Replies to post #83911 on Hartcourt Companies (fka HRCT)

[EZ2]

disagree ~~~ "vested" as identified in footnotes would imply OPTION grants ----- and, all officers "shares held" must be divulged!

Name & Address
of Beneficial Owner(1) Amount and
Nature of
Beneficial
Ownership(2) Percent of
Class

Billy Wang, Director 10,193,440(3) 5.0%
Geoffrey Wei, Director 1,965,307(4) 1.0%
Victor Zhou, Chief Executive Officer 4,093,997(5) 2.0%
Wilson Li, Director 1,820,602(6) *
Yungeng Hu, Chief Financial Officer 6,225,000(7) 3.0%
All Directors and Executive Officers as a Group (5 persons) 24,298,346(8) 11.8%

* Indicates ownership of less than 1%.

(1) Unless otherwise indicated, the address for each beneficial owner listed above is c/o The Hartcourt Companies, Inc., Room 706, Silver Tower, No. 933, Zhongshanxi Road, Shanghai 200051, China.

(2) Unless indicated in the notes, each shareholder has sole voting and dispositive power for all shares shown, subject to community property laws where applicable.

(3) Shares beneficially owned by Billy Wang include (a) 193,440 shares of common stock held by Dr. Wang and (b) options to purchase 10,000,000 shares of our common stock, all of which are vested and currently exercisable.

(4) Shares beneficially owned by Geoffrey Wei include (a) 865,307 shares of common stock held by Mr. Wei and (b) an option to purchase 1,100,000 shares of our common stock, all of which are vested and currently exercisable.

(5) Shares beneficially owned by Victor Zhou include (a) 243,997 shares of common stock held by Mr. Zhou and (b) options to purchase 3,850,000 shares of our common stock, all of which are vested and currently exercisable.

(6) Shares beneficially owned by Wilson Li include (a) 720,602 shares of common stock held by Mr. Li and (b) options to purchase 1,100,000 shares of our common stock, all of which are vested and currently exercisable.

(7) Shares beneficially owned by Yungeng Hu include (a) 600,000 shares of common stock held by Mr. Hu and (b) options to purchase 5,625,000 shares of our common stock, all of which are vested and currently exercisable.

(8) Shares beneficially owned by all Executive Officers and Directors as a group include the shares held by each and options granted as in above (3), (4), (5), (6), and (7).

[EZ2]

All pretty clear to me:
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excerpt from filing:

http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=5545323


Elements of Compensation

The Company’s compensation program includes both cash and equity-based elements. Because it is directly linked to the interest of our shareholders, equity-based compensation is emphasized in the design of the Company’s compensation programs.

Salary


The Compensation Committee sets a base salary range for each executive officer, including our Chief Executive Officer and our Chief Financial Officers and President, by reviewing the base salary for comparable positions of a broad peer group, including companies similar in size and business that compete with the Company in the recruitment and retention of senior personnel. Individual salaries for each executive officer are set based on experience, performance and contribution to the Company’s development of acquisitions related to the vocational/training business, as well as our financial performance. We do not currently have a cash bonus program, and no cash bonuses have been given to executive officers to date.



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Equity-Based Compensation


Stock options are granted to executive officers when they first join the Company. In addition, restricted stock may be sold to certain executive officers when they first join the Company. Thereafter, options may be granted and restricted stock may be sold to each executive officer from time to time based on performance. No performance based restricted stock grants have been made to date. To enhance retention, options granted and restricted stock sold to an executive officer is subject to vesting restrictions that generally lapse over the period of the executive officer’s employment contract. The vesting schedule is generally two years, to coincide with the period of employment under the employment contract for the Chief Executive Officer and the Chief Financial Officer and President, with one quarter of the total shares subject to the grant vesting each six months. The amount of actual options granted depends on the individual’s level of responsibility and a review of stock option grants of positions at a broad peer group. The 2005 Stock Option Plan imposes individual limitations on certain awards, in part to comply with Section 162(m). Under these limitations, no more than 15,000,000 shares of stock may be granted to an individual during any fiscal year pursuant to any awards granted under the 2005 plan.

The following table sets forth information concerning compensation for the fiscal year ended May 31, 2007 for our named executive officers, which includes disclosure related to our principal executive officer and our principal financial officer.

SUMMARY COMPENSATION TABLE


Name and
principal
Position Year Salary
(US$) Bonus
(US$) Stock
Awards
(US$) (1) Option
Awards
(US$) (2) Non-equity
Incentive
Plan
Compensation
(US$)
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
(US$) All
Other Compensation (US$)
Total
(US$)
Victor Zhou, CEO (3) 2007 137,500 3,625 225,350 362,850
Yungeng Hu,
CFO and President (4) 2007 150,000 180,238 330,238



Explanatory Notes:
(1) The amounts provided in this column represent the compensation cost calculated in accordance with FAS 123R with respect to stock awards granted in previous fiscal years and in the fiscal year ended May 31, 2007. The full grant date fair value of the stock awards granted to each officer in the fiscal year ended May 31, 2007, as computed in accordance with FAS 123R, is provided in the Grants of Plan-Based Awards table hereafter. For awards reported in this column, disregard the estimate of forfeitures related to service-based vesting conditions. Include a footnote describing all forfeitures during the year, and disclosing all assumptions made in the valuation. Disclose assumptions made in the valuation by reference to a discussion of those assumptions in the registrant's financial statements, footnotes to the financial statements, or discussion in the Management's Discussion and Analysis. The sections so referenced are deemed part of the disclosure provided pursuant to this Item.



