AWARD AGREEMENT
For
Use in China
2009
EMPLOYEE STOCK OPTION AND STOCK AWARD PLAN
AWARD
AGREEMENT
China
Natural Gas, Inc., a Delaware corporation (the “Company”), has granted to the
Participant named on the Notice of Grant of Options (the “Notice of Grant”),
which is attached hereto, an option (the “Option”) to purchase that number of
Shares set forth on the Notice of Grant at the exercise price per Share set
forth on the Notice of Grant (the “Exercise Price”), subject to all of the
terms, definitions and provisions in this Agreement and the Company’s 2009
Employee Stock Option and Stock Award Plan (as applicable, the “Plan”), which is
incorporated herein by reference. In the event of a conflict between
the terms and conditions of the Plan and the terms and conditions of this
Agreement, the terms and conditions of the Plan shall prevail. The
terms defined in the Plan shall have the same defined meanings in this
Agreement.
1. Nature of
Option. This Option is not intended to qualify as an Incentive
Stock Option under Section 422 of the Code. This Option is intended to be a
Nonstatutory Stock Option.
2. Vesting
Schedule. Subject to the Performance Conditions provided in
Section 3, the Option awarded by this Agreement shall vest in accordance with
the vesting provisions set forth in the Notice of Grant. Shares
scheduled to vest on a certain date or upon the occurrence of a certain
condition shall not vest in Participant in accordance with any of the provisions
of this Agreement, unless Participant shall have been continuously an Employee
from the Grant Date until the date such vesting occurs.
3. Performance
Conditions. The Option is subject to the performance
requirements set forth in Appendix I, which must be
satisfied as a condition of the Option becoming vested and
exercisable.
4. Administrator
Discretion. The Plan Administrator, in its discretion, may
accelerate the vesting of the balance, or some lesser portion of the balance, of
the unvested Option at any time, subject to the terms of the Plan. If
so accelerated, such Option shall be considered as having vested as of the date
specified by the Plan Administrator.
5. Exercise of
Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Agreement.
6. Method of
Payment. The exercise price for Shares purchased under an
Option shall be paid in full to the Company by delivery of consideration equal
to the product of the Option exercise price and the number of Shares purchased.
Such consideration must be paid in cash.
7. Termination
Period. Subject to applicable laws, if the Participant
ceases to be an Employee, he or she may, but only within three (3) months after
the date Participant ceases to be an Employee, exercise this Option to the
extent that he or she was entitled to exercise it as of the date of such
cessation. To the extent he or she was not entitled to exercise this
Option as of the date of such cessation, or if he or she does not exercise the
Option within the time specified herein, the Option shall
terminate.
Notwithstanding the provisions above,
if Participant ceases to be an employee as a result of his or her Disability, he
or she may, but only within twelve (12) months from the
date of such cessation, exercise his or her Option to the extent he or she was
entitled to exercise it at the date of cessation. To the extent that
he or she was not entitled to exercise this Option at the date of such
cessation, or if he or she does not exercise such Option within the time
specified herein, the Option shall terminate.
In the event of the death of the
Participant during the term of this Option and while an employee, the Option
shall become fully exercisable, including as to Shares for which it would not
otherwise be exercisable, and may be exercised, at any time within twelve (12) months following
the date of death, by Participant’s estate or by a person who acquired the right
to exercise the Option by bequest or inheritance.
Notwithstanding
the foregoing, in no event may this Option be exercised after the expiration
date as provided above.
