Document:

Unassociated Document

    

    CHINA
AGRITECH, INC.

    

    2008 EQUITY
INCENTIVE PLAN

     

    
      	
              1.

            	
              Purposes.  The
      purposes of this Plan are to promote the success of the Company’s
      business, advance the interests of the Company, attract and retain the
      best available personnel for positions of substantial responsibility, and
      provide additional incentive to Employees, Directors and
      Consultants.  The Plan permits the grant of Options, Stock
      Appreciation Rights, Restricted Stock, Restricted Stock Units, and Other
      Share-Based Awards as the Administrator may determine.  Capitalized terms used herein
      shall have the meanings given to such terms in Section 23.

            

    

     

    
      	
              2.

            	
              Stock Subject to the
      Plan.  Subject to adjustment as provided in Section 12, a maximum of three million six hundred
      thousand (3,600,000) Shares will be available for issuance under the
      Plan.  The Shares may be authorized but unissued, or reacquired
      Common Stock.

            

    

     

    If an
Award granted under the Plan lapses, is forfeited, terminated or canceled, or
expires or becomes unexercisable without having been exercised in full, the
unpurchased, 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).  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 grant or sale under the Plan.  With respect to SARs, only Shares
actually issued pursuant to a SAR will cease to be available for future grant or
sale under the Plan (unless the Plan has terminated).  Forfeited
Restricted Stock will revert to the Company and will not be available for grant
under the Plan.  Shares related to forfeited RSUs will become
available for grant under the Plan.  Except with respect to issued
Shares, 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 reduce the number of Shares available for issuance under the
Plan.

     

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

     

    
      	
              3.

            	
              Administration of the
      Plan.

            

    

     

    
      	
               
      

            	
              a.

            	
              Administration.  The
      Board will act as Plan Administrator or will appoint a Committee
      consistent with Applicable Laws to act as Administrator.  If and
      so long as the Shares are registered under Section 12(b) or 12(g) of the
      Exchange Act, the Board will consider in selecting the membership of any
      Committee acting as Administrator the requirements regarding (1)
      “nonemployee directors” within the meaning of Rule 16b-3 under the
      Exchange Act; (2) “independent directors” as described in the listing
      requirements for any stock exchange on which Shares are listed; and (3)
      Section 14.b.i. of the Plan if the Company
      pays salaries for which it claims on its U.S. tax returns deductions that
      are subject to the Code section 162(m) limitation.  The Board
      will determine any Committee member’s term and may remove a Committee
      member 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;

            

    

     

    
      	
               
      

            	
              iii.

            	
              to
      determine the types of Awards to each
  Participant;

            

    

     

    
      	
               
      

            	
              iv.

            	
              to
      determine the number of Shares to be covered by each
  Award;

            

    

     

    
      	
               
      

            	
              v.

            	
              to
      approve forms of agreement for use under the
  Plan;

            

    

     

    
      	
               
      

            	
              vi.

            	
              to
      determine the terms and conditions of each Award, including without
      limitation, the exercise price, amount, the exercise period, vesting
      conditions, any vesting acceleration, any waiver of forfeiture
      restrictions, and any other restriction, condition, or limitation
      regarding any Award or its related
Shares;

            

    

     

    
      	
               
      

            	
              vii.

            	
              to
      construe and interpret the terms of the Plan and Awards and resolve any
      disputes regarding Plan and Award
provisions;

            

    

     

    
      	
               
      

            	
              viii.

            	
              to
      prescribe, amend, rescind or waive rules and regulations relating to the
      Plan;

            

    

     

    
      	
               
      

            	
              ix.

            	
              to
      modify or amend each Award to the extent any modification or amendment is
      consistent with the terms of the
Plan;

            

    

     

    
      	
               
      

            	
              x.

            	
              to
      allow Participants to satisfy withholding tax obligations as permitted
      by  Section 13;

            

    

     

    
      	
               
      

            	
              xi.

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

            

    

     

    
      	
               
      

            	
              xii.

            	
              to
      delay issuance of Shares or suspend a Participant’s right to exercise an
      Award as deemed necessary to comply with Applicable
  Laws;

            

    

     

    
      	
               
      

            	
              xiii.

            	
              to
      determine any issues necessary or advisable for administering the Plan;
      and

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              xiv.

            	
              to
      correct any defect, supply any omission, or reconcile any inconsistency in
      the Plan or any Award in the manner and to the extent it shall deem
      desirable to carry the Plan into
effect.

            

    

     

    
      	
               
      

            	
              c.

            	
              Effect of
      Administrator’s Decision.  Any act or decision of the
      Administrator will be binding and conclusive on the Company, all
      Participants, anyone holding an Award, and any person claiming under or
      through any Participant.

            

    

     

    
      	
              4.

            	
              Eligibility.  ISOs
      may be granted only to Employees who may be subject to U.S.
      tax.  All other Awards may be granted to Service
      Providers.  Service Providers may include prospective Employees
      or Consultants to whom Awards are granted in connection with written
      offers of employment or engagement of services, respectively, with the
      Company; provided that no Award granted to a prospective Employee or
      Consultant may be exercised or purchased prior to the commencement of
      employment or services with the
Company.

            

    

     

    
      	
              5.

            	
              Stock
      Options.

            

    

     

    
      	
               
      

            	
              a.

            	
              Grant of
      Options.  The Administrator may grant Options in such
      amounts as it will determine from time to time.  The
      Administrator may grant NSOs, ISOs, or any combination of the
      two.  ISOs will be granted in accordance with Section 14.a. of the Plan.  NSOs granted to
      U.S. taxpayers will be granted in accordance with Section 14.c. of the
Plan.

            

    

     

    
      	
               
      

            	
              b.

            	
              Option Award
      Agreement.  Each Option will be evidenced by an Award
      Agreement that will specify the type of Option granted, the exercise
      price, the number of Shares to which the Option pertains, vesting
      conditions, the exercise period, restrictions on transferability, and any
      other terms and conditions specified by the Administrator (which need not
      be identical among Participants).  If the Award Agreement does
      not specify that the Option is to be treated as an ISO, the Option will be
      a NSO.

            

    

     

    
      	
               
      

            	
              c.

            	
              Exercise
      Price.  The exercise price per share with respect to each
      Option will be determined by the Administrator provided that the exercise
      price per share cannot be less than the Fair Market Value of a Share on
      the Grant Date.

            

    

     

    
      	
               
      

            	
              d.

            	
              Exercisability.  An
      Option may be exercised at such time as the Option vests.  No
      Option will be exercisable after the expiration of ten (10) years from the
      Grant Date, provided that if an exercise would violate applicable
      securities laws, the Option will be exercisable no more than thirty (30)
      days after the exercise of the Option first would no longer violate
      applicable securities laws.  Subject to the terms of the Plan,
      Options may be exercised at such times, and in such amount and subject to
      such restrictions as will be determined by the Administrator, in its
      discretion.

