Document:

ex_226628.htm

 

Exhibit 10.1

 

SHARE EXCHANGE AGREEMENT

 

By and among

 

fUSE GROUP HOLDING, INC.

 

and

 

FUSE PROCESSING, INC.

 

and

 

CHOO KEAM HUI

 

and

 

TIA CHAI TECK

 

and

 

GOH HAU GUAN

 

and

 

LIM HUI SING

 

and

 

TEH BOON NEE

 

Dated as of February 9, 2021

 

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SHARE EXCHANGE AGREEMENT

 

SHARE EXCHANGE AGREEMENT dated as of February 9, 2021 (this “Agreement”), by and among Fuse Group Holding, Inc., a Nevada corporation with its principal office at 805 W. Duarte Road, Suite 102, Arcadia, California (“Fuse Holding”), Fuse Processing, Inc., a California corporation with its principal office at 805 W. Duarte Road, Suite 102, Arcadia, California (“Fuse Processing”), Choo Keam Hui, Malaysian Passport Number A54089__, having an address at Jalan 9/155B, Taman Esplanad, Bukit Jalil, 57000 Kuala Lumpur, Malaysia (“Hui”), Goh Hau Guan, Malaysian Passport Number 40117__, having an address at Seri Kuchai Lama, Jalan Kuchai Maju 12, 58200 Kuala Lumpur, Malaysia (“Guan”), Lim Hui Sing, Malaysian Passport Number A51360__, having an address at Jalan Du 4/7, Taman Damai Utama, Kinrara Residence 47180 Puchong, Selangor, Malaysia (“Sing”), Teh Boon Nee, Malaysian Passport Number A38199__, having an address at Menara Avenue Residences,189 Jalan Tun Razak 50400.Kuala Lumpur. Malaysia (“Nee”), and Tia Chai Teck, Malaysian Passport Number A53630__, having an address at Wangsa 9 Residency, Jalan Wangsa Perdana 1, Wangsa Maju, 53300 Kuala Lumpur, Malaysia (“Teck” and hereinafter collectively with Hui, Nee, Guan, and Sing, “Mexican Sellers” and, collectively with Fuse Holding and Fuse Processing, the “Parties” and, each individually, a “Party”). Capitalized terms not otherwise defined shall have the meanings set forth below.

 

WHEREAS, Mexican Sellers own all of the outstanding shares and other equity interests, if any, in Portafolio en Investigacion Ambiental S.A. de C.V., a Mexican company having its principal address at Monte Azul No. 8, Jesus del Monte, C.P. 05250 Cuajimalpa, Cuidad de Mexico (the “Company”);

 

WHEREAS, Mexican Sellers are willing to transfer to Fuse Processing all of the shares of the Company on the terms and conditions set forth herein;

 

WHEREAS, Fuse Processing is a wholly-owned subsidiary of Fuse Holding; and.

 

WHEREAS, Fuse Holding is willing to issue and transfer to the Mexican Sellers 14,285,715 new shares in Fuse Holding on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound, the Parties agree as follows:

 

Purchase and Sale; Closing

 

1.1. Purchase and Sale of Fuse Shares. Upon the terms and conditions set forth herein, Fuse Holding will authorize and issue and, at the Closing, will sell, convey, assign, transfer and deliver to Mexican Sellers, and each of them equal share of 14,285,715 shares of Fuse Holding (the “Fuse Shares”) as listed in Exhibit A, free and clear of all encumbrances, and Mexican Sellers, and each of them, pro rata, will purchase, acquire and accept from Fuse Holding his or her pro rata share of 14,285,715 Fuse Shares as listed in Exhibit A. Fuse Holding will deliver stock certificates representing Fuse Shares, pro rata, to each of the Mexican Sellers in his or her name.

 

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1.2. Purchase and Sale of Company Shares. At the Closing, the Mexican Sellers, and each of them, shall assign, sell, and deliver to Fuse Processing, his or her pro rata share of all of the outstanding shares and other equity interests, if any, of the Company, free and clear of any and all encumbrances (the “Company Shares”). The Mexican Sellers, and each of them, shall deliver to Fuse Holding the Company Shares in form sufficient to legally effect the transfer, including endorsement as provided on certificates of the Company Shares, if any, or execution and delivery of an Assignment Separate from Share Certificates substantially in the form attached as Exhibit B.

 

1.3. Closing. The closing (the “Closing”) of the purchase and sale of the Fuse Shares and the Company Shares (the “Transaction”) shall take place at such time and place as the Parties may designate and may include a remote closing at which all of the Parties may not be present. The “Closing Date” shall be the date upon which the Closing occurs.

 

1.4. Restricted Shares. The Mexican Sellers hereby acknowledge that the Fuse Shares are not registered with SEC and shall be restricted and may not be sold, transferred, exchanged, pledged, redeemed or otherwise disposed of for the holding period required in accordance with the requirement of Regulation S and Rule 144.

 

ARTICLE II

Representations and Warranties

 

2.1. Representations and Warranties of Mexican Sellers. Mexican Sellers, and each of them, jointly and severally, hereby represent and warrant to each of Fuse Holding and Fuse Processing, as of the date hereof and as of the Closing Date, as follows:

 

(a) Organization and Good Standing; Due Diligence. The Company has been duly organized, is validly existing, and is in good standing under the laws of the United Mexican States and has the right to conduct its business as currently conducted. Prior to the date hereof, Fuse Holding and Fuse Processing have been provided with access to complete and correct copies of the Company’s organizational documents and other books and records of the Company, including contracts for the purchase of the Company’s output, as well as permitted physical inspection of the Company’s properties, including its mining properties.

 

(b) Authorization. Mexican Sellers, and each of them, have all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Transaction. The execution and delivery by Mexican Sellers, and each of them, of this Agreement, the performance of its obligations hereunder, and the consummation by Mexican Sellers, and each of them, of the Transaction have been duly authorized by all necessary action of Mexican Sellers, and each of them.

 

(c) No Conflicts. The execution and delivery of this Agreement by Mexican Sellers, and each of them, the performance of its obligations hereunder and the consummation of the Transaction, will not constitute or result in a breach or violation of, or a default under, (i) the Company’s organizational documents or (ii) any contract of the Company or any Mexican Seller.

 

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(d) Capitalization. The authorized capital stock of the Company consists solely of shares of common stock. The Company Shares represent all shares of the Company issued and outstanding. All of the Company Shares (A) have been duly authorized and validly issued, (B) are fully paid and nonassessable, and (C) were issued in compliance with all applicable laws concerning the issuance of securities, including laws of the United Mexican States. There are no other equity interests of Mexican Sellers, or any of them, issued, authorized, or outstanding and there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or other commitments of the Company or the Mexican Sellers, or any of them, of any character outstanding.

 

(e) Litigation. There is no civil, criminal, or administrative action, suit, demand, claim or hearing, or proceeding or investigation pending or threatened against the Company or any Mexican Seller.

 

(f) Taxes. All tax returns required to be filed by, or on behalf of, or with respect to, the Company have been timely filed.

 

(g) Intellectual Property. All intellectual property owned or held exclusively by the Company is exclusively owned or held (beneficially and of record, where applicable) by the Company and the Company has not infringed, misappropriated, or otherwise violated the intellectual property rights of any third party.

 

(h) Mining and Other Assets. All other assets, including without limitation all mining assets ((i) Mine “PONDEROSA” mine, protected under mining title number 236633, with an area of ​​150 hectares, located in Culiacán, Sinaloa, Mexico; (ii) Mine "ESPERANZA I", protected under title 241176, with an area of ​​250 hectares, located in Durango, Durango, Mexico; (iii) Mine “BRENDA”, protected under title 240846, with an area of ​​381,1400 hectares, located in the state of Sinaloa, Mexico; (iv) Mine "PINA", protected under title 245073, with an area of ​​100 hectares, located in Culiacán, Sinaloa, Mexico; and (v) Mine “AMPMOR”, protected under title 244765, with an area of ​​99 hectares, located in Culiacán, Sinaloa, Mexico), are owned exclusively by the Company, free and clear of any encumbrances.