8. Tax
Obligations. The Company and its Subsidiaries shall
assess tax and social insurance contribution liability and requirements in
connection with the Participant’s participation in the Plan, including, without
limitation, tax liability and social insurance contribution liability associated
with the grant or exercise of the Option or sale of the underlying Shares (the
“Tax Liability”). These requirements may change from time to time as
laws or interpretations change. Regardless of the Company’s or any
Subsidiary’s actions in this regard, the Participant hereby
acknowledges and agrees that the Tax Liability shall be the Participant’s
ultimate responsibility and liability. The Participant agrees as a
condition of his or her participation in the Plan to make arrangements
satisfactory to the Company and its Subsidiaries to enable it to satisfy all
withholding, payment and/or collection requirements associated with the
satisfaction of the Tax Liability, including authorizing the Company or the
Subsidiary to: (i) withhold all applicable amounts from the Participant’s wages
or other cash compensation due to the Participant, in accordance with any
requirements under the laws, rules, and regulations of the country of which the
Participant is a resident, and/or (ii) act as the Participant’s agent to sell
sufficient Shares for the proceeds to settle such
requirements. Furthermore, the Participant agrees to pay the Company
or the Subsidiary any amount the Company or any Subsidiary may be required to
withhold, collect or pay as a result of the Participant’s participation in the
Plan or that cannot be satisfied by deduction from the Participant’s wages or
other cash compensation paid to the Participant by the Company or the Subsidiary
or sale of the Shares acquired under the Plan. The Participant acknowledges that
he or she may not participate in the Plan and the Company and the
Subsidiary shall have no obligation to deliver Shares until the Tax
Liability has been satisfied by the Participant.
9. Rights as
Stockholder. Neither Participant nor any person claiming under
or through Participant shall have any of the rights or privileges of a
stockholder of the Company in respect of any Shares deliverable hereunder unless
and until certificates representing such Shares shall have been issued, recorded
on the records of the Company or its transfer agents or registrars, and
delivered to Participant. After such issuance, recordation and
delivery, Participant shall have all the rights of a stockholder of the Company
with respect to voting such Shares and receipt of dividends and distributions on
such Shares.
10. Acknowledgments. In accepting the
Option, the Participant acknowledges that:
(a) Any
notice period mandated under applicable laws shall not be treated as continuous
service for the purpose of determining the vesting of the Option; and the
Participant’s right to receive Shares in settlement of the Option after
termination of service, if any, will be measured by the date of termination of
the Participant’s service and will not be extended by any notice period mandated
under applicable laws. Subject to the foregoing and the provisions of
the Plan, the Company, in its sole discretion, shall determine whether the
Participant’s service has terminated and the effective date of such
termination.
(b) The
Plan is established voluntarily by the Company. It is discretionary
in nature and it may be modified, amended, suspended or terminated by the
Company at any time, unless otherwise provided in the Plan and this
Agreement.
(c) All
decisions with respect to future Option grants, if any, will be at the sole
discretion of the Company.
(d) The
Participant’s participation in the Plan shall not create a right to continued
service with the Company (or any Subsidiary).
(e) The
Participant is voluntarily participating in the Plan.
(f) The
Option is an extraordinary item that does not constitute compensation of any
kind for service of any kind rendered to the Company (or any Subsidiary), and
which is outside the scope of the Participant’s employment contract, if
any.
(g) The
Option is not part of normal or expected compensation or salary for any purpose,
including, but not limited to, calculating any severance payments, resignation,
termination, redundancy, end-of-service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments. This applies to
any payment even in those jurisdictions requiring such payments upon termination
of employment.
(h) In
the event that the Participant is not an employee of the Company, the Option
grant will not be interpreted to form an employment contract or relationship
with the Company; and furthermore the Option grant will not be interpreted to
form an employment contract with any Subsidiary .
(i) The
future value of the underlying Shares is unknown and cannot be predicted with
certainty. If the Participant obtains Shares upon exercise of the
Option, the value of those Shares may increase or decrease.
11. Address for
Notices. Any notice to be given to the Company under the terms
of this Agreement shall be addressed to the Company at [insert] or at such other
address as the Company may hereafter designate in writing.
12. Grant is Not
Transferable. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of Participant only by Participant.
13. Binding
Agreement. Subject to the limitation on the transferability of
this grant contained herein, this Agreement shall be binding upon and inure to
the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.
