Exhibit 10.3
STOCK OPTION AGREEMENT
AGREEMENT made as of this 27th day of December, 2001 by and
between EUPA INTERNATIONAL CORPORATION, a corporation organized under the laws
of the State of Nevada (the "Company"), and TSANN PAO CO. (the "Optionee").
W I T N E S S E T H:
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WHEREAS, Optionee has provided and will provide services to
the Company; and
WHEREAS, the Company desires to compensate the Optionee for
his efforts.
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto hereby agree as follows:
1. GRANT OF OPTION. Upon the terms and subject to the
conditions set forth herein, the Company hereby grants to the Optionee, during
the period commencing on the date of this Agreement, the right and option (the
"Option") to purchase 1,000,000 shares of the Company's common stock (the
"Common Stock") at $.01 per share.
2. VESTING AND EXERCISE OF OPTION. The Option shall vest as of
the date hereof and shall expire on the fifth anniversay of the date hereof (the
"Termination Date"). Subject to the terms and conditions set forth herein, the
Optionee may exercise all or part of the Option any time prior to the
Termination Date.
3. METHOD OF EXERCISING OPTION. The Optionee may exercise the
Option by delivering to the Company (i) a written notice stating the number of
shares of Common Stock that the Optionee has elected to purchase at that time
from the Company and (ii) full payment of the purchase price of the shares of
Common Stock then to be purchased. Payment of the purchase price for the shares
of Common Stock upon any exercise of the Option may be made by certified or bank
cashier's check payable to the order of the Company, by wire transfer subject to
the Company's instructions ck.
4. ISSUANCE OF COMMON STOCK UPON EXERCISE OF OPTION. As
promptly as practicable after receipt of such written notification of the
Optionee's election to exercise the Option and full payment of such purchase
price, the Company shall issue or transfer to the Optionee the number of shares
of Common Stock with respect to which the Option has been so exercised and shall
deliver to the Optionee a certificate or certificates therefor, registered in
the Optionee's name.
5. SECURITIES LAW ACKNOWLEDGMENTS. (a) The Optionee
acknowledges that the shares of Common Stock issued upon exercise of the Option
may not be registered under applicable securities laws, that such shares of
Common Stock purchased upon the exercise of the Option must be held indefinitely
unless subsequently registered under the applicable securities laws or unless an
exemption therefrom is available and at the election of the Company, such
certificates may bear such legends regarding the limited transferability of the
shares of Common Stock under applicable securities laws as counsel for the
Company may require. The shares of Common Stock issued pursuant to the terms of
this Agreement shall represent fully paid and nonassessable shares of Common
Stock.
6. OPTIONEE. Whenever the word "Optionee" is used in any
provision of this Agreement under circumstances where the provision should
logically be construed to apply to the executors, administrators or person or
persons to whom the Option may be transferred by will or by the laws of descent
and distribution, the word "Optionee" shall be deemed to include such person or
persons.
7. TRANSFERABILITY. The Option may be transferred
by the Optionee only with the consent of the Company in accordance with
applicable securities laws.
8. RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as
a shareholder with respect to any share of Common Stock covered by the Option
until the Optionee shall have become the holder of record of such share of
Common Stock, and no adjustment shall be made for dividends or distributions or
other rights in respect of such share of Common Stock for which the record date
is prior to the date upon which the Optionee shall become the holder of record
thereof.
9. ADJUSTMENT FOR RECAPITALIZATION, MERGER, ETC. The aggregate
number of shares of Common Stock that may be purchased pursuant to the Option,
the number of shares of Common Stock covered by the Option and the price per
share shall be appropriately adjusted for any increase or decrease in the number
of outstanding shares of Common Stock resulting from a stock split or other
subdivision or consolidation of shares of Common Stock or for other capital
adjustments or payments of stock dividends or distributions or other increases
or decreases in the outstanding shares of Common Stock effected without receipt
of consideration by the Company.
Subject to any required action by the shareholders, if the
Company shall be the surviving corporation in any merger, combination,
consolidation or other business transaction, the Option shall cover the
securities to which a holder of the number of shares of Common Stock covered by
the unexercised portion of the Option would have been entitled pursuant to the
terms of the merger or consolidation.
Upon the dissolution or liquidation of the Company, the Option
shall terminate; provided, however, that the surviving corporation may grant an
option or options to purchase its shares on such terms and conditions, both as
to the number of shares and otherwise, which shall substantially preserve the
rights and benefits of the Option.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Board of Directors of the
Company in its sole discretion. Any such adjustments may provide for the
elimination of any fractional share which might otherwise become subject to the
Option.
10. COMPLIANCE WITH LAW. Notwithstanding any of the provisions
hereof, the Optionee hereby agrees that the Optionee will not exercise the
Option, and that the Company will not be obligated to issue or transfer any
shares of Common Stock to the Optionee hereunder, if the exercise hereof or the
issuance or transfer of such Common Stock shall constitute a violation by the
Optionee or the Company of any provisions of any law or regulation of any
governmental authority. Any determination in this regard by the Compensation
Committee or, in the absence of a Compensation Committee, by the Board of
Directors shall be final, binding and conclusive. The Company shall in no event
be obliged to register any securities pursuant to the Securities Act of 1933, as
amended, or to take any other affirmative action in order to cause the exercise
of the Option or the issuance or transfer of Common Stock pursuant thereto to
comply with any law or regulation of any governmental authority.
11. NOTICE. Every notice or other communication relating to
this Agreement shall be in writing and shall be mailed to or delivered to the
party for whom it is intended at such address as may from time to time be
designated in a notice mailed or delivered to the other party as herein
provided; provided that, unless and until some other address be so designated,
all notices or communications by the Optionee to the Company shall be mailed or
delivered to the Company at its executive offices, and all notices or
communications by the Company to the Optionee may be given to the Optionee
personally or may be mailed to the Optionee at the address shown below the
Optionee's signature to this Agreement.
12. ENTIRE AGREEMENT. This Agreement sets forth the
complete understanding of the Company and the Optionee with respect to the
subject matter hereof and supersedes all prior understandings,whether oral
or written.
13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada (without giving
effect to principles of conflicts of law).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
EUPA INTERNATIONAL CORPORATION
By: /S/ CHENG-XXX XXXXX
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Name:
Title:
TSANN PAO CO.
By: /S/ [ILLEGIBLE]
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Name:
Title:
Address:
