STOCK AWARD AND NON-QUALIFIED STOCK OPTION GRANT AGREEMENT UNDER THE 2006 EQUITY INCENTIVE PLAN OF THE AMERICAN ORIENTAL BIOENGINEERING, INC.
Exhibit 10.11
GRANT
AGREEMENT
UNDER THE 2006 EQUITY
INCENTIVE PLAN OF THE
AMERICAN ORIENTAL
BIOENGINEERING, INC.
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Company:
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American Oriental
Bioengineering, Inc.
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Name of
Grantee:
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____________________
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Number of Stock
Awards:
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______ Shares of Common
Stock of Company
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Number of Stock
Options:
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______ Options for Shares of
Common Stock of Company
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(1:1 basis) |
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Date of
Grant:
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Vesting
Period:
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__________
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Option Exercise
Price:
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__________ per
Share
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Stock Purchase
Price:
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$0.00 per
Share
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Option Expiration
Date:
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__________
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SECTION 1.
STOCK
AWARDS AND STOCK OPTIONS
(a) Pursuant to the American
Oriental Bioengineering, Inc. 2006 Equity Incentive Plan (“Plan”), Company, in exercise of
its sole discretion, hereby grants to the Grantee named above, who is a
Participant of the Plan, (1) a number of Shares at the purchase price as
indicated above (“Stock Awards”), and (2) stock options to purchase a number of
Shares at the exercise price as indicated above, which exercise price represents
the 100% percent of the Fair Market Value per Share on the Date of Grant (“Stock
Options”), subject to the terms and conditions set forth in this Grant Agreement
(“Agreement”).
Common
Stock & Non-Qualified Common Stock Option – Executive
(b) Capitalized terms
hereinafter used but not defined shall have the meanings defined in the Plan.
All references to Share prices and numbers herein shall be equitably adjusted
pursuant to the applicable provisions of Section 3 of the
Plan.
SECTION 2. VESTING
SCHEDULE & EXPIRATION DATE
(a) Subject to the terms of
this Agreement and the Plan, and provided that (1) Grantee remains in Continued
Status as a Participant (as defined in Section 1(d)(6) of the Plan), (2)
Grantee is not in breach of any duly executed written agreement with Company,
and (3) subject to other conditions set forth in this Agreement and Schedule A hereto:
(i) The Stock Awards hereby
granted shall vest at the end of each consecutive twelve (12) month intervals
following the Date of Grant over the Vesting Period, and each time upon payment
of applicable purchase price, an equivalent of 1/5 of the number of Shares
granted hereunder shall be issued to Grantee. Payment for Stock Awards must be
made at the time of vesting.
(ii) The Stock Options hereby
granted shall vest at the end of each twelve (12) month
intervals following the Date of Grant over the Vesting Period, and
each time be converted into right to purchase, at the exercise price, 1/5 of the
number of Shares granted hereunder. Payment for Stock Options must be made at
the time of exercise.
(b) The Grants issued
hereunder shall expire 6 years from the Date of Grant unless terminated earlier
pursuant to this Agreement and the Plan (“Expiration
Date”).
SECTION 3. TERMINATION
OF GRANTS
(a) Termination
of Stock Awards.
Unless otherwise terminated under this Agreement, a Grantee’s rights under this
Agreement with respect to the Stock Awards granted shall terminate at the time
when such Stock Awards are vested and Shares are issued to Grantee in accordance
with the terms hereof.
(b) Termination
of Stock Options. Unless otherwise terminated
under this Agreement, a Grantee’s rights under this Agreement with respect to
the Stock Options granted shall terminate at the time when such Stock Options
are vested and exercised in accordance with the terms
hereof.
(c) Date
of Termination.
For purposes of this Agreement, Date of Termination means the date when
Grantee’s Continuous Status as a Participant terminates, which, for purposes of
this Agreement and unless otherwise provided herein, shall be the earliest of:
(i) the date when Grantee’s actual relationship with Company as a Participant
(as defined in Section 1(d)(17) of the Plan) ceases, voluntarily or
involuntarily, with or without cause; (ii) the date when Grantee ceases
performing services for Company as a Participant; or (3) in the event of
involuntary termination of Grantee’s Participant status (regardless of the
reason or manner or validity thereof), the date when Grantee is no longer
actively engaged without extension by any notice period mandated under
applicable law. The Board shall have the exclusive discretion to determine when
Grantee is no longer actively engaged for purposes hereof.