 

(i) Consents and Approvals; No Violations. Neither the execution and delivery of this Agreement by Mexican Sellers, or any of them, nor the consummation by Mexican Sellers, or any of them, of the Transaction, will (a)  result in a violation or breach of, or constitute a default under, or require any consent or advance notice under, any indenture, license, contract, agreement or other instrument or obligation to which the Company or any Mexican Seller is a party or by which any of them or any of their respective properties or assets are bound or to which they are subject, (b) violate any order, writ, injunction, decree, statute, rule or regulation that is currently in effect (collectively, “Laws” and, individually, a “Law”) applicable to the Company, the Mexican Sellers, or any of them, or any of their respective properties or assets, or (c) require the Company, the Mexican Sellers, or any of them, to obtain any permit, authorization, consent, or approval of, any governmental or regulatory authority, domestic or foreign.     

 

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(j) Financial Statements. Copies of the financial statements of the Company prepared in accordance with applicable financial standards and accurately reflecting the financial condition of the Company have been made available to Fuse Holding and Fuse Processing.

 

(k) Environmental Rules and Regulations. The Company is in compliance with all applicable rules and regulations affecting the environment, including without limitation having no materials considered to be environmentally hazardous under applicable rules and regulations. None of the Company’s mining assets is in violation of any applicable rule or regulation, including rules and regulations of the United Mexican States governing protection of the environment and other environmental matters.

 

(l) Absence of Undisclosed Liabilities. Except for liabilities relating to continuing obligations (excluding any current or accrued payment obligation) previously disclosed to Fuse Holding, the Company has no material liabilities that have accrued or will have accrued as of the Closing Date.

 

(m) Permits and Licenses. The Company holds all permits, licenses and authorizations necessary to the conduct of its business, including without limitation, its mining operations. Each such permit, license, or other authorization is in full force and effect and no event has occurred that constitutes, or that with the giving of notice or the passage of time or both would constitute, a material default by the Company or any other person under any of such permits, licenses, or other authorizations.           

 

(n) Labor and Employment Matters. The Company is in compliance with all applicable laws and regulations governing labor and employment matters.

 

(o) Enforceability. This Agreement is a legal, valid, and binding obligation of the Mexican Sellers, and each of them, fully enforceable against the Mexican Sellers, and each of them, in accordance with its terms, subject to any applicable exceptions under bankruptcy law or laws governing creditors’ rights generally.

 

(p) Title, Ownership and Related Matters. The real property interests of the Company as described to Fuse Holding, including the mining properties, constitutes all of the real property and mining interests of the Company and (i) there are no pending or threatened condemnation, expropriation, or taking proceedings against the real property and mining interests of the Company; and (ii) there are no outstanding options or rights of first refusal to purchase or lease the real property and mining interests of the Company, or any portion thereof or interest therein.

 

(q) Investment Representations.

 

a. The Fuse Shares will be acquired hereunder by each of the Mexican Sellers solely for his or her own account, for investment, and not with a view to the resale or distribution thereof.

 

b. Each of the Mexican Sellers is aware that an investment in Fuse Holding is highly speculative and that there can be no assurance as to what, if any, return the Mexican Sellers may realize in connection with the Transaction. Each of the Mexican Sellers is aware of

 

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the Fuse Holding’s business affairs, business plans and financial condition, and has made his or her own evaluation of the merits and risks of the proposed Transaction and of the advisability of the Transaction. Each of the Mexican Sellers is aware that investment in Fuse Holding is subject to a high degree of risk that could result in the loss of his or her investment in part or in whole.

 

c. Each of the Mexican Sellers has experience as an investor in securities of companies and acknowledges that he or she is able to fend for him or herself, can bear the economic risk of his or her investment in the Fuse Shares and has such knowledge and experience in financial or business matters that he or she is capable of evaluating the merits and risks of, and protecting his or her own interests in connection with, the Transaction and his or her investment in the Fuse Shares.

 

d. Each of the Mexican Sellers has had full access to all of the information he or she considers necessary or appropriate to make an informed investment decision with respect to the Fuse Shares to be acquired under this Agreement. Each of the Mexican Sellers further has had an opportunity to ask questions and receive answers from Fuse Holding and to obtain additional information necessary to verify any information furnished to him or her or to which he or her had access. Each of the Mexican Sellers has had access to Fuse Holding’s publicly filed reports with the SEC and has been furnished during the course of the transactions contemplated by this Agreement with all other public information regarding Fuse Holding that he or she has requested and all such public information is sufficient for such person or entity to evaluate the risks of investing in the Fuse Shares.

 

e. Each of the Mexican Sellers is not acquiring the Fuse Shares in a transaction (or an element of a series of transactions) that is part of any plan or scheme to evade the registration provisions of the United States Securities Act of 1933, as amended (“1933 Act”), as amended.

 

f. The principal residence or place of business for each of the Mexican Sellers is located at the address indicated on the signature page or exhibit hereto.

 

g. Each of the Mexican Sellers has the status:

 

(i) By marking “Yes” next to “U.S. Person” on the signature page of this Agreement, each of the Mexican Sellers hereby agrees and acknowledges that (1) he or she is a “U.S. Person” (as defined below) and/or (2) he or she was in the United States (as defined below) at the time he or she was offered the Fuse Shares or on the date hereof.

 

(ii) By marking “No” next to “U.S. Person” on the signature page of this Agreement, each of the Mexican Sellers hereby agrees and acknowledges that (1) he or she is not a “U.S. Person” and (2) he or she was not in the United States at the time he or she was offered the Fuse Shares or on the date hereof.

 

For the purpose of this Agreement, a “U.S. Person” means:

 

(A) Any natural person resident in the United States;

 

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(B) Any partnership or corporation organized or incorporated under the laws of the United States;

 

(C) Any estate of which any executor or administrator is a U.S. person;

 

(D) Any trust of which any trustee is a U.S. person;

 

(E) Any agency or branch of a foreign entity located in the United States;

 

(F) Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

 

(G) Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; or

 

(H) Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by accredited investor(s) (as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act) who are not natural persons, estates or trusts.

 

“United States” or “U.S.” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.

 

(iii) Each of the Mexican Sellers understands that no action has been or will be taken in any jurisdiction by Fuse Holding that would permit the public offering or resale of the Fuse Shares in any country or jurisdiction where action for that purpose is required.

 

(iv) If any of the Mexican Sellers is not a U.S. Person, he or she represents and warrants that he or she is not purchasing the Fuse Shares for the account or benefit of any U.S. Person, except in accordance with one or more available exemptions from the registration requirements of the 1933 Act or in a transaction not subject thereto.

 

(v) If any of the Mexican Sellers is not a U.S. Person, he or she will make all subsequent offers and sales of the Fuse Shares either (x) outside of the United States in compliance with Regulation S; (y) pursuant to a registration under the 1933 Act; or (z) pursuant to an available exemption from registration under the 1933 Act. Specifically, each of the Mexican Sellers will not resell the Fuse Shares to any U.S. person or within the United States prior to the expiration of a period commencing on the date when the Fuse Shares are earned according to this Agreement and ending on the date that is one year thereafter (the “Distribution Compliance Period”), except pursuant to registration under the 1933 Act or an exemption from registration under the 1933 Act.

 

(vi) Neither the Mexican Sellers nor any person acting on behalf of the Mexican Sellers, has entered into, has the intention of entering into, or will enter into any put option, short

 

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position or other similar instrument or position in the U.S. with respect to the Fuse Shares at any time after the date when the Fuse Shares are earned according to this Agreement through the Distribution Compliance Period except in compliance with the 1933 Act.

 

(vii) Each of the Mexican Sellers agrees that he or she will not resell the Fuse Shares except in accordance with the provisions of Regulation S (Rule 901 through 905 and Preliminary Notes thereto), pursuant to a registration statement under the 1933 Act, or pursuant to an available exemption from registration.

 

h. Each of the Mexican Sellers hereby agrees that the Fuse Shares, upon issuance, shall bear the following or similar legend, if applicable at the time:

 

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.”

 

(r) Brokers’ Fees. Each of the Mexican Sellers has no liability to pay any fees or commissions or other consideration to any broker, finder, or agent with respect to the transactions contemplated by this Agreement

 

      2.2 Representations and Warranties of Fuse Holding. Fuse Holding hereby represents and warrants to the Mexican Sellers, and each of them, as follows:

 

     (a) Organization and Good Standing. Fuse Holding has been duly organized, is validly existing and is in good standing under the laws of the State of Nevada, United States of American, and has the right to conduct its business as currently conducted. Prior to the date hereof, the Mexican Sellers, and each of them, have been provided with access to complete and correct copies of Fuse Holding’s organizational documents as well as its other books and records.

