NON-QUALIFIED STOCK OPTION AGREEMENT
THIS
NON-QUALIFIED STOCK OPTION AGREEMENT (“Agreement”) is made by and between China
Green Agriculture, Inc., a Nevada corporation (the “Company”), and Xxxxxx Xxxxx
(the “Optionee”).
W
I T
N E S S E T H:
WHEREAS,
the Board of Directors of the Company (the “Board of Directors”) or, if so
previously appointed, its compensation committee (the “Compensation Committee”)
has, on the date set forth on the signature page below, granted Optionee a
Non-Qualified stock option (the “Option”) to purchase from the Company shares of
the Company’s common stock, par value $.001 per share (“Common
Stock”);
NOW,
THEREFORE, in consideration of the mutual benefit to be derived herefrom, the
Company and Optionee agree as follows:
1. Grant
of Option. The
Company hereby grants to Optionee, the right, privilege and option (“Option”) to
purchase 10,000 shares of its Common Stock at an exercise price (“Exercise
Price”) of $6.00 per share, in the manner and subject to the conditions provided
hereinafter.
2. Vesting
of Option. The
Option shall become vested and exercisable in accordance with the following
schedule:
3,000
shares Vesting
on June 29, 2008.
7,000
shares Vesting
on July 1, 2009.
In
the
event that Optionee is no longer a member of the Board of Directors of the
Company, any unvested options shall immediately terminate on the date of his
removal or resignation.
3.
Exercise
Period.
Any
exercise may be with respect to any part or all of the shares then exercisable
pursuant to such Option. All Options must be exercised within [two
years]
after
the date of the vesting.
1
4. Manner
of Exercise.
(a) The
Option shall be exercised by written notice of exercise in the form of Exhibit
A
to this Agreement addressed to the Company and signed by the Optionee and
delivered to the Company, as such Exhibit may be amended by the Board of
Directors or the Compensation Committee from time to time. Optionee also agrees
to make such other representations as are deemed necessary or appropriate by
the
Company and its counsel. If the Option is exercised in part only, the Company
shall make a record such option on its books and records reflecting the partial
exercise which shall be presumptive of the number of shares
exercised.
(b) The
Exercise Price is payable by certified or official bank check or by personal
check; provided, however, that no shares of Common Stock shall be issued to
Optionee until the Company has been advised by its bank that the check has
cleared.
(c) The
Option may also be exercised by the delivery to the Company of shares of Common
Stock having a fair market value, as of the date of exercise, equal to the
Exercise Price of the Optioned Shares to the extent that the Option is being
exercised.
(d) (i) In
the
event of the merger or consolidation of the Company with or into any corporation
or other entity or in the event of the sale by the Company of all or
substantially all of its business and assets followed by a distribution of
assets to the stockholders in connection with a liquidation or partial
liquidation of the Company or in the event of a similar transaction (each a
“Merger Transaction”), prior to the expiration of this Option, this Option shall
be converted into the consideration payable with respect to the Common Stock
in
the Merger Transaction (the “Merger Consideration”) as follows.
(ii) The
Optionee shall receive Merger Consideration having a value equal to the
appreciation, if any, of this Option. The appreciation of this Option shall
be
determined by multiplying the number of shares subject to this Option by the
difference between (i) the value of the Merger Consideration payable with
respect to one share of Common Stock and (ii) the Exercise Price of this Option.
If the value of the Merger Consideration shall be equal to or less than the
Exercise Price, this Option shall not be converted into Merger Consideration,
but shall terminate, to the extent not exercised, at the effective time of
the
Merger Transaction.
(iii) The
consideration payable to the Optionee shall be in the same form as the Merger
Consideration. If the Merger Consideration shall consist of both cash and
non-cash consideration, the consideration payable upon conversion of this Option
shall be a combination of cash and non-cash consideration in the same proportion
as the Merger Consideration is payable to the holders of the Common
Stock.
