About Equity Incentive Distribution Agreement

September 6, 2021
Latest company case about About Equity Incentive Distribution Agreement

Party A (Company): Shenzhen Aixton Cables Co., Ltd.

Address: 3 Floor, Building B3, Jintai Industrial Park, Gushu, Xixiang, Bao’an, Shenzhen, Guangdong, the P.R.C.

Legal Representative: Feng Zhou

Tel: +8618665360026


Party B (Cooperative Customer):

Identification Number:



Email: WeChat:

Whatsapp: Skype:

Company Address:

Emergency Contact Person:

Relationship :

Emergency Contact Phone Number:



1, The Company (the "Company") plans to commence its listing process concerning IPO on NASDAQ. In order to achieve win-win cooperation model, the Company will implement a new cooperation model formally from 1 July 2021, which will involve that the Company will release its 20% shareholding for establishing a share pool to reward all cooperative customer which will jointly hold 20% shareholding of Shenzhen Aixton Cables Co., Ltd.



1, The Company was registered in the industrial and commercial administrative department on 28 March 2013 with total registered capital of RMB 500 million.

2, Party B is a customer of the Company, starting official cooperation with the Company from_____ ______ _____, and the Company intends to offer Party B extra bonus and incentives;

3. According to the Company's "Equity Incentive Plan", "Resolution of the Shareholders' Meeting" and relevant national laws, regulations and policies, the Company agrees to adopt the incentive model that Party B will be provided equity-based incentives for its cooperation.

Through friendly negotiation, Parties A and B hereby conclude this Agreement for compliance:


1. Definition of Incentive Equity

Unless the terms of this Agreement or the context indicate otherwise, the following terms shall have the following meanings:

1). Incentive equity: refers to the Company's internal nominal equity. The owner of the incentive equity is not the actual shareholder of Party A registering in the industrial and commercial administrative department. The owner of the incentive equity only has the right to participate in the distribution of the Company's profits without ownership and other rights. The incentive equity shall not be transferred internally or externally, while it can be inherited under special conditions.

2). Dividends: refers to among the total amount of distributable profits determined by the Company in accordance with the "Company Law of the People's Republic of China" and the "Articles of Association", the dividends distributed to each shareholder in proportion to its equity(including the equity held by the actual shareholders of the Company and the incentive equity under this Agreement).

2. Total amount of incentive equity

1). Party A agrees that Party B shall hold 20% of the incentive shares of the Company in the form of a resolution of the shareholders' meeting

The incentive criteria are as follows:
According to the total amount of products purchased by customers, a certain amount of company stocks are calculated based on an annual total.
A: OEM products: each sales volume of 1 RMB will be rewarded with 0.7 stocks.
B: AixTon brand products: each sales volume 1 RMB will be rewarded with 1 stock.
C: AixTon brand agents: each sales volume 1 RMB will be rewarded with 1.4 stocks.
D: Old customers introduce new customers to make a deal:
For old customers: each sales volume 1 RMB will be rewarded with 0.5 stocks. (calculated by year)
For new customers: following the above three rules.

2). The calculation of Party B’s equity is based on the proportion of Party B’s total equity in the Company’s customers each year to divide the shares of the 20% equity pool.

3). Party A can make additional stock awards every year based on the following circumstances of Party B: additional stock awards will be provided appropriately to the top three customers in terms of proportion in equities in cooperative customers and the length of the cooperation period (refer to Party A's standard documents).

3. Conditions for exercise of incentive equity

1). In accordance with the provisions of the "Equity Incentive Plan", Party A shall assess the sales of Party B in shareholding and calculate the percentage of dividends attributable to Party B.

2).Party A shall publish its annual financial statements for review by Party B.Party A shall pay Party B's dividends to Party B in one lump sum in February each year.

3). Party B's dividend shall be paid in RMB or US dollars. Unless Party B agrees, Party A shall not pay in other forms (payment methods include cash or transfer, credit, option).

4). Party B shall have obligations of loyalty and sales to Party A , and shall not do anything that damages the interests and image of the Company.

