BOARD COMMITTEES

Standing committees include an audit committee, a corporate governance and nominating committee, and a compensation committee. The board has determined that the members of these committees, Albert Mclelland, Xuewen Xiao, Guoyou Zhang, and Xianghua Li "independent directors" under the current independence standards of Nasdaq Marketplace Rule 4200(a)(15) and meet the criteria for independence set forth in Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The board has also determined that these persons have no material relationships with China Fire & Security Group, Inc. (the "Company") - either directly or as a partner, shareholder or officer of any entity - that could be inconsistent with a finding of their independence as members of the board.

 

The audit committee, comprised of Albert Mclelland (Chairman), Xianghua Li, Guoyou Zhang, oversees the Company's financial reporting process on behalf of the board. The responsibilities of the audit committee include the following functions:
· approving and retaining independent auditors to conduct the annual audit of the Company's books and records;
· reviewing the proposed scope and results of the audit;
· reviewing and pre-approving the independent auditors' audit and non-audit services rendered;
· approving the audit fees to be paid;
· reviewing accounting and financial controls with the independent auditors and the Company's financial and accounting staff;
· reviewing and approving transactions between the Company and its directors, officers and affiliates; and
· recognizing and preventing prohibited non-audit services.
· The board has determined that Mr. Mclelland, the Chair of the audit committee, is an "audit committee financial expert" as defined by the     SEC's rules.

 

The compensation committee, comprised of Guoyou Zhang (Chairman), Xuewen Xiao, and Xianghua Li, is responsible for making recommendations to the board concerning salaries and incentive compensation for the Company's officers and employees, as well as administering the Company's stock option plans. The responsibilities of the compensation committee include the following functions:
· reviewing and recommending policy relating to the compensation and benefits of the Company's officers and employees, including reviewing and approving corporate goals and objectives relevant to the compensation of the chief executive officer and other senior officers, as well as evaluating the performance of these officers in light of those goals and objectives and setting their compensation based on such evaluations;
· administering the Company's benefit plans and the issuance of stock options and other awards under the Company's stock option plans, as well as reviewing and establishing appropriate insurance coverage for the directors and executive officers;
· recommending the type and amount of compensation to be paid or awarded to members of the board, including consulting, retainer, meeting, committee and committee chair fees, and stock option grants or awards; and
· reviewing and approving the terms of any employment agreements, severance arrangements, change-of-control protections and any other compensatory arrangements for executive officers.

 

The corporate governance and nominating committee, comprised of Xuewen Xiao(Chairman), Guoyou Zhang and Xianghua Li, is responsible for identifying potential candidates to serve on the Company's board and its committees. The responsibilities of the nominating and corporate governance committee include the following functions:
· making recommendations to the board regarding the size and composition of the board;
· identifying and recommending to the board nominees for election or re-election to the board, or for appointment to fill any vacancy;
· establishing procedures for the nomination process;
· advising the board with respect to periodically reviewing corporate governance guidelines; and
· establishing and administering a periodic assessment of the board as a whole and its individual members.