xia’s rich experience in financing law led the Board to conclude that that he should be nominated to serve another term as a director.
JUN WANG
Director Since: 2014 Age: 45
Mr. Wang has served as one of our directors since June 16, 2014 and as our general manager since May 1, 2014. Mr. Wang has worked at Wuhan Kingold since 2003 as a gold investment analyst, and has successively served as the manager of the purchase department, the manager of the investment department, the assistant general manager and as the vice general manager of Wuhan Kingold. From 2000 to 2002, Mr. Wang worked at Hubei Mailyard Group Company and led its network information management and website development. From 1997 to 2000, Mr. Wang worked at MODISH C’BONS Cosmetics Company and led its network information management and logistics management. Mr. Wang graduated with a Bachelor’s Degree from the Computer Engineering Department of Central China Normal University in 1997 where he majored in software development and application.
Mr. Wang possesses over a dozen years of working experience both within the gold jewelry industry and at Wuhan Kingold. Mr. Wang’s experience and involvement with the Company, as well as his deep understanding of the gold jewelry industry and abundant experience in the management of industrial production technology and business management, led the Board to conclude that he should be nominated to serve another term as a director.
GUANG CHEN*
Director Since: 2014 Age: 40
Mr. Chen has served as one of our directors since June 16, 2014. Mr. Chen has severed as chairman of the Nominating Committee and a member of the Audit Committee and the Compensation Committee. Mr. Chen has extensive banking experience as well as experience with public companies and in capital markets within China. Mr. Chen has worked as a Vice President at the Investment Bank Department of HuaTai United Securities Co., Ltd. since June 2015. He worked at China Merchants Securities Co., Ltd. Investment Bank since 2007 to 2015. From 2007 to 2009, Mr. Chen worked in the Supervision Department of the China Securities Regulatory Commission. From 2006 to 2007, Mr. Chen worked in the Supervision
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Department of the Tianjin Securities Regulatory Bureau. Mr. Chen graduated from the Xi’an University of Architecture and Technology in 2003, from which he earned a Bachelor’s Degree in Accounting. Mr. Chen also holds a Master’s Degree in Economics from Nankai University, from which he graduated in 2006.
Mr. Chen’s extensive banking and public company experience led the Board to conclude that he should be nominated to serve another term as a director.
Except as noted above, the above persons do not hold any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act.
*
Indicates Independent Director/Nominee
Vote Required
Directors are elected by a plurality of the votes cast at the Annual Meeting, assuming a quorum is present.
Recommendation of Our Board
Our Board recommends that Kingold stockholders voteFOR the election of the nominees listed above.
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CORPORATE GOVERNANCE
Director Independence
In accordance with the current listing standards of The NASDAQ Stock Market, our Board, on an annual basis, affirmatively determines the independence of each director or nominee for election as a director. Our Board has determined that three of our current directors, Ms. Wu, Messrs. Chen and Xia, are “independent directors” as defined under the NASDAQ Rules, constituting a majority of independent directors of our Board as required by the corporate governance rules of NASDAQ. In making this determination, our Board has concluded that none of those members has an employment, business, family or other relationship that, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Board Leadership Structure and Corporate Governance
In accordance with our Bylaws, our Board elects our officers, including a President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and such other officers as our Board may appoint from time to time. In addition, our Board may appoint a Chairman of the Board. Mr. Jia has served as our Chairman and Chief Executive Officer since the consummation of our December 2009 reverse acquisition transaction, overseeing our day-to-day operations while also leading our Board. The Board believes that the current model is effective for our continued growth in that the combined position of Chief Executive Officer and Chairman maximizes strategic advantages and Mr. Jia’s industry expertise. Mr. Jia, given his extensive knowledge of China’s gold jewelry industry, coupled with the fact that he has overseen our operations since inception, is the director most familiar with our business and industry, and is best positioned to set and execute strategic priorities. Mr. Jia provides a strong link between management and the Board, which promotes clear communication and enhances strategic planning and implementation of corporate strategies. Mr. Jia’s leadership, driven by his deep business and industry expertise, enhances the Board’s exercise of its responsibilities. In addition, this model provides enhanced efficiency and effective decision-making and clear accountability. The Board has not named a lead independent director.
The Chairman may preside at meetings of our Board. In his absence, any other director or any member of any committee designated by the Board may chair a meeting of the Board or such committee. A director is not required to hold any shares in us by way of qualification. A director may vote with respect to any contract, proposed contract or arrangement in which he is materially interested. A director may exercise all the powers of the Company to borrow money, mortgage its undertaking, property and uncalled capital and issue debentures or other securities whenever money is borrowed or as security for any obligation of the Company or of any third party.
The Company’s corporate governance serves to ensure that members of the Board are independent from management and that the Board adequately performs its function to ensure that the interests of the Board and management are in alignment with the interests of the stockholders. The Board has adopted Corporate Governance Guidelines to promote effective governance of the Company. The Corporate Governance Guidelines are available on our website atwww.kingoldjewelry.com under “Investors — Corporate Governance Guidelines.”
On an annual basis, each director and executive officer is required to complete a Director and Officer Questionnaire. Within this questionnaire are requirements for disclosure of any transactions with the Company in which the director or executive officer, or any member of his or her immediate family, have a direct or indirect material conflict of interest.
The Company maintains an insider trading policy that provides that the Company’s personnel may not buy, sell or engage in other transactions in the Company’s stock while aware of material non-public information and that restricts trading in Company securities for a limited group of Company employees (including executive officers and directors) to defined window periods that follow our quarterly earnings releases. The policy is available on our website atwww.kingoldjewelry.com under “Investors — Insider Policy.”
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Board’s Role in Risk Oversight
Risk is inherent in every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including strategic risks, enterprise risks, financial risks, regulatory risks, and others. Management is responsible for the day-to-day management of risks that the Company faces, while our Board, as a whole and through its committees, has responsibility for the oversight of risk management, and is tasked with assuring that the long-term interests of our stockholders are being served. In its risk oversight role, our Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.
Our Board believes that establishing the right “tone at the top,” and full and open communication between management and our Board, are essential for effective risk management and oversight. Our Chairman meets regularly with other senior officers to discuss strategy and the risks we face. Senior management is available to address any questions or concerns raised by our Board on risk management-related and any other matters. Our Chairman holds strategic planning sessions with senior management to discuss strategies, key challenges, and risks and opportunities for us.
While our Board is ultimately responsible for risk oversight at our company, our Board committees assist our Board in fulfilling its oversight responsibilities in certain areas of risk as further set forth below. Our Board committees report to our Board on significant risks and other matters.
Executive Sessions
The independent members of our Board meet in executive session (without the participation of executive officers or other non-independent directors) at least once each year, after a regularly scheduled Board meeting, and at any other time requested by any independent director. The chairman of our Nominating Committee is responsible for calling and presiding over executive sessions or, if such person is absent, by the independent director present who has the most seniority on our Board.
Committees and Meeting Attendance
Our Board held four meetings and acted one times by unanimous written consent in connection with matters related to the fiscal year ended December 31, 2018. Our Board has an Audit Committee, a Compensation Committee and a Nominating Committee. The Audit Committee held five meetings and acted one time by unanimous written consent during the fiscal year ended December 31, 2018. The Compensation Committee held two meeting and did not act by unanimous written consent during the fiscal year ended December 31, 2018. The Nominating Committee held two meeting and did not act by unanimous written consent during the fiscal year ended December 31, 2018.
During 2018, each member of the Board attended or participated in 60% or more of the aggregate of (i) the total number of meetings of the Board (held during the period for which such person has been a director) and (ii) the total number of meetings held by all committees of the Board on which such person served (during the periods that such person served). Our Bylaws provide that the Chairman of our Board shall preside at all meetings of our stockholders. Each director is expected to make reasonable efforts to attend Board meetings, meetings of committees of which such director is a member and the Annual Meetings of Stockholders. All five of our then sitting directors participated in the 2018 Annual Meetings of Stockholders.
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Committee Composition
The following table sets forth the current membership of our Audit Committee, Compensation Committee and Nominating Committee. Each committee conducts its business pursuant to a written charter approved by our Board, copies of which are available on our website atwww.kingoldjewelry.com under “Investors — Committee Charters.”
Audit Committee
Compensation Committee
Nominating Committee
Alice Io Wai Wu*
Guang Chen
Zhiyong Xia
Zhiyong Xia*
Guang Chen
Alice Io Wai Wu
Guang Chen*
Zhiyong Xia
Alice Io Wai Wu
*
Chairman of the committee.
Audit Committee.   Ms. Wu, Mr. Chen and Mr. Xia currently serve on the Audit Committee, which is chaired by Ms. Wu. Our Audit Committee falls within the definition of  “Audit Committee” under Section 3(a)(58)(A) of the Securities Exchange Act of 1934, or the Exchange Act. In addition to meeting The NASDAQ Stock Market’s tests for director independence, directors serving on our Audit Committee must meet two basic criteria set forth in the rules promulgated by the Commission. First, Audit Committee members are barred from accepting, directly or indirectly, any consulting, advisory or other compensatory fee from us or any affiliate of us, other than in the member’s capacity as a member of our Board and any Board committee. Second, a member of our Audit Committee may not be an affiliated person of us or any subsidiary of us, apart from his or her capacity as a member of our Board and any Board committee. Our Board has determined that each member of our Audit Committee meets these independence requirements, in addition to the independence criteria established by The NASDAQ Stock Market. Our Board has determined that each Audit Committee member has sufficient knowledge in financial and auditing matters to serve on the Audit Committee. Our Board has designated Ms. Wu as an “Audit Committee financial expert,” as defined in Item 407(d) of Regulation S-K. Our Audit Committee assists our Board in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements, and, in accordance with The NASDAQ Stock Market requirements, discusses policies with respect to risk assessment and risk management. Our Audit Committee’s primary duties and responsibilities include:

