KRFG 8-K
King Resources, Inc. (KRFG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date
of earliest event reported): September 1, 2022 (
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
+
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbols(s) | Name of each exchange on which registered |
| NA |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective August 30, 2022, the following individuals were appointed to serve as directors of the Corporation until their successor(s) shall be duly elected or appointed, unless he or she resigns, is removed from office or is otherwise disqualified from serving as a director or officer of the Corporation:
| Name | Age | Office(s) |
| Wong Kan Tat Frederick | 58 | Independent Director |
| Lo Mei Fan Pauline | 51 | Independent Director |
Mr. WONG Kan Tat Frederick, age 58, was appointed to serve as our Independent Director on August 30, 2022. Mr. Wong has over 20 years of experiences in wealth management and asset management, he is a licensed holder of securities dealings and asset management under Securities and Futures Commission of Hong Kong. Mr. Wong is currently the managing partner of Allotrope Capital, a Hong Kong company which links up startup companies and investors. Prior to 2021, Mr. Wong has served as the managing director for CASH Financial Services Group for seven years, a company listed in the Hong Kong Stock Exchange Limited. Mr. Wong has also served as the Executive Director of China Reserve Securities Limited, and held senior position in several financial institutions. Mr. Wong has been actively involved and supportive in the Hong Kong tech-based startups community. He serves as the core committee member of Technology Incubation Network, an association composites by members under the incubation programs managed by Hong Kong Science and Technology Parks.
Mr. Wong received his PHD in Management in 2005 from Empresarial University, Costa Rica and his Master of Business Administration from Newport University, USA in 1994. Mr. Wong brings to the Board his strong network of technology companies and his expertise in the capital markets and capital management.
Ms. Lo Mei Fan Pauline, age 51, was appointed to serve as our Independent Director on August 30, 2022. For more than 25 years, Ms. Lo has been serving as the duty manager of Cathay Pacific Airways, one of the world’s top airline and air freight giant. She is well-versed in effective task delegation and workflow coordination. She also has comprehensive experience in customer relationship management and user experience improvement. Currently, Ms. Lo also served as the consultant for a mobile app solutions provider. Ms. Lo brings to the Board with her sophisticated experience in operation management and consumer services, and advices the Company regarding the development of its IoT smart home mobile app.
None of foregoing persons has a direct family relationship with any of the Corporation’s directors or executive officers, or any person nominated or chosen by the Corporation to become a director or executive officer.
None of foregoing officers and directors will receive compensation in connection with their service on our Board of Directors or as an executive officer.
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Item 8.01 – Other Events.
On August 30, 2022, the Board of Directors of King Resources, Inc. (the “Issuer”) adopted an Insider Trading Compliance Program, established an audit committee, a compensation committee and a nomination and governance committee, and adopted charters to govern the governance of such audit, compensation, nomination and governance committees. Our audit and compensation committees consist of Mr. Wong Kan Tat Frederick and Ms. Lo Mei Fan Pauline, our independent directors, and Mr. Lau Ping Kee, our Chief Financial Officer and Director. Mr. Lau is the chair of our audit committee and compensation committee. Our nomination and governance committee consists of Mr. Wong Kan Tat Frederick, Ms. Lo Mei Fan Pauline, and Mr. Fu Wah, our Chief Executive Officer, Secretary and Director. Mr. Fu is the chair of our nomination and governance committee.
The foregoing descriptions of the Insider Trading Compliance Program, Audit Committee Charter, Compensation Committee Charter, and Nomination and Governance Committee Charter are not complete and are qualified in their entirety by reference to the form of the Insider Trading Compliance Program, the Audit Committee Charter, the Compensation Committee Charter, and the Nomination and Governance Committee Charter, which are incorporated herein by reference and attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4.
Item 9.01 – Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 10.1 | Insider Trading Compliance Program | |
| 10.2 | Audit Committee Charter | |
| 10.3 | Compensation Committee Charter | |
| 10.4 | Nomination and Governance Committee Charter | |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document). |
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
King Resources, Inc. | |
| Date: September 1, 2022 | |
| By: /s/ Fu Wah | |
| Chief Executive Officer, Secretary and Director |
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Exhibit 10.1
KING RESOURCES, INC.
INSIDER TRADING COMPLIANCE PROGRAM
This Insider Trading Compliance Program (the “Program”) consists of four sections:
Section I provides an overview; Section II sets forth the policies of King Resources, Inc. (the “Company”) prohibiting insider trading; Section III explains insider trading; and Section IV consists of various procedures which have been put in place by the Company to prevent insider trading.
| I. | SUMMARY |
Preventing insider trading is necessary to apply with securities laws and to preserve the reputation and integrity of the Company as well as that of all persons affiliated with it. “Insider trading” occurs when any person purchases or sells a security while in possession of inside information relating to the security. As explained in Section III below, “inside information” is information which is considered to be both “material” and “non-public.” Insider trading is a crime and the penalties for violating the law include imprisonment, disgorgement of profits, civil fines of up to three (3) times the profit gained or loss avoided, and criminal fines of up to $5,000,000 for individuals and $25,000,000 of entities. Insider trading is also prohibited by this Program and could result in serious sanctions, including dismissal.
This Program applies to all officers, directors and employees of the company and extends to all activities within and outside an individual’s duties at the Company. This program also applies to any consultant or contractor to the Company that receives or has access to material, non-public information regarding the Company (each consultant or contractor, including such consultant’s or contractor’s representatives and agents, a “Subject Contractor”). Every officer, director, employee and Subject Contractor must review and adhere to this Program. The Company has appointed the Chief Financial Officer as the Company’s Insider Trading Compliance Officer (the “Compliance Officer”). The audit committee (the “Compliance Committee”) of the Board of Directors of the Company is responsible for oversight of this Program. The Compliance Officer is responsible for monitoring and updating this program, presenting any material updates to the program to the Compliance Committee for approval, and providing a report, at least once annually, to the Compliance Committee regarding his or her monitoring of this program. Questions regarding the program should be directed at the Compliance Officer.
| II. | STATEMENT OF POLICIES PROHIBITING INSIDER TRADING |
A. No officer, director, employee or Subject Contractor shall purchase or sell any type of security while in possession of material, non-public information relating to the security, whether the issuer of such security is the Company or any other company.
B. Additionally, except as set forth in Section II.D. below and except for transactions effected under an approved Rule 10b5-1 Trading Plan as described in Section V below, no officer, director, employee or Subject Contractor shall purchase or sell any security of the Company during the period beginning five (5) full trading days before the public release of earnings data of the Company or quarterly/annual report and ending two (2) full “trading days” after the public release of earnings data of the Company or quarterly/annual report whether or not the Company or any of its officers, directors, employees or Subject Contractor is in possession of material, non-public information (the “Black-Out Period”). For purposes of this Program, a “trading day” shall mean a day on which national stock exchanges are open for trading. The Company also encourages officers, directors, employees and Subject Contractors to consider conducting transactions in the Company’s securities during the first 45 calendar days following the end of the Black-Out Period.
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C. No officer, director, employee or Subject Contractor shall directly or indirectly tip material, non-public information to anyone while in possession of such information. In addition, material, and non-public information should not be communicated to anyone outside the Company under any circumstances (absent prior approval from the Compliance Officer and execution of an appropriate confidentiality agreement), or to anyone within the company other than on a need-to-know basis.
D. This Program does not apply in the case of the following transactions under Company plans, except as set forth in Section IV.D. (Pre-Clearance) and except as otherwise specifically noted:
| 1. | This Program does not apply to the exercise of stock options or the vesting of restricted stock units or restricted stock, in each case granted under Company’s equity compensation plans. This Program does apply, however, to any sale of the Company Stock (as defined below) as part of a broker-assisted cashless option exercise, or any other market sale of the Company Stock received upon exercise or vesting of any equity award, whether or not for the purpose of generating the cash needed to pay the exercise price of a stock option or to pay taxes. |
| 2. | This Program does not apply to the surrender of shares directly to the Company to satisfy tax withholding obligations as a result of the issuance of shares upon vesting or exercise of restricted stock units, stock options or other equity awards granted under the Company’s equity compensation plans. Of course, any market sale of the Company Stock received upon exercise or vesting of any such equity awards remains subject to all provisions of this Program, whether or not for the purpose of generating the cash needed to pay the exercise price or pay taxes. |
| III. | EXPLANATION OF INSIDER TRADING |
As noted above, “insider trading” refers to the purchase or sale of a security while in possession of “material,” “non-public” information relating to the security. “securities” include not only stocks, bonds, notes and debentures, but also stock options, warrants and similar instruments. “Purchase” and “sale” are defined broadly under the federal securities laws. “Purchase” includes not only the actual purchase of a security, but any contract to purchase or otherwise acquire a security. “Sale” includes not only the actual sale of a security, but any contract to sell or otherwise dispose of a security. These definitions extend to a broad range of transactions including conventional cash-for-stock transactions, conversions, the grant and exercise of stock options and acquisitions and exercises of warrants or puts, calls or other options related to a security. I tis generally understood that insider trading includes the following:
| · | Trading by insiders while in possession of material, non-public information; |
| · | Trading by persons other than insiders while in possession of material, non-public information where the information either was given in breach of an insider’s fiduciary duty to keep it confidential or was misappropriated; or |
| · | Communicating or tipping material, non-public information to others, including recommending the purchase or sale of a security while in possession of such information |
It is important to note that the prohibition against insider trading is absolute. Such prohibitions apply even if the decision to trade is not based on your evaluation of such material, non-public information; all that matters is whether you were simply aware of such information at the time you trade. It also applies to transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure) and also to very small transactions. The U.S. federal securities laws do not recognize any mitigating circumstances to insider trading. In addition, even the appearance of an improper transaction must be avoided to preserve the Company’s reputation for adhering to the highest standards of conduct. In some circumstances, you may need to forgo a planned transaction even if you planned it before becoming aware of the material, non-public information. So, even if you believe you may suffer an economic loss or sacrifice an anticipated profit by waiting to trade, you must wait.