(2) The amounts provided in this column represent the compensation cost calculated in accordance with FAS 123R with respect to stock option awards granted in previous fiscal years and in the fiscal year ended May 31, 2007. The full grant date fair value of the stock option granted to each officer in the fiscal year ended May 31, 2007, as computed in accordance with FAS 123R, is provided in the Grants of Plan-Based Awards table hereafter. For awards reported in this column, disregard the estimate of forfeitures related to service-based vesting conditions. Include a footnote describing all forfeitures during the year, and disclosing all assumptions made in the valuation. Disclose assumptions made in the valuation by reference to a discussion of those assumptions in the registrant's financial statements, footnotes to the financial statements, or discussion in the Management's Discussion and Analysis. The sections so referenced are deemed part of the disclosure provided pursuant to this Item.





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(3) On June 1, 2006, the Board of Directors of the Company appointed Mr. Zhou to be the acting Chief Executive Officer with an annual base salary of US$100,000, payable in equal monthly installments of US$8,333. On September 1, 2006, the Board of Directors of the Company promoted Mr. Victor Zhou to be the Company’s Chief Executive Officer. The Company signed an employment contract with Mr. Zhou on September 1, 2006. The compensation provided for under Mr. Zhou’s employment contract includes an annual base salary of $150,000, payable in equal monthly installments of US$12,500.



(4) On May 31, 2006, the Board of Directors of the Company appointed Mr. Hu to be the President and Chief Financial Officer, effective June 1, 2006. Mr. Hu’s employment contract was signed on June 1, 2006. The compensation provided for under Mr. Hu’s employment contract includes an annual base salary of $150,000, payable in equal monthly installments of US$12,500.




GRANTS OF PLAN-BASED AWARDS

The following table sets forth information regarding plan-based awards granted during the fiscal year ended May 31, 2007 to each of our executive officers listed in the Summary Compensation Table.


Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards Estimated Future Payouts Under
Equity Incentive Plan Awards All Other Stock
Awards:
Number of
Shares of
Stock or Units
(#) All Other Option
Awards:
Number of
Securities
Underlying
Options
(#) Exercise
or Base
Price of
Option
Awards
($/Sh) Grant Date Fair
Value of Stock
and Option
Awards
($)

Name
Grant Date
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Mr. Victor Zhou,
Acting CEO and CEO 2006-9-1 7,500,000(2) 0.05 225,350
2006-7-5 84,681(1) 3,625

Mr. Yungeng Hu,
CFO and President 2006-6-1 7,500,000 (3) 0.04 180,238



Explanatory Notes:


(1) On July 5, 2006, the Company issued 84,681 restricted shares Mr. Zhou of the Company’s common stock for his previous director service. Effective June 1, 2006 when he was appointed as the acting Chief Executive Officer, the Company stopped paying any fee for his director service.


(2) The Company granted Mr. Zhou an option to purchase the Company’s common stock with an exercise price of $0.05 based on the closing market price of the underlying common stock at the date of grant. The stock option vesting schedule is as follows: a) with respect to 7,500,000 shares subject to the option, 1,875,000 shares shall vest each six months during the two(2) years of the employment contract period; b) 2,000,000 stock options shall vest upon each successful new business acquisition of the Company; and c) 1,500,000 stock options shall vest upon each full profitable year.


(3) The Company granted Mr. Hu an option to purchase the Company’s common stock with an exercise price of $0.04 based on the closing market price of the underlying common stock at the date of grant. The stock option vesting schedule is as follows: a) with respect to 7,500,000 shares subject to the option, 1,875,000 shares shall vest each six months during the two (2) years of the employment contract period; b) 2,000,000 stock options shall vest upon each successful new business acquisition of the Company; and c) 1,500,000 stock options shall vest upon each full profitable year.




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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END


The following table sets forth information with respect to all unexercised options as of the fiscal year ended May 31, 2007 that have been previously awarded to the executive officers named above


Name Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable Equity
Incentive
Plan
Awards: Number of
Securities
Underlying Unexercised Unearned Options
(#) Option
Exercise
Price
($) Option
Expiration
Date (3) Number
Of
Shares
or Units
of Stock
That
Have
Not
Vested
(#) Market
Value of
Shares or
Units of
Stock
That
Have
Not
Vested
($) Equity
Incentive
Plan
Awards:
Number
Of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)

Victor Zhou,
CEO (1) 1,875,000 5,625,000 0.05 2012-2-29

Yungeng Hu,
CFO and President (2) 1,875,000 5,625,000 0.04 2011-11-30




Explanatory Notes:

(1) The Company granted Mr. Zhou an option to purchase the Company’s common stock with an exercise price of $0.05 based on the closing market price of the underlying common stock at the date of grant. The stock option vesting schedule is as follows: a) with respect to 7,500,000 shares subject to the option, 1,875,000 shares shall vest each six months during the two(2) years of the employment contract period; b) 2,000,000 stock options shall vest upon each successful new business acquisition of the Company; and c) 1,500,000 stock options shall vest upon each full profitable year.


(2) The Company granted Mr. Hu an option to purchase the Company’s common stock with an exercise price of $0.04 based on the closing market price of the underlying common stock at the date of grant. The stock option vesting schedule is as follows: a) with respect to 7,500,000 shares subject to the option, 1,875,000 shares shall vest each six months during the two (2) years of the employment contract period; b) 2,000,000 stock options shall vest upon each successful new business acquisition of the Company; and c) 1,500,000 stock options shall vest upon each full profitable year.


(3) The expiration date for this grant is contingent upon the vesting date. When the conditions have been met, and the shares vest, then the expiration date will be five years after the vesting date

[hrct_bull]

yup, and they both kept their day jobs from before. hey, they have managed to pick up some decent change for filing a few sec reports and an occasional email to the "in group". i'm sure most of us have heard motivational speakers from time to time as well. go you dog, er hrct....hb