reviewing the financial reports provided by us to the Commission, our stockholders or to the general public;

reviewing our internal financial and accounting controls;

recommending, establishing and monitoring procedures designed to improve the quality and reliability of the disclosure of our financial condition and results of operations;

overseeing the appointment, compensation and evaluation of the qualifications and independence of our independent auditors;

overseeing our compliance with legal and regulatory requirements;

overseeing the adequacy of our internal controls and procedures to promote compliance with accounting standards and applicable laws and regulations;

engaging advisors as necessary; and

determining the funding from us that is necessary or appropriate to carry out the Audit Committee’s duties.
Compensation Committee.   Mr. Xia, Ms. Wu and Mr. Chen currently serve on the Compensation Committee, which is currently chaired by Mr. Xia. Each member of the Compensation Committee is “independent” as that term is defined in the rules of the Commission and within the meaning of such term as defined under the listing standards of The NASDAQ Stock Market, a “nonemployee director” for purposes of Section 16 of the Exchange Act and an “outside director” for purposes of Section 162(m) of
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the Internal Revenue Code of 1986, as amended. Our Compensation Committee also administers our stock option incentive plan, and assists our Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. The Compensation Committee’s responsibilities include:

considering and authorizing the compensation philosophy for our personnel;

monitoring and evaluating matters relating to our compensation and benefits structure;

reviewing and approving corporate goals and objectives relevant to the Chief Executive Officer and other executive officers’ compensation;

evaluating the Chief Executive Officer’s and other executive officers’ performance in light of corporate goals and objectives and determining and approving the Chief Executive Officer’s and other executive officers’ compensation based on such evaluation;

reviewing and approving all compensation for all our nonemployee directors and other employees of ours and our subsidiaries with a base salary greater than or equal to $100,000;

reviewing the terms of our incentive compensation plans, equity-based plans, retirement plans, deferred compensation plans and welfare benefit plans;

reviewing and approving executive officer and director indemnification and insurance matters;

reviewing and discussing the compensation discussion and analysis section proposed for inclusion in our annual report on Form 10-K and annual proxy statement with management and recommending to the Board whether such section should be so included;

preparing and approving the Compensation Committee’s report to be included as part of our annual proxy statement;

evaluating its own performance on an annual basis and reporting on such performance to the Board;

reviewing and reassessing the Compensation Committee charter and submitting any recommended changes to the Board for its consideration; and