 

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(b) Authorization. Fuse Holding has all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the Transaction. The execution and delivery by Fuse Holding of this Agreement, the performance of its obligations hereunder, and the consummation of the Transaction by Fuse Holding have been duly authorized by all necessary action of Fuse Holding.

 

(c) No Conflicts. The execution and delivery of this Agreement by Fuse Holding, the performance of its obligations hereunder, and the consummation of the Transaction, will not constitute or result in a breach or violation of, or a default under, (i) Fuse Holding’s organizational documents or (ii) any contract of Fuse Holding.

 

(d) Capitalization. Prior to the Closing Date, Fuse Holding will authorize and issue 14, 285, 715 shares, all of which shall be available for sale and delivery, pro rata, to each Mexican Seller.  

 

(e) Litigation. There is no civil, criminal, or administrative action, suit, demand, claim or hearing, or, to the knowledge of the Fuse Holding, proceeding or investigation pending or threatened against Fuse Holding.

 

(f) Taxes. All tax returns required to be filed by, for on behalf of, or with respect to, Fuse Holding have been timely filed.

 

(g) Intellectual Property. All intellectual property owned or held exclusively by Fuse Holding is exclusively owned or held (beneficially and of record, where applicable) by Fuse Holding and Fuse Holding has not infringed, misappropriated, or otherwise violated the intellectual property rights of any third party.

 

(h) Fuse Holding Assets. All assets held by Fuse Holding are owned exclusively by Fuse Holding, free and clear of any encumbrances.

 

(i) Consents and Approvals; No Violations. Neither the execution and delivery of this Agreement by Fuse Holding, nor the consummation by Fuse Holding of the Transactions, will (a)  result in a violation or breach of, or constitute a default under, or require any consent or advance notice under, any indenture, license, contract, agreement, or other instrument or obligation to which Fuse Holding is a party or by which any of its properties or assets are bound or to which they are subject, (b) violate any order, writ, injunction, decree, statute, rule, or regulation that is currently in effect (collectively, “Laws” and, individually, a “Law”) applicable to Fuse Holding or any of its respective properties or assets, or (c) require Fuse Holding to obtain any permit, authorization, consent, or approval of, any governmental or regulatory authority, domestic or foreign.     

 

(j) Financial Statements. Copies of the financial statements of Fuse Holding prepared in accordance with applicable financial standards and accurately reflecting the financial condition of Fuse Holding have been made available to the Mexican Sellers, and each of them.

 

(k) Environmental Rules and Regulations. Fuse Holding is in compliance with all applicable rules and regulations affecting the environment, including without limitation having no materials considered to be environmentally hazardous under applicable rules and regulations.

 

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(l) Absence of Undisclosed Liabilities. Except for liabilities relating to continuing obligations (excluding any current or accrued payment obligation) or disclosed in the reports filed with U.S. Securities and Exchange Commission (“SEC”), Fuse Holding has no material liabilities that have accrued or will have accrued as of the Closing Date.

 

(m) Permits and Licenses. Fuse Holding holds all permits, licenses, and authorizations necessary to the conduct of its business. Each such permit, license, or other authorization is in full force and effect and no event has occurred that constitutes, or that with the giving of notice or the passage of time or both would constitute, a material default by Fuse Holding or any other person under any of such permits, licenses, or other authorizations.           

 

(n) Labor and Employment Matters. Fuse Holding is in compliance with all applicable laws and regulations governing labor and employment matters.

 

(o) Enforceability. This Agreement is a legal, valid, and binding obligation of Fuse Holding, fully enforceable against Fuse Holding in accordance with its terms, subject to any applicable exceptions under bankruptcy law or laws governing creditors’ rights generally.    

 

ARTICLE III

Covenants 

 

3.1. Expenses. Except as otherwise specifically provided in this Agreement, each of the Parties shall bear his, her, or its respective expenses, costs and fees (including attorneys’, auditors’ and financing fees, if any) in connection with the Transaction.

 

3.2. Further Action.

 

(a) Subject to the terms and conditions hereof, each of the Parties shall use reasonable best efforts to, take or cause to be taken, all appropriate action to do or cause to be done all things necessary, proper, or advisable under applicable law and to execute and deliver such documents and other papers, as may be required to carry out the provisions hereof and consummate the Transaction.

 

(b) From the date hereof until the Closing Date, Mexican Sellers shall provide Fuse Holding and its representatives full access to the books and records of the Company and Fuse shall provide the Mexican Sellers, and each of them, full access to the books and records of Fuse Holding.

 

(c) Prior to the Closing, the Mexican Sellers shall cause the Company shall conduct and maintain its business in the ordinary course and in no less manner as prior to this Agreement and Fuse Holding will do the same for itself.

 

(d) The Mexican Sellers agree to forever cancel and discharge any indebtedness owed to such seller by the Company or any of its subsidiaries, both principal and interest, along with any charges, costs, sums and any other amounts associated therewith.

 

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ARTICLE IV

Conditions

 

4.1. Conditions to Obligations of Fuse Holding. The obligations of Fuse Holding to effect the Transaction are subject to the satisfaction or waiver by Fuse Holding at or prior to the Closing of the following conditions:

 

(a) Representations and Warranties. The representations and warranties of the Mexican Sellers set forth herein shall be true and correct in all material respects (A) on the date hereof and (B) at the Closing.

 

(b) Performance of Obligations of Mexican Sellers. Mexican Sellers shall have performed in all material respects their obligations set forth in Section 3.2 (b), (c) and (d) above.

 

4.2. Condition to Obligations of Mexican Sellers. The obligations of the Mexican Sellers to effect the Transaction are subject to the satisfaction or waiver by the Mexican Sellers at or prior to the Closing of the following conditions:

 

(a) Representations and Warranties. The representations and warranties of Fuse Holding set forth herein shall be true and correct in all material respects (A) on the date hereof and (B) at the Closing.

 

(b) Performance of Obligations of Fuse Holding. Fuse Holding shall have performed in all material respects its obligations set forth in Section 3.2 (b) and (c) above.

 

ARTICLE V

Miscellaneous and General

 

5.1. Amendments in Writing. No amendment or modification of this Agreement shall be valid or binding unless set forth in writing and agreed by all parties.

 

5.2. Counterparts. This Agreement may be executed in counterparts, each such counterpart (including any facsimile or electronic document transmission of such counterpart) being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement.

 

5.3. Governing Law; Submission to Jurisdiction; Selection of Forum; Waiver of Trial by Jury. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THEREOF. Each Party hereto agrees that it shall bring any action or proceeding in respect of any claim arising out of, or related to, this Agreement or the Transaction, exclusively in the United States District Court for the Central District of California or any California State court sitting in the County of Los Angeles (the “Chosen Courts”), and solely in connection with claims arising under this Agreement or the Transaction (a) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (b) waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (c) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any Party hereto, and (d) agrees that service of process upon such Party in any such action or proceeding shall be effective if notice is given in accordance with Section 5.4. Each Party hereto irrevocably designates C.T. Corporation as its agent and attorney-in-fact for

 

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the acceptance of service of process and making an appearance on its behalf in any such claim or proceeding and for the taking of all such acts as may be necessary or appropriate in order to confer jurisdiction over it before the Chosen Courts and each Party hereto stipulates that such consent and appointment is irrevocable and coupled with an interest. Each Party hereto irrevocably waives any and all right to trial by jury in any legal proceeding arising out of, or relating to, this Agreement or the Transaction. The Parties acknowledge that, by mutual agreement of a majority of the Mexican Sellers and Fuse Holding, they may elect alternative dispute resolution, including submission to arbitration in Los Angeles, California, under the rules of the American Arbitration Association or the Judicial Arbitration and Mediation Services, Inc.

 

5.4. Notices. Any notice, request, instruction or other document to be given hereunder by any Party to the others shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid, or by facsimile or email to such persons and addresses as currently exist for such Parties or may be designated in writing by the Party to receive such notice.

 

5.5. Entire Agreement; No Other Representations. This Agreement (including Exhibits hereto, if any), constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations, and warranties, both written and oral, among the Parties with respect to the subject matter hereof. Each of Fuse Holding and the Mexican Sellers acknowledges that no Party has made any representation, express or implied, with respect to the accuracy, completeness, or adequacy of any available information except to the extent such information is specifically covered by the representations and warranties contained in Article II.

 

5.6. No Third-Party Beneficiaries. This Agreement is not intended to confer upon any person other than the Parties hereto any rights or remedies hereunder.