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| A. | What Facts are Material? |
The materiality of a fact depends upon the circumstances. A fact is considered “material” if there is a substantial likelihood that a reasonable investor would consider it important in making a decision to buy, sell or hold a security or where the fact is likely to have a significant effect on the market price of a security. Material information can be positive or negative and can relate to virtually any aspect of a company’s business or to any type of security, debt or equity.
Examples of material information include (but are not limited to) facts concerning: dividends; corporate earnings or earnings forecasts; possible mergers or acquisition; significant developments in borrowings or financings; information concerning product developments or clinical results; important business developments and major litigation developments. Moreover, material information does not have to be related to a company’s business. For example, the contents of a forthcoming newspaper column that is expected to affect the market price of a security can be material.
A good general rule of thumb: when in doubt, do not trade.
| B. | What is Non-Public? |
Information is “non-public” if it is not available to the general public. In order for information to be considered public, it must be widely disseminated in a manner making it generally available to investors through such media as Dow Jones, Reuters, The Wall Street Journal, Business Wire, Globe Newswire, Associated Press, PR Newswire or United Press International of filed with the United States Securities and Exchange Commission (“SEC”). The circulation of rumors, even if accurate and reported in the media, does not constitute effective public dissemination.
In addition, even after a public announcement, a reasonable period of time must lapse in order for the market to react to the information. Generally, one should allow approximately 24 hours following publication asked a reasonable waiting period before such information is deemed to be public.
| C. | Who is an Insider? |
“Insiders” include officers, directors and employees of a company and anyone else who has material inside information about a company, including Subject Contractors. Insiders have independent fiduciary duties to their company and its stockholders not to trade on material, non- public information relating to the company’s securities. All officers, directors, employees and Subject Contractors of the Company should consider themselves insiders with respect to material, non-public information about the Company’s business, activities and securities. Officers, directors, employees and Subject Contractors may not trade the Company’s securities while in possession of material, non-public information relating to the Company nor tip (or communicate except on a need-to-know basis) such information to others.
It should be noted that trading by members of an insider’s household, as well as others whose transactions may be attributable to, or influenced, directed or controlled by, an insider, can be the responsibility of such insider under certain circumstances and could give rise to legal and Company-imposed sanctions.
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| D. | Trading by Persons other than Insiders |
Insiders may be liable for communicating or tipping material, non-public information to a third party (a “tippee”), and insider trading violations are not limited to trading or tipping by insiders. Persons other than insiders also can be liable for insider trading, including tippees who trade on material, non-public information tipped to them or individuals who trade on material, non- public information which has been misappropriated.
Tippees inherit an insider’s duties and are liable for trading on material, non-public information illegally tipped to them by an insider. Similarly, just as insiders are liable for the insider trading of their tippees, so are tippees who pass the information along to others who trade. In other words, a tippee’s liability for insider trading is no different from that of an insider. Tippees can obtain material, non-public information by receiving overt tips from others or through, among other things, conversations at social, business or other gatherings.
| E. | Penalties for Engaging in Insider Trading |
Penalties for trading on or tipping material, non-public information can extend significantly beyond any profits made or losses avoided, both for individuals engaging in such unlawful conduct and their employers. The SEC and the Department of Justice have made the civil and criminal prosecution of insider trading violations a top priority. Enforcement remedies available to the government or private plaintiffs under the federal securities laws include:
| · | SEC administrative sanctions; | |
| · | Securities industry self-regulatory organization sanctions; | |
| · | Civil injunctions; | |
| · | Damage awards to private plaintiffs; | |
| · | Disgorgement of profits; | |
| · | Civil fines for the violator of up to three (3) times the amount of profit gained or loss avoided; | |
| · | Civil fines for the employer or other controlling person of a violator (i.e., where the violator is an employee or other controlled person) of up to the greater of $1,000,000 or three (3) times the amount of profit gained or loss avoided by the violator; | |
| · | Criminal fines for individual violators of up to $5,000,000 ($25,000,000 for an entity); and | |
| · | Jail sentences of up to twenty (20) years. |
In addition, insider trading could result in serious sanctions by the Company, including dismissal. Insider trading violations are not limited to violations of the federal securities laws. Other federal and state civil or criminal laws, such as the laws prohibiting mail and wire fraud and the Racketeer Influenced and Corrupt Organizations Act, also may be violated upon the occurrence of insider trading.
| F. | Examples of Insider Trading |
Examples of insider trading cases include actions brought against: corporate officers, directors and employees who traded a company’s securities after learning of significant confidential corporate developments; friends, business associates, family members and other tippees of such officers, directors and employees who traded the securities after receiving such information; government employees who learned of such information in the course of their employment; and other persons who misappropriated, and took advantage of, confidential information from their employers.
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The following are illustrations of insider trading violations. These illustrations are hypothetical and are not comprehensive, and, consequently, are not intended to reflect the actual activities or business of the Company or any other entity.
Trading by Insider
An officer of X Corporation learns that earnings to be reported by X Corporation will increase dramatically. Prior to the public announcement of such earnings, the officer purchases X Corporation’s stock. The officer, an insider, is liable for all profits as well as penalties of up to three (3) times the amount of all profits. The officer also is subject to, among other things, criminal prosecution, including up to $5,000,000 in additional fines and twenty (20) years in jail. Depending upon the circumstances, X Corporation and the individual to whom the officer reports also could be liable as controlling persons.
Trading by Tippee
An officer of X Corporation tells a friend that X Corporation is about to publicly announce that it has concluded an agreement for a major acquisition. This tip causes the friend to purchase X Corporation’s stock in advance of the announcement. The officer is jointly liable with his friend for all of the friend’s profits and each is liable for all penalties of up to three (3) times the amount of the friend’s profits. In addition, the officer and his friend are subject to, among other things, criminal prosecution, as described above.
| G. | Insider Reporting Requirements, Short-Swing Profits and Short Sales |
| 1. | Reporting Obligations Under Section 16(a)—SEC Forms 3, 4 and 5 |
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), generally requires all officers, directors and 10% stockholders, within ten (10) days after the insider becomes an officer, director or 10% stockholder (such person a “Section 16 reporting person”), to file with the SEC an “Initial Statement of Beneficial Ownership of Securities” on SEC Form 3 (“Form 3”) listing the amount of the Company’s Common Stock (the “Stock”), stock options and warrants which the insider beneficially owns. The Form 3 must include all Company Stock held directly and indirectly by the Section 16 reporting person, their spouse, children and any other immediate family members living in their household, as well as certain securities owned by entities they control. Special rules apply to 10% owners, groups, trusts, partnerships and other entities. A Section 16 reporting person may disclaim beneficial ownership of applicable shares. The rules relating to the determination of beneficial ownership are complex and legal counsel should be consulted with any questions.
Following the initial filing on Form 3, every change in the beneficial ownership of the Company’s Stock, stock options and warrants must be reported on SEC Form 4 (“Form 4”) within two (2) business days after the date on which such change occurs or in certain cases on SEC Form 5 (“Form 5”) within forty-five (45) days after fiscal year end.
A Form 4 is required whenever there is a non-exempt acquisition or disposition of the Company’s Stock. Examples of transactions that must be reported on a Form 4 include open market purchases and sales, stock repurchases, stock awards and stock option grants and exercises (including regrants, cancellations and repricings). In deciding the filing deadline for purposes of filing Form 4, the trade date rather than the settlement date is ordinarily determinative, subject to two narrowly defined exceptions where the insider does not control the trade date. Additionally, a special rule applies if an officer or director purchases or sells any of the Company’s Stock within six (6) months after his or her termination from such position. In that situation, the transaction must be reported on Form 4 if he or she made any matching purchase or sale within the preceding six (6) months and prior to termination.