having such other powers and functions as may be assigned to it by the Board from time to time.
For more information regarding our compensation programs and processes, see the discussion below under the heading “Compensation Discussion and Analysis.”
Nominating Committee.   Mr. Chen, Ms. Wu and Mr. Xia currently serve on the Nominating Committee, which is chaired by Mr. Chen. Each member of the Nominating Committee is “independent” as that term is defined in the rules of the Commission and within the meaning of such term as defined under the listing standards of The NASDAQ Stock Market.
Our Nominating Committee makes recommendations to our Board regarding the nomination of candidates to stand for election as members of our Board, evaluates our Board’s performance, and provides oversight of corporate governance and ethical standards. Our Nominating Committee has the responsibility to oversee the Company’s Corporate Governance Guidelines and propose changes to such guidelines from time to time as may be appropriate. Our Nominating Committee assists our Board in fulfilling its oversight responsibilities with respect to the management of risks associated with Board organization, membership and structure, succession planning for our directors and executive officers, and corporate governance. For more information regarding our director nomination processes, see the discussion below under the heading “Director Nominations.”
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Director Nominations
As noted above, the Board has determined that each member of the Nominating Committee (referred to in this section as the “Committee”) is independent as defined under the rules of the Commission and within the meaning of such term as defined under the listing standards of The NASDAQ Stock Market.
The Committee’s process for considering all candidates for election as directors, including stockholder-recommended candidates, is designed to ensure that the Committee fulfills its responsibility to recommend candidates that are properly qualified and are not serving any special interest groups, but rather the best interest of all of the stockholders.
In identifying candidates for membership on the Board, the Committee seeks directors with established strong professional reputations and experience in areas relevant to the strategy and operations of our business. The Committee seeks directors who possess the qualities of integrity and candor, who have strong analytical skills and who are willing to engage management and each other in a constructive and collaborative fashion. The Committee also seeks directors who have the ability and commitment to devote significant time and energy to service on the Board and its committees. Directors should have varied educational and professional experiences and backgrounds that, collectively, provide meaningful guidance and counsel to management. We believe that all of our directors meet the foregoing qualifications. The Nominating Committee does not have a specific policy in place with regard to the consideration of diversity when identifying director nominees; however, the Nominating Committee does consider diversity of opinion and experience when nominating directors, and, as a company, we are committed to creating and sustaining a culture of inclusion and fairness.
If there is a need for a new director because of an open position on the Board or because the Board has determined to increase the total number of directors, the Committee may retain a third-party search firm to locate candidates that meet the needs of the Board at that time. When a search firm is used, the firm typically provides information on a number of candidates for review and discussion by the Committee. If appropriate, the Committee chairman and some or all of the members of the Committee may interview potential candidates. If in these circumstances the Committee determines that a potential candidate meets the needs of the Board and possesses the relevant qualifications, the Committee will vote to recommend to the Board the election of such candidate as a director.
The Committee will consider director candidates recommended by stockholders if properly submitted to the Committee. Stockholders wishing to recommend persons for consideration by the Committee as nominees for election to the Board can do so by writing to the Nominating Committee, c/o Mr. Guang Chen, Kingold Jewelry, Inc., No. 8 Han Huang Road, Jiang’an District, Wuhan, Hubei Province, PRC 430023. Recommendations must include the proposed nominee’s name, detailed biographical data, work history, qualifications and corporate and charitable affiliations, as well as a written statement from the proposed nominee consenting to be named as a nominee and, if nominated and elected, to serve as a director. The Committee will then consider the candidate and the candidate’s qualifications using the criteria as set forth above. The Committee may discuss with the stockholder making the nomination the reasons for making the nomination and the qualifications of the candidate. The Committee may then interview the candidate and may also use the services of a search firm to provide additional information about the candidate prior to making a recommendation to the Board.
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Code of Business Conduct and Ethics
We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. The most recent version is available on the Investor Relations section of our website atwww.kingoldjewelry.com. The information contained on our website is not incorporated by reference into this Proxy Statement. If we make any substantive amendments to the code or grant any waiver from a provision of the code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website, as well as via any other means required by applicable law.
Communications by Stockholders with Directors
The Chairman of our Board may receive and distribute to our Board, and arrange for responses to, communications from stockholders. Stockholders may communicate with any and all of our directors by transmitting correspondence by mail, facsimile or email, addressed as follows:
c/o Corporate Secretary
Kingold Jewelry, Inc.
No. 8 Han Huang Road
Jiang’an District
Wuhan, Hubei Province, PRC 430023
Email Address: bl@kingoldjewelry.com
Our Corporate Secretary maintains a log of such communications and transmits as soon as practicable such communications to the Chairman and the identified director addressee(s), unless there are safety or security concerns that mitigate against further transmission of the communications, as determined by the Corporate Secretary. Our Board or individual directors so addressed are advised of any communication withheld for safety or security reasons as soon as practicable. The mailing envelope should contain a clear notation indicating that the enclosed letter is a “Board Communication” or “Director Communication.” All such letters must clearly state whether the intended recipients are all members of the Board or just certain specified directors. The Corporate Secretary relays all communications to directors absent safety or security issues.
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PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
Our Board has appointed the firm of Friedman LLP, or Friedman, as our independent registered public accounting firm to audit our consolidated financial statements and internal control over financial reporting for the fiscal year ending December 31, 2019, and recommends that stockholders vote for ratification of this appointment.
Stockholder ratification of the appointment of Friedman as our independent registered public accounting firm is not required by our Bylaws or otherwise; however, our Board is submitting the appointment of Friedman to our stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the appointment, our Audit Committee and our Board will reconsider whether or not to retain Friedman. Even if the appointment is ratified, our Board in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such change would be in the best interests of us and our stockholders. Representatives of Friedman are not expected to be present at the Annual Meeting, but we expect that they will participate telephonically, they will have the opportunity to make a statement if they desire to do so, and we expect that they will be available to respond to appropriate questions.
The table set forth below lists the fees billed to the Company by Friedman for audit services rendered in connection with the audits of our consolidated financial statements for the years ended December 31, 2018 and 2017, and fees billed for other services rendered by Friedman during these periods.
Description
2018
2017
Audit fees(1)
$ 425,000 $ 375,000
Audit related fees
Tax fees(2)
$ 23,443
All other fees
Total
$ 425,000 $ 398,443
(1)
Composed of the audit of our annual financial statements and reviews of our quarterly financial statements and registration statements.
(2)
Composed of services for tax compliance and tax inquiries from the IRS.
Vote Required
Approval of this proposal shall be determined by a majority of the votes cast affirmatively or negatively on the matter, assuming a quorum is present.
Recommendation of Our Board
Our Board recommends that the stockholders voteFOR the ratification of the appointment of Friedman as our independent registered public accounting firm for the fiscal year ending December 31, 2019.
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AUDIT COMMITTEE REPORT
The Audit Committee consists of three members: Alice Io Wai Wu, Guang Chen and Zhiyong Xia. All of the members are independent directors under the NASDAQ and SEC audit committee structure and membership requirements. The Audit Committee has certain duties and powers as described in its written charter adopted by the Board.
The Audit Committee is responsible primarily for assisting the Board in fulfilling its oversight responsibility of reviewing the financial information that will be provided to stockholders and others, appointing the independent registered public accounting firm, reviewing the services performed by the Company’s independent registered public accounting firm and internal audit department, evaluating the Company’s accounting policies and the Company’s system of internal controls that management and the Board have established, and reviewing significant financial transactions. The Audit Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements.
In fulfilling its oversight responsibility of appointing and reviewing the services performed by the Company’s independent registered public accounting firm, the Audit Committee carefully reviews the policies and procedures for the engagement of the independent registered public accounting firm, including the scope of the audit, audit fees, auditor independence matters and the extent to which the independent registered public accounting firm may be retained to perform non-audit related services.
The Company maintains an auditor independence policy that bans its auditors from performing non-financial consulting services, such as information technology consulting and internal audit services. This policy mandates that the Audit Committee approve the audit and non-audit services and related budget in advance, and that the Audit Committee be provided with quarterly reporting on actual spending. This policy also mandates that the Company may not enter into auditor engagements for non-audit services without the express approval of the Audit Committee.
The Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 2018 with the Company’s management and Friedman LLP, the Company’s independent registered public accounting firm (“Friedman”). The Audit Committee has also discussed under applicable Public Company Accounting Oversight Board (“PCAOB”) standards.
The Audit Committee also has received and reviewed the written disclosures and the letter from Friedman required by applicable requirements of the PCAOB regarding Friedman’s communications with the Audit Committee concerning independence, and has discussed with Friedman its independence from the Company.
Submitted by the Audit Committee of the Board of Directors
Alice Io Wai Wu
Guang Chen
Zhiyong Xia
14