 

5.7. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

 

5.8. Interpretation. The headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. The Parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the Parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.

 

5.9. Assignment. This Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective successors, heirs, legal representatives, and permitted assigns. No Party may directly or indirectly assign any of its rights or delegate any of its obligations under this Agreement, by operation of law or otherwise, without the prior written consent of the other Parties. 

 

5.10. Limitation of Liability. Notwithstanding anything to the contrary contained in this Agreement, no Party hereto, or any officer, director or affiliate of such Party, shall be liable to any person under this Agreement for any special, consequential, punitive, indirect or exemplary

 

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damages (including lost or anticipated revenues or profits relating to the same) arising from any claim relating to this Agreement (other than to the extent such damages are paid to a third party), whether such claim is based on warranty, contract, tort (including negligence or strict liability) or otherwise.

 

5.11. Transfer Taxes. Any transfer taxes levied on the transfer of shares hereunder shall be borne by the party so required by applicable law and such party shall file all necessary tax returns and other documentation with respect to such transfer taxes, and, if required by the applicable law, the other Party or Parties shall join in the execution of any such tax returns and other documentation.

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the Parties hereto as of the date first written above.

 

	
			FUSE GROUP HOLDING, INC. 

				FUSE PROCESSING, INC.  
	 	 
	
			BY:  /s/UMESH PATEL

				
			BY:  /s/UMESH PATEL

			
	 	 
	
			NAME: UMESH PATEL  

				
			NAME: UMESH PATEL  

			
	 	 
	
			ITS: CEO

				
			ITS: CEO

			
	 	 
	
			CHOO KEAM HUI

				 
	 	 
	
			By:/s/ CHOO KEAM HUI

				 

 

Address:

 

I understand that the below certification as status of a U.S. or non-U.S. Person may be disclosed to the Internal Revenue Service by the Company and that any false statement contained herein could be punished by fine, imprisonment or both. Under penalties of perjury I declare that I have examined this certification as status of a U.S. or non-U.S. Person and to the best of my knowledge and belief it is true, correct and complete.

 

	
			 

				
			U.S. Person? Yes/No __No_____

				
			(refer to Subsection 5.5(g))

			

 

TIA CHAI TECK

 

By: /s/TIA CHAI TECK

 

Address:

 

I understand that the below certification as status of a U.S. or non-U.S. Person may be disclosed to the Internal Revenue Service by the Company and that any false statement contained herein could be punished by fine, imprisonment or both. Under penalties of perjury I declare that I have examined this certification as status of a U.S. or non-U.S. Person and to the best of my knowledge and belief it is true, correct and complete.

 

	
			 

				
			U.S. Person? Yes/No ___No____

				
			(refer to Subsection 5.5(g))

			

 

13

 

 

GOH HAU GUAN

 

By:/s/ GOH HAU GUAN

 

Address:

 

I understand that the below certification as status of a U.S. or non-U.S. Person may be disclosed to the Internal Revenue Service by the Company and that any false statement contained herein could be punished by fine, imprisonment or both. Under penalties of perjury I declare that I have examined this certification as status of a U.S. or non-U.S. Person and to the best of my knowledge and belief it is true, correct and complete.

 

	
			 

				
			U.S. Person? Yes/No ____No___

				
			(refer to Subsection 5.5(g))

			

 

 

LIM HUI SING

 

By:/s/ LIM HUI SING

 

 

Address:

 

I understand that the below certification as status of a U.S. or non-U.S. Person may be disclosed to the Internal Revenue Service by the Company and that any false statement contained herein could be punished by fine, imprisonment or both. Under penalties of perjury I declare that I have examined this certification as status of a U.S. or non-U.S. Person and to the best of my knowledge and belief it is true, correct and complete.

 

	
			 

				
			U.S. Person? Yes/No ___No____

				
			(refer to Subsection 5.5(g))

			

 

 

TEH BOON NEE

 

By:/s/ TEH BOON NEE

 

Address:

 

I understand that the below certification as status of a U.S. or non-U.S. Person may be disclosed to the Internal Revenue Service by the Company and that any false statement contained herein could be punished by fine, imprisonment or both. Under penalties of perjury I declare that I have examined this certification as status of a U.S. or non-U.S. Person and to the best of my knowledge and belief it is true, correct and complete.

 

	
			 

				
			U.S. Person? Yes/No __No_____

				
			(refer to Subsection 5.5(g))

			

 

14

 

 

EXHIBIT A

 

SELLING SHAREHOLDERs OF the Company AND SHARE NUMBERS

	
			Mexican Sellers

				
			Number of shares of the Company to be delivered to Fuse Processing

				
			Number of shares of Fuse Holding to be issued to Mexican Sellers

			
	
			CHOO KEAM HUI

				
			10

				
			2,857,143

			
	
			TIA CHAI TECK

				
			10

				
			2,857,143

			
	
			GOH HAU GUAN

				
			10

				
			2,857,143

			
	
			LIM HUI SING

				
			10

				
			2,857,143

			
	
			TEH BOON NEE

				
			10

				
			2,857,143

			
	
			Total:

				
			50

				
			14,285,715

			

 

 

15

 

 

 

EXHIBIT B TO SHARE EXCHANGE AGREEMENT

 

STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE

 

For Value Received ______________________________ hereby sells, assigns and transfer unto _____________________________, ___________________ (_____) shares of the Capital Stock of ________________________ represented by Certificate(s) Numbered _____ herewith, and do hereby irrevocably constitute and appoint _______________ attorney to transfer the said stock on the books of said Corporation with full power of substitution in the premises.

 

Dated: ___________

 

Signature: ____________________.

 

 

 

 

 

 

16Leatt Corp: Exhibit 4.2 - Filed by newsfilecorp.com

    

    LEATT CORPORATION

    AMENDED AND RESTATED 2011 EQUITY INCENTIVE PLAN

    	
                1.

            	
                Purposes of the Plan. Leatt Corporation, a Nevada corporation (the "Company") hereby establishes the LEATT CORPORATION AMENDED AND RESTATED 2011 EQUITY INCENTIVE PLAN (the "Plan").The purposes of this Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants, and to promote the long-term growth and profitability of the Company. The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares as the Administrator may determine.

            
	
                 

            	
                 

            
	
                2.

            	
                Definitions. The following definitions will apply to the terms in the Plan:

            

                   "Administrator" means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4.

                "Applicable Laws" means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

                   "Award" means, individually or collectively, a grant under the Plan of Options, SARs, Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares.

                   "Award Agreement" means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

                    "Board" means the Board of Directors of the Company.

                   "Change in Control" means the occurrence of any of the following events:

                (i) Any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities; provided however, that for purposes of this subsection (i) any acquisition of securities directly from the Company shall not constitute a Change in Control; or

                (ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company's assets;

    

    
        Page 2 of 20

    

                (iii) A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. "Incumbent Directors" means directors who either (A) are Directors as of the effective date of the Plan, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or

                (iv) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

                  For avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is the change the state of the Company's incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company's securities immediately before such transaction.

                   "Code" means the Internal Revenue Code of 1986, as amended. Any reference in the Plan to a section of the Code will be a reference to any successor or amended section of the Code.

                   "Committee" means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

                   "Common Stock" means the common stock of the Company.

                   "Company" means Leatt Corporation, a Nevada corporation, or any successor thereto.

                   "Consultant" means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.

                   "Director" means a member of the Board.

                   "Disability" means total and permanent disability as determined by the Administrator in its discretion in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

                   "Employee" means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director's fee by the Company will be sufficient to constitute "employment" by the Company.

    

    
        Page 3 of 20

    

                   "Exchange Act" means the Securities Exchange Act of 1934, as amended.

                   "Fair Market Value" means, as of any date, the value of Common Stock determined as follows:

                (i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation any division or subdivision of the Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

                (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, including without limitation quotation through the over the counter bulletin board ("OTCBB") quotation service administered by the Financial Industry Regulatory Authority ("FINRA"), the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

                (iii) In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator, and to the extent Section 15 applies (a) with respect to ISOs, the Fair Market Value shall be determined in a manner consistent with Code section 422 or (b) with respect to NSOs or SARs, the Fair Market Value shall be determined in a manner consistent with Code section 409A.

                   "Fiscal Year" means the fiscal year of the Company.