(d) Effect
of Termination of Grantee’s Status as a Participant. In the event of termination
of Grantee’s Continuous Status as a Participant as set forth in Section 3(c)
above, Grantee’s rights under this Agreement shall terminate, both as to then
unvested Stock Awards and as to then unvested Stock Options, as of the Date of
Termination. Grantee must exercise the Stock Options, to the extent vested and
exercisable as of the Date of Termination, within ninety (90) days after the
Date of Termination (but in no event later than the earlier of March 15 of the
following year or the Expiration Date), and the Stock Options shall terminate to
the extent not so exercised. Provided, however, if the Grantee died before the
vested Stock Options have expired or been terminated in accordance with the
foregoing, such vested Stock Options may be exercised within twelve (12) months
from the date of death, but in no event later than the earlier of March 15 of
the following year or the Expiration Date.
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Stock & Non-Qualified Common Stock Option – Executive
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(e) Disability
or Death of Grantee. Notwithstanding the
foregoing, in the event Grantee’s Continuous Status as a Participant is
terminated by reason of death or disability (as defined in Section 7(c) of the
Plan), as of such termination, any unvested Stock Awards and Stock Options
hereunder shall become fully vested, provided all of the other vesting
conditions under this Agreement are met. The vested Stock Options may thereafter
be exercised by the Grantee, Xxxxxxx’s estate, legal representative or legatee;
provided, however:
(i) In the event of termination
as a result of disability as defined above, the Stock Options must be exercised,
to the extent exercisable after application of this Section 3(e), within twelve
(12) months from the date of disability (but in no event later than the earlier
of March 15 of the following year or the Expiration Date), and the vested Stock
Options shall terminate to the extent not so exercised; and
(ii) In the event of termination
as a result of death, the Stock Options must be exercised, to the extent
exercisable after application of this Section 3(e), within twelve (12) months
from the date of death (but in no event later than the earlier of March 15 of
the following year or the Expiration Date); and the vested Stock Options shall
terminate to the extent not so exercised.
(f) Change
of Control.
Notwithstanding the forgoing, in the event Grantee’s Continuous Status as a
Participant is terminated by Company without cause in connection with a Sale
Event (as defined in Section 3(c) of the Plan) and within eighteen (18) months
of such Sale Event, all of the unvested Stock Awards and unvested Stock Options
shall become fully vested provided all of the other vesting conditions under
this Agreement are met, and Grantee must exercise the Stock Options, to the
extent exercisable after application of this Section 3(f), within thirty (30)
days after the Date of Termination (but in no event later than the Expiration
Date), and the Stock Options shall terminate to the extent not so
exercised
(g) Value
of Unvested Grants. Xxxxxxx agrees that as of
Date of Termination, and regardless of the reason or manner or validity of the
termination of Xxxxxxx’s Continuous Status as a Participant, any unvested Stock
Awards and Stock Options shall be deemed to have a value of zero dollars
($0.00).
(h) Value
of Terminated Grants. Grantee agrees that any
Stock Awards or Stock Options terminated pursuant to this Agreement, regardless
of the reason or manner or validity of the termination, shall be deemed to have
a value of zero dollars ($0.00).
SECTION
4. PURCHASE
OF SHARES AND EXERCISE OF STOCK OPTIONS
(a) Upon vesting of the Stock
Awards, and subject to the payment by Grantee of the applicable purchase price
and the satisfaction of applicable tax withholding obligations, in a manner
authorized by the Plan, an equivalent number of Shares will be issued and
distributed to the Grantee. Failure by Grantee to pay the applicable purchase
price for the Stock Awards, as notified by Company, will result in termination
of such Stock Awards as of the date of vesting.
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Stock & Non-Qualified Common Stock Option – Executive
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(b) Upon delivering to
Company or its designated agent the notice of exercise by Grantee for vested
Stock Options (“Notice of
Exercise”),
which notice shall set forth Grantee’s intention to exercise the vested Stock
Options and the number of Shares to be purchased, together with the payment by
Grantee of the applicable exercise price for such Shares and the satisfaction of
applicable tax withholding obligations therefore, in a manner authorized by the
Plan (“Date of
Exercise”), such
Shares will be issued and distributed to Grantee.
(c) The distribution of
Shares to the Grantee, or in the event of Xxxxxxx’s death, to Xxxxxxx’s legal
representative, shall be evidenced by a stock certificate and appropriate entry
on the books of Company or a duly authorized transfer agent of Company, or other
appropriate means as determined by Company. No fractions of a Share may be
exercised hereunder.
(d) The Company may, at its
option, allow such Grantee elect to pay all or part of the purchase/exercise
price with bank checks, or with shares which, as of the date of payment, the
officer or director has owned for six (6) months or more. Shares so used shall
be valued at their Fair Market Value on the exercise date.