MANAGEMENT
Board of Directors and Executive Officers
The following table sets the names, positions and ages of our current executive officers and directors. Our directors serve until the 2020 annual meeting of shareholders or until their successors are elected and qualified. Our officers are elected by the Board and their terms of office are, except to the extent governed by an employment contract, at the discretion of the Board.
Name
Age
Position
Zhihong Jia
57
Chief Executive Officer and Chairman of the Board
Bin Liu
48
Chief Financial Officer and Secretary
Jun Wang
45
General Manager and Director
Guang Chen
40
Independent Director
Zhiyong Xia
50
Independent Director
Alice Io Wai Wu
48
Independent Director
For biographical summaries of Ms. Wu, Messrs. Jia, Wang, Chen and Xia, please see the section above entitled “Proposal No. 1: Election of Directors — Nominees for Directors.”
BIN LIU
Chief Financial Officer and Secretary Since: 2010      Age: 48
Mr. Liu has served as our Chief Financial Officer since April 2010. Mr. Liu has more than 20 years of experience in the financial markets and in bridging business between the U.S. and China. From July 2004 through March 2010, Mr. Liu served as a vice president of Citigroup’s Financial Institution Cards business where he had full financial responsibility of a $2 billion business. He has also played critical roles in the development of Citigroup’s franchise development in the U.S. From 1993 through 2002, Mr. Liu worked for the China’s Ministry of Commerce (MOFCOM), promoting bilateral business and investment between the U.S. and China. Mr. Liu graduated from Shanghai Institute of Foreign Trade with a Bachelor’s Degree in International Business in 1993 and graduated from the Kellogg School at Northwestern University with a Master of Business Administration in 2004.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have established procedures for identifying related parties and related party transactions, and for ensuring that any changes in the status of related parties are brought to the attention of the Board and management in a timely manner. For transactions with related parties in the ordinary course of business, such as customer sales, supply purchases, subcontracting or consulting services, we apply the same review and approval process as we would in the context of other commercial agreements. All such transactions with related parties are summarized and provided to our Audit Committee for review. For transactions with related parties outside the ordinary course of business, such as significant capital expenditures, capital raising activities and mergers and acquisitions, the transactions must be approved by our Audit Committee. The following is a summary of the related party transactions in which we are engaged for the past two fiscal years.
During the year ended December 31, 2018 and 2017, the Company received working capital from Mr. Zhihong Jia, the CEO and Chairman of the Company, to pay certain expenses to various service providers on behalf of the Company. Such proceeds are unsecured and payable on demand with no interest. As of December 31, 2018 and 2017, the amount due to this related party was $3,941,846 and $2,630,301, respectively.
On November 30, 2018, Wuhan Kingold Industrial Group signed an agreement with the CEO and Chairman of the Company to transfer the credit right for its loan to the Company of approximately $143.9 million (RMB 1 billion). As the result, the CEO and Chairman of the Company assumed the credit right. The CEO and Chairman subsequently transferred this credit right to paid-in capital through a share restructuring on November 31, 2018. As a result, the Company recorded this transaction by increasing the additional paid-in capital as of December 31, 2018.
In connection with the Company’s borrowings of approximately $42.2 (RMB 290 million) loans from China Construction Bank, related party Wuhan Huayuan pledged fixed assets buildings as collaterals to secure these loans.
On June 27, 2016, Wuhan Kingold signed certain 5 years lease agreements with Wuhan Huayuan, a related party which is controlled by the CEO and Chairman of the Company, to rent office and store space at the Jewelry Park, commencing in July 2016 and October 2016, respectively, with aggregate annual rent of approximately $0.3 million (RMB 2.3 million). On July 1, 2017, Wuhan Kingold signed another 5 years lease agreement with Wuhan Huayuan to rent additional office space at the Jewelry Park commencing in July 2017 with aggregate annual rent of approximately $87,058 (RMB 576,000). The lease agreement with Wuhan Huayuan has been amended on November 16, 2017, pursuant to which two office spaces and a dormitory were no longer leased. The lease agreement was further amended on September 1, 2018, pursuant to which the store space was no longer leased.
For the years ended December 31, 2018 and 2017, the Company recorded $202,167 and $211,692 rent expense, respectively. As of December 31, 2018 and 2017, the Company had lease payables to Wuhan Huayuan of  $443,992 and $263,740, respectively, which were included in other payables and accrued expenses.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information concerning beneficial ownership of our capital stock as of November 14, 2019, by:

each stockholder or group of affiliated stockholders, who owns more than 5% of our outstanding capital stock;

each of our named executive officers;