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A Form 5 is required annually to report holdings and transactions that should have been reported during the year but were not, and to report certain transactions that are allowed to be reported on a deferred basis (e.g., gifts, transfers to trusts, inheritances). Filing a Form 5 for a late or omitted report, however, will not cleanse the Section 16 violation. In addition, if a Form 5 is not filed at fiscal year end, the Section 16 reporting person will be required to provide the Company with a written representation that no Form 5 filing is due (i.e., there were no unreported transactions).
| 2. | Recovery of Profit Under Section 16(b) |
For the purpose of preventing the unfair use of information which may have been obtained by an insider, any profits realized by any Section 16 reporting person from any “purchase” and “sale” of the Company’s Stock during a six (6) month period, so called “short-swing profits,” may be recovered by the Company. When such a purchase and sale occurs, good faith is no defense. The Section 16 reporting person is liable even if compelled to sell for personal reasons, and even if the sale takes place after full disclosure and without the use of any inside information.
The liability of a Section 16 reporting person under Section 16(b) of the 1934 Act is only to the Company itself. The Company, however, cannot waive its right to short-swing profits, and any Company stockholder can bring suit in the name of the Company. In this context it must be remembered that reports of ownership filed with the SEC on Form 3, Form 4 or Form 5 pursuant to Section 16(a) (discussed above) are readily available to the public, and certain attorneys carefully monitor these reports for potential Section 16(b) violations. In addition, liabilities under Section 16(b) may require separate disclosure in the Company’s annual report to the SEC on Form 10-K or its proxy statement for its annual meeting of stockholders. No suit may be brought more than two (2) years after the date the profit was realized. However, if the Section 16 reporting person fails to file a report of the transaction under Section 16(a), as required, the two (2) year limitation period does not begin to run until after the transactions giving rise to the profit have been disclosed. Failure to report transactions and late filing of reports require separate disclosure in the Company’s proxy statements.
Officers and directors should consult the attached “Short-Swing Profit Rule Section 16(b) Checklist” attached hereto as Attachment A in addition to consulting with the Compliance Officer prior to engaging in any transactions involving the Company’s securities (see Section IV(A) below), including without limitation, the Company’s Stock, stock options or warrants.
| 3. | Short Sales Prohibited Under Section 16I |
Section 16(c) of the 1934 Act absolutely prohibits insiders from making short sales of the Company’s Stock, i.e., sales of shares which the insider does not own at the time of sale or sales of the Company’s Stock against which the insider does not deliver the shares within twenty (20) days after the sale. Under certain circumstances, the purchase or sale of put or call options, or the writing of such options, can result in a violation of Section 16(c). Insiders violating Section 16(c) face criminal liability.
The Compliance Officer should be consulted if you have any questions regarding reporting obligations, short-swing profits or short sales under Section 16.
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| H. | Prohibition of Records Falsifications and False Statements |
Section 13(b)(2) of the 1934 Act requires companies subject to the 1934 Act to maintain proper internal books and records and to devise and maintain an adequate system of internal accounting controls. The SEC has supplemented the statutory requirements by adopting rules that prohibit (1) any person from falsifying records or accounts subject to the above requirements and (2) officers or directors from making any materially false, misleading or incomplete statement to any accountant in connection with any audit or filing with the SEC. These provisions reflect the SEC’s intent to discourage officers, directors and other persons with access to the Company’s books and records from taking action that might result in the communication of materially misleading financial information to the investing public.
| IV. | STATEMENT OF PROCEDURES PREVENTING INSIDER TRADING |
The following procedures have been established, and will be maintained and enforced, by the Company to prevent insider trading. Every officer, director, employee and Subject Contractor is required to follow these procedures.
| A. | Identifying Material, Non-Public Information |
Prior to directly or indirectly engaging in any transaction involving any security of the Company, every officer, director, employee and Subject Contractor is required to contact the Compliance Officer (as part of the pre-clearance procedure discussed below in Section IV.D) and make an initial determination whether the Company and/or such officer, director, employee and/or Subject Contractor is in possession of material, non-public information relating to such security. In making such assessment, the explanations of “material” and “non-public” information set forth above should be of assistance. If after consulting with the Compliance Officer it is determined that the Company and/or such officer, director, employee or Subject Contractor is in possession of material, non-public information, there can be no trading of such security.
| B. | Information Relating to the Company |
| 1. | Access to Information |
Access to material, non-public information about the Company, including the Company’s business, clinical data or analyses, interactions with regulatory authorities, pending publication of scientific/clinical data or results, earnings or prospects, should be limited to officers, directors, employees and Subject Contractors of the Company on a need-to-know basis. In addition, such information may not be communicated to anyone outside the Company under any circumstances (absent prior approval by the Compliance Officer and execution of an appropriate confidentiality agreement) or to anyone within the Company other than on a need-to-know basis.
In communicating material, non-public information to employees of the Company, all officers, directors, employees and Subject Contractors must take care to emphasize the need for confidential treatment of such information and adherence to the Company’s policies with regard to confidential information.
| 2. | Inquiries from Third Parties |
Inquiries from third parties, such as industry analysts or members of the media, about the Company should be directed to the Compliance Officer or his/her designee.
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| C. | Limitations on Access to the Company Information |
The following procedures are designed to maintain confidentiality with respect to the Company’s information, business operations and activities.
| 1. | All officers, directors, employees and Subject Contractors should take all steps and precautions necessary to restrict access to, and secure, material, non-public information by, among other things: |
| · | Maintaining the confidentiality of Company related information; | |
| · | Conducting their business and social activities so as not to risk inadvertent disclosure of confidential information. Review of confidential documents in public places should be conducted so as to prevent access by unauthorized persons; | |
| · | Restricting access to documents and files (including computer files) containing material, non-public information to individuals on a need-to-know basis (including maintaining control over the distribution of documents and drafts of documents); | |
| · | Promptly removing and cleaning up all confidential documents and other materials from conference rooms following the conclusion of any meetings; | |
| · | Disposing of all confidential documents and other papers, after there is no longer any business or other legally required need, through shredders when appropriate; | |
| · | Restricting access to areas likely to contain confidential documents or material, non- public information; and. | |
| · | Avoiding the discussion of material, non-public information in places where the information could be overheard by others, such as in elevators, restrooms, hallways, restaurants, airplanes or taxicabs. |
| 2. | Personnel involved with material, non-public information, to the extent feasible, should conduct their business and activities in areas separate from other Company activities. |
| D. | Pre-Clearance of Trades by Officers, Directors, Employees and Subject Contractors |
To provide assistance in preventing inadvertent violations of applicable securities laws and to avoid the appearance of impropriety in connection with the purchase and sale of the Company securities, except as set forth in the paragraph below, any transactions in Company securities (including without limitation, acquisitions and dispositions of the Company’s Stock, the exercise of stock options, the sale of the Company’s Stock issued upon the exercise of stock options or the vesting of restricted stock units or restricted stock) by officers, directors, employees and Subject Contractors must be pre-cleared by the Compliance Officer. Additionally, except as set forth in Section II.D. above, neither the Company nor any of its officers, directors, employees or Subject Contractors may trade in any securities of the Company during the Black-Out Period, unless authorized by the Compliance Officer. Also, please consult the “Insider Trading Reminders” attached hereto as Attachment B.
The requirement for pre-clearance as set forth in the above paragraph does not apply to the following transactions:
| · | the vesting of restricted stock units or restricted stock; and |
| · | transactions effected under an approved Rule 10b5-1 Trading Plan as set forth in Section V below. |
All other transactions in Company securities, including gifts of Company securities and the exercise of stock options, are subject to pre-clearance as set forth in the above paragraph.
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| E. | Avoidance of Certain Aggressive or Speculative Trading |
Officers, directors, employees and Subject Contractors, and their respective family members (including spouses, minor children or any other family members living in the same household), as applicable, may not directly or indirectly participate in transactions involving trading activities which by their aggressive or speculative nature cause or even give the appearance of an impropriety, such as, for example, those listed in Nos. 1 and 2 below. If you are uncertain whether your proposed transaction may implicate these prohibitions, please contact the Compliance Officer for pre-approval.
| 1. | PROHIBITION OF SPECULATIVE TRADING/HEDGING. All directors, officers, employees and Subject Contractors are prohibited from engaging in short sales; transactions in put or call options, hedging or monetization transactions; or other inherently speculative transactions with respect to the securities of the Company at any time. | |
| 2. | PROHIBITION ON PLEDGING. All directors, officers, employees and Subject Contractors are prohibited from holding any securities of the Company in a margin account or otherwise pledging any securities of the Company as collateral for any loan. |
| F. | Prohibition of Trading During Pension Plan Blackouts |
No director or executive officer of the Company may, directly or indirectly, purchase, sell or otherwise transfer any equity security of the Company (other than an exempt security) which was acquired in connection with service to the issuer if a sufficient number of participants in the issuers’ benefit plans are also prohibited from trading in the issuer’s securities because of a plan “blackout”, as defined by Regulation BTR under the 1934 Act. This prohibition does not apply to any transactions that are specifically exempted, including but not limited to, purchases or sales of the Company’s securities made pursuant to, and in compliance with, an approved Rule 10b5-1 Trading Plan as described in Section V below; compensatory grants or awards of equity securities pursuant to a plan that, by its terms, permits executive officers and directors to receive automatic grants or awards and specifies the terms of the grants and awards; or acquisitions or dispositions of equity securities involving a bona fide gift or by will or the laws of descent or pursuant to a domestic relations order. The Company will notify each director and executive officer of any blackout periods in accordance with the provisions of Regulation BTR. Because Regulation BTR is very complex, no director or executive officer of the Company should engage in any transactions in the Company’s securities, even if believed to be exempt from Regulation BTR, without first consulting with the Compliance Officer.