                   "Grant Date" means, for all purposes, the date on which the Administrator determines to grant an Award, or such other later date as is determined by the Administrator, provided that the Administrator cannot grant an Award prior to the date the material terms of the Award are established. Notice of the Administrator's determination to grant an Award will be provided to each Participant within a reasonable time after the Grant Date.

                   "Incentive Stock Option" or "ISO" means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

                   "Nonstatutory Stock Option" or "NSO" means an Option that by its terms does not qualify or is not intended to qualify as an ISO.

                   "Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

    

    
        Page 4 of 20

    

                   "Option" means a stock option granted pursuant to the Plan.

                   "Optioned Shares" means the Common Stock subject to an Option.

                   "Optionee" means the holder of an outstanding Option.

                   "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code.

                   "Participant" means the holder of an outstanding Award.

                 "Performance Share" means an Award denominated in Shares which may vest in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine pursuant to Section 10.

                  "Performance Unit" means an Award which may vest in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 10.

                   "Period of Restriction" means the period during which Shares of Restricted Stock are subject to forfeiture or restrictions on transfer pursuant to Section 7.

                   "Plan" means this 2011 Equity Incentive Plan.

                   "Restricted Stock" means Shares awarded to a Participant which are subject to forfeiture and restrictions on transferability in accordance with Section 7.

                   "Restricted Stock Unit" means the right to receive one Share at the end of a specified period of time, which right is subject to forfeiture in accordance with Section 8 of the Plan.

                   "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3.

                   "Section" means a paragraph or section of this Plan.

                   "Section 16(b)" means Section 16(b) of the Exchange Act.

                   "Service" shall mean service as an Employee, Director or Consultant.

                   "Service Provider" means an Employee, Director or Consultant.

                   "Share" means a share of the Common Stock, as adjusted in accordance with Section 13.

                   "Stock Appreciation Right" or "SAR" means the right to receive payment from the Company in an amount no greater than the excess of the Fair Market Value of a Share at the date the SAR is exercised over a specified price fixed by the Administrator in the Award Agreement, which shall not be less than the Fair Market Value of a Share on the Grant Date. In the case of a SAR which is granted in connection with an Option, the specified price shall be the Option exercise price.

    

    
        Page 5 of 20

    

                    "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Code.

                   "Ten Percent Owner" means any Service Provider who is, on the grant date of an ISO, the owner of Shares (determined with application of ownership attribution rules of Code Section 424(d)) possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries.

    	
                3.

            	
                Stock Subject to the Plan.

            

    

    	
                 

            	
                a.

            	
                Stock Subject to the Plan. Subject to the provisions of Section 13, the maximum aggregate number of Shares that may be issued under the Plan is Nine Hundred and Twenty Thousand (920,000) Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                b.

            	
                Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full or, with respect to Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, is forfeited in whole or in part to the Company, the unpurchased Shares (or for Awards other than Options and SARs, the forfeited or unissued Shares) which were subject to the Award will become available for future grant or sale under the Plan (unless the Plan has terminated). With respect to SARs, only Shares actually issued pursuant to a SAR will cease to be available under the Plan; all remaining Shares subject to the SARs will remain available for future grant or sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are forfeited to the Company, such Shares will become available for future grant under the Plan. Shares withheld by the Company to pay the exercise price of an Award or to satisfy tax withholding obligations with respect to an Award will become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan.

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                c.

            	
                Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan.

            

    

    	
                4.

            	
                Administration of the Plan.

            

    

    

    
        Page 6 of 20

    

    

    	
                 

            	
                a.

            	
                Procedure. The Plan shall be administered by the Board or a Committee (or Committees) appointed by the Board, which Committee shall be constituted to comply with Applicable Laws. If and so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in selecting the Administrator and the membership of any committee acting as Administrator the requirements regarding: (i) "nonemployee directors" within the meaning of Rule 16b-3 under the Exchange Act; (ii) "independent directors" as described in the listing requirements for any stock exchange on which Shares are listed; and (iii) Section 15(b)(i) of the Plan, if the Company pays salaries for which it claims deductions that are subject to the Code section 162(m) limitation on its U.S. tax returns. The Board may delegate the responsibility for administering the Plan with respect to designated classes of eligible Participants to different committees consisting of two or more members of the Board, subject to such limitations as the Board or the Administrator deems appropriate. Committee members shall serve for such term as the Board may determine, subject to removal by the Board at any time.

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                b.

            	
                Powers of the Administrator. Subject to the provisions of the Plan and the approval of any relevant authorities, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:

            

    i.        to determine the Fair Market Value;

    ii.      to select the Service Providers to whom Awards may be granted hereunder;

    iii.      to determine the number of Shares to be covered by each Award granted hereunder;

    iv.      to approve forms of agreement for use under the Plan;

    v.        to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on continued employment, continued service or performance criteria), any vesting acceleration (whether by reason of a Change of Control or otherwise) or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator, in its sole discretion, will determine;

    vi.        to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan, including the right to construe disputed or doubtful Plan and Award provisions;

    vii.      to prescribe, amend and rescind rules and regulations relating to the Plan;

    viii.      to modify or amend each Award (subject to Section 19(c)) to the extent any modification or amendment is consistent with the terms of the Plan. The Administrator shall have the discretion to extend the exercise period of Options generally provided the exercise period is not extended beyond the earlier of the original term of the Option or 10 years from the original grant date, or specifically (1) if the exercise period of an Option is extended (but to no more than 10 years from the original grant date) at a time when the exercise price equals or exceeds the fair market value of the Optioned Shares or (2) an Option cannot be exercised because such exercise would violate Applicable Laws, provided that the exercise period is not extended more than 30 days after the exercise of the Option would no longer violate Applicable Laws.

    

    
        Page 7 of 20

    

    ix.        to allow Participants to satisfy withholding tax obligations in such manner as prescribed in Section 14;

    x.          to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;

    xi.        to delay issuance of Shares or suspend Participant's right to exercise an Award as deemed necessary to comply with Applicable Laws; and

    xii.        to make all other determinations deemed necessary or advisable for administering the Plan.

    c.          Effect of Administrator's Decision. The Administrator's decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards. Any decision or action taken or to be taken by the Administrator, arising out of or in connection with the construction, administration, interpretation and effect of the Plan and of its rules and regulations, shall, to the maximum extent permitted by Applicable Laws, be within its absolute discretion (except as otherwise specifically provided in the Plan) and shall be final, binding and conclusive upon the Company, all Participants and any person claiming under or through any Participant.

    	
                5.

            	
                Eligibility. NSOs, Restricted Stock, Restricted Stock Units, SARs, Performance Units and Performance Shares may be granted to Service Providers. ISOs may be granted as specified in Section 15(a).

            
	
                 

            	
                 

            
	
                6.

            	
                Stock Options.

            

    a.        Grant of Options. Subject to the terms and conditions of the Plan, the Administrator, at any time and from time to time, may grant Options to Service Providers in such amounts as the Administrator will determine in its sole discretion. For purposes of the foregoing sentence, Service Providers shall include prospective employees or consultants to whom Options are granted in connection with written offers of employment or engagement of services, respectively, with the Company; provided that no Option granted to a prospective employee or consultant may be exercised prior to the commencement of employment or services with the Company. The Administrator may grant NSOs, ISOs, or any combination of the two. ISOs shall be granted in accordance with Section 15(a) of the Plan.