each of our directors and director nominees; and

all of our directors, director nominees and executive officers as a group.
The following table lists the number of shares and percentage of shares beneficially owned based on 11,020,744 shares of our common stock outstanding as of November 14, 2019.
Beneficial ownership is determined in accordance with the rules of the SEC, and generally includes voting power and/or investment power with respect to the securities held. Shares of common stock subject to options and warrants currently exercisable or exercisable within 60 days of November 14, 2019 or issuable upon conversion of convertible securities which are currently convertible or convertible within 60 days of November 14, 2019 are deemed outstanding and beneficially owned by the person holding those options, warrants or convertible securities for purposes of computing the number of shares and percentage of shares beneficially owned by that person, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated in the footnotes to this table, and subject to applicable community property laws, the persons or entities named have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them.
Unless otherwise indicated in the footnotes, the principal address of each of the stockholders below is c/o Kingold Jewelry, Inc., the Kingold Jewelry Corporate Center, No. 8 Han Huang Road, Jiang’an District, Wuhan, Hubei Province, PRC 430023.
Name and Address of Beneficial Owner
Shares of
Common
Stock Beneficially
Owned
Percent of
Common
Stock
Outstanding
Directors and Named Executive Officers:
Zhihong Jia(1)
2,809,324 25.5%
Bin Liu(2)
138,334 1.3%
Jun Wang
63,351 *
Guang Chen
* *
Alice Io Wai Wu
Zhiyong Xia
All Officers and Directors as a Group (total of six persons)
3,011,008 27.3%
5% Stockholders:
Famous Grow Holdings Limited(3)(4)
2,654,324 24.1%
Ng, Shik Yau(5)(6)
633,334 5.7%
*
less than 1%
(1)
Includes (i) 2,654,323 shares of which the beneficial ownership or the right to control can be acquired by Zhihong Jia pursuant to a December 17, 2014 Amended and Restated Call Option Agreement in which the shares can be acquired from Famous Grow Holdings Limited, (ii) 45,000 buyback shares, and (iii) options to purchase 60,000 shares at $15.54 per share that vested and became exercisable as following schedule: 25% of the options became exercisable on the first anniversary of March 24, 2011 and 6.25% of the options became exercisable on an ongoing basis in three month increments until the fourth anniversary of March 24, 2011, (iv) options to purchase 50,000 shares at $7.32 per share that
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vested and became exercisable as following schedule: 25% of the options became exercisable on the first anniversary of January 9, 2012 and 6.25% of the options became exercisable on an ongoing basis in three month increments until the fourth anniversary of January 9, 2012. All the above numbers of shares have been given effect to the 1-for-6 reverse stock split effected in October 2019.
(2)
Includes (i) options to purchase 5,000 shares at $15.54 per share that vested and became exercisable on June 24, 2011, (ii) options to purchase 15,000 shares at $15.54 per share that vested and became exercisable as following schedule: 25% of the options became exercisable on the first anniversary of March 24, 2011 and 6.25% of the options became exercisable on an ongoing basis in three month increments until the fourth anniversary of March 24, 2011, (iii) options to purchase 20,000 shares at $13.62 per share that vested and became exercisable on July 1, 2011, October 1, 2011, January 1, 2012, and April 1, 2012, respectively, (iv) options to purchase 20,000 shares at $8.94 per share that vested and became exercisable on July 1, 2012, October 1, 2012, January 1, 2013, and April 1, 2013, respectively, (v) options to purchase 18,334 shares at $7.32 per share that vested and became exercisable as following schedule: 25% of the options became exercisable on the first anniversary of January 9, 2012 and 6.25% of the options became exercisable on an ongoing basis in three month increments until the fourth anniversary of January 9, 2012, and (vi) awarded with 60,000 common shares awarded when renewed a three year employment agreement on April 3, 2013. All the above numbers of shares have been given effect to the reverse stock split of October 2019.
(3)
Address: ATC Trustees (BVI) Limited, 2nd Floor, Abbott Building Road Tow, Tortola, British Virgin Islands.
(4)
Based upon Schedule 13D filed by Famous Grow Holdings Limited with the SEC on August 5, 2010 (giving effect to the reverse stock split effected in October 2019). Pursuant to the Schedule 13D, Qian Lei may be deemed the beneficial owner of such shares.
(5)
Address: Flat A 9/F, 7 Mount Sterling, Mall Meifoo Sun Chuen, Kowloon, and Hong Kong.
(6)
Based upon Schedule 13G filed by Ng, Shik Yau with the SEC on March 18, 2013. And based on the transfer of 1,100,000 warrants (without giving effect to the reverse stock split) from Ng, Shik Yau to Wang Jianhua on April 15, 2013.
Change in Control
We are not aware of any arrangements 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 the registrant, with the exception of the Call Option Agreement as amended, entered into by and among Zhihong Jia and Fok Wing Lam Winnie (whose Mandarin name is Huo Yong Lin) on December 21, 2009. Mr. Jia has the ability to acquire 100% of the shares of Famous Grow Holdings Limited, provided that he exercises his Call Option. Upon the exercise of such Call Option Agreement, if any, Mr. Jia would have the ability to control 2,654,324 shares of our common stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than ten percent of a registered class of our equity securities, to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors and greater than ten percent stockholders also are required by rules promulgated by the SEC to furnish us with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to us or written representations that no Forms 5 were required, we believe that all Section 16(a) filing requirements were timely as of the date of this report.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following Compensation Discussion and Analysis relates to compensation paid to our executive officers (“NEOs”) named in the Summary Compensation Table for fiscal 2018.
The Company’s NEOs for Fiscal 2018 were as follows:
Zhihong Jia Chairman and Chief Executive Officer
Bin Liu Chief Financial Officer
This Compensation Discussion and Analysis and the executive compensation discussion and tables that immediately follow describe our compensation, objectives, the strategy and elements of our compensation program, and our compensation-setting process as applied to our NEOs.
Compensation Program
Our compensation program is designed to reward each individual named executive officer for his or her contribution to the advancement of our overall performance and execution of our goals, ideas and objectives. It is designed to reward and encourage exceptional performance at the individual level in the areas of organization, creativity and responsibility while supporting our core values and ambitions. This in turn aligns the interest of our executive officers with the interests of our stockholders, and thus with our interests.
The principal objectives of our compensation program are:

attract, motivate and retain executives who drive our success and industry leadership; and