(e) Until the distribution to
Grantee of the Shares as set forth above, Grantee shall have no right to vote or
receive dividends or any other rights as a shareholder with respect to such
Shares, notwithstanding the grant or vesting of Stock Awards or Stock Options.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date Grantee is distributed such Shares, except otherwise
authorized by the Plan.
(f) The nature of Shares is
described in Schedule
A
hereto.
SECTION
5. WITHHOLDING
TAXES.
(a) Grantee acknowledges and
agrees that Grantee is solely responsible to pay all applicable taxes in
connection with the grant, purchase, vesting and exercise of the Stock Awards
and Stock Options hereunder, and that Company has the right to deduct from
payment of any kind otherwise due to Grantee, or from the Shares to be issued,
any federal, state or local taxes required by law to be withheld with respect
thereto.
(b) Company may, at its
option, satisfy such withholding tax obligations by withholding Shares having a
Fair Market Value equal to the amount required to be withheld on the date of
conversion of the Stock Awards or Stock Options to Shares; provided that such
Share withholding shall otherwise be made in compliance with Rule 16b-3 and
other applicable regulations.
(c) For purposes of tax
withholding, the valuation and assessment made by the Board shall be
determinative. Company may refuse to issue the Shares to Grantee if Xxxxxxx
fails to comply with Xxxxxxx’s obligations in connection with the tax
withholding as described herein and in the Plan.
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Stock & Non-Qualified Common Stock Option – Executive
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SECTION 6.GRANTEE
REPRESENTATION.
By accepting the Stock Awards
and Stock Options hereunder, Grantee represents and warrants that Grantee shall
not sell any of the Shares received hereunder where applicable laws, rules or
regulations of any government unit or stock exchanges on which the Shares are
listed, Company policies or this Agreement prohibit such a
sale.
SECTION 7.NON-TRANSFERABILITY
OF GRANTS
Xxxxxxx’s right in the Stock
Awards and Stock Options hereunder are personal to Grantee, and any interest
therein may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution. The Stock Awards and Stock Options hereunder shall not be subject
to execution, attachment or other process. Any attempted disposition of the
Stock Awards or Stock Options in violation of this section shall be null and
void.
SECTION 8.GRANTEE
ACKNOWLEDGMENT.
By accepting the Grants
hereunder, Xxxxxxx acknowledges that:
(a) the Plan is established
voluntarily by Company, it is discretionary in nature and may be modified,
amended, suspended or terminated by Company, at any time and for any reason, as
provided in the Plan;
(b) the Grants hereunder are
voluntary and occasional and do not create any contractual or other right to
receive future similar or different grants even if such may have been granted
repeatedly in the past;
(c) the participation in the
Plan by Xxxxxxx is voluntary;
(d) the future value of the
Stock Awards or Stock Options upon vesting may increase or decrease and cannot
be predicted with certainty;
(e) Grantee has received and
has read, understood and accepted all the terms, conditions and restrictions set
forth in this Agreement and the Plan, all of which apply to Grantee as
applicable;
(f) Grantee must execute this
Agreement and the related documents in the manner prescribed by the
Company;
(g) neither this Agreement
nor any provision of this Agreement or the Plan or the Company policies adopted
pursuant to the Plan shall confer upon Grantee any right with respect to
employment/engagement with Company or as to the term or termination thereof;
and
(h) Grantee is strictly
subject to the terms of the legends identified in Schedule
A
hereto.
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Stock & Non-Qualified Common Stock Option – Executive
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SECTION 9. NO
RIGHT TO DAMAGES
Grantee agrees that,
regardless of the reason or manner or validity of the termination of Grantee’s
Continuous Status as a Participant, Grantee has no right to, and will not bring
any legal claim or action for any damages for the vested, unvested or terminated
Stock Awards or Stock Options, in whole or in part, under this Agreement or the
Plan.
SECTION 10. COMPANY
POLICIES
The Grantee’s rights in the
Stock Awards and Stock Options hereunder shall be affected, with regard to both
vesting and termination, by Company’s published written policies in related
matters. These policies may change from time to time without notice in Company’s
sole discretion.
SECTION
11. BOARD
APPROVAL.
This Agreement is subject to
approval by the Board. If such approval is not obtained, this Agreement is null
and void.
SECTION 12.GENERAL
PROVISIONS.
(a) Plan
Governs. Notwithstanding
anything in this Agreement to the contrary, the terms of this Agreement shall be
subject to the terms of the Plan, and this Agreement is subject to all
interpretations, amendments, rules and regulations promulgated by the Board from
time to time pursuant to the Plan.