(iv) If
and to
the extent that the Merger Consideration is other than cash, the value of the
non-cash Merger Consideration shall be determined in good faith by the Company’s
Board of Directors, and the Company shall promptly advise the Optionee of such
determination. If the Optionee disagrees with the determination of the Board
of
Directors, the Optionee shall have the right to exercise this Option by paying
the Exercise Price as provided in Section 4(b) or (c) of this Agreement prior
to
the effectiveness of the Merger Transaction. If the Option is not exercised
prior to the effectiveness of the Merger Transaction, the Option shall be
automatically converted or terminated, as the case may be, as provided in this
Section 4(d).
2
(e) The
shares of Common Stock when issued upon exercise of the Option (the “Optioned
Shares”), will be duly and validly authorized and issued, fully paid and
non-assessable.
(f) In
connection with any exercise of this Option, the Optionee shall,
contemporaneously with the exercise of this Option, to the extent required
by
law, pay or provide for payment of any withholding taxes due as a result of
such
exercise.
5. Restrictions
on Exercise and Delivery. The
exercise of this Option, in whole or in part, shall be subject to the condition
that, if at any time the Board of Directors or the Compensation Committee,
shall
determine, in its sole and absolute discretion,
(a)
the
satisfaction of any withholding tax or other withholding liabilities, is
necessary or desirable as a condition of, or in connection with, such exercise
or the delivery or purchase of Stock pursuant thereto,
(b)
the
listing, registration, or qualification of any shares deliverable upon such
exercise is desirable or necessary, under any state or federal law, as a
condition of, or in connection with, such exercise or the delivery or purchase
of shares pursuant thereto, or
(c)
the
consent or approval of any regulatory body is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery or purchase
of shares pursuant thereto, then in any such event, such exercise shall not
be
effective unless such withholding, listing, registration, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors or its compensation committee. Optionee
shall execute such documents and take such other actions as are required by
the
Board of Directors or the Compensation Committee to enable it to effect or
obtain such withholding, listing, registration, qualification, consent or
approval. Neither the Company nor any officer or director, or member of the
Board of Directors or the Compensation Committee, shall have any liability
with
respect to the non-issuance or failure to sell shares as the result of any
suspensions of exercisability imposed pursuant to this Section.
6. Termination
of Option. Except
as
otherwise provided in this Agreement, to the extent not previously exercised,
upon the first to occur of any of the following events:
(a) The
dissolution or liquidation of the Company;
3
(b)
The
breach by Optionee of any material provision of this Agreement;
(c) The
expiration of two years from the vesting date of any Options.
8. Adjustment
Provisions.
The
number of shares of Common Stock subject to the Option and the Exercise Price
shall be adjusted in accordance with generally accepted accounting principles
in
the event of a stock dividend, stock split, stock distribution, reverse split
or
other combination of shares, recapitalization or otherwise, which affects the
Common Stock.
9. Transferability.
The
Option is not transferable by the Optionee except that, in the event of
Optionee’s death or incompetence, the Option may be exercised by Optionee’s
legal representative or by the persons to whom the Option is transferred by
will
or the laws of descent and distribution.
10. No
Rights As a Stockholder.
The
Optionee shall have no interest in and shall not be entitled to any voting
rights or any dividend or other rights or privileges of a stockholder of the
Company with respect to any shares of Common Stock issuable upon exercise of
this Option prior to the exercise of this Option and payment of the Exercise
Price.
11.
No
Rights to Continued Service.
Nothing
in this Option shall be constructed as an employment or consulting
agreement.
12. Legality.
Anything in this Option to the contrary notwithstanding, the Optionee agrees
that he or she will not exercise the Option, and that the Company will not
be
obligated to issue any shares of Common Stock pursuant to this Option, if the
exercise of the Option or the issuance of such shares shall constitute a
violation by the Optionee or by the Company of any provisions of any law or
of
any regulation of any governmental authority. Any determination by the Board
of
Directors or the Compensation Committee shall be final, binding and conclusive.
The Company shall not be obligated to take any affirmative action in order
to
cause the exercise of the Option or the issuance of shares pursuant thereto
to
comply with such law or regulation. The Optionee understands that, unless the
issuance of the Optioned Shares is registered pursuant to the Securities Act
of
1933, as amended (the “Securities Act”), the Optioned Shares, if and when
issued, will be restricted securities, as defined in Rule 144 of the Securities
and Exchange Commission pursuant to the Securities Act. The Company shall not
be
required to issue any Optioned Shares if the issuance thereof is not permitted
pursuant to the Securities Act. The Company shall not be required to register
the Optioned Shares pursuant to the Securities Act.