            

    

     

    
      	
               
      

            	
              e.

            	
              Vesting
      Conditions.  The Administrator shall establish and set
      forth in the Award Agreement the times, installments or conditions upon
      which the Options shall vest and become exercisable, which may include,
      among other things, the achievement of Company-wide, business unit, and
      individual goals (including, but not limited to continued employment or
      service).

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              f.

            	
              Modification of Option
      Awards.  The Administrator may accelerate the
      exercisability of any Option or a portion of any Option.  The
      Administrator may extend the period for exercise provided the exercise
      period is not extended beyond the earlier of the original term of the
      Option or ten (10) years from the original Grant
  Date.

            

    

     

    
      	
               
      

            	
              g.

            	
              Exercise of
      Option.  An Option is exercised when the Company
      receives: (1) notice of exercise (in such form as the Administrator
      will 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).  An Option may not be exercised for a fraction of a
      Share.  Exercise of an Option in any manner shall result in a
      decrease in the number of Shares thereafter available, both for purposes
      of the Plan and for sale under the Option, by the number of Shares as to
      which the Option is exercised.

            

    

     

    
      	
               
      

            	
              h.

            	
              Payment.  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).  Such consideration may consist
      entirely
      of:

            

    

     

    
      	
               
      

            	
              i.

            	
              cash;

            

    

     

    
      	
               
      

            	
              ii.

            	
              check;

            

    

     

    
      	
               
      

            	
              iii.

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

            

    

     

    
      	
               
      

            	
              iv.

            	
              other
      Shares, provided the Shares have a Fair Market Value on the date
      of  exercise of the Option equal to the aggregate exercise price
      for the Shares being purchased;

            

    

     

    
      	
               
      

            	
              v.

            	
              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;

            

    

     

    
      	
               
      

            	
              vi.

            	
              by
      requesting the
      Company to withhold such number of Shares then issuable upon exercise of
      the Option that have an aggregate Fair Market Value equal to the exercise
      price for the Option being
exercised;

            

    

     

    
      	
               
      

            	
              vii.

            	
              any
      combination of the foregoing; or

            

    

     

    
      	
               
      

            	
              viii.

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

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              i.

            	
              Shares Issued Upon
      Exercise.  The Company will issue (or cause to be issued)
      Shares promptly after the Option is exercised.  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 Shares,
      notwithstanding the exercise of the Option.  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 12.

            

    

     

    
      	
               
      

            	
              j.

            	
              Termination and
      Forfeiture of Options.

            

    

     

    
      	
               
      

            	
              i.

            	
              Termination of
      Relationship as a Service Provider.  If a Participant
      ceases to be a Service Provider, such Participant may exercise his or her
      Option within three (3) months of termination, or such other period of
      time as specified in the Award Agreement, to the extent that the Option is
      vested on the date of termination (but in no event later than the
      expiration of the term of the Option as set forth in the Award
      Agreement).  Unless the Administrator provides otherwise, if on
      the date of termination the Participant is not vested as to his or her
      entire Option, the Shares covered by the unvested portion of the Option
      shall revert to the Plan.  If, after termination, the
      Participant does not exercise his or her Option within the time specified
      by the Administrator, the Option shall terminate, and the Shares covered
      by such Option shall revert to the
Plan.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Disability of
      Participant.  If a Participant ceases to be a Service
      Provider as a result of the Participant’s Disability, the Participant may
      exercise his or her Option within twelve (12) months of termination, or
      such longer period of time as specified in the Award Agreement, to the
      extent the Option is vested on the date of termination (but in no event
      later than the expiration of the term of such Option as set forth in the
      Award Agreement).  Unless the Administrator provides otherwise,
      if on the date of termination the Participant is not vested as to his or
      her entire Option, the Shares covered by the unvested portion of the
      Option shall revert to the Plan.  If, after termination, the
      Participant does not exercise his or her Option within the time specified
      herein, the Option shall terminate, and the Shares covered by such Option
      shall revert to the Plan.

            

    

     

    
      	
               
      

            	
              iii.

            	
              Death of Participant.  If
      a Participant dies while a Service Provider, the Option may be exercised
      within twelve (12) months following Participant’s death, or such longer
      period of time as specified in the Award Agreement, to the extent that the
      Option is vested on the date of death (but in no event later than the
      expiration of the term of such Option as set forth in the Award Agreement)
      by the Participant’s designated beneficiary, provided such beneficiary has
      been designated prior to Participant’s death in a form acceptable to the
      Administrator.  If no such beneficiary has been designated by
      the Participant, then such Option may be exercised by the personal
      representative of the Participant’s estate or by the person(s) to whom the
      Option is transferred pursuant to the Participant’s will or in accordance
      with the laws of descent and distribution.  If, at the time of
      death, the Participant is not vested as to his or her entire Option, the
      Shares covered by the unvested portion of the Option shall immediately
      revert to the Plan.  If the Option is not so exercised within
      the time specified herein, the Option shall terminate, and the Shares
      covered by such Option shall revert to the
Plan.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              iv.

            	
              Expiration of Option
      Term.  Subject to the provisions of section 5.d, if the Option
      is not exercised prior to the expiration of the term of such Option as set
      forth in the Award Agreement, the Option shall terminate, and the Shares
      covered by such Option shall revert to the
Plan.

            

    

     

    
      	
              6.

            	
              Stock Appreciation
      Rights.

            

    

     

    
      	
               
      

            	
              a.

            	
              Grant of
      SARs.  The Administrator may grant SARs in such amounts
      as it will determine from time to time.  SARs granted to U.S.
      taxpayers will be granted in accordance with Section 14.c. of the
Plan.

            

    

     

    
      	
               
      

            	
              b.

            	
              SAR Award
      Agreement.  Each SAR will be evidenced by an Award
      Agreement that will specify the exercise price, the number of Shares
      underlying the SAR grant, vesting conditions, the exercise period,
      restrictions on transferability, and such other terms and conditions
      specified by the Administrator (which need not be identical among
      Participants).

            

    

     

    
      	
               
      

            	
              c.

            	
              Exercise
      Price.  The exercise price per share with respect to each
      SAR will be determined by the Administrator provided that the exercise
      price per share cannot be less than the Fair Market Value of a Share on
      the Grant Date.

            

    

     

    
      	
               
      

            	
              d.