14. Data Privacy Consent.
The Participant hereby
explicitly and unambiguously consents to the collection, use and transfer, in
electronic or other form, of the Participant’s personal data as described in
this document by and among the Company and each Subsidiary for the exclusive
purpose of implementing, administering and managing the
Participant’s participation in the Plan.
(a) The
Participant understands that the Company (or any Subsidiary) holds certain
personal information about the Participant, including, but not limited to, the
Participant’s name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares or directorships held in the Company, details of all Options or any
other entitlement to Shares awarded, canceled, exercised, vested, unvested or
outstanding in the Participant’s favor, for the purpose of implementing,
administering and managing the Plan (“Data”).
(b)
The Participant understands that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that
these recipients may be located in the Participant’s country or elsewhere, and
that the recipient’s country may have different data privacy laws and
protections than the Participant’s country. The Participant
understands that he or she may request a list with the names and addresses of
any potential recipients of the Data by contacting the Participant’s local human
resources representative. The Participant authorizes the recipients
to receive, possess, use, retain and transfer the Data, in electronic or other
form, for the purposes of implementing, administering and managing the
Participant’s participation in the Plan, including any requisite transfer of
such Data as may be required to a broker or other third party with whom the
Participant may elect to deposit any Shares acquired upon settlement of the
Option. The Participant understands that Data will be held only as
long as is necessary to implement, administer and manage the Participant’s
participation in the Plan. The Participant understands that he or she
may, at any time, view Data, request additional information about the storage
and processing of Data, require any necessary amendments to Data or refuse or
withdraw the consents herein, in any case without cost, by contacting in writing
the Participant’s local human resources representative. The
Participant understands, however, that refusing or withdrawing the Participant’s
consent may affect the Participant’s ability to participate in the
Plan. For more information on the consequences of the Participant’s
refusal to consent or withdrawal of consent, the Participant understands that he
or she may contact the Participant’s local human resources
representative.
15. Additional Conditions to
Issuance of Stock. If at any time the Company shall determine,
in its discretion, that the listing, registration or qualification of the Shares
upon any securities exchange or under any national, local or applicable law, or
the consent or approval of any governmental regulatory authority is necessary or
desirable as a condition to the issuance of Shares to Participant (or his or her
estate), such issuance shall not occur unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company. The
Company shall make all reasonable efforts to meet the requirements of any such
state or federal law or securities exchange and to obtain any such consent or
approval of any such governmental authority.
16. Special Administration in
China. The grant of the Option, the Participant ’s ability to
exercise the Option and sale of the Shares may be contingent upon the Company or
any Subsidiary obtaining approval from SAFE for the related foreign exchange
transaction and the establishment of a SAFE-approved bank account. The receipt
of funds by the Participant from the sale of the Shares and the
conversion of those funds to the local currency must be approved by SAFE.
In order to comply with the SAFE regulations, the proceeds from the sale
of the Shares must be repatriated into China through a SAFE-approved bank
account set up and monitored by the Company.
17. Currency Exchange
Risk. The
Participant agrees and acknowledges that the Participant shall bear any and all
risk associated with the exchange or fluctuation of currency associated with the
Option, including without limitation the exercise of the Option or sale of the
Shares (the “Currency Exchange Risk”). The Participant waives and
releases the Company and its Subsidiaries from any potential claims arising out
of the Currency Exchange Risk.
18. Exchange Control
Requirements. The Participant agrees and acknowledges that the
Participant shall comply with any and all exchange control requirements
applicable to the Option and the sale of Shares and any resulting funds
including, without limitation, reporting or repatriation
requirements.
19. Plan
Governs. This Agreement is subject to all terms and provisions
of the Plan. In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. Capitalized terms used and not
defined in this Agreement shall have the meaning set forth in the
Plan.