    

    
        Page 8 of 20

    

    b.        Option Award Agreement. Each Option shall be evidenced by an Award Agreement that shall specify the type of Option granted, the Option price, the exercise date, the term of the Option, the number of Shares to which the Option pertains, and such other terms and conditions (which need not be identical among Participants) as the Administrator shall determine in its sole discretion. If the Award Agreement does not specify that the Option is to be treated as an ISO, the Option shall be deemed a NSO.

    c.        Exercise Price. The per Share exercise price for the Shares to be issued pursuant to exercise of an Option will be no less than the Fair Market Value per Share on the Grant Date.

    d.        Term of Options. The term of each Option will be stated in the Award Agreement. Unless terminated sooner in accordance with the remaining provisions of this Section 6, each Option shall expire either ten (10) years after the Grant Date, or after a shorter term as may be fixed by the Board. Each Award Agreement shall set forth the extent to which the Option may be exercised following termination of Service. Each Award Agreement shall provide the holder with the right to exercise the Option following the Service Provider's termination of Service during the Option term, to the extent the Option was exercisable for vested Shares upon termination of Service, for at least thirty (30) days if termination of Service is due to any reason other than cause (as defined for this purpose by applicable law, the terms of the Award Agreement or a contract of employment), death or Disability, and for at least six (6) months after termination of Service if due to death or Disability (but in no event later than the expiration of the Option term). If Service is terminated for cause, the Award Agreement may provide that the right to exercise the Option terminates immediately on the effective date of termination of Service. To the extent the Option was not exercisable for vested Shares upon termination of Service, the Option shall terminate on the date of termination of Service. Subject to the foregoing, such provisions shall be determined in the sole discretion of the Administrator, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.

    e.        Time and Form of Payment.

    i.        Exercise Date. Each Award Agreement shall specify how and when Shares covered by an Option may be purchased. The Award Agreement may specify waiting periods, the dates on which Options become exercisable or "vested" and, subject to the termination provisions of this section, exercise periods. The Administrator may accelerate the exercisability of any Option or portion thereof.

    ii.        Exercise of Option. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share. An Option will be deemed exercised when the Company receives: (1) notice of exercise (in such form as the Administrator specify from time to time) from the person entitled to exercise the Option, and (2) full payment for the Shares with respect to which the Option is exercised (together with all applicable withholding taxes). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan (together with all applicable withholding taxes). Shares issued upon exercise of an Option will be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Optioned Shares, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13.

    

    
        Page 9 of 20

    

    iii.      Payment. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. Such consideration may consist entirely of:

    (1)        cash;

    (2)        check;

    (3)        to the extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, a promissory note;

    (4)        other Shares, provided Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option will be exercised;

    (5)        to the extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, in accordance with any broker-assisted cashless exercise procedures approved by the Company and as in effect from time to time;

    (6)        by asking the Company to withhold Shares from the total Shares to be delivered upon exercise equal to the number of Shares having a value equal to the aggregate Exercise Price of the Shares being acquired;

    (7)        any combination of the foregoing methods of payment; or

    (8)        such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

    f.        Forfeiture of Options. All unexercised Options shall be forfeited to the Company in accordance with the terms and conditions set forth in the Award Agreement and again will become available for grant under the Plan.

    	
                7.

            	
                Restricted Stock.

            

    a.        Grant of Restricted Stock. Subject to the terms and conditions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator will determine in its sole discretion.

    

    
        Page 10 of 20

    

    b.        Restricted Stock Award Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions (which need not be identical among Participants) as the Administrator will determine in its sole discretion. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed.

    c.        Vesting Conditions and Other Terms.

    i.        Vesting Conditions. The Administrator, in its sole discretion, may impose such conditions on the vesting of Shares of Restricted Stock as it may deem advisable or appropriate, including but not limited to, achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment or service), or any other basis determined by the Administrator in its discretion. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed. The Administrator may, in its discretion, also provide for such complete or partial exceptions to an employment or service restriction as it deems equitable.

    ii.        Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.

    iii.      Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator determines otherwise. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.

    iv.        Transferability. Except as provided in this Section, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

    d.        Removal of Restrictions. All restrictions imposed on Shares of Restricted Stock shall lapse and the Period of Restriction shall end upon the satisfaction of the vesting conditions imposed by the Administrator. Vested Shares of Restricted Stock will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine, but in no event later than the 15th day of the third month following the end of the year in which vesting occurred.

    e.        Forfeiture of Restricted Stock. On the date set forth in the Award Agreement, the Shares of Restricted Stock for which restrictions have not lapsed will be forfeited and revert to the Company and again will become available for grant under the Plan.

    

    
        Page 11 of 20

    

    

    	
                8.

            	
                Restricted Stock Units.

            

    a.        Grant of Restricted Stock Units. Subject to the terms and conditions of the Plan, the Administrator, at any time and from time to time, may grant Restricted Stock Units to Service Providers in such amounts as the Administrator will determine in its sole discretion.

    b.        Restricted Stock Units Award Agreement. Each Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the number of Restricted Stock Units granted, vesting criteria, form of payout, and such other terms and conditions (which need not be identical among Participants) as the Administrator will determine in its sole discretion.

    	
                 

            	
                c.        Vesting Conditions. The Administrator shall set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment or service), or any other basis determined by the Administrator in its discretion. At any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.

            
	
                 

            	
                 

            
	
                 

            	
                d.        Time and Form of Payment. Upon satisfaction of the applicable vesting conditions, payment of vested Restricted Stock Units shall occur in the manner and at the time provided in the Award Agreement, but in no event later than the 15th day of the third month following the end of the year in which vesting occurred. Except as otherwise provided in the Award Agreement, Restricted Stock Units may be paid in cash, Shares, or a combination thereof at the sole discretion of the Administrator. Restricted Stock Units that are fully paid in cash will not reduce the number of Shares available for issuance under the Plan.

            
	
                 

            	
                 

            
	
                 

            	
                e.        Forfeiture of Restricted Stock Units. All unvested Restricted Stock Units shall be forfeited to the Company on the date set forth in the Award Agreement and again will become available for grant under the Plan.

            
	
                 

            	
                 

            
	
                9.

            	
                Stock Appreciation Rights.

            
	
                 

            	
                 

            
	
                 

            	
                a.        Grant of SARs. Subject to the terms and conditions of the Plan, the Administrator, at any time and from time to time, may grant SARs to Service Providers in such amounts as the Administrator will determine in its sole discretion.

            
	
                 

            	
                 

            
	
                 

            	
                b.        Award Agreement. Each SAR grant will be evidenced by an Award Agreement that will specify the exercise price, the number of Shares underlying the SAR grant, the term of the SAR, the conditions of exercise, and such other terms and conditions (which need not be identical among Participants) as the Administrator will determine in its sole discretion.

            
	
                 

            	
                 

            
	
                 

            	
                c.        Exercise Price and Other Terms. The per Share exercise price for the exercise of an SAR will be no less than the Fair Market Value per Share on the Grant Date.

            
	
                 

            	
                 

            

    

    

    
        Page 12 of 20

    

    

    	
                 

            	
                d.        Term of SARs. The term of each SAR will be stated in the Award Agreement. Unless terminated sooner in accordance with the remaining provisions of this Section 9, each SAR shall expire either ten (10) years after the Grant Date, or after a shorter term as may be fixed by the Board. Each Award Agreement shall set forth the extent to which the SAR may be exercised following termination of Service. Each Award Agreement shall provide the holder with the right to exercise the SAR following the Service Provider's termination of Service during the SAR term, to the extent the SAR was vested upon termination of Service, for at least thirty (30) days if termination of Service is due to any reason other than cause (as defined for this purpose by applicable law, the terms of the Award Agreement or a contract of employment), death or Disability, and for at least six (6) months after termination of Service if due to death or Disability (but in no event later than the expiration of the SAR term). If Service is terminated for cause, the Award Agreement may provide that the right to exercise the SAR terminates immediately on the effective date of termination of Service. To the extent the SAR was not vested upon termination of Service, the SAR shall terminate on the date of termination of Service. Subject to the foregoing, such provisions shall be determined in the sole discretion of the Administrator, need not be uniform among all SARs issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.

            
	
                 

            	
                 

            
	
                 

            	
                e.        Time and Form of Payment of SAR Amount. Upon exercise of a SAR, a Participant will be entitled to receive payment from the Company in an amount no greater than: (i) the difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times (ii) the number of Shares with respect to which the SAR is exercised. An Award Agreement may provide for a SAR to be paid in cash, Shares of equivalent value, or a combination thereof.

            
	
                 

            	
                 

            
	
                 

            	
                f.        Forfeiture of SARs. All unexercised SARs shall be forfeited to the Company in accordance with the terms and conditions set forth in the Award Agreement and again will become available for grant under the Plan.

            
	
                 

            	
                 

            
	
                10.

            	
                Performance Units and Performance Shares.

            
	
                 

            	
                 

            
	
                 

            	
                a.        Grant of Performance Units and Performance Shares. Performance Units or Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Performance Units and Performance Shares granted to each Participant.

            

    

    	
                 

            	
                b.        Award Agreement. Each Award of Performance Units and Shares will be evidenced by an Award Agreement that will specify the initial value, the Performance Period, the number of Performance Units or Performance Shares granted, and such other terms and conditions (which need not be identical among Participants) as the Administrator will determine in its sole discretion.

            
	
                 

            	
                 

            
	
                 

            	
                c.        Value of Performance Units and Performance Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before the Grant Date. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the Grant Date.