13. Action
by Company.
The
existence of the Option shall not effect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalization, reorganizations or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company, or
any
issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
4
14. Entire
Agreement.
This
Agreement contains the entire understanding of the parties with respect to
the
subject matter hereof and supersedes all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters,
which the parties acknowledge have been merged into this Agreement, including
but not limited, the offer letter by and between the Company and the Optionee
dated March 27, 2008.
15. Interpretation.
As a
condition of the granting of the Option, the Optionee and each person who
succeeds to the Optionee’s rights hereunder, agrees that any dispute or
disagreement which shall arise under or as a result of or pursuant to this
Option shall be determined by the Board of Directors or its Compensation
Committee in its sole discretion and that any interpretation by the Board of
Directors or its Compensation Committee of the terms of this Option shall be
final, binding and conclusive.
16. Mandatory
Arbitration. In
the
event of any dispute between the Company and Optionee regarding this Agreement,
the dispute and any issue as to the arbitrability of such dispute, shall be
settled to the exclusion of a court of law, by arbitration in New York, New
York, by a panel of three arbitrators (each party shall choose one arbitrator
and the third shall be chosen by the two arbitrators so selected) in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
then in effect. The decision of a majority of the arbitrators shall be final
and
binding upon the parties. All costs of the arbitration and the fees of the
arbitrators shall be allocated between the parties as determined by a majority
of the arbitrators, it being the intention of the parties that the prevailing
party in such a proceeding be made whole with respect to its
expenses.
17. Notices.
Any
notice to be given under the terms of this Agreement shall be addressed to
the
Company in care of its Secretary at its principal office, and any notice to
be
given to Optionee shall be addressed to such Optionee at the address maintained
by the Company for such person or at such other address as the Optionee may
specify in writing to the Company.
18. Binding
Effect.
This
Agreement shall be binding upon and inure tothe benefit of Optionee, his heirs
and successors, and of the Company, its successors and assigns.
19. Governing
Law.
This
Agreement shall be governed by the laws of the State of New York without giving
effect to principles of conflicts of laws.
20. Descriptive
Headings. Titles
to
Sections are solely for informational purposes.
5
IN
WITNESS WHEREOF, this Agreement is effective as of, and the date of grant shall
be April ___, 2008.
|
a
Nevada corporation
|
|
|
By:
|
|
|
Name:
Xxx
Xx
|
|
|
Title:
President
and Chief Executive Officer
|
|
|
OPTIONEE
|
|
|
|
|
|
Xxxxxx
Xxxxx
|
|
|
Print
Name
|
|
6
EXHIBIT
A
______________,
200__
Re: Stock
Option Exercise
To
Whom
It May Concern:
I
(the
“Optionee”) hereby exercise my right to purchase ________ shares of common stock
(the “Stock”) of China Green Agriculture, Inc., a Nevada corporation (the
“Company”) as set forth in my agreement (the “Agreement”) with the Company
granting me 10,000 shares of its common stock. I deliver herewith payment as
set
forth in the Agreement in the amount of the aggregate option exercise price.
Please deliver to me at my address as set forth above stock certificates
representing the subject shares registered in my name.
The
Optionee hereby represents and agrees as follows:
1. The
Optionee acknowledges receipt of a copy of the Agreement. The Optionee has
carefully reviewed the Agreement.
2.
The
Optionee is a resident of __________.
3.
The
Optionee represents and agrees that if the Optionee is an “affiliate” (as
defined in Rule 144 under the Securities Act of 1933) of the Company at the
time
the Optionee desires to sell any of the Stock, the Optionee will be subject
to
certain restrictions under, and will comply with all of the requirements of,
applicable federal and state securities laws.
The
foregoing representations and warranties are given on ________ at
_____________________.
|
OPTIONEE:
|
|
|
|
|
|
Print Name:
|
|
7