provide each executive, from vice president to Chief Executive Officer, with a base salary on the market value of that role, and the individual’s demonstrated ability to perform that role.
Compensation Strategy: Policies and Procedures
Determining Executive Compensation
Our Compensation Committee generally reviews and approves the compensation program for executive officers annually after the close of each year. Reviewing the compensation program at such time allows the Compensation Committee to consider the overall performance of the past year and the financial and operating plans for the upcoming year in determining the compensation program for the upcoming year.
A named executive officer’s base salary is determined by an assessment of his sustained performance against individual job responsibilities, including, where appropriate, the impact of his performance on our business results, current salary in relation to the salary range designated for the job, experience and mastery, and potential for advancement. Although we do not engage in benchmarking, the Compensation Committee may also consider compensation levels with comparable positions in the industry to evaluate the total compensation decisions that it makes for our officers.
Role of Executive Officers in Determining Executive Compensation
The Compensation Committee determines the compensation for our Chief Executive Officer, which is based on various factors, such as level of responsibility and contributions to our performance. Our Chief Executive Officer recommends the compensation for our executive officers (other than the compensation of the Chief Executive Officer) to the Compensation Committee. The Compensation Committee reviews the recommendations made by the Chief Executive Officer and determines the compensation of the Chief Executive Officer and the other executive officers.
Say-on-Pay and Say-on-Frequency
Stockholders voted at the 2015 annual stockholders meeting on the frequency of future non-binding advisory votes on executive compensation. The Company’s Board of Directors has since evaluated the results of that non-binding advisory vote and made a determination as to whether the Company will submit
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future non-binding votes on executive compensation to the stockholders for consideration every one, two, or three years. A majority of the shares voted at the 2015 annual meeting of stockholders on a non-binding advisory vote on the frequency of future non-binding advisory votes to approve the compensation of named executive officers voted for the Company to hold votes every three years. In light of this result and after further discussion by the Board of Directors, the Board of Directors determined that the Company would hold non-binding advisory votes to approve the compensation of named executive officers every three years until the next required non-binding advisory vote on the frequency of future non-binding advisory votes on executive compensation.
At the 2018 annual meeting of stockholders, the Company’s Say-on-Pay proposal passed with a majority of the stockholder advisory votes in favor of the Company’s executive compensation program, which indicated to the Compensation Committee that stockholders were supportive of the Company’s executive compensation design and strategy. The Compensation Committee will continue to consider Say-on-Pay results in the design of the Company’s compensation program.
Compensation Elements
In general, our compensation program consists of base salary and certain equity-based incentive compensation awards. Our NEOs also receive certain other benefits as set forth in the employment agreements that we entered into with the NEOs.
Base Salary
The compensation to the NEOs contained base salary only for 2017 and 2018, subject to the provisions of the employment agreements that we entered into.
Equity-Based Compensation
Our primary stock-based employee compensation plan, the 2011 Stock Incentive Plan, was approved by our Board of Directors on March 24, 2011 and ratified by stockholders on October 31, 2011. This plan serves as the primary vehicle by which we offer long-term incentives and rewards to our executive officers and key employees. We regard the 2011 Stock Incentive Plan as a key retention tool. Retention serves as a very important factor in our determination of the type of award to grant and the number of underlying shares that are granted in connection with that award.
Because of the direct relationship between the value of an option and the market price of our common stock, we believe that granting stock options is a superb method of motivating our executive officers and other key employees to manage our Company in a manner that is consistent with the interests of our Company and our stockholders. The exercise period under an option granted pursuant to our 2011 Stock Incentive Plan is subject to early termination in certain instances upon termination of the employment of a grantee. The exercise price of the options awarded pursuant to the plan is priced at the fair market value of our common stock as of the date of grant. Based on such exercise price and the other conditions of the award agreements to be entered into with qualifying employees under the 2011 Stock Incentive Plan, some options are intended to qualify as incentive stock options (under the United States Internal Revenue Code of 1986, as amended).
We grant option awards to our executive officers and key employees based upon prior performance, the importance of retaining their services and the potential for their performance to help us attain our long-term goals. However, there is no set formula for the granting of awards to individual executives or employees. Option awards generally reflect the Compensation Committee’s assessment of the influence an employee’s position has on stockholder value. The number of options awarded may vary up or down from prior year awards based on the level of an individual executive officer’s contribution to the Company in a particular year, determined in part on the recommendation of the CEO. The Committee’s determination of option grants in fiscal 2011 took into consideration a number of factors. These factors include past grants to the individual, total compensation level (relative to other executives and relative to market data), contributions to the Company during the last completed fiscal year, potential for contributions in the future, and as a component of competitive total compensation based on market data. The Compensation
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Committee also considers the recommendations of our Chief Executive Officer and the Chief Financial Officer in reviewing and approving the awards to executive officers and employees. Traditionally, our Compensation Committee meets in January or February of each year to determine option awards for our executive officers and key employees.
In fiscal 2013, on July 16, 2013, our Compensation Committee approved the grant of stock options for the purchase, in the aggregate, of 15,000 shares of common stock to our non-employee directors (5,000 each) (giving effect to the reverse stock split effected in October 2019). 25% of the options became exercisable on the first anniversary of the grant date, and 6.25% of the options became or will become exercisable on the date three months after the initial vesting date, and on such date every third month thereafter, through the fourth anniversary of the grant date. The options have an exercise price of  $7.08 per share (the closing share price on the grant date) (giving effect to the reverse stock split effected in October 2019).
In fiscal 2015, on February 25, 2015, our Compensation Committee approved the grant of stock options for the purchase, in the aggregate, of 15,000 shares of common stock to our non-employee directors (5,000 each) (giving effect to the reverse stock split effected in October 2019). 25% of the options became exercisable on the first anniversary of the grant date, and 6.25% of the options became or will become exercisable on the date three months after the initial vesting date, and on such date every third month thereafter, through the fourth anniversary of the grant date. The options have an exercise price of  $6.66 per share (the closing share price on the grant date) (giving effect to the reverse stock split effected in October 2019).
Other Compensation and Benefits
We do not have a formal bonus plan or profit sharing plan pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers. Although we do not have a broad-based bonus plan, we may award bonuses on a case-by-case basis depending on the terms of specific employment agreements or other arrangements, our financial performance, as well as the executive’s performance, which are determined by the Board in its sole discretion. There are no arrangements or plans under which we provide company-based pension, retirement, nonqualified deferred compensation or similar benefits for the NEOs or other executive officers.
Summary Compensation Table
The following table sets forth information concerning cash or non-cash compensation paid to our named executive officers for 2017 and 2018, respectively. The compensation to our NEOs contained base salary only for 2017 and 2018.
Name and Position
Year
Salary
Bonus
Stock
Awards
Option
Awards
All other
compensation
Total
Zhihong Jia
Chief Executive Officer
2018 $ 175,000(1) $ $ $ $ $ 175,000
2017 $ 175,000(1) $ $ $ $ $ 175,000
Bin Liu
Chief Financial Officer
2018 $ 135,000 $ $ $ $ $ 135,000
2017 $ 135,000 $ $ $ $ $ 135,000
(1)
Represents the amounts of base salary Mr. Jia was entitled to for his services as our CEO in the respective periods pursuant to his employment agreement with us. The amounts of annual compensation Mr. Jia actually received were substantially lower than the base salary provided in his employment agreement because Mr. Jia voluntarily waived most of his salary amounts in the respective periods.
Pursuant to the terms of the employment agreements that Messrs. Jia and Liu have with us, both executives are compensated by us for services provided to us and our subsidiary and consolidated affiliate, including Wuhan Vogue — Show Jewelry Co., Inc., or Vogue Show, and Wuhan Kingold Jewelry Company
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Limited, or Wuhan Kingold. Pursuant to the terms of the employment agreement that Mr. Jun Wang has with Wuhan Kingold, Mr. Wang is compensated by Wuhan Kingold for services provided to Wuhan Kingold, as well as its affiliates, including us and Vogue Show.
Employment Agreements
We have entered into employment agreements with our senior executive officers, as described below. Copies of these employment agreements are filed with the Securities and Exchange Commission as exhibits to our registration statements, annual reports and other filings under applicable rules. Our Board may adjust base salaries annually to reflect increases in the cost of living, but it has not done so to date. An executive’s base salary may also be increased if the executive’s workload substantially increases as a result of our business expansion. In addition, an executive’s base salary may be correspondingly adjusted if the salaries of all of our other employees are adjusted.
Zhihong Jia.   We entered into an employment agreement with Zhihong Jia, our chief executive officer, effective October 28, 2019, for a term of three years. Pursuant to the employment agreement, Mr. Jia is entitled to receive annual compensation equal to $175,000 during the agreement term. In addition, Mr. Jia’s employment agreement provides for an annual bonus based on the executive’s performance and our financial performance. Annual bonuses will be determined by us in our sole discretion and will be approved by our Compensation Committee.
If Mr. Jia’s employment agreement terminates as a result of death, we will pay Mr. Jia’s beneficiaries or estate, as applicable, an amount equal to twenty-four months’ base salary plus the full amount of any compensation to which the executive was entitled as of the date of termination. If we terminate Mr. Jia’s employment based on the executive’s disability, we will pay him an amount equal to eighteen months’ base salary plus the full amount of any compensation to which he was entitled as of the date of termination.
We may terminate Mr. Jia’s employment agreement with cause (as defined in his employment agreement) at any time with three months written notice. If we dismiss Mr. Jia without cause (as defined in his employment agreement), or if he terminates his employment for good reason (as defined in his employment agreement), we will pay him the product of his monthly base salary and the number of years the executive was employed pursuant to his employment agreement plus twelve. If Mr. Jia terminates his employment other than for good reason, he will be entitled to a contribution bonus in an amount determined by us and approved by our Board. A contribution bonus shall not exceed the product of Mr. Jia’s monthly base salary and the number of years the executive was employed pursuant to his employment agreement plus ten. If Mr. Jia’s employment agreement expires in accordance with its term without earlier termination or extension, he will be eligible to receive an amount equal to twelve months’ base salary.
Our employment agreement with Mr. Jia provides for the protection of confidential information and contains non-competition and non-solicitation provisions applicable for a term of twelve months following the termination of his employment. Mr. Jia will continue to receive his monthly base salary during the term of the non-competition and non-solicitation provisions in consideration of his fulfilling his obligations thereunder.
Bin Liu.   We entered into an employment agreement with Bin Liu, our CFO, effective April 1, 2010, for a term of three (3) years, which was subsequently amended on January 7, 2011. Pursuant to that agreement, Mr. Liu received annual compensation equal to $135,000. In addition, Mr. Liu was entitled to participate in any and all benefit plans, from time to time, in effect for employees, along with vacation, sick and holiday pay in accordance with policies established and in effect from time to time. Under the agreement, as amended, upon the first and second anniversary of his employment, Mr. Liu received an equity grant on each of April 1, 2011 and April 1, 2012 of an option to purchase 20,000 shares of our common stock (giving effect to the reverse stock split effected in October 2019). Each of the annual options granted vests quarterly at a rate of 5,000 options at the end of each three month period of employment. Mr. Liu’s agreement was also amended to provide him with an increased relocation package of up to $150,000 given the additional and significant cost of living and related expenses Mr. Liu was to incur upon his relocation from Illinois to our New York office. In addition, Mr. Liu agreed that, during his employment with us and for a period of one (1) year thereafter, he would not directly or indirectly employ, solicit, or
22