            	
              Exercisability.  A
      SAR may be exercised at such time as the SAR vests.  No SAR will
      be exercisable after the expiration of ten (10) years from the Grant Date,
      provided that if an exercise would violate applicable securities laws, the
      SAR will be exercisable no more than thirty (30) days after the exercise
      of the SAR first would no longer violate applicable securities
      laws.  Subject to the terms of the Plan, SARs may be exercised
      at such times, and in such amount and subject to such restrictions as will
      be determined by the Administrator, in its
  discretion.

            

    

     

    
      	
               
      

            	
              e.

            	
              Vesting
      Conditions.  The Administrator shall establish and set
      forth in the Award Agreement the times, installments or conditions upon
      which the SARs shall vest and become exercisable, which may include the
      achievement of Company-wide, business unit, and individual goals
      (including, but not limited to continued employment or
      service).

            

    

     

    
      	
               
      

            	
              f.

            	
              Modification of SAR
      Awards.  The Administrator may accelerate the
      exercisability of any SAR or a portion of any SAR.  The
      Administrator may extend the period for exercise provided the exercise
      period is not extended beyond the earlier of the original term of the SAR
      or 10 years from the original Grant
Date.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              g.

            	
              Exercise of
      SAR.  Upon exercise of a vested SAR, a Participant will
      be entitled to receive payment from the Company in an amount no greater
      than (1) the difference between the Fair Market Value of a Share on
      the date of exercise over the exercise price; times (2) the number of
      Shares with respect to which the SAR is
  exercised.

            

    

     

    
      	
               
      

            	
              h.

            	
              Settlement.  An
      Award Agreement may provide that the amount payable upon the exercise of a
      SAR may consist of cash, Shares of equivalent value, or a combination
      thereof.

            

    

     

    
      	
               
      

            	
              i.

            	
              If
      paid in Shares, the Company will issue (or cause to be issued) Shares
      promptly after the SAR is exercised.  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 Shares, notwithstanding the exercise of the
      SAR.  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 12.

            

    

     

    
      	
               
      

            	
              ii.

            	
              If
      paid in cash, the Company will pay the participant promptly after the SAR
      is exercised but in no event later than the 15th day of the third month
      following the end of the year in which the SAR is
    exercised.

            

    

     

    
      	
               
      

            	
              i.

            	
              Forfeiture of
      SARs.  All unexercised SARs will 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 and
      Restricted Stock Units.

            

    

     

    
      	
               
      

            	
              a.

            	
              Grant.  The
      Administrator may grant Restricted Stock or RSUs in such amounts and form
      as it will determine from time to
time.

            

    

     

    
      	
               
      

            	
              b.

            	
              Award
      Agreement.  Each Award of Restricted Stock or RSUs will
      be evidenced by an Award Agreement that will specify the number and form,
      vesting conditions, the Period of Restriction, purchase price (if any),
      method of payment, restrictions on transferability, repurchase rights, and
      such other terms and conditions specified by the Administrator (which need
      not be identical among
Participants).

            

    

     

    
      	
               
      

            	
              c.

            	
              Vesting
      Conditions.  The Administrator may impose vesting
      conditions on awards of Restricted Stock or RSUs which may include, among
      other things, the achievement of Company-wide, business unit, and
      individual goals (including, but not limited to continued employment or
      service).  Unless the Administrator determines otherwise,
      Restricted Stock will be held in escrow by the Company until the
      restrictions on such Shares have
lapsed.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              d.

            	
              Modification of
      Restricted Stock  or RSUs.  The Administrator
      may accelerate or waive the time at which vesting conditions and other
      restrictions lapse and provide for a complete or partial exception to an
      employment or service restriction.

            

    

     

    
      	
               
      

            	
              e.

            	
              Rights During the
      Restriction Period.  During the Period of Restriction,
      Service Providers who have been granted Restricted Stock may exercise full
      voting rights and will be entitled to receive all dividends and other
      distributions paid with respect to those Shares, unless otherwise provided
      in the Award Agreement.  Any such dividends or distributions
      paid in Shares will be subject to the same restrictions on transferability
      and forfeitability as the Restricted Stock with respect to which they were
      paid.  Service Providers who have been granted RSU’s do not have
      any voting rights with respect to those RSUs and are not entitled to
      receive any dividends and other distributions paid with respect to those
      RSUs. Restricted Stock and RSUs may not be sold, transferred, pledged,
      assigned, or otherwise alienated or hypothecated until the end of the
      applicable Period of Restriction.

            

    

     

    
      	
               
      

            	
              f.

            	
              Removal of
      Restrictions.  All restrictions imposed on Restricted
      Stock and RSUs will lapse and the Period of Restriction will end upon the
      satisfaction of the vesting conditions imposed by the Administrator at
      which time:

            

    

     

    
      	
               
      

            	
              i.

            	
              vested
      Restricted Stock, if held in escrow, 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, or

            

    

     

    
      	
               
      

            	
              ii.

            	
              vested
      RSUs will be paid in Shares at the time provided for 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.

            

    

     

    
      	
               
      

            	
              g.

            	
              Forfeiture.  All
      unvested Restricted Stock and RSUs for which restrictions have not lapsed
      will be forfeited to the Company on the date set forth in the Award
      Agreement.

            

    

     

    
      	
              8.

            	
              Other Share-Based
      Awards.  The Administrator may grant Other Share-Based
      Awards that are payable in, valued in whole or in part by reference to, or
      otherwise based on or related to Shares as may be deemed by the
      Administrator to be consistent with the purposes of the
      Plan.  Other Share-Based Awards may include, without limitation,
      (a) Shares awarded purely as a bonus and not subject to any
      restrictions or conditions, (b) grants in lieu of cash compensation,
      (c) other rights convertible or exchangeable into Shares, and
      (d) awards valued by reference to the value of Shares or the value of
      securities of or the performance of specified Subsidiaries.  The
      Administrator will have the authority to determine the time or times at
      which Other Share-Based Awards will be granted, the number of Shares or
      stock units and the like to be granted or covered pursuant to an Award,
      and all other terms and conditions of an Award, including, but not limited
      to, the vesting period (if any), purchase price (if any), and whether such
      Awards will be payable or paid in cash, Shares or
      otherwise.  Each Other Share-Based Award will be evidenced by an
      Award Agreement.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              9.

            	
              Cash
      Settlement.  The Administrator, in its sole discretion,
      may choose to settle any Award, in whole or in part, granted under the
      Plan in cash in lieu of Shares.  The value of such Award on the
      date of distribution will be determined in the same manner as the Fair
      Market Value of Shares on the Grant Date of an
  Option.

            

    

     

    
      	
              10.

            	
              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. A
      Service Provider will not cease to be a Service Provider 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 and any
      Subsidiary.

            

    

     

    
      	
              11.