| V. | RULE 10B5-1 TRADING PLANS |
| A. | Overview |
SEC Rule 10b5-1 (“Rule 10b5-1”) protects directors, officers and employees from insider trading liability under Rule 10b5-1 for transactions under a previously established contract, plan or instruction to trade the Company’s Stock (a “Trading Plan”) entered into in good faith and in accordance with the terms of Rule 10b5-1 of the 1934 Act and all applicable state laws and shall be exempt from the trading restrictions set forth in the Program. The initiation of, and any modification to, any such Trading Plan will be deemed to be a transaction in the Company’s securities and such initiation or modification is subject to all limitations and prohibitions of transactions involving the Company’s securities. Each such Trading Plan, and any modification thereof, shall be submitted to and pre-approved by the Compliance Officer, or such other person as the Company’s Board of Directors may designate from time to time (the “Authorizing Officer”), who may impose such conditions on the implementation and operation of the Trading Plan as the Authorizing Officer deems necessary or advisable. Without limiting the generality of the foregoing, the Authorizing Officer may prescribe certain forms of Trading Plans to which each Trading Plan must conform. The Authorizing Officer may also require that Trading Plans be arranged with a specified broker. However, compliance of the Trading Plan to the terms of Rule 10b5-1 and the execution of transactions pursuant to the Trading Plan are the sole responsibility of the person initiating the Trading Plan, not the Company or the Authorizing Officer.
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Rule 10b5-1 presents an opportunity for insiders to establish arrangements to sell (or purchase) the Company’s Stock without the restrictions of windows and blackout periods even when there is undisclosed material information. A Trading Plan might also help reduce negative publicity that may result when key executives sell the Company’s Stock. Rule 10b5-1 only provides an “affirmative defense” in the event there is an insider-trading lawsuit. It does not prevent someone from bringing a lawsuit.
A director, officer and employee may enter into a Trading Plan that outlines a pre-set plan for trading of the Company’s Stock, including the exercise of stock options only when he or she is not in possession of material, non-public information, and only during an open trading window period outside of the Black-Out Period. An individual may adopt more than one Trading Plan at a time. Although transactions effected under a Trading Plan will not require further pre-clearance at the time of the trade, any transaction (including the quantity and price) made pursuant to a Trading Plan of a Section 16 reporting person must be reported to the Company promptly on the day of each trade to permit the Company’s Section 16 filing coordinator to assist in the preparation and filing of a required Form 4. Trades pursuant to a Trading Plan may occur at any time, subject to a thirty (30) day waiting period after adoption of the Trading Plan during which time no transactions under the Trading Plan can be made.
From time to time, for legal or other reasons, the Authorizing Officer may direct that purchases and sales pursuant to any Trading Plan be suspended or discontinued. Failure to discontinue purchases and sales as directed shall constitute a violation of the terms of this Section V and result in a loss of the exemption set forth herein.
Please review the following description of how a Trading Plan works.
Pursuant to Rule 10b5-1, an individual’s purchase or sale of securities will not be “on the basis of” material non-public information if:
| · | First, before becoming aware of the information, the individual enters into a binding contract to purchase or sell the securities, provides instructions to another person to sell the securities or adopts a written plan for trading the securities (i.e., the Trading Plan). |
| · | Second, the Trading Plan must either: |
| o | specify the amount of securities to be purchased or sold, the price at which the securities are to be purchased or sold and the date on which the securities are to be purchased or sold; |
| o | include a written formula or computer program for determining the amount, price and date of the transactions; or |
| o | prohibit the individual from exercising any subsequent influence over the purchase or sale of the Company’s Stock under the Trading Plan in question. |
| · | Third, the purchase or sale must occur pursuant to the Trading Plan and the individual must not enter into a corresponding hedging transaction or alter or deviate from the Trading Plan. |
| B. | Revocation/Amendments to Trading Plans |
Revocation of Trading Plans (which includes terminations of Trading Plans) should occur only in unusual circumstances, and the effectiveness of any revocation of a Trading Plan will be subject to the prior review and approval of the Authorizing Officer. If an individual revokes a Trading Plan, then the individual may not enter into a new Trading Plan until thirty (30) days after termination of the Trading Plan or such longer period as the Authorizing Officer may determine in his or her discretion. Such new Trading Plan can be executed only when the individual is not in possession of material non-public information, and during a trading window period outside of a Black-Out Period. In addition, transactions pursuant to such new Trading Plan will be subject to a thirty (30) day waiting period after adoption of the new Trading Plan during which time no transactions under the new Trading Plan can be made.
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Each Trading Plan must contain provisions allowing the Company to revoke or suspend a Trading Plan. Circumstances under which Trading Plans may be revoked or suspended include the announcement of a merger or the occurrence of an event that would cause the transaction either to violate applicable law or to have an adverse effect on the Company. The Authorizing Officer or administrator of the Company’s stock plans is authorized to notify the applicable broker in such circumstances.
Amendments to Trading Plans, which for these purposes would include any modifications to or voluntary suspensions of Trading Plans, should be made in only very limited circumstances and should be avoided if possible. Any amendment to a Trading Plan will be subject to the prior review and approval of the Authorizing Officer. Any amendment to a Trading Plan can be effected only when the individual is not in possession of material non-public information, and during a trading window period outside of a Black- Out Period. In addition, transactions pursuant to such amended Trading Plan will be subject to a thirty (30) day waiting period after adoption of the amended Trading Plan (or such longer period as the Authorizing Officer may determine in his or her discretion) during which time no transactions under the amended Trading Plan can be made.
| C. | Discretionary Plans |
Discretionary Trading Plans, where the discretion or control over trading is transferred to a broker, are permitted if (i) pre-approved by the Authorizing Officer, (ii) the officer, director, or employee may not exercise influence over the broker’s trading decisions and (iii) the broker may not be in possession of any Company material non-public information.
The Authorizing Officer of the Company must pre-approve any Trading Plan, arrangement or trading instructions, etc., involving potential sales or purchases of the Company’s Stock or stock option exercises, including but not limited to, blind trusts, or limit orders. The actual transactions effected pursuant to a pre-approved Trading Plan will not be subject to further pre-clearance for transactions in the Company’s Stock once the Trading Plan or other arrangement has been pre-approved.
| D. | Reporting (if required) |
SEC Form 144 (“Form 144”) will be filled out and filed by the individual/brokerage firm in accordance with the existing rules regarding Form 144 filings. A footnote at the bottom of the Form 144 should indicate that the trades “are in accordance with a Trading Plan that complies with Rule 10b5-1 and expires_______.” For Section 16 reporting persons, Form 4s should be filed before the end of the second (2nd) business day following the date that the broker, dealer or plan administrator informs the individual that a transaction was executed, provided that the date of such notification is not later than the third (3rd) business day following the trade date. A similar footnote should be placed at the bottom of the Form 4 as outlined above.
| E. | Stock Options |
Cash exercise of stock options currently can be executed at any time. Same day sales exercises of stock options are subject to trading windows. However, the Company will permit same day sales under Trading Plans. Once a broker determines that the time is right to exercise the stock option and dispose of the shares in accordance with the Trading Plan, the broker will notify the Company in writing and the administrator of the Company’s stock plans will process the transaction. The insider should not be involved with this type of same day sale exercise.
| F. | Trades Outside of a Trading Plan |
Trades outside of a Trading Plan are discouraged, but may be allowed during an open window with pre-clearance as set forth under Section IV.D. (Pre-Clearance), as long as the Trading Plan continues to be followed.
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The Trading Plans do not exempt the Section 16 reporting person from the Section 16 six(6) month short-swing profit rules or liability.
| G. | Public Announcements |
The Company may make a public announcement that Trading Plans are being implemented in accordance with Rule 10b5-1. It will consider in each case whether a public announcement of a particular Trading Plan should be made. It may also make public announcements or respond to inquiries from the media as transactions are made under a Trading Plan.
| H. | Pledging the Company’s Stock to Secure Margin of Other Loans |
The Company does not permit officers or directors to pledge the Company’s Stock or securities as collateral to secure loans. Such pledges also cannot be carried out through a Trading Plan. The Trading Plan must be consistent with Section IV.E. above.
| I. | Put and Call Options and other Hedging Transactions |
Put and call options and other hedging transactions are not permitted under the Program and therefore are not be permitted under a Trading Plan. The Trading Plan must be consistent with Section IV.E. above.
| J. | Program Takes Precedence |
In the event of any conflict between this Program and any Trading Plan, this Program shall control, to the extent the Trading Plan would permit activities otherwise prohibited by this Program.
| VI. | EXECUTION AND RETURN OF CERTIFICATION OF COMPLIANCE |
After reading this policy statement all officers, directors, employees and Subject Contractors should execute and return to a Compliance Officer the applicable Certification of Compliance form attached hereto as Attachment C, Attachment D or Attachment E.