induce for employment or in any other fashion hire any of the senior management of the Company. Mr. Liu also agreed to a non-compete clause whereby he agreed not engage or assist others to engage in the business of designing and manufacturing gold jewelry for a one (1) year period following the end of his employment with us. This employment agreement terminated on April 1, 2013 in accordance with its terms and on April 2, 2013, we entered into a new employment agreement with Mr. Liu on substantially the same terms.
Mr. Liu’s employment agreement is for a three (3) year term, and is retroactively effective to April 2, 2013 and was scheduled to terminate on April 2, 2016. Since April 2, 2016, Mr. Liu and the Company have continued to perform under the same terms as the then-effective agreement. Pursuant to the agreement, Mr. Liu will receive annual compensation equal to $135,000, and is entitled to participate in any and all benefit plans, from time to time, in effect for employees, along with vacation, sick and holiday pay in accordance with policies established and in effect from time to time. In addition, we granted Mr. Liu 60,000 shares of our common stock (giving effect to the reverse stock split effected in October 2019) pursuant to our 2011 Stock Incentive Plan. Mr. Liu also agreed to both a non-solicit and non-compete clause while employed and for a one (1) year period following the end of his employment.
We may terminate Mr. Liu’s employment agreement at any time without cause upon thirty (30) days’ notice and the payment to Mr. Liu of a lump amount equal to three (3) months’ salary which shall be paid upon termination. Mr. Liu may effect a voluntary termination of his employment agreement at any time upon sixty (60) days’ notice to us; however, in such event no additional compensation will be due to Mr. Liu. We have the right to terminate Mr. Liu’s employment agreement for cause (as defined in his employment agreement), in which event we will not have any further obligations or liability to Mr. Liu under his employment agreement subsequent to the actual date of termination.
Jun Wang.   Effective as of April 4, 2019, our consolidated affiliate, Wuhan Kingold, has entered into an employment agreement with Jun Wang to serve as general manager for a term of five (5) years, unless terminated early by either party as provided in the agreement. Pursuant to the employment agreement, Mr. Wang will receive monthly compensation equal to RMB 12,000. We may terminate the employment agreement with Mr. Wang for cause (as described in his employment agreement), provided that we should inform the labor union of such cause of termination. In the event that Mr. Wang, due to sickness or injury inflicted off the job, cannot resume his work after specified period of medical treatment, or is unqualified after training or a job adjustment, or in the event that the objective conditions on which the employment agreement is based have materially changed to the extent that it is impossible to perform the employment agreement while we and Mr. Wang cannot reach an agreement to amend the employment agreement to reflect the changed conditions, we may terminate the employment agreement by providing thirty (30) days’ notice, or pay additional one-month salary to Mr. Wang, subject to certain exceptions provided in the employment agreement.
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Outstanding Equity Awards at 2018 Fiscal Year End
The following table includes certain information with respect to all equity awards that remain outstanding as of December 31, 2018 for our named executive officers.
Name
Options Granted
Year
Total
Number of
Securities
Underlying
Options
Granted
Option
Exercise
Price ($)
Option
Start
Date
Option
Expiration
Date
Number of
Securities
Underlying
Options
Exercisable
Number of
Securities
Underlying
Unexercised
Options
Zhihong Jia
2011 60,000(1) 15.54 3/24/2011 3/23/2021 60,000
2012 50,000(4) 7.32 1/9/2012 1/9/2022 50,000
2013
2014
2015
2016
2017
2018
Bin Liu
2011 20,000(1) 15.54 3/24/2011 3/23/2021 20,000
2011 20,000(2) 13.62 4/1/2011 4/1/2021 20,000
2012 20,000(3) 8.94 4/1/2012 4/1/2022 20,000
2012 18,334(4) 7.32 1/9/2012 1/9/2022 18,334
2013
2014
2015
2016
2017
2018
(1)
Give effect to the 1-for-6 reverse stock split effected on October 21, 2019. The option award was granted on March 24, 2011, subject to stockholder approval of the stock option plan under which the option was granted, which was approved by stockholders on October 31, 2011. The options vested as follows: 25% of the options became exercisable on the first anniversary of March 24, 2011 and 6.25% of the options became exercisable on an ongoing basis in three month increments until the fourth anniversary of March 24, 2011.
(2)
Give effect to the 1-for-6 reverse stock split effected on October 21, 2019. The option award was granted on April 1, 2011, subject to stockholder approval of the stock option plan under which the option was granted, which was approved by stockholders on October 31, 2011. The options under the award vested as follows: 5,000 options vested every three months following April 1, 2011 until all options have vested.
(3)
Give effect to the reverse stock split effected in October 2019. The option award was granted on April 1, 2012. The options under the award vested as follows: 5,000 options vest every 3 months following April 1, 2012 until all options have vested.
(4)
Give effect to the reverse stock split effected in October 2019. The options under the award vested as follows: 25% of the options became exercisable on the first anniversary of January 9, 2012 and 6.25% of the options became exercisable on an ongoing basis in three month increments until the fourth anniversary of January 9, 2012.
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Potential Payments upon Termination or Change of Control
We have no compensatory plan with respect to any officer that results or will result in the payment of compensation from the resignation, retirement or any other termination of such officer’s employment with our company, from a change in control of our company or a change in such officer’s responsibilities following a change in control, except for severance payments or certain other benefits that may be provided pursuant to the employment agreements with the NEOs. Mr. Jia is entitled, under his employment agreement, to severance payments and certain benefits in the event of termination. Mr. Liu is also entitled to certain payments upon certain terminations of employment pursuant to his employment agreement.
Director Compensation
The following table sets forth a summary of our directors’ compensation for fiscal year 2018 except for our employee directors. Mr. Zhihong Jia, our Chairman and Chief Executive Officer, did not receive any compensation for his board service beyond the compensation he received as the CEO of the Company. Mr. Jun Wang received his annual compensation of  $$22,355 for his service as our General Manager, while he did not receive any compensation for his board service.
Director Compensation — Fiscal Year 2018
Name
Fees Earned or Paid in Cash(1)
Option Awards(2)
All other compensation
Total
Guang Chen
$ 17,884 $ $ $ 17,884
Jun Wang
$ $ $ $
Alice Io Wai Wu
$ 48,000 $ $ $ 48,000
Zhiyong Xia
$ $ $ $
(1)
Represents the amounts of all fees earned or paid in cash for services as a director in 2018 except Mr. Jun Wang. Our director compensation program is described in more details below.
(2)
The amounts in this column were calculated based on the grant date fair value of stock options computed using the Black-Scholes model, in accordance with FASB ASC Topic 718. For additional information regarding the assumptions used in determining fair value using the Black-Scholes pricing model, see Note 12, “Options” to our audited consolidated financial statements included in this report.
Our directors (except Mr. Zhihong Jia whose option awards information is provided in the previous page) held the following outstanding option awards as of December 31, 2018:
Name
Outstanding Option
Awards(1)
Guang Chen
5,000
Jun Wang
Alice Io Wai Wu
Zhiyong Xia
(1)
Give effect to the reverse stock split effected in October 2019.
We do not pay our directors in connection with attending individual Board meetings, but we reimburse our directors for expenses incurred in connection with such meetings.
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DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 2020
Stockholder proposals which are intended to be presented by such stockholders at our 2020 annual meeting of stockholders must be received by our Corporate Secretary at our principal executive offices no later than 120 calendar days in advance of the one year anniversary of the date our proxy statement was released to stockholders in order to be considered for inclusion in the proxy statement and form of proxy/​voting instruction card relating to that meeting pursuant to Rule 14a-8 under the Exchange Act. Under the rules of the SEC, stockholders who wish to submit proposals for inclusion in the Proxy Statement for the 2020 Annual Meeting of Stockholders must submit such proposals to Kingold by July 20, 2020. However, if the date of our 2020 annual meeting is changed by more than 30 days from the anniversary of this year’s annual meeting of stockholders, then, to be considered for inclusion in our proxy statement relating to our 2020 annual meeting, notice of a stockholder proposal will need to be received by our Corporate Secretary in a reasonable amount of time before we begin to send our proxy materials for the 2020 annual meeting.
Any proposal must comply with the requirements as to form and substance established by the SEC for such proposal to be included in our proxy statement. We reserve the right to exclude stockholder proposals pursuant to SEC rules, or if untimely. Stockholders continuously holding at least 1% or $2,000 in market value of the issued and outstanding shares of a class of our securities for at least one year are eligible to submit proposals or may nominate director candidates. If a stockholder nominates a director candidate, in order for such nomination to be valid and acceptable, all information required to be provided under Regulation 14A under the Exchange Act and requested by the board of directors (or Nominating Committee, if applicable) concerning such candidate must be furnished within a reasonable time prior to the above deadline for stockholder proposals.
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OTHER MATTERS
Our Board knows of no other matters to be submitted to the Annual Meeting. If any other matters properly come before the Annual Meeting, then the persons named in the enclosed form of proxy will vote the shares they represent in their discretion.
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers, banks and nominees) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies and intermediaries.
This year, a number of brokers, banks and nominees with account holders who are our stockholders may be householding our proxy materials. In such circumstances, a single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received by the broker, bank or nominee from one or more of the affected stockholders. We have not initiated householding with respect to the small number of our record holders, because such householding would increase our costs. If, at any time, you would like to receive a separate copy of our proxy statement and annual report, we will promptly send you an additional copy upon written or oral request directed to our Secretary. If you are a beneficial owner, you can request additional copies of the proxy statement and the Annual Report on Form 10-K for the fiscal year ended December 31, 2018. If your shares are held in “street name,” you can request a change in your householding status by notifying your broker, bank or nominee.
To the extent that this Proxy Statement is incorporated by reference into any other filing by us under the Securities Act or the Exchange Act, the sections of this Proxy Statement entitled “Compensation Committee Report” and “Audit Committee Report” (to the extent permitted by the rules of the SEC) will not be deemed incorporated unless specifically provided otherwise in such filing.
The final results of the balloting at the Annual Meeting will appear in our Current Report on Form 8-K within four business days of the annual meeting.
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[MISSING IMAGE: tv532761-pc_page1bw.jpg]
KINGOLD JEWELRY, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS – DECEMBER 18, 2019, AT 10:00 A.M., LOCAL TIME CONTROL ID: REQUEST ID: The undersigned hereby appoints Zhihong Jia and Bin Liu or any one of them with full power of substitution, proxies to vote at the Annual Meeting of Stockholders of Kingold Jewelry, Inc. (hereinafter referred to as the “company”) to be held on December 18, 2019, at the Kingold Jewelry Corporate Center, No. 8 Han Huang Road, Jiang’An District, Wuhan, China, at 10:00 AM local time, and at any adjournment or postponement thereof, hereby revoking any proxies heretofore given, to vote all shares of common stock of the company held or owned by the undersigned as directed on the reverse side of this proxy card, and in their discretion upon such other matters as may come before 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/KGJI PHONE: Call toll free 1-866-752-VOTE(8683)