            	
              Transferability of
      Awards.  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 Options and SARs may be
      exercised, during the lifetime of the Participant, only by the Participant
      or the Participant’s legal
representative.

            

    

     

    
      	
              12.

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

            

    

     

    
      	
               
      

            	
              a.

            	
              Adjustments.  In
      the event of a reorganization, recapitalization, stock split, stock
      dividend, extraordinary cash dividend, combination of shares, merger,
      consolidation, rights offering, spin off, split off, split up or other
      event identified by the Committee, the Committee will equitably adjust
      (i) the number and kind of shares authorized for issuance under the
      Plan, (ii) the number and kind of shares subject to outstanding
      Awards, and (iii) the exercise price of Options and SARs, in order to prevent diminution or
      enlargement of the benefits or potential benefits intended to be made
      available under the Plan.

            

    

     

    
      	
               
      

            	
              b.

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

            

    

     

    
      	
               
      

            	
              c.

            	
              Change in
      Control.  In the event of a 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
      Participants, substantially similar shares or other property subject to
      vesting requirements and repurchase restrictions no less favorable to the
      Participants than those in effect prior to the Change in
      Control.

            

    

     

    
      	
               
      

            	
              In the event that the successor
      corporation does not agree to assume or provide a substitute for the Award, unless the
      Administrator provides otherwise, the Participants will fully vest in and
      have the right to exercise all of their outstanding Options, including
      Shares as to which such Awards would not otherwise be vested or
      exercisable, and all restrictions on Restricted Stock
      and Restricted Stock Units will lapse.  The Administrator will
      notify the Participants in writing or electronically that the Option or
      SAR will be exercisable for a period of time prior to the Change in
      Control determined by
      the Administrator in its sole discretion, and the Option or SAR will
      terminate upon the expiration of such
  period.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    For the
purposes of this section, 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) 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, for each Share subject to such Award (or in the case of Restricted
Stock Units, the number of implied shares determined by dividing the value of
the Restricted Stock Units 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.

     

    Notwithstanding
anything in this section 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.

     

    
      	
              13.

            	
              Withholding.

            

    

     

    
      	
               
      

            	
              a.

            	
              Withholding
      Requirements.  The Company may require the Participant to
      pay to the Company the amount of any taxes that the Company is required by
      applicable federal, state, local, foreign law or other Applicable Laws to
      withhold with respect to the grant, vesting or exercise of an Award;
      provided, however, that the Company will not withhold any amounts in
      excess of the Participant’s minimum statutory withholding requirements
      (“tax withholding obligations”).   The Company shall not be
      required to issue any shares of Common Stock under the Plan until such tax
      withholding obligations are
satisfied.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              b.

            	
              Withholding
      Arrangements.  The Administrator may permit or require a
      Participant to satisfy all or part of his or her tax withholding
      obligations by (i) paying cash to the Company, (ii) having the
      Company withhold an amount from any cash amounts otherwise due or to
      become due from the Company to the Participant, (iii) having the
      Company withhold a number of shares of Common Stock that would otherwise
      be issued to the Participant (or become vested in the case of Restricted
      Stock) having a Fair Market Value equal to the tax withholding
      obligations, (iv) surrendering a number of shares of Common Stock the
      Participant already owns having a value equal to the tax withholding
      obligations, or (v) any other method permitted or required by Applicable
      Law.  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.

            

    

     

    
      
        	
                 
      

              	
                c.

              	
                Other
      Withholdings.  The
      Company may withhold such other amounts above and beyond the tax
      withholdings obligations as may be permitted or required by Applicable
      Laws.

              

      

    

     

    
      	
              14.

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

            

    

     

    
      	
               
      

            	
              a.

            	
              Grant of Incentive
      Stock Options. The Administrator may grant ISOs to Employees that
      may be subject to U.S. taxation.  Section 5 of this Plan and the following terms apply to
      all grants that are intended to qualify as ISO
  Awards:

            

    

     

    
      	
               
      

            	
              i.

            	
              Maximum
      Amount.  Subject to adjustment as provided in Section 12, to the extent consistent with Code section
      422, not more than an aggregate of three million six-hundred thousand
      (3,600,000) Shares may be issued pursuant to the exercise of ISOs granted
      under the Plan.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Eligibility.  Only
      Employees of the Company or an Affiliate will be eligible for the grant of
      ISOs.

            

    

     

    
      	
               
      

            	
              iii.

            	
              Continuous
      Employment.  The Optionee must remain in the continuous
      employ of the Company or the Affiliate from the ISO Grant Date to the date
      that is three months prior to exercise.  Service will be treated
      as continuous during a leave of absence approved by the Employer that does
      not exceed three (3) months.  A leave of absence approved by the
      Employer  may exceed three (3) months if reemployment upon
      expiration of such leave is guaranteed by statute or
      contract.  An Option exercised more than three (3) months after
      termination of employment will be treated as a
  NSO.

            

    

     

    
      	
               
      

            	
              iv.

            	
              Award
      Agreement.

            

    

     

    
      	
               
      

            	
              (1)

            	
              The
      Administrator will designate Options granted as ISOs in the Award
      Agreement.

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (2)

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

            

    

     

    
      	
               
      

            	
              v.

            	
              Limitation on
      ISOs.  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 or any Affiliate) exceeds one hundred thousand dollars ($100,000),
      Options will not qualify as ISOs and will be treated as
      NSOs.  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 Grant
      Date.

            

    

     

    
      	
               
      

            	
              vi.

            	
              Notice Required Upon
      Disqualifying Dispositions.  The Optionee must notify the
      Company in writing within thirty (30) days after any disposition of 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
      must also provide the Company with all information that the Company
      reasonably requests 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.

            

    

     

    
      	
               
      

            	
              b.

            	
              Performance-Based
      Compensation.  The Administrator may impose the following
      conditions on any Award under this Plan to any Service
      Provider:

            

    

     

    
      	
               
      

            	
              i.

            	
              Outside
      Directors.  Awards that the Administrator intends to
      qualify as “performance-based compensation” must be (1) granted by a
      committee of the Board comprised solely of two or more “outside directors”
      within the meaning of Code section 162(m) and (2) administered in a manner
      that will enable such Awards to qualify as “performance-based
      compensation” within the meaning of Code section
  162(m).

            

    

     

    
      	
               
      

            	
              ii.

            	
              Maximum
      Amount.  In any calendar year, no eligible Employee may
      receive (1) with respect to Awards denominated in Shares, Awards
      covering more than three million six-hundred thousand
      (3,600,000)  Shares (adjusted in accordance with Section 12), or (2) with respect to Awards
      denominated in cash, Awards with a Fair Market Value exceeding that of
      three million six-hundred thousand (3,600,000) Shares determined as of the
      Grant Date.