20. Administrator
Authority. The Plan Administrator shall have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules (including, but not limited
to, the determination of whether or not any Shares subject to the Option have
vested). All actions taken and all interpretations and determinations
made by the Plan Administrator
in good faith shall be final and binding upon Participant, the Company and all
other interested persons. The Plan Administrator shall not be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or this Agreement. The Plan
Administrator shall, in its absolute discretion, determine when such conditions
have been fulfilled.
21. Electronic
Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to Options awarded under the Plan or future
Options that may be awarded under the Plan by electronic means or request
Participant’s consent to participate in the Plan by electronic
means. Participant hereby consents to receive such documents by
electronic delivery and agrees to participate in the Plan through any on-line or
electronic system established and maintained by the Company or another third
party designated by the Company.
22. Captions. Captions
provided herein are for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.
23. Agreement
Severable. In the event that any provision in this Agreement
shall be held invalid or unenforceable, such provision shall be severable from,
and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining provisions of this Agreement.
24. Modifications to the
Agreement. This Agreement constitutes the entire understanding
of the parties on the subjects covered. Participant expressly
warrants that he or she is not accepting this Agreement in reliance on any
promises, representations, or inducements other than those contained
herein. Modifications to this Agreement or the Plan can be made only
in an express written contract executed by a duly authorized officer of the
Company.
25. Amendment, Suspension or
Termination of the Plan. By accepting this Award, Participant
expressly warrants that he or she has received an Option under the Plan, and has
received, read and understood a description of the Plan. Participant
understands that the Plan is discretionary in nature and may be amended,
suspended or terminated by the Company at any time.
26. Governing
Law. Subject to applicable laws, this Agreement and all
determinations made and actions taken pursuant hereto, to the extent not
otherwise governed by the federal laws of the United States, shall be governed
by the laws of the State of Delaware without giving effect to principles of
conflicts of laws.
APPENDIX
I
PERFORMANCE
CONDITIONS
None.
2009
EMPLOYEE STOCK OPTION AND STOCK AWARD PLAN
NOTICE
OF GRANT
Unless
otherwise defined herein, the terms defined in the China Natural Gas, Inc. 2009
Employee Stock Option and Stock Award Plan (the “Plan”) will have the same
defined meanings in this Notice of Grant (the “Notice of Grant”) and the China
Natural Gas, Inc. 2009 Employee Stock Option and Stock Award Award Agreement
(together, the “Agreement”).
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Participant:
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Address:
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Participant
has been granted an Option to purchase Shares of common stock, subject to the
terms and conditions of the Plan and this Agreement, as follows:
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Grant
Number
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Date
of Grant
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Vesting
Commencement Date
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Number
of Shares Granted
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Exercise
Price per Share
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$
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Total
Exercise Price
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$
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Type
of Option
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Nonstatutory
Option
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Term/Expiration
Date
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Vesting
Schedule:
Subject
to the terms of the Plan and the Participant's continued status as an employee
of the Company through each of the applicable vesting dates, this Option will be
exercisable, in whole or in part, in accordance with the vesting schedule set
forth below.
As of
each vesting date, the number of shares that become exercisable under this
Option shall be the product of (i) the number of shares set forth above
corresponding to the heading “Number of Shares Granted” and (ii) the percentage
corresponding to the relevant vesting date set forth in the table below under
the heading “Vesting Percentage”.
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Vesting
Date
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Vesting
Percentage
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April
1, 2010
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25 | % | ||
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April
1, 2011
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25 | % | ||
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April
1, 2012
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25 | % | ||
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April
1, 2013
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25 | % | ||
By
Participant’s signature and the signature of the Company’s representative below,
Participant and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this
Agreement. Participant has reviewed the Plan and this Agreement in
their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of the Plan and
Agreement. Participant hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any
questions relating to the Plan and Agreement. Participant further
agrees to notify the Company upon any change in the residence address indicated
below.
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Signature
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By
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Print
Name
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Title
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Address:
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