(b) Entire
Agreement and Amendment. This Agreement,
the schedules hereto and the Plan constitute the entire agreement between the
parties hereto with respect to the subject matter hereof, and are supplemental
to any other agreements between the Grantee and Company. Any prior agreements,
commitments or negotiations concerning the subject matter hereof are superseded.
This Agreement may be changed, modified or terminated only by an agreement in
writing signed by both parties hereto, except as otherwise provided in the
Plan.
(c) Governing
Law and Forum. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Nevada without regard to conflict of law principles. Without derogation to the
arbitration provision below, the parties consent to the jurisdiction of the
state or federal courts having jurisdiction over matters arising in New York,
New York. The parties agree that in any such proceeding, each party shall waive,
if applicable, inconvenience of forum and right to a jury.
(d) Headings. The headings are
intended only for convenience and do not constitute part of the text of this
Agreement and shall not be considered in the interpretation of this
Agreement.
(e) Severability. If one or more
of the provisions of this Agreement shall be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby;
however, to the extent permissible by law, such invalid, illegal or
unenforceable provisions shall be construed, interpreted or revised
retroactively so as to xxxxxx the intent of this Agreement and the
Plan.
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Stock & Non-Qualified Common Stock Option – Executive
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(f) Notices. Any written
notices provided for in this Agreement which are sent by regular mail shall be
deemed received three business days after mailing, but not later than the date
of actual receipt. Notices shall be directed, if to Grantee, at the Grantee’s
address indicated by Company’s records and, if to Company, at
Beijing Economic and Technology Development Zone
0 Xxxxx
Xxxxxxxxxxx Xxxxxx, Xxxxxxx, X-xxxx, XXX 000000.
(g) Assignment. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto,
their respective successors, permitted assigns and legal representatives.
Grantee may not assign this Agreement or Xxxxxxx’s rights or obligations
hereunder. Company has the right to assign this Agreement, and such assignee
shall become entitled to all the rights of Company hereunder to the extent of
such assignment.
(h) Counterparts. For the
convenience of the parties and to facilitate execution, this Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same document.
(i) Dispute
Resolution. Any dispute,
controversy or claim arising out of or relating to this Agreement or the breach
thereof, shall be settled by arbitration, before one arbitrator in accordance
with the rules of the American Arbitration Association then in effect and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction. The arbitrator will be selected, by the parties,
from a panel of attorney arbitrators. The parties agree that any
arbitration shall be held in New York, New York. The language of the
arbitration shall be in English. The arbitrator will have no
authority to make any relief, finding or award that does not conform to the
terms and conditions of this Agreement. Company shall bear the costs of the
arbitration charged by the AAA. Each party shall bear its own
attorneys’ or expert fees and expenses incurred in the
arbitration. Each party shall bear its own attorneys’ or expert fees
and any and all other party specific costs. Either party, before or
during any arbitration, may apply to a court having jurisdiction for a
restraining order or injunction where such relief is necessary to protect its
interests. Prior to initiation of arbitration, the aggrieved
party will give the other party written notice, in accordance with this
Agreement, describing the claim as to which it intends to initiate
arbitration.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement below.
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AGREED
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AGREED
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American Oriental
Bioengineering, Inc.
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Grantee
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By:
_____________________________
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By:
__________________________
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Name:
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Name:
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Title:
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Address:
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Date:
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Date:
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Common
Stock & Non-Qualified Common Stock Option – Executive
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SCHEDULE
A
DESCRIPTON
OF SHARES
Nature of
Shares:
Common stock reserved under
the 2006 Stock Plan
Registered under S-8 on April
4, 2007
Shares Converted from Stock
Awards shall Bear the Following Legends:
“Registered Shares. Control
Shares.
Resale
restrictions:
Rule 144,
Securities Act of 1933, as amended.
Section
16(b)-(c), Securities Exchange Act of 1934, as amended.
Lock-Up
period of 12 months after the date of vesting
Employment
Agreement dated ___, if applicable”
Shares Exercised from Stock
Options shall Bear the Following Legends:
“Registered Shares. Control
Shares.
Resale
restrictions:
Rule
144
Section
16(b)-(c)”
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AGREED
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AGREED
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American Oriental
Bioengineering, Inc.
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Grantee
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By:
_____________________________
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By:
__________________________
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Name:
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Name:
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Title:
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Address:
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Date:
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Date:
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Common
Stock & Non-Qualified Common Stock Option – Executive
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