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              iii.

            	
              Performance
      Criteria.  The performance goal applicable to any Award
      (other than an Option or SAR) that is intended to qualify as
      performance-based compensation must be established in writing prior to the
      beginning of the Performance Period or at a later time as permitted by
      Code section 162(m) and may be based on any one or more of the following
      performance measures that apply to the individual, a business unit, or the
      Company as a whole:

            

    

     

    
      	
               
      

            	
              (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);

            

    

     

    
      	
               
      

            	
              (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

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (17)

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

            

    

     

    
      	
               
      

            	
              iv.

            	
              The
      terms of the performance goal applicable to any Award that is intended to
      qualify as performance-based compensation must preclude discretion to
      increase the amount of compensation that would otherwise be due upon
      attainment of the goal.

            

    

     

    
      	
               
      

            	
              v.

            	
              Following
      the completion of the Performance Period, the outside directors described
      in Section 14.b.i. above must certify in
      writing whether the applicable performance goals have been achieved for
      such Performance Period.  In determining the amount earned, the
      Administrator will have the right to reduce (but not increase) the amount
      payable at a given level of performance to take into account additional
      factors that the Administrator may deem relevant to the assessment of
      individual or corporate performance for the Performance
      Period.

            

    

     

    
      	
               
      

            	
              c.

            	
              Stock Options and
      SARs.

            

    

     

    
      	
               
      

            	
              i.

            	
              Eligibility.  Section
      5 of this Plan and the following terms apply
      to all grants of NSOs and SARs to Service Providers that are subject to
      U.S. taxation.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Administration.

            

    

     

    
      	
               
      

            	
              (1)

            	
              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,
  and

            

    

     

    
      	
               
      

            	
              (2)

            	
              any
      adjustment pursuant to Section 12 will be
      done in a manner consistent with Code section 409A and Treasury
      Regulations section 1.409A-1 et
  seq.

            

    

     

    
      	
               
      

            	
              (3)

            	
              The
      Company intends that no payments under this Plan will be subject to the
      tax imposed by Code section 409A.  The Administrator will
      interpret and administer the Plan in a manner that avoids the imposition
      of any increase in tax under Code section 409A(a)(1)(B), and any
      ambiguities herein will be interpreted to satisfy the requirements of Code
      section 409A or any exemption
thereto.

            

    

     

    
      	
              15.

            	
              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
      Affiliate, nor will either interfere in any way with the Participant’s
      right or the Company’s or Affiliate’s right to terminate such relationship
      at any time, with or without cause, to the extent permitted by Applicable
      Laws.

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              16.

            	
              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 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 will 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 before or after the Effective
      Date, any Awards granted hereunder prior to stockholder approval will be
      null and void and of no
effect.  

            

    

     

    
      	
              17.

            	
              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 18.   

            

    

     

    
      	
              18.

            	
              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 in writing and signed by the Participant and the
      Company.  Termination of the Plan will not affect the
      Administrator's ability to exercise its powers with respect to Awards
      granted under the Plan prior to the Plan termination
      date.  After the Plan is terminated, no future Awards may be
      granted, but Awards previously granted shall remain outstanding in
      accordance with their applicable terms and conditions and the Plan’s terms
      and conditions.

            

    

     

    
      	
              19.

            	
              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 with 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.  The Company shall be under no
      obligation to any Participant to register for offering or resale or to
      qualify for exemption under the Securities Act, or to register or qualify
      under the laws of any state or foreign jurisdiction, any shares of Common
      Stock, security or interest in a security paid or issued under, or created
      by, the Plan, or to continue in effect any such registrations or
      qualifications if made.  As a condition to the exercise of an
      Award or the issuance of Shares, the Company may require the individual
      exercising such Award or receiving Shares to represent and warrant that
      the Shares are being purchased only for investment and without any present
      intention to sell or distribute such
Shares.

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              c.

            	
              Certificates.  To
      the extent the Plan or any instrument evidencing an Award provides for
      issuance of stock certificates to reflect the issuance of shares of Common
      Stock, the issuance may be effected on a noncertificated basis, to the
      extent not prohibited by applicable law or the applicable rules of any
      stock exchange.

            

    

     

    
      	
              20.

            	
              Inability to Obtain
      Authority.  If the Company is unable to obtain required
      authority from any regulatory body in order to lawfully issue or sell
      Shares pursuant to this Plan, all rights with respect to such Shares will
      be void and the Company will have no liability with respect to the failure
      to issue or sell such Shares.

            

    

     

    
      	
              21.

            	
              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 repurchase Options
      with payment in cash, Shares or other consideration at any time pursuant
      to terms that are mutually agreeable to the Company and the
      Participant.

            

    

     

    
      	
              22.

            	
              Governing
      Law.  The
      Plan, any Award Agreement, and documents evidencing Awards or rights
      relating to Awards will be construed, administered, and governed in all
      respects under and by the laws of the State of Delaware, without giving
      effect to its
      conflicts or choice of law
principles.

            

    

     

    
      	
              23.

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

            

    

     

    “Administrator” means the Board or Committee that
administers the Plan pursuant to Section 3.

    

    “Affiliate” means any
“parent corporation” or “subsidiary corporation,” as such terms are defined in
Code sections 424(e) and 424(f).

    

    “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 Shares are
listed or quoted and the applicable laws of any foreign country or jurisdiction
(i) where Awards are, or will be, granted under the Plan, or (ii) would otherwise have jurisdiction
over the Plan.

    

    “Award” means an Option, a SAR, a share of
Restricted Stock, a RSU, or an Other Share-Based Award granted pursuant to the
terms of the Plan.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    “Award
Agreement” means the written agreement
governing Plan
Awards.  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 sections13(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, (A) any acquisition of
securities directly from the Company shall not constitute a Change in Control
and (B) any change in the beneficial ownership of the securities of the Company as a
result of a private financing of the Company that is approved by the Board shall
not constitute a Change in Control;

    

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

    

    (iii)           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 the
avoidance of doubt, a transaction shall not constitute a Change in Control if:
(i) its sole purpose is to change the state of the Company’s incorporation or
the Company’s name, or (ii) its sole purpose is to create a holding company that
shall 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 the compensation committee, if
any, or such similar or successor Committee appointed by the Board.  If the Board has not
appointed a Committee, the Board will function in the place of the
Committee.

    

    “Company” means China Agritech, Inc., a Delaware
corporation, or its successor.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    “Consultant” means any person, including an advisor,
if: (1) the consultant or
adviser is a natural person; (2) the consultant or adviser renders bona
fide services to the
Company or any Subsidiary; and (3) the services rendered by the consultant or
adviser are not in connection with the offer or sale of securities in a
capital-raising transaction
and do not directly or indirectly promote or maintain a market for the
Company’s securities.