[MISSING IMAGE: tv532761-pc_page2bw.jpg]
ANNUAL MEETING OF THE STOCKHOLDERS OF KINGOLD JEWELRY, 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 Proposal 1 FOR ALL AGAINST ALL FOR ALL EXCEPT To elect the nominees listed below to hold office until the 2020 Annual Meeting of Stockholders or until their successors are elected.☐☐Zhihong Jia☐ CONTROL ID:Guang Chen☐REQUEST ID: Alice Io Wai Wu☐Jun Wang☐Zhiyong Xia☐Proposal 2 FOR AGAINST ABSTAIN To ratify the appointment of Friedman LLP as the company’s independent registered public accounting firm for the fiscal year ending December 31, 2019.☐☐☐Proposal 3 FOR AGAINST ABSTAIN To transact such other business as may properly come before the meeting or any adjournment or postponement thereof☐☐☐MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING:☐This Proxy, when properly executed will be voted as provided above, or if no contrary direction is indicated, it will be voted “For All” in Proposal 1, and “For” in Proposals 2 and 3. 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: ________________________, 2019 (Print Name of Stockholder and/or Joint Tenant) (Signature of Stockholder) (Second Signature if held jointly)

Company Info:

Ticker: KGJI, Company: KINGOLD JEWELRY, INC., Type: DEF 14A, Date: 2019-11-18CIK: 0001089531, Location: NY, SIC: 7389, SIC Desc: SERVICES-BUSINESS SERVICES, NEC
Business Phone & Address:
888C 8TH AVE, #106, 58TH FLOOR
NEW YORK, NY 10019

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By | 2019-11-19T04:32:02+00:00 November 18th, 2019|Categories: Chinese Stocks, KGJI, Webplus ver|Tags: , , , , , |0 Comments

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