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Attachment A
SHORT-SWING PROFIT RULE SECTION 16(b) CHECKLIST
Note: ANY combination of PURCHASE AND SALE or SALE AND PURCHASE within six (6) months of each other results in a violation of Section 16(b), and the “profit” must be recovered by the Company. It makes no difference how long the shares being sold have been held or that you are an insider for only one of the two matching transactions. The highest priced sale will be matched with the lowest priced purchase within the six (6) month period.
SALES
If a sale is to be made by an officer, director or 10% stockholder (or any family member living in the same household):
| 1. | Have there been any purchases by the insider (or family members living in the same household) within the past six (6) months? | |
| 2. | Have there been any stock option exercises within the past six (6) months? | |
| 3. | Are any purchases (or stock option exercises) anticipated or required within the next six (6) months? | |
| 4. | Has a Form 4 been prepared? |
Note: If a sale is to be made by an affiliate of the Company and unregistered stock is to be sold, has a Form 144 been prepared and has the broker been reminded to sell pursuant to Rule 144?
PURCHASES AND STOCK OPTION EXERCISES
If a purchase or stock option exercise for stock is to be made:
| 1. | Have there been any sales by the insider (or family members living in the same household) within the past six (6) months? | |
| 2. | Are any sales anticipated or required within the next six (6) months (such as tax- related or year-end transactions)? | |
| 3. | Has a Form 4 been prepared? |
BEFORE PROCEEDING WITH A PURCHASE OR SALE, CONSIDER WHETHER YOU ARE AWARE OF MATERIAL, NON-PUBLIC INFORMATION WHICH COULD AFFECT THE PRICE OF THE STOCK.
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Attachment B
INSIDER TRADING REMINDERS
Before engaging in any transaction in the Company’s securities, please read the following:
Both the federal securities laws and the Company’s policy prohibit transactions in the Company’s securities at a time when you may be in possession of material information about the Company which has not been publicly disclosed. This also applies to members of your household as well as all others whose transactions may be attributable to you or whose transactions you otherwise influence, direct or control.
Material information, in short, is any information which could affect the price of the securities. Either positive or negative information may be material. Once a public announcement has been made, you should wait until the information has been made available to the public for at least one (1) full trading day before engaging in any transaction. For these purposes, a “trading day” shall mean a day on which national stock exchanges are open for trading.
Except as set forth in Section II.D. of our Insider Trading Compliance Program and except for transactions effected under an approved Rule 10b5-1 Trading Plan as described in Section V of our Insider Trading Compliance Program, neither the Company nor any of its officers, directors, employees or Subject Contractors may trade in any securities of the Company during the period beginning five (5) full trading days before the public release of earnings data of the Company or quarterly/annual report and ending on the close of business two (2) full trading days after the public release of earnings data or quarterly/annual report whether or not the Company or any of its officers, directors, employees or Subject Contractors is in possession of material, non-public information, unless authorized by the Compliance Officer.
Important: All transactions by officers, directors, employees and Subject Contractors must be pre-cleared with the Compliance Officer, except as specifically noted in Section IV.D. of our Insider Trading Compliance Program.
For further information and guidance, please refer to our Insider Trading Compliance Program and do not hesitate to contact the Compliance Officer.
ALL TRANSACTIONS IN KING RESOURCES, INC. SECURITIES BY OFFICERS, DIRECTORS, EMPLOYEES AND SUBJECT CONTRACTORS MUST BE PRE- CLEARED BY THE COMPLIANCE OFFICER.
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Attachment C
Outside Directors
CERTIFICATION OF COMPLIANCE
| TO: | Compliance Officer |
| FROM: | _____________________________________ |
| RE: | INSIDER TRADING COMPLIANCE PROGRAM OF KING RESOURCES, INC. |
I have received, reviewed and understand the above-referenced Insider Trading Compliance Program and hereby undertake, as a condition to my present and continued affiliation with King Resources, Inc., to comply fully with the policies and procedures contained therein.
I hereby certify that to the best of my knowledge I have complied, and I will henceforth comply fully with all policies and procedures set forth in the above-referenced Insider Trading Compliance Program.
| SIGNATURE | DATE | |
| TITLE |
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Attachment D
Officers, Management Directors & Employees
CERTIFICATION OF COMPLIANCE
| TO: | Compliance Officer |
| FROM: | _____________________________________ |
| RE: | INSIDER TRADING COMPLIANCE PROGRAM OF KING RESOURCES, INC. |
I have received, reviewed and understand the above-referenced Insider Trading Compliance Program and hereby undertake, as a condition to my present and continued affiliation with King Resources, Inc., to comply fully with the policies and procedures contained therein.
I hereby certify that to the best of my knowledge I have complied, and I will henceforth comply fully with all policies and procedures set forth in the above-referenced Insider Trading Compliance Program.
| SIGNATURE | DATE | |
| TITLE |
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Attachment E
Consultants, Contractors
CERTIFICATION OF COMPLIANCE
| TO: | Compliance Officer |
| FROM: | _____________________________________ |
| RE: | INSIDER TRADING COMPLIANCE PROGRAM OF KING RESOURCES, INC. |
The above named consultant or contractor to King Resources, Inc. has received, reviewed and understands the above-referenced Insider Trading Compliance Program and hereby undertakes, as a condition to his, her or its present and continued consulting or other contractual relationship with King Resources, Inc., to comply fully with the policies and procedures contained therein.
The above named consultant or contractor hereby certifies that to the best of his, her or its knowledge such consultant or contractor has complied and will henceforth comply fully with all policies and procedures set forth in the above-referenced Insider Trading Compliance Program.
| SIGNATURE | DATE | |
| TITLE |
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Exhibit 10.2
KING RESOURCES, INC.
AUDIT COMMITTEE CHARTER
I. Purpose
The purpose of the Audit Committee of the Board of Directors (the “Board”) of King Resources, Inc. (the “Company”) is to oversee:
| · | evaluating the performance, independence and qualifications of our independent auditors and determining whether to retain our existing independent auditors or engage new independent auditors; |
| · | reviewing and approving the engagement of our independent auditors to perform audit services and any permissible non- audit services; |
| · | reviewing our annual and quarterly financial statements and reports, including the disclosures contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and discussing the statements and reports with our independent auditors and management; |
| · | reviewing with our independent auditors and management significant issues that arise regarding accounting principles and financial statement presentation and matters concerning the scope, adequacy and effectiveness of our financial controls; |
| · | reviewing our major financial risk exposures, including the guidelines and policies to govern the process by which risk assessment and risk management is implemented; and |
| · | reviewing and evaluating on an annual basis the performance of the Audit Committee, including compliance of the Audit Committee with this Charter. |
The Audit Committee will maintain and foster an open avenue of communication with the Company’s management, internal audit, and any independent auditor. In addition to the duties and responsibilities described in this Charter, it will also be responsible for any additional duties and responsibilities prescribed or mandated by the Board.
The Audit Committee’s responsibility is one of oversight. The members of the Audit Committee are not employees of the Company, and they do not perform management’s or any independent auditor’s functions. The Audit Committee relies on the expertise and knowledge of management, the internal auditors, and any independent auditor in carrying out its oversight responsibilities. The Company’s management is responsible for preparing accurate and complete financial statements in accordance with generally accepted accounting principles (“GAAP”), crafting periodic reports, and establishing and maintaining appropriate accounting principles and financial reporting policies and satisfactory internal control over financial reporting. The independent auditor will audit the Company’s annual consolidated financial statements, review the Company’s quarterly financial statements, and, as required under Securities and Exchange Commission (“SEC”) rules, attest as to the effectiveness of the Company’s internal control over financial reporting. It is not the Audit Committee’s responsibility to prepare or certify the Company’s financial statements, guarantee the audits or reports of the independent auditor, certify as to whether any independent auditors are “independent” under applicable rules, or ensure that the financial statements or periodic reports are complete and accurate, conform to GAAP, or otherwise comply with applicable laws and the Company’s policies.
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II. Composition
The members of the Audit Committee, including the Chair, will be appointed by and serve at the discretion of the Board. Members may be removed from the Audit Committee, with or without cause, by the Board.