            

    

    

    
        Page 13 of 20

    

    

    	
                 

            	
                d.        Vesting Conditions and Performance Period. The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units or Performance Shares that will be paid out to the Service Providers. The time period during which the performance objectives or other vesting provisions must be met will be called the "Performance Period." The Administrator may set performance objectives based upon the achievement of Company-wide, divisional, or individual goals or any other basis determined by the Administrator in its discretion.

            
	
                 

            	
                 

            
	
                 

            	
                e.        Time and Form of Payment. After the applicable Performance Period has ended, the holder of Performance Units or Performance Shares will be entitled to receive a payout of the number of vested Performance Units or Performance Shares by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved. Vested Performance Units or Performance Shares will be paid as soon as practicable after the expiration of the applicable Performance Period, but in no event later than the 15th day of the third month following the end of the year the applicable Performance Period expired. An Award Agreement may provide for the satisfaction of Performance Unit or Performance Share Awards in cash or Shares (which have an aggregate Fair Market Value equal to the value of the vested Performance Units or Performance Shares at the close of the applicable Performance Period) or in a combination thereof.

            
	
                 

            	
                 

            
	
                 

            	
                f.        Forfeiture of Performance Units and Performance Shares. All unvested Performance Units or Performance Shares will be forfeited to the Company on the date set forth in the Award Agreement, and again will become available for grant under the Plan.

            
	
                 

            	
                 

            
	
                11.

            	
                Leaves of Absence/Transfer Between Locations. Unless the Administrator provides otherwise or as required by Applicable Laws, vesting of Awards will be suspended during any unpaid leave of absence. An Employee will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary.

            
	
                 

            	
                 

            
	
                12.

            	
                Transferability of Awards. Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate, and transfers will be permitted only to a revocable trust or to one or more family members or a trust established for the benefit of the Participant and/or one or more family members to the extent permitted by Rule 701 of the Securities Act.

            
	
                 

            	
                 

            
	
                13.

            	
                Adjustments; Dissolution or Liquidation; Merger or Change in Control.

            

    

    

    
        Page 14 of 20

    

    

    	
                 

            	
                a.        Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, shall appropriately adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award.

            
	
                 

            	
                 

            
	
                 

            	
                b.        Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.

            

    

    	
                 

            	
                c.        Change in Control. In the event of a merger or Change in Control, any or all outstanding Awards may be assumed by the successor corporation, which assumption shall be binding on all Participants. In the alternative, the successor corporation may substitute equivalent Awards (after taking into account the existing provisions of the Awards). The successor corporation may also issue, in place of outstanding Shares of the Company held by the Participant, substantially similar shares or other property subject to vesting requirements and repurchase restrictions no less favorable to the Participant than those in effect prior to the merger or Change in Control.

            
	
                 

            	
                 

            
	
                 

            	
                      In the event that the successor corporation does not assume or substitute for the Award, unless the Administrator provides otherwise, the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and SARs, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Performance Shares and Performance Units, all Performance Goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. In addition, if an Option or SAR is not assumed or substituted in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or SAR will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or SAR will terminate upon the expiration of such period.

            
	
                 

            	
                 

            
	
                 

            	
                      For the purposes of this Section 13(c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) or, in the case of a SAR upon the exercise of which the Administrator determines to pay cash or a Performance Share or Performance Unit which the Administrator can determine to pay in cash, the fair market value of the consideration received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or SAR or upon the payout of a Restricted Stock Unit, Performance Share or Performance Unit, for each Share subject to such Award (or in the case of Restricted Stock Units and Performance Units, the number of implied shares determined by dividing the value of the Restricted Stock Units and Performance Units, as applicable, by the per share consideration received by holders of Common Stock in the Change in Control), to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

            

    

    

    
        Page 15 of 20

    

    

    	
                 

            	
                      Notwithstanding anything in this Section 13(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant's consent; provided, however, a modification to such performance goals only to reflect the successor corporation's post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

            
	
                 

            	
                 

            
	
                14.

            	
                Tax Withholding.

            
	
                 

            	
                 

            
	
                 

            	
                a.        Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes required by Applicable Laws to be withheld with respect to such Award (or exercise thereof).

            
	
                 

            	
                 

            
	
                 

            	
                b.        Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the amount required to be withheld, or (iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.

            

    

    	
                15.

            	
                Provisions Applicable In the Event the Company or the Service Provider is Subject to U.S. Taxation.

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                a.

            	
                Grant of Incentive Stock Options. If the Administrator grants Options to Employees subject to U.S. taxation, the Administrator may grant such Employee an ISO and the following terms shall also apply:

            

    i.        Maximum Amount. Subject to the provisions of Section 13, to the extent consistent with Section 422 of the Code, not more than an aggregate of Nine Hundred and Twenty Thousand (920,000) Shares may be issued as ISOs under the Plan.

    

    
        Page 16 of 20

    

    ii.        General Rule. Only Employees shall be eligible for the grant of ISOs.

    iii.        Continuous Employment. The Optionee must remain in the continuous employ of the Company or its Subsidiaries from the date the ISO is granted until not more than three months before the date on which it is exercised. A leave of absence approved by the Company may exceed ninety (90) days if reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the ninety-first (91st) day of such leave any ISO held by the Optionee will cease to be treated as an ISO.

    iv.        Award Agreement.

    (1)        The Administrator shall designate Options granted as ISOs in the Award Agreement. Notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which ISOs are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), Options will not qualify as an ISO. For purposes of this section, ISOs will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.

    (2)        The Award Agreement shall specify the term of the ISO. The term shall not exceed ten (10) years from the Grant Date or five (5) years from the Grant Date for Ten Percent Owners.

    (3)        The Award Agreement shall specify an exercise price of not less than the Fair Market Value per Share on the Grant Date or one hundred ten percent (110%) of the Fair Market Value per Share on the Grant Date for Ten Percent Owners.

    (4)        The Award Agreement shall specify that an ISO is not transferable except by will, beneficiary designation or the laws of descent and distribution.

    v.        Form of Payment. The consideration to be paid for the Shares to be issued upon exercise of an ISO, including the method of payment, shall be determined by the Administrator at the time of grant in accordance with Section 6(e)(iii).

    vi.        "Disability", for purposes of an ISO, means total and permanent disability as defined in Section 22(e)(3) of the Code.

    vii.        Notice. In the event of any disposition of the Shares acquired pursuant to the exercise of an ISO within two years from the Grant Date or one year from the exercise date, the Optionee will notify the Company thereof in writing within thirty (30) days after such disposition. In addition, the Optionee shall provide the Company with such information as the Company shall reasonably request in connection with determining the amount and character of Optionee's income, the Company's deduction, and the Company's obligation to withhold taxes or other amounts incurred by reason of a disqualifying disposition, including the amount thereof.

    

    
        Page 17 of 20

    

    

    	
                 

            	
                b.

            	
                Performance-based Compensation. If the Company pays salaries for which it claims deductions that are subject to the Code Section 162(m) limitation on its U.S. tax returns, then the following terms shall be applied in a manner consistent with the requirements of, and only to the extent required for compliance with, the exclusion from the limitation on deductibility of compensation under Code Section 162(m):

            

    i.        Outside Directors. The Board shall consider in selecting the Administrator and the membership of any committee acting as Administrator the provisions regarding "outside directors" within the meaning of Code Section 162(m).

    ii.        Maximum Amount.