    

    “Director” means a member of the
Board.

    

    “Disability” generally 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, but “Disability,” for purposes of an ISO, means total and
permanent disability as defined in Code section 22(e)(3).

    

    “Employee” means any person employed by the Company
or any 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.”

    

    “Employer” means the entity that employs the
Employee.

    

    “Exchange
Act” means the Securities Exchange Act of
1934, as amended.

    

    “Fair Market
Value” means, as of any date, the value of
Shares determined as follows:

    

    (i)           If the Shares are 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; or

    

    (ii)           If the Shares are regularly quoted by a
recognized securities dealer but selling prices are not reported, including
without limitation quotation through the Over-The-Counter Bulletin
Board quotation service administered by the Financial Industry Regulatory
Authority, the Fair Market Value of a Share will be the mean between the high
bid and low asked prices for the Shares 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 Shares, the Fair Market Value will be determined in good faith by the
Administrator, and to the
extent Section 13.a applies (a) with respect to ISOs, the
Fair Market Value will be determined in a manner consistent with Code section
422 or (b) with respect to NSOs or SARs, the Fair Market Value will be
determined in a manner
consistent with Code section 409A.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    “Fiscal
Year” means the fiscal year of the
Company.

    

    “Grant
Date” means the date on which the
Administrator grants 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.  The
Administrator may not grant an Award with a Grant Date that is effective prior
to the date the Administrator takes action to approve such
Award.

    

    “Incentive Stock
Option” or “ISO” means an Option intended to qualify as
an incentive stock option within the meaning of Code section 422 and its
regulations.

    

    “Independent
Directors” means (i) a Director who does not have a financial interest in
the decision of the Board, and (ii) if the Company is currently listed on a
national securities exchange, a Director who meets the definition of
“independent director” (or analogous term) for such national securities
exchange.

    

    “Nonstatutory
Stock Option” or “NSO” means an Option that by 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 its rules and
regulations.

    

    “Option” means a stock option granted pursuant
to the Plan.

    

    “Optionee” means the holder of an Option granted
pursuant to the Plan.

    

    “Other
Share-Based Awards” will mean awards of Shares or other
rights in accordance with Section 8.

    

    “Participant” means the holder of an Award
granted pursuant to the
Plan.

    

    “Performance
Period” means one or more time periods, which
may be of varying and overlapping durations, over which the attainment of the
performance goals or other vesting conditions will be measured for the purpose
of determining a
Participant’s right to payment.

    

    “Period of
Restriction” means the period during which
Restricted Stock and RSUs  are subject to forfeiture or restrictions
on transfer pursuant to Section 7.

    

    “Plan” means this 2008 Equity Incentive Plan.

    

    “Related
Entity” means the corporation or other entity,
other than the Company, to which the Service Provider provides services on the
Grant Date, and any corporation or other entity, other than the Company, in an
unbroken chain of corporations or other entities beginning with the
Company in which each corporation or other entity has a controlling interest in
another corporation or other entity in the chain, and ending with the
corporation or other entity that has a controlling interest in the corporation or other entity to which
the Service Provider provides services on the Grant Date.  For a
corporation, a controlling interest means ownership of stock possessing at least
fifty (50%) percent of total combined voting power of all classes of
stock, or at least fifty (50%) percent of
the total value of all classes of stock.  For a partnership or limited
liability company, a controlling interest means ownership of at least fifty
(50%) percent of the profits interest or capital interest of the entity.  In determining ownership,
the rules of Treasury Regulation sections 1.414(c)-3 and 1.414(c)-4
apply.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

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

    

    “Restricted
Stock Unit” or “RSU” means the right to receive one Share at
the end of a specified period of time that is subject to forfeiture in
accordance with Section 7 of the Plan.

    

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

    

    “Section
16(b)” means Section 16(b) of the Exchange
Act.

    

    “Service
Provider” means an Employee, Director or
Consultant.

    

    “Share” means a share of Company common stock,
as adjusted in accordance
with Section 12.

    

    “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 that is not less than the Fair Market Value
of a Share on the Grant Date.

    

    “Subsidiary” means a “subsidiary corporation” as defined in Code section
424(f).

    

    “Ten Percent
Owner” means any Service Provider who is, on
the Grant Date of an ISO, the owner of more than 10% of the total combined
voting power of all classes of stock of the Company or any Affiliate (determined
with application of ownership attribution rules of Code section 424(d)).

    

    

    Adopted
by the Board of Directors on December 19, 2008

     

    
      
        
        

      

      
        20Rogers
Consulting Group 

      
        

      

                                                   Specialty
Securities Advisement

      

      May 15,
2008

      

      Dr.
Alexander Gak

      BAETA
Corp.

      253
Warren Avenue

      Fort Lee,
NJ 07024

      

      RE: Proposal for CFO
Services

      

      Dear Dr.
Gak:

      

      In
response to your request for proposal for CFO services in the preparation and
oversight of materials intended for completing annual audits and quarterly
financial results in full compliance with current PCAOB and FINRA standards, I
have developed the following outline of responsibilities, duties, obligations
and tasks, for your consideration.

      

      
        	
                 
      

              	
                I.

              	
                Duties
      & Responsibilities

              

      

      

      
        	
                 
      

              	
                          
          a.

              	
                PCAOB Annual Audits
      & Quarterly Financial Reporting. It is understood that a
      significant portion of the obligations shall be in the development and
      support of materials necessary to complete BAETA’s annual audits and
      regular quarterly financial results. Your PCAOB accountant is an essential
      component in ensuring that all materials and required financial controls
      have been developed and properly executed by management, but in order to
      maintain independence per regulatory guidelines, they are required to rely
      on management’s presentation of all financial documents and Internal
      Controls of Financial Reporting (“ICFR”).  The preparation,
      maintenance and responsibility over the tasks, statements, estimates,
      documentation and other materials necessary to engage your PCAOB
      accountant is management’s responsibility, and specifically what I propose
      to obligate myself to perform for
BAETA.

              

      

      

      
        	
                 
      

              	
                      
              b.

              	
                Such duties and
      responsibilities include, but are not necessarily limited to the
      following:

              

      

      

      
        	
                 
      

              	
                         
      i.

              	
                Preparation
      & Maintenance of Financial Statements. The PCAOB audit and quarterly
      financial reporting process begins with the preparation of financial
      statements, including actual current Income Statement, Balance Sheet and
      Statement of Cash Flows.  It is management’s responsibility to
      prepare and present these, along with all fully reconciled supporting
      sub-ledger documentation, to the auditor for review.  The PCAOB
      accountant cannot perform this function and cannot assist in the creation
      or reconciliation of the numbers to sub-ledgers and other supporting
      documentation.