During such time as the common stock of the Company is quoted on The OTC Markets, the Audit Committee shall be made up of at least two (2) members of the Board of Directors. During such time as the common stock of the Company is listed on a national stock exchange such as the Nasdaq Stock Market (“Nasdaq”), the Audit Committee shall be made up of at least three (3) members of the Board of Directors, subject to any available exception. Subject to any available exception, each member of the Audit Committee will satisfy the independence requirements imposed by the SEC and Nasdaq, not having participated in the preparation of the financial statements of the Company or any subsidiary of the Company at any time during the past three years, be able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement and cash flow statement, and at least one member of the Audit Committee will satisfy the applicable financial-sophistication requirements and any other requirement for accounting or related financial management expertise as determined by the Board and required by the SEC and Nasdaq.
III. Authority
The Audit Committee will have access to all books, records, facilities, and the Company’s personnel as deemed necessary or appropriate by any member of the Audit Committee. The Audit Committee may retain any outside counsel, experts, or advisors that the Audit Committee believes to be necessary or appropriate. The Company must provide for appropriate funding for payment of compensation to any independent auditor for the purpose of preparing or issuing an audit report or performing other audit, review or attest services, and for payment of any compensation to any outside counsel, experts, or advisors retained by the Audit Committee. The Company must also pay any ordinary administrative expenses of the Audit Committee that the Audit Committee deems appropriate in carrying out its duties.
The Audit Committee may form and delegate authority to one or more subcommittees. By delegating an issue to a subcommittee, the Audit Committee does not surrender any authority over that issue. Although the Audit Committee may act on any issue that has been delegated to a subcommittee, doing so will not limit or restrict future action by the subcommittee on any matters delegated to it. Any action or decision of a subcommittee, including the preapproval of audit or non-audit services, will be presented to the full Audit Committee at its next scheduled meeting. By approving this Charter, the Board delegates authority to the Audit Committee with respect to these responsibilities.
The Audit Committee may, in its sole discretion, retain or obtain advice from consultants, legal counsel or other advisers (independent or otherwise), provided that, preceding any such retention or advice, the Audit Committee must take into consideration the applicable factors under Nasdaq rules. The Audit Committee will be directly responsible for the appointment, compensation and oversight of any adviser it retains. The Company must provide for appropriate funding, as determined by the Audit Committee, for payment of reasonable compensation to any adviser retained by the Audit Committee.
In addition to the duties and responsibilities expressly delegated to the Audit Committee in this Charter, the Audit Committee may exercise any other powers and carry out any other responsibilities consistent with this Charter, the purposes of the Audit Committee, the Company’s organizational documents and other governance policies and applicable Nasdaq rules.
The Audit Committee has the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it deems appropriate, including the authority to request any officer, employee or adviser of the Company to meet with the Audit Committee or any advisers engaged by the Audit Committee.
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IV. Duties and Responsibilities
Auditor Management:
1 . Hiring, Selecting, and Overseeing Auditors. The Audit Committee is responsible for the appointment, retention, and replacement of any independent auditor, as well as determining the fees of any independent auditor. The independent auditor and any other registered public accounting firm engaged for the financial reporting process will report directly to the Audit Committee and be accountable to it. In addition, the Audit Committee may replace any existing independent auditor with a different public accounting firm.
2 . Approving Audit and Non-Audit Engagements. The Audit Committee will oversee and evaluate audit plans, the adequacy of staffing, the fees to be paid to independent auditors, and oversee the negotiation and execution of any engagement letters on behalf of the Company. The Audit Committee will oversee the rotation of the independent auditors’ partners on the Company’s audit engagement team as required by applicable rules and regulations. The Audit Committee Chair may pre-approve audit and permissible non-audit services and any associated fees, as long as this pre-approval is presented to the full Audit Committee at scheduled meetings. The Audit Committee may, in accordance with applicable law, establish pre-approval policies and procedures for the engagement of independent accountants to render services to the Company.
3 . Auditor Independence. At least annually, the Audit Committee will review and discuss the qualifications, performance, and independence of the independent auditors, or in the case of prospective independent auditors, before they are engaged. That review will include reviewing written disclosures from any independent auditor regarding any relationships or services that may impact the objectivity and independence of such independent auditor, as defined by applicable rules and regulations. If the Audit Committee determines that further inquiry is advisable, it must take appropriate action in response to the independent auditor’s report to satisfy itself of the auditor’s independence.
4 . Former Employees of Auditors. The Audit Committee will oversee the policies and procedures as required by applicable rules and regulations governing how the Company may employ individuals who are or once were employed by an independent auditor.
Financial Review and Disclosure:
5 . Annual Audit Results. The Audit Committee will review with the Company’s management and the independent auditors the results of the annual audit, including:
| · | the independent auditors’ assessment of the quality of the Company’s accounting principles and practices; |
| · | the independent auditors’ views about qualitative aspects of the Company’s significant accounting practices, the reasonableness of significant judgments, and estimates (including material changes in estimates and analyses of the effects of alternative GAAP methods on the financial statements); |
| · | all known and likely misstatements identified during the audit (other than those the independent auditors believe to be trivial); |
| · | the adequacy of the disclosures in the financial statements; and |
| · | any other matters that the independent auditor must communicate to the Audit Committee under applicable accounting or auditing standards. |
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6. Audited Financial Statement Review; Quarterly and Annual Reports. The Audit Committee will review the annual audited financial statements and quarterly financial statements with the Company’s management and the independent auditor. The Audit Committee will be responsible for recommending to the Board whether the proposed annual audited financial statements should be included in the Company’s Annual Report on Form 10-K.
7 . Earnings Announcements. The Audit Committee will review and discuss with the Company’s management and the independent auditors any earnings press releases and other financial information regarding the Company’s results of operations.
8 . Proxy Report. The Audit Committee will oversee the preparation of any report required by applicable rules and regulations to be included in the Company’s annual proxy statement.
9 . Accounting Principles and Policies. The Audit Committee will review and discuss with the Company’s management and the independent auditors significant issues regarding accounting principles and financial statement presentation, including:
| · | critical accounting policies and practices; |
| · | alternative accounting policies available under GAAP; |
| · | the potential impact on the Company’s financial statements of alternative treatments; and |
| · | any other significant reporting issues and judgments, significant regulatory, legal, and accounting initiatives, or developments that may have a material impact on the financial statement. |
Audit Committee will review with the independent auditors and the Company’s management, if appropriate, any written communication, such as any management letter or internal control letter, before the independent auditors issue it and before management responds to the communication.
10. Management Cooperation with Auditors. The Audit Committee will evaluate the Company’s management’s cooperation with the independent auditors during their audit examination, including any significant difficulties or disagreements encountered during the audit,if any. The Audit Committee will resolve any conflicts or disagreements regarding financial reporting.
Internal Control and Procedures:
11. Risk Assessment and Management. The Audit Committee will review and discuss with the Company’s management and the independent auditors the Company’s policies on risk management and assessment, including guidelines and policies to govern the process by which the Company’s exposure to risk is handled, and oversee management of the Company’s financial risks, regulatory risks, cybersecurity risks and, as necessary or advisable, such other material risks facing the Company. The Audit Committee will provide regular reports to the Board about material issues affecting the quality or integrity of the Company’s financial statements, compliance with legal or regulatory requirements, the performance or independence of the independent auditor, the performance of the Company’s internal audit function, and other matters as the Audit Committee deems appropriate.
12. Internal Auditors. If and when the Company establishes an internal audit team, the Audit Committee will review the audit plan of the Company’s internal audit team and discuss with that team the adequacy and effectiveness of the Company’s scope, staffing, and general audit approach. The Audit Committee will review any significant reports prepared by the Company’s internal auditors, as well as management’s response. The head of the internal audit team will also have a reporting relationship to, and be evaluated by, the Audit Committee.
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13. Internal Control over Financial Reporting; Disclosure Controls. The Audit Committee will confer with the Company’s management and the independent auditors concerning the scope, design, adequacy, and effectiveness of the Company’s internal control over financial reporting and its disclosure controls and procedures. The Audit Committee will review reports on significant findings and recommendations with respect to internal controls over financial reporting, together with management responses and any special audit steps adopted in light of any material control deficiencies.
14. Correspondence with Regulators. The Audit Committee will consider and review with the Company’s management, the independent auditors, and outside advisors or accountants any correspondence with regulators or governmental agencies and any published reports that raise material issues regarding the Company’s financial statements or accounting policies.
15. Complaint Procedures. The Audit Committee is responsible for overseeing procedures for receiving, retaining, and investigating:
| · | complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and |
| · | confidential and anonymous submissions by employees of concerns regarding questionable accounting or auditing matters. |
16. Ethical Compliance. The Audit Committee will review the results of management’s efforts to monitor compliance with the Company’s programs and policies adhering to applicable laws and rules, including the Company’s Code of Conduct.
17. Related Party Transactions. The Audit Committee will review and approve, in accordance with the Company’s policies, any related party transaction as defined by applicable rules and regulations.
Other Matters:
18. Review of this Charter. The Audit Committee will annually review and reassess this Charter and submit any recommended changes to the Board for its consideration.
19. Audit Committee Self-Evaluation. The Audit Committee will annually perform an evaluation of the performance of the Audit Committee.