    (1)        Subject to the provisions of Section 13, the maximum number of Shares that can be awarded to any individual Participant in the aggregate in any one fiscal year of the Company is Seventy-Eight Thousand (78,000) Shares;

    (2)        For Awards denominated in Shares and satisfied in cash, the maximum Award to any individual Participant in the aggregate in any one fiscal year of the Company is the Fair Market Value of Seventy-Eight Thousand (78,000) Shares on the Grant Date; and

    (3)        The maximum amount payable pursuant to any cash Awards to any individual Participant in the aggregate in any one fiscal year of the Company is the Fair Market Value of Seventy-Eight Thousand (78,000) Shares on the Grant Date.

    iii.        Performance Criteria. All performance criteria must be objective and be established in writing prior to the beginning of the performance period or at later time as permitted by Code Section 162(m). Performance criteria may include alternative and multiple performance goals and may be based on one or more business and/or financial criteria. In establishing the performance goals, the Committee in its discretion may include one or any combination of the following criteria in either absolute or relative terms, for the Company or any Subsidiary:

    	
                 

            	
                (1)

            	
                Increased revenue;

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (2)

            	
                Net income measures (including but not limited to income after capital costs and income before or after taxes);

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (3)

            	
                Stock price measures (including but not limited to growth measures and total stockholder return);

            

    

    

    
        Page 18 of 20

    

    

    	
                 

            	
                (4)

            	
                Market share;

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (5)

            	
                Earnings per Share (actual or targeted growth);

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (6)

            	
                Earnings before interest, taxes, depreciation, and amortization ("EBITDA");

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (7)

            	
                Cash flow measures (including but not limited to net cash flow and net cash flow before financing activities);

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (8)

            	
                Return measures (including but not limited to return on equity, return on average assets, return on capital, risk-adjusted return on capital, return on investors' capital and return on average equity);

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (9)

            	
                Operating measures (including operating income, funds from operations, cash from operations, after-tax operating income, sales volumes, production volumes, and production efficiency);

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (10)

            	
                Expense measures (including but not limited to overhead cost and general and administrative expense);

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (11)

            	
                Margins;

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (12)

            	
                Stockholder value;

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (13)

            	
                Total stockholder return;

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (14)

            	
                Proceeds from dispositions;

            

    

    	
                 

            	
                (15)

            	
                Production volumes;

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (16)

            	
                Total market value; and

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                (17)

            	
                Corporate values measures (including but not limited to ethics compliance, environmental, and safety).

            

    

    	
                 

            	
                c.

            	
                Stock Options and SARs Exempt from Code section 409A. If the Administrator grants Options or SARs to Employees subject to U.S. taxation the Administrator may not modify or amend the Options or SARs to the extent that the modification or amendment adds a feature allowing for additional deferral within the meaning of Code section 409A.

            

    

    	
                16.

            	
                No Effect on Employment or Service. Neither the Plan nor any Award will confer upon any Participant any right with respect to continuing the Participant's relationship as a Service Provider with the Company or any Parent or Subsidiary of the Company, nor will they interfere in any way with the Participant's right or the Company's or its Parent's or Subsidiary's right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

            

    

    

    
        Page 19 of 20

    

    

    	
                17.

            	
                Effective Date. The Plan's effective date is the date on which it is adopted by the Board, so long as it is approved by the Company's stockholders at any time within twelve (12) months of such adoption. Upon approval of the Plan by the stockholders of the Company, all Awards issued pursuant to the Plan on or after the Effective Date shall be fully effective as if the stockholders of the Company had approved the Plan on the Effective Date. If the stockholders fail to approve the Plan within one year after the Effective Date, any Awards made hereunder shall be null and void and of no effect.

            
	
                 

            	
                 

            
	
                18.

            	
                Term of Plan. The Plan will terminate 10 years following the earlier of (i) the date it was adopted by the Board or (ii) the date it became effective upon approval by stockholders of the Company, unless sooner terminated by the Board pursuant to Section 19.

            
	
                 

            	
                 

            
	
                19.

            	
                Amendment and Termination of the Plan.

            

    a.        Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.

    b.        Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

    c.        Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator's ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

    	
                20.

            	
                Conditions Upon Issuance of Shares.

            
	
                 

            	
                 

            
	
                 

            	
                a.        Legal Compliance. The Administrator may delay or suspend the issuance and delivery of Shares, suspend the exercise of Options or SARs, or suspend the Plan as necessary to comply Applicable Laws. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.

            
	
                 

            	
                 

            
	
                 

            	
                b.        Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

            
	
                 

            	
                 

            
	
                21.

            	
                Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.

            

    

    

    
        Page 20 of 20

    

    

    	
                22.

            	
                Repricing Prohibited; Exchange And Buyout of Awards. The repricing of Options or SARs is prohibited without prior stockholder approval. The Administrator may authorize the Company, with prior stockholder approval and the consent of the respective Participants, to issue new Option or SAR Awards in exchange for the surrender and cancellation of any or all outstanding Awards. The Administrator may at any time repurchase Options with payment in cash, Shares or other consideration, based on such terms and conditions as the Administrator and the Participant shall agree.

            
	
                 

            	
                 

            
	
                23.

            	
                Substitution and Assumption of Awards. The Administrator may make Awards under the Plan by assumption, substitution or replacement of performance shares, phantom shares, stock awards, stock options, stock appreciation rights or similar awards granted by another entity (including an Parent or Subsidiary), if such assumption, substitution or replacement is connection with an asset acquisition, stock acquisition, merger, consolidation or similar transaction involving the Company (and/or its Parent or Subsidiary) and such other entity (and/or its affiliate). The Administrator may also make Awards under the Plan by assumption, substitution or replacement of a similar type of award granted by the Company prior to the adoption and approval of the Plan. Notwithstanding any provision of the Plan (other than the maximum number of shares of Common Stock that may be issued under the Plan), the terms of such assumed, substituted or replaced Awards shall be as the Administrator, in its discretion, determines is appropriate.

            
	
                 

            	
                 

            
	
                24.

            	
                Governing Law. The Plan and all Agreements shall be construed in accordance with and governed by the laws of the State of Nevada.

            

    Adopted by the Board of Directors on November 4, 2015

    

    AMENDMENT NO. 1

    TO THE LEATT CORPORATION

    AMENDED AND RESTATED 2011 EQUITY INCENTIVE PLAN

    This AMENDMENT NO. 1 TO THE LEATT CORPORATION AMENDED AND RESTATED 2011 EQUITY INCENTIVE PLAN (this "Amendment") is effective as of the date adopted by the Board of Directors of the Company (the "Board") below. Capitalized terms used, but not otherwise defined, herein have the meanings ascribed to such terms in the Plan (as defined below).

    The Board has previously adopted, and the stockholders of the Company have previously ratified and approved, the Leatt Corporation Amended and Restated 2011 Equity Incentive Plan, allowing the Company to grant equity incentives in the form of options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other share-based awards to employees, directors, and consultants (the "Plan").

    In accordance with Section 19 of the Plan, the Board, as Administrator of the Plan, desires to increase the amount of the Company's common stock, par value $0.001 available for issuance under the Plan from 920,000 shares to 1,120,000 shares as follows:

    A. Amendment to Section 3 (Stock Subject to the Plan).  Section 3 of the Plan is deleted in its entirety and in lieu thereof the following provision is inserted:

    
        	
                    3.

                	
                    Stock Subject to the Plan.

                

    

    

    
        	
                    a.   

                	
                    Stock Subject to the Plan. Subject to the provisions of Section 13, the maximum aggregate number of Shares that may be issued under the Plan is Eleven Hundred and Twenty Thousand (1,120,000) Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

                

    

    B. Full Force and Effect.  In all other respects, the Plan shall remain in full force and effect.

     

    Adopted by the Board of Directors on August 27, 2018

    

    AMENDMENT NO. 2

    TO THE LEATT CORPORATION

    AMENDED AND RESTATED 2011 EQUITY INCENTIVE PLAN

    This AMENDMENT NO. 2 TO THE LEATT CORPORATION AMENDED AND RESTATED 2011 EQUITY INCENTIVE PLAN (this "Amendment") is effective as of the date adopted by the Board of Directors of the Company (the "Board") below. Capitalized terms used, but not otherwise defined, herein have the meanings ascribed to such terms in the Plan (as defined below).

    The Board has previously adopted, and the stockholders of the Company have previously ratified and approved, the Leatt Corporation Amended and Restated 2011 Equity Incentive Plan, allowing the Company to grant equity incentives in the form of options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other share-based awards to employees, directors, and consultants (the "Plan").

    In accordance with Section 19 of the Plan, the Board, as Administrator of the Plan, desires to increase the amount of the Company's common stock, par value $0.001 available for issuance under the Plan from 1,120,000 shares to 1,320,000 shares as follows:

    A. Amendment to Section 3 (Stock Subject to the Plan).  Section 3 of the Plan is deleted in its entirety and in lieu thereof the following provision is inserted:

    
        	
                    3.

                	
                    Stock Subject to the Plan.

                
	 	 

    

    
        	
                    a.   

                	
                    Stock Subject to the Plan. Subject to the provisions of Section 13, the maximum aggregate number of Shares that may be issued under the Plan is Thirteen Hundred and Twenty Thousand (1,320,000) Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

                

    

    B. Full Force and Effect.  In all other respects, the Plan shall remain in full force and effect.

     

    Adopted by the Board of Directors on October 12, 2020

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