              

      

      

      Rogers
Consulting Group

      8251
Blackburn Avenue| Suite 4 | Los Angeles | CA | 90048

      Ph.
310.300.8485 | F. 323.852.7157

      Http://www.managesource.com
| CEO@managesource.com

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Rogers
Consulting Group CFO Services Proposal

      

      
        	
                 
      

              	
                         
      ii.

              	
                Preparation
      & Maintenance of Supporting Sub-Ledgers.  The regular
      financial reporting process also requires that management prepare and
      submit to its PCAOB accountant for review, the following items intrinsic
      to the completion of the financial
statements:

              

      

      

      

      
        	
                 
      

              	
                         
      1.

              	
                Equity
      Ledgers and Additional Paid-In Capital (“APIC”) Calculations. This
      requires ongoing maintenance of equity ledgers and disclosable calculation
      of APIC, inclusive of equity purchase or distribution documents to
      validate the numbers presented.

              

      

      

      
        	
                 
      

              	
                         
      2.

              	
                Reconciliation
      & Accounting of all Financial Sub-Ledgers.  All sub-ledger
      documents must tie exactly to financial statements presented to the
      accountants, and must be accompanied by associated contracts, statements,
      etc. for verification.  These
include:

              

      

      

      

      
        	
                 
      

              	
                         
      a.

              	
                Accounts
      Payable / Accounts Receivable
sub-ledgers.

              

      

      

      
        	
                 
      

              	
                         
      b.

              	
                Actual
      Cash sub-ledgers (subject to outstanding A/R & A/P), and
      substantiating statements sets.

              

      

      

      
        	
                 
      

              	
                         
      c.

              	
                Debt
      Notes, Lines of Credit, Credit Cards, etc. These must be presented in
      actual balance form, and broken into interest and principle amounts
      incurred on a rolling basis.  All statements and supporting
      sub-ledgers must accompany.

              

      

      

      
        	
                 
      

              	
                         
      d.

              	
                Inventory
      Sub-Ledger.  The inventory sub-ledger must also be reconciled
      between sub-ledger and statements presented on a regular basis and
      submitted to PCAOB accountant with the rest of the materials for regular
      audits and quarterly financial
reporting.

              

      

      

      
        	
                 
      

              	
                         
      e.

              	
                Depreciation
      & Amortization “Waterfalls” and reconcile quarterly and annual
      totals.

              

      

       

      
        
          
            	
                    Confidential:
      BAETA Corp.

                  	
                    Page 2
      / 6

                  

          

           

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Rogers Consulting Group CFO
Services Proposal

         

      

      
        
          	
                   
      

                	
                           
      f.

                	
                  Estimates.  Management
      makes certain estimates to its accountants on its financial
      statements.  These estimates include, but are not necessarily
      limited to, the following:

                

        

      

      
         

        
          	
                   
      

                	
                        
           i.

                	
                  Tax
      Assets & Liabilities.

                

        

      

      
        	
                 
      

              	
                    
            ii.

              	
                Allowance
      for Doubtful Accounts.

              

      

      
        	
                 
      

              	
                     
          iii.

              	
                Deferred
      Revenue  & Deferred Liabilities (both long-term, and current
      portions).

              

      

      
        	
                 
      

              	
                      
         iv.

              	
                Goodwill.

              

      

      
        	
                 
      

              	
                        
        v.

              	
                Intangible
      Asset Values.

              

      

      
        	
                 
      

              	
                         
      vi.

              	
                FMV
      of any Term Investments.

              

      

      
        	
                 
      

              	
                        
      vii.

              	
                Prepaid
      Expenses & Other Current
Assets.

              

      

      
        	
                 
      

              	
                       
      viii.

              	
                Deferred
      Compensation Liabilities.

              

      

      

      
        	
                 
      

              	
                       
      g.

              	
                Management’s
      Discussion & Analysis (“MD&A”).  Financial reports are
      not considered complete without the MD&A.  MD&A will be
      prepared and delivered at each regular reporting
  event.

              

      

      

      
        	
                 
      

              	
                       
      h.

              	
                Open
      Items.  The PCAOB accountant shall, upon review of regular
      financial presentation, return lists of Open Items that they require to
      validate or correct any items they wish to have more clarity on, or wish
      to test for actual value.  In performance of other duties, Open
      Items will be addressed and completed to finalize the financial reporting
      procedures forthwith.  Some periods can produce multiple rounds
      of Open Items.  It is purely dependent on accountant
      preferences, until they are satisfied that all numbers, sub-ledgers,
      estimates, etc. are qualified and validated by supporting sub-ledgers,
      stated procedures, statements, contracts,
etc.

              

      

      

      All of
these items must be reconciled, prepared and calculated on an ongoing basis, in
accordance with stated, written procedures for doing so consistently each
time.

      

      The need
for a stated system of consistent reporting and estimation is the basis for ICFR
and written procedures.

       

      
        	
                 
      

              	
                       
      iii.

              	
                ICFR &
      Procedures. Although PCAOB accountants will likely be lenient with
      ICFR and written procedures during development phases, they will not over
      a short period of time. ICFR and written procedures for oversight and
      reporting need to be developed and maintained in accordance with decisions
      made relative to completing the tasks outlined in Item 1(b)(i) –
      1(b)(f).  Initial ICFR & Procedures duties shall
      include:

              

      

       

      
        
          
            	
                    Confidential:
      BAETA Corp.

                  	
                    Page 3
      / 6

                  

          

           

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Rogers Consulting Group CFO Services Proposal

         

      

      
        	
                 
      

              	
                           
      1.

              	
                Create
      written financial reporting procedures
manual.

              

      

      
        	
                 
      

              	
                         
        2.

              	
                Update
      and record all financial reporting process
  decisions.

              

      

      
        	
                 
      

              	
                          
       3.

              	
                Prepare
      financial reporting oversight procedures and charts, per ICFR
      requirements.

              

      

       

      
        	
                 
      

              	
                       
      iv.

              	
                Records &
      Retention It is necessary to retain all records and statements
      relative the financial operations of BAETA to complete the tasks outlined
      above, and to meet the PCAOB accountant’s regular reporting
      requirements.  These records include, but are not limited
      to:

              

      

      

      
        	
                 
      

              	
                         
        1.

              	
                Placement
      Memorandums and any other debt or equity obligations of the
      Company.

              

      

      
        	
                 
      

              	
                       
          2.

              	
                Securities
      Subscription Agreements.

              

      

      
        	
                 
      

              	
                        
         3.

              	
                Contracts,
      Leases & Other Direct Commercial
  Obligations.