20. Other Legal and Finance Matters. The Audit Committee will review and discuss, as needed, with the Company’s management legal and regulatory compliance and any actual, pending, or threatened legal or financial matters that could significantly affect the Company’s business or financial statements.
21. Compensation. Members of the Audit Committee shall receive such fees, if any for their service as Audit Committee members as may be determined by the Board in its sole discretion. Members of the Audit Committee may not receive any compensation from the Company except the fees that they receive for service as a member of the Board or any committee thereof.
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V. Meetings and Minutes
The Audit Committee will meet whenever its members deem a meeting necessary or appropriate. The Audit Committee will meet at least quarterly, but may meet more frequently if its members deem doing so necessary or appropriate. The Audit Committee will determine where and when to meet and provide this schedule in advance to the Board.
Unless otherwise directed by the Audit Committee, each regularly scheduled meeting will conclude with an executive session that excludes members of management. As part of its responsibility to foster open communication, the Audit Committee will meet periodically with management, personnel in charge of the internal audit function, and the independent auditor in separate executive sessions.
The Audit Committee will maintain written minutes of its meeting and regularly report to the Board on its actions and recommendations. The Audit Committee may act by unanimous written consent; when it does so, those actions will be filed in the minute book. The Audit Committee has the authority to establish its own rules and procedures for notice and conduct of its meetings, so long as they are not otherwise inconsistent with any provision of this Charter or of the Company's certificate of incorporation and bylaws that are applicable to the Audit Committee.
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Exhibit 10.3
KING RESOURCES, INC.
CHARTER OF THE COMPENSATION COMMITTEE
I. PURPOSE OF THE COMMITTEE
The Compensation Committee (the “Committee”) of the Board of Directors King Resources, Inc. (the “Company”) is appointed by the Board of Directors (the “Board”) to discharge the Board’s responsibilities with respect to all forms of compensation for the Company’s executive officers and to administer the Company’s equity incentive plans for employees. This Charter sets forth the authority and responsibility of the Committee for evaluating and approving executive officer compensation arrangements, plans, policies and programs of the Company, and for administering the Company’s equity incentive plans for employees whether adopted prior to or after the date of adoption of this Charter (the “Stock Plans”).
II. COMPOSITION OF THE COMMITTEE
During such time as the common stock of the Company is quoted on The OTC Markets, the Committee shall be made up of at least two (2) members of the Board of Directors. During such time as the common stock of the Company is listed on a national stock exchange such as the Nasdaq Stock Market (“Nasdaq”), the Committee shall be made up of at least three (3) members of the Board of Directors, subject to any available exception. Each of the members of the Committee will be (i) an “independent director” as defined under the rules of Nasdaq, as amended (the “Rules”), except as may otherwise be permitted by such Rules, and (ii) a “Non- Employee Director,” as defined in Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All members of the Committee will be appointed by, and shall serve at the discretion of, the Board.
The Board will select members of the Committee who will be approved by a majority vote of the Board. Committee members will serve during their respective term as a director, subject to earlier removal by a majority vote of the Board. Unless a chair is elected by the full Board, the members of the Committee may designate a chair by majority vote of the Committee membership.
III. MEETINGS AND PROCEDURES OF THE COMMITTEE
Meetings of the Committee will be held from time to time and in any event at least four times per fiscal year, in response to the needs of the Board or as otherwise determined by the Chairman of such Committee, and the Committee shall provide reports to the Board. In lieu of a meeting, the Committee may also act by unanimous written consent resolution.
IV. COMMITTEE RESPONSIBILITIES
The principal processes of the Committee in carrying out its oversight responsibilities are set forth below. These processes are set forth as a guide with the understanding that the Committee may supplement them as appropriate and may establish policies and procedures from time to time that it deems necessary or advisable in fulfilling its responsibilities.
| 1. | The Committee will have the authority to review and oversee the Company’s overall compensation philosophy, and to oversee the development and implementation of compensation programs aligned with the Company’s business strategy. | |
| 2. | The Committee will periodically review Environmental, Social and Governance (“ESG”) matters that are relevant to the Committee’s oversight responsibilities, including matters with respect to diversity, equity and inclusion, talent development, employee engagement, culture, and as otherwise enumerated herein, in coordination with other committees and/or the Board as necessary or appropriate. | |
| 3. | The Committee will have the sole authority to determine the form and amount of compensation to be paid or awarded to the Chief Executive Officer (“CEO”) and all other executive officers of the Company. |
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| 4. | The Committee will annually review and approve all matters related to CEO compensation and determine (i) the salary paid to the CEO, (ii) the grant of all cash-based bonuses and equity compensation to the CEO, (iii) the entering into or amendment or extension of any employment contract or similar arrangement with the CEO, (iv) any CEO severance or change in control arrangement, (v) material perquisites provided to the CEO and (vi) any other CEO compensation matter that may arise from time to time as directed by the Board. The compensation decisions with regard to CEO compensation matters shall incorporate the review of the CEO’s performance against pre-established business and individual objectives conducted annually by the Board. In determining the long-term incentive component of the CEO’s compensation, the Committee may consider among other things: the Company’s performance and relative stockholder return, the value of similar incentive awards to all other executive officers of the Company the Committee determines comparable based on factors it selects and the incentive awards given to the Company’s CEO in prior years. | |
| 5. | For all executive officers other than the CEO, the Committee, in consultation with the CEO, will annually review and approve the corporate goals and objectives relevant to executive officers’ compensation. In light of these goals and objectives, the Committee, in consultation with the CEO, will determine (i) the salary paid to executive officers, (ii) the grant of cash-based bonuses and equity compensation provided to executive officers, (iii) the entering into or amendment or extension of any employment contract or similar arrangement with executive officers, (iv) executive officers’ severance or change in control arrangements, (v) material perquisites provided to executive officers and (vi) any other executive officer compensation matter that may arise from time to time as directed by the Board. In determining the long-term incentive component of executive officers’ compensation, the Committee will consider the same factors pertaining to such compensation that it considers for that element of the CEO’s compensation. | |
| 6. | The Committee will periodically review and make recommendations to the Board with respect to adoption and approval of, or amendments to, all equity-based incentive compensation plans and arrangements for employees, and the shares and amounts reserved thereunder after taking into consideration the Company’s strategy of long-term and equity-based compensation. The Committee will also periodically review and approve, or recommend to the Board for approval, the adoption of, and amendments to, all cash-based incentive plans for executive officers. | |
| 7. | The Committee will: (i) approve grants of stock, stock options or stock rights to employees eligible for such grants (including grants in compliance with Rule 16b-3 promulgated under the Exchange Act to individuals who are subject to Section 16 of the Exchange Act); (ii) determine the Company’s policy regarding the timing of such grants of stock, stock options or stock purchase rights; (iii) interpret the Stock Plans and agreements thereunder; and (iv) determine acceptable forms of consideration for stock acquired pursuant to the Stock Plans. The Committee will have the authority to approve stock ownership guidelines applicable to the CEO and to other designated executives, and the responsibility to annually review compliance with such guidelines. Pursuant to §157 of the Delaware General Corporation Law, the Committee may delegate to the Company’s CEO the authority to grant options to employees of the Company or of any subsidiary of the Company who are not directors or executive officers, provided that such grants are within the limits established by §157 and by resolution of the Board. | |
| 8. | The Committee will exercise the powers of the Board and perform such duties and responsibilities as may be assigned to a “committee,” this Committee or the Board under the terms of any incentive-compensation, equity-based compensation, deferred compensation, or other plan in the Company’s executive benefit program. | |
| 9. | The Committee will participate, with management, in the preparation of the Compensation Discussion and Analysis. The Committee will review the final draft of the Compensation Discussion and Analysis and recommend to the Board its inclusion in the proxy statement or Form 10-K, as applicable, to the extent required by the rules and regulations of the Securities and Exchange Commission (the “SEC”). | |
| 10. | The Committee will review the results of the Company’s “say on pay” vote as well as the results of other Company stockholder votes with respect to compensation-related matters, and will consider whether any changes should be made to the Company’s compensation plans and programs as a result of any such stockholder vote. | |
| 11. | The Committee will provide the Compensation Committee Report for inclusion in the Company’s proxy statement or annual report on Form 10-K that complies with the rules and regulations of the SEC. | |
| 12. | The Committee will oversee the Company’s submission to a stockholder vote of matters relating to compensation, including advisory votes on executive compensation and the frequency of such votes, incentive and other compensation plans, and amendments to such plans. |
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| 13. | Following each of its meetings, the Committee shall deliver a report on the meeting to the Board, including a summary of actions taken by the Committee at the meeting. The Committee shall keep written minutes of its meetings, which minutes shall be maintained with the books and records of the Company. | |
| 14. | The Committee will review this Charter annually and recommend to the Board any changes it determines are appropriate. | |
| 15. | The Committee will review its performance annually and submit a report on its performance to the Board. | |
| 16. | For the purpose of assessing whether risks arising from any compensatory plan or arrangement are reasonably likely to have a material adverse effect on the Company, the Committee will periodically review the relationship between the incentives associated with these plans and the level of risk-taking by executive officers in response to such incentives. | |
| 17. | The Committee will, in consultation with the Company's CEO and Executive Vice President and Chief Human Resources Officer, engage in an annual review of senior management's succession plans. The reviews shall include an examination of potential permanent and interim candidates for the CEO and senior management positions. The Committee will approve and maintain a process regarding CEO succession in the event of an emergency or the retirement or other temporary or permanent absence of the CEO. To assist with CEO succession planning, the CEO will create and periodically assess (at least annually) a list of potential successors who may be able to perform the CEO's duties on an interim basis. The Committee will review with the CEO and Executive Vice President and Chief Human Resources Officer the Company's process for the education and development of senior management throughout the Company. | |
| 18. | The Committee will have the sole authority and right, as and when it shall determine to be necessary or appropriate to the functions of the Committee, to retain, obtain the advice of and terminate compensation consultants, independent legal counsel or other advisors of its choosing to assist the Committee with its functions. The Committee shall have the sole authority to approve the fee arrangement and other retention terms of such advisors, and the Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable fees to a compensation consultant, independent legal counsel or any other advisor retained by the Committee. In this regard, the Committee shall be directly responsible for the appointment, fee arrangement and oversight of the work of any compensation consultant, independent legal counsel or other advisor retained by the Committee. The Committee shall evaluate the qualifications, performance and independence of any such advisors in accordance with policies that the Committee may establish in its sole discretion. Except as otherwise required by the applicable Rules of the New York Stock Exchange, the Committee may select a compensation consultant, legal counsel or other advisor to the Committee only after taking into consideration all factors relevant to that person’s independence from management, as enumerated by the New York Stock Exchange. | |
| 19. | The Committee will perform any other activities required by applicable law, rules or regulations, including the rules of the SEC and any exchange or market on which the Company’s capital stock is traded, and perform other activities that are consistent with this Charter, the Company’s certificate of incorporation and bylaws, and governing laws, as the Committee or the Board deems necessary or appropriate. |
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Exhibit 10.4
Nomination and Governance Committee Charter
As of August 30, 2022
Purpose
The Committee is appointed by the Board of Directors to (i) identify individuals qualified to become Board members and to recommend to the Board the director nominees for the next annual meeting of shareholders, (ii) recommend to the Board corporate governance principles, applicable to the Company (iii) oversee and approve the process and guidelines for the annual evaluation of the performance and effectiveness of the Board and its committees, and (iv) exercise and perform the authority, duties and responsibilities of the Committee set forth in this charter.