If Party B does not continue to cooperate with Party A , Party B shall still abide by Article 4 of this Agreement.

4. Change of incentive equity and its responsibility

1). If the number or structure of the Company's personnel needs to be adjusted due to the Company's own operation, the Company has the right to repurchase all the incentive shares held by Party B based on its net assets per share as at the end of the previous year.

2). If Party B has the following behaviors, Party A may directly consider that Party B has voluntarily given up the Company’s equity, and Party A will takes back Party B’s shares and continues to put them back into the 20% incentive equity pool :

(1) If the both parties have no business relationship of purchase or sale within 180 days , the shares shall be deemed to be given up automatically .

(2 ) The cooperation with Party B is terminate due to its negligence or other reasons.

(3) Party B waives voluntarily.

3). If Party B has the following behaviors, Party A may directly repurchase the incentive equity held by Party B without Party B's consent, and only need to pay one RMB to repurchase the equity purchased by Party B.

(1 ) In violation of regulations, accepting or giving company business kickbacks and other commercial bribes;

( 2 ) Finding other manufacturers to purchase counterfeit AixTon brand, causing major losses to the Company;

( 3) During the period of cooperation with the Company, Party B is criminally detained, arrested, or penalized for illegal acts;

( 4 ) Having one of the prohibited acts as stipulated in Article 149 of the "Company Law";

( 5 ) Serious violation of the Company’s cooperation agreement or other deliberate or gross negligence, causing serious impact or major losses to the Company.

4). If the Company loses its position as the actual controller of the Company due to mergers, reorganization, restructuring, division, merger, increase or decrease in registered capital, etc., this Agreement may not be performed.

5). The signing of this equity incentive agreement by both Parties is based on the current policies, laws and regulations of the People's Republic of China at the time the agreement was signed. If there are changes in laws and policies during the performance of this Agreement that make Party A unable to perform this Agreement, Party A shall not bear any legal responsibility;

6). Before the exercise period stipulated in this Agreement arrives or Party B has not actually exercised the equity subscription right, and the Company loses its qualifications as a civil entity or cannot continue its business due to bankruptcy, dissolution, cancellation, or revocation of its business license, this Agreement may no longer be performed;

7). If Party A’s mismanagement causes the Company’s debts to go bankrupt, Party A will bear it alone, and Party B shall not bear any legal responsibility.

5. the standard of inheritance

The prerequisite for inheritance is that the two parties continue to cooperate in business. Party B has unexpected circumstances. This Agreement can be inherited by the person in charge of Party B’s business. The following information is required for inheritance

1). Party B's power of attorney.

2). Proof of relevant report documents of Party B


6. Liability for breach of contract

1). If Party A violates this Agreement and delays payment or refuses to pay Party B's bonus, it shall be liable to Party B for breach of contract at 10 % of the total bonus .

2). If Party B violates the provisions of this Agreement, Party A has the right to reduce or not pay Party B's bonus according to the circumstances, and has the right to terminate this Agreement. If losses are caused to Party A, Party B shall be liable for compensation.

7. Settlement of disputes

In the event of a dispute arising from the performance of this Agreement, the both parties shall first resolve it through friendly negotiation. If the negotiation fails, the dispute shall be submitted to the people's court where the Company is located for ruling.

8. Other agreements

This Agreement and the purchase and sale contracts signed by both Parties are independent of each other. While enjoying the incentive equity dividend, Party B can still enjoy other benefits granted by Party A in accordance with the purchase and sale contracts signed by both Parties .

9. Effect of the Agreement

1). This Agreement will take effect from the date of signing by both Parties.

2). For matters not covered in this Agreement, both Parties shall sign a supplementary agreement. The supplementary agreement shall have the same effect as this Agreement.

3). In case of any conflict between this Agreement and the Articles of Association, the Articles of Association shall prevail.

4). This Agreement is made in triplicate, with Party a holding two copies and Party B holding one copy. The three copies have the same effect.


Party A: ( Signature )


Party B: ( Signature )