              

      

      
        	
                 
      

              	
                       
          4.

              	
                Employment
      Contracts & Benefits Packages.

              

      

      
        	
                 
      

              	
                         
        5.

              	
                Statements
      & Invoices from Financial & Commercial
  Partners.

              

      

      

      
        	
                 
      

              	
                       
      c.

              	
                Operations.  It
      is understood that a significant portion of future obligations, possibly
      beyond the term proposed here, shall be the ongoing shall be in the
      development and support of operational elements as they pertain to the
      financial operations of the company, including but not necessarily limited
      to:

              

      

      

      
        	
                 
      

              	
                       
      i.

              	
                Budgeting &
      Pro-Forma Statements.  Establish and maintain operating
      budgets for the purpose of establishing compliance with required controls
      and procedures and ensure effective capital management, tracking and
      reconciliation for tax, and regulatory filings, as well as regular capital
      expenditures, financing and
acquisitions.

              

      

      

      
        	
                 
      

              	
                       
      ii.

              	
                Inventory
      Management. Establish compliant procedures and systems for tracking
      inventory and reconciling production and sales with inventory, accounts
      payable and accounts receivable.

              

      

      

      
        	
                 
      

              	
                       
      iii.

              	
                Sales Tracking &
      Reconciliation. Establish compliant procedures and systems for
      tracking and reconciling daily, weekly, monthly, quarterly and annual
      sales.

              

      

       

      
        
          	
                  Confidential:
      BAETA Corp.

                	
                  Page 4
      / 6

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Rogers Consulting Group CFO
Services Proposal

         

      

      
        
          	
                   
      

                	
                         
      iv.

                	
                  Corporate
      Filings. Prepare and submit all required information statements to
      the Secretary of State, including proxies, annual board minutes and
      interim material changes necessitating
  reporting.

                

        

        

        
          	
                   
      

                	
                         
      v.

                	
                  Hiring & Financial
      Personnel Management. Identify, interview, select and manage key
      financial and operational heads at various facilities nationally and
      globally to ensure compliance and integration with established financial
      controls and procedures.  Individuals will report directly and
      comply with all corporate
requirements.

                

        

         

      

      
        	
                 
      

              	
                       
      vi.

              	
                Corporate
      Governance. Assist in the establishment and implementation of
      required corporate governance standards and personnel independent audit
      committee, compensation committee and various other mandated governance
      elements.

              

      

      

      
        	
                 
      

              	
                       
      d.

              	
                Legal, Accounting,
      Transfer Agent & Other Misc. Professional Services Providers.
      Work closely with and support the efforts of all key professional services
      providers to ensure timely compliance with regulatory requirements and
      effective corporate operations
management.

              

      

      

      
        	
                 
      

              	
                       
      e.

              	
                Capital
      Formation.

              

      

      

      
        	
                 
      

              	
                     
          i.

              	
                Assist
      the preparation and development of all required capital formation
      documents, including but not limited to Power Point presentations,
      financial pro-forma statements and financial forecasts, placement
      memorandums, state and federal securities filings upon consummation of
      financing.

              

      

      

      
        	
                 
      

              	
                      
        ii.

              	
                Introduction
      to capital partners through existing contacts and professional
      network.

              

      

      

      
        	
                 
      

              	
                       
      iii.

              	
                Presentations
      to investors and prospective
investors.

              

      

      

      
        	
                 
      

              	
                       
      f.

              	
                Miscellaneous.  It
      is understood that, due to the early stage nature of BAETA, all chart of
      accounts, financial software and other operational tools necessary for
      financial oversight and reporting will also be part of the Duties &
      Obligations.

              

      

       

      
         
  II.       
Fees
& Term

      

      

      
        	
                 
      

              	
                       
      a.

              	
                Initial Term &
      Fees. The initial terms shall be Four (4) months from the date of
      execution hereof.

              

      

      
        	
                 
      

              	
                         
      i.

              	
                Fees
      for the initial term shall be the
following:

              

      

      
        	
                 
      

              	
                       
      1.

              	
                $7,500
      monthly retainer as follows:

              

      

      
        	
                 
      

              	
                       
      a.

              	
                $3,000
      cash / month.

              

      

       

      
        
          
            
              	
                      Confidential:
      BAETA Corp.

                    	
                      Page
      5 / 6

                    

            

             

          

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Rogers Consulting Group CFO Services Proposal

      

       

      
        	
                 
      

              	
                       
      b.

              	
                $4,500
      restricted common shares / month @ $0.50
/sh.

              

      

      
        	
                 
      

              	
                       
      c.

              	
                Restricted
      common shares are due upon commencement of
term.

              

      

       

      
        	
                 
      

              	
                       
      b.

              	
                Renewal Term &
      Fees.  The terms set forth shall automatically renew upon
      the Four (4) month anniversary of execution hereof and remain in effect
      for an additional Four (4) months:

              

      

      
        	
                 
      

              	
                       
      i.

              	
                Fees
      for the renewed term through shall be the
  following:

              

      

      
        	
                 
      

              	
                        
        1.

              	
                $10,000
      monthly retainer as follows:

              

      

      
        	
                 
      

              	
                       
      a.

              	
                $5,000
      cash / month.

              

      

      
        	
                 
      

              	
                       
      b.

              	
                $5,000
      restricted common shares / month @ $0.50
/sh.

              

      

      
        	
                 
      

              	
                       
      c.

              	
                Restricted
      common shares are due upon commencement of
term.

              

      

      

      
        	
                 
      

              	
                       
      c.

              	
                Cancellation.
      Cancellation upon thirty (30) days prior written
      notice.  Pro-rata fees due through final termination
      date.

              

      

      

      
        	
                 
      

              	
                III.

              	
                Transition. It is
      understood and agreed that, subject to the effective implementation of the
      Company’s business plan, Rogers Consulting will assist the Company in
      seeking a full-time employee for the position of Chief Financial Officer
      anytime during the Term set forth
above.

              

      

      

      I hope
that this provides you with a detailed account of the commitment, obligations
and duties I shall make.  I look forward to discussing the details
with you shortly, and moving ahead in earnest towards exceptional results and
success for BAETA Corp.

      

      Sincerely,

      

      

      

      Douglas A
Rogers, President

      Rogers
Consulting Group

       

      Agreed
and Accepted by duly authorized signature 15th Day of
May, 2008:

      

      

      

      
        
          
            
              
                
                  	 	 	 
	
                          Signature
      – Rogers Consulting Group

                        	 	
                          Signature
      – BAETA
Corp.

                        

                

              

            

          

        

      

      

      

      
        	
                Confidential:
      BAETA Corp.

              	
                Page 6
      / 6

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