Membership
| 1. | During such time as the common stock of the Company is quoted on The OTC Markets, the Committee shall be made up of at least two (2) members of the Board of Directors. During such time as the common stock of the Company is listed on a national stock exchange such as the Nasdaq Stock Market (“Nasdaq”), the Committee shall be made up of at least three (3) members of the Board of Directors, subject to any available exception. Each of the members of the Committee will be (i) an “independent director” as defined under the rules of Nasdaq, as amended (the “Rules”), except as may otherwise be permitted by such Rules, and (ii) a “Non- Employee Director,” as defined in Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All members of the Committee will be appointed by, and shall serve at the discretion of, the Board. | |
| 2. | The Board shall designate one Committee member as the Committee’s chair (the “Chair”). |
Operations
| 1. | The Committee shall hold regular meetings at least four times per year and report to the Board on a regular basis. Meetings shall include any participants the Committee deems appropriate and shall be of sufficient duration and scheduled at such times as the Committee deems appropriate to discharge properly its responsibilities. | |
| 2. | The Committee shall meet, as deemed necessary and appropriate, with management, including the Chief Executive Officer, in executive session. | |
| 3. | The Committee shall receive information and participate in informal meetings and briefings with management, including the Chief Executive Officer, as necessary and appropriate between formal meetings of the Committee. Such briefings and informal meetings may be through the Chair or individual Committee members, as appropriate. | |
| 4. | The Committee may form and delegate to one or more subcommittees all or any portion of the Committee’s authority, duties and responsibilities, and may establish such rules as it determines necessary or appropriate to conduct the Committee’s business. | |
| 5. | The Committee shall have direct access to, and complete and open communication with, the Company’s management and may obtain advice and assistance from internal legal or other advisors to assist it. The Committee may also retain legal or other advisors. The Committee shall have the sole authority to retain and terminate any search firm to be used to identify director candidates and to approve the search firm’s fees and retention terms. | |
| 6. | The Company shall provide for appropriate funding, as determined by the Committee, for the payment of (i) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties and responsibilities and (ii) compensation to legal and other advisors retained by the Committee. | |
| 7. | The Committee shall review and assess its performance annually and report the results to the Board. | |
| 8. | The Committee shall review and assess the adequacy of this charter annually and, if appropriate, recommend changes to this charter to the Board. |
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Authority, Duties and Responsibilities
The Committee shall:
Board Succession Planning
| 1. | Oversee succession planning for the Board and Board leadership appointments, including committee chairs, in accordance with the Board’s Corporate Governance Policies. | |
| 2. | Review the overall size and composition of the Board, taking into consideration the skills, attributes, experience and tenure of each Board member in accordance with the Company’s Corporate Governance Policies. | |
| 3. | Review the term limit and retirement policies set forth in the Board’s Corporate Governance Policies and, if appropriate, recommend changes to the Board. | |
| 4. | Actively seek and identify individuals qualified to become Board members for recommendation to the Board consistent with the Board membership criteria set forth in the Company’s Corporate Governance Policies. The Committee may consider director candidates proposed by shareholders or management, and shall evaluate such candidates using the same criteria as other candidates considered by the Committee. Consistent with the retirement policy set forth in the Corporate Governance Policies of the Company, no director candidate may be nominated for election if he or she would be age 80 or older at the time of the election. | |
| 5. | Recommend to the Board the director nominees for the Company’s next annual meeting of shareholders. In the case of a vacancy on the Board (including a vacancy created by an increase in the size of the Board), the Committee shall recommend to the Board an individual to fill such vacancy, as needed. | |
| 6. | Retain and terminate, in its sole discretion, any search firm used to identify director candidates and any compensation consultant used to assist in the evaluation of director compensation, and to approve the fees and other retention terms for such firms and consultants. | |
| 7. | Oversee the orientation program for newly elected or appointed directors. |
Board Committees
| 1. | Recommend to the Board director nominees for each Board committee, taking into consideration the skills, attributes, experience and tenure of each committee member, including committee members to fill vacancies as needed. In nominating a director for a committee membership, the Committee shall take into consideration the factors set forth in that committee’s charter, if any, and the rotation of committee assignments as set forth in the Company’s Corporate Governance Policies, and other factors it deems appropriate, including without limitation the interplay of the candidate’s experience with the experience of other committee members. | |
| 2. | Recommend to the Board changes that the Committee believes desirable to the size of any committee of the Board or to the Board’s committee structure. |
Board Performance
| 1. | Oversee and approve the process and guidelines for the annual evaluation of the performance and effectiveness of the Board and its committees, including the communication of the results of such evaluations to the full Board. |
Director Compensation and Insurance
| 1. | Review the director compensation program, as necessary and appropriate, and recommend changes to the Board. | |
| 2. | Review the Company’s directors and officers insurance. |
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Corporate Governance Policies and Governance Documents
| 1. | Annually review and assess the adequacy of the Board’s Corporate Governance Policies, including the director independence standards, and, if appropriate, recommend changes to the Board. | |
| 2. | Periodically review the Company’s organizational documents, and, if appropriate, recommend changes to the Board. | |
| 3. | Review and approve related person transactions in accordance with the Company’s Related Person Transactions Policy, if any, and associated disclosure. | |
| 4. | Report approved related person transactions to the Board. | |
| 5. | Review shareholder proposals relating to governance, social responsibility and environmental matters and management’s proposed response to such proposals. | |
| 6. | Review and recommend to the Board whether to seek and accept a director’s offer to tender his or her resignation in the event such director’s principal occupation or employer changes. | |
| 7. | Review and approve, directors’ service on other public or private company’s boards and committees, and changes in director circumstances in accordance with the Board’s Corporate Governance Policies. | |
| 8. | Monitor and review evolving corporate governance trends and best practices, and as it determines appropriate, consider other matters of corporate governance and make recommendations to the Board regarding, or take action with respect to, such matters. |
Philanthropic Programs
| 1. | Review the strategies, policies and practices with respect to the philanthropic programs of the Company and foundations significantly supported by the Company. |
Environmental, Social Responsibility and Other Governance Matters
| 1. | As it determines appropriate, consider environmental, social responsibility, and sustainability matters and make recommendations to the Board regarding, or take action with respect to, such matters. |
Other Authority
| 1. | Have such other authorities, duties or responsibilities as may be delegated to the Committee by the Board. |
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