Exhibit 10.2
CHINA FINANCE ONLINE CO., LTD.
2004 STOCK INCENTIVE PLAN
FORM OF STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "OPTION AGREEMENT") dated
_____________________ by and between CHINA FINANCE ONLINE CO., LTD., a company
formed under the laws of Hong Kong Special Administration Region, P.R. China
(the "CORPORATION"), and ___________________________ (the "GRANTEE") evidences
the nonqualified stock option (the "OPTION") granted by the Corporation to the
Grantee as to the number of the Corporation's Ordinary Shares first set forth
below.
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NUMBER OF ORDINARY SHARES:(FN 1) _______ AWARD DATE: ________________
EXERCISE PRICE PER SHARE:(FN 1) $________ EXPIRATION DATE:(FN 1),(FN 2) ____
VESTING(FN 1),(FN 2) The Option shall become vested as to [ ]% of the total
number of Ordinary Shares subject to the Option on each of the first, second,
third and fourth anniversaries of the Award Date.
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The Option is granted under the CHINA FINANCE ONLINE CO., LTD. 2004 Stock
Incentive Plan (the "PLAN") and subject to the Terms and Conditions of Stock
Option (the "TERMS") attached to this Option Agreement (incorporated herein by
this reference) and to the Plan. The Option has been granted to the Grantee in
addition to, and not in lieu of, any other form of compensation otherwise
payable or to be paid to the Grantee. Capitalized terms are defined in the Plan
if not defined herein. The parties agree to the terms of the Option set forth
herein. The Grantee acknowledges receipt of a copy of the Terms, the Plan and
the Prospectus for the Plan.
"GRANTEE" CHINA FINANCE ONLINE CO., LTD.
___________________________________ By:________________________________
Signature
Print Name:________________________
___________________________________ Title:_____________________________
Print Name
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1 Subject to adjustment under Section 7.1 of the Plan.
2 Subject to early termination under Section 4 of the Terms and Section 7.4
of the Plan.
TERMS AND CONDITIONS OF STOCK OPTION
1. VESTING; LIMITS ON EXERCISE.
The Option shall vest and become exercisable in percentage installments of
the aggregate number of shares subject to the Option as set forth on the cover
page of this Option Agreement. The Option may be exercised only to the extent
the Option is vested and exercisable.
o Cumulative Exercisability. To the extent that the Option is vested and
exercisable, the Grantee has the right to exercise the Option (to the
extent not previously exercised), and such right shall continue, until
the expiration or earlier termination of the Option.
o No Fractional Shares. Fractional share interests shall be disregarded,
but may be cumulated.
o Minimum Exercise. No fewer than [ ](FN 1) Ordinary Shares may be
purchased at any one time, unless the number purchased is the total
number at the time exercisable under the Option.
o Nonqualified Stock Option. The Option is a nonqualified stock option
and is not, and shall not be, an incentive stock option within the
meaning of Section 422 of the Code.
2. CONTINUANCE OF EMPLOYMENT/SERVICE REQUIRED; NO EMPLOYMENT/SERVICE
COMMITMENT.
The vesting schedule requires continued employment or service through each
applicable vesting date as a condition to the vesting of the applicable
installment of the Option and the rights and benefits under this Option
Agreement. Employment or service for only a portion of the vesting period, even
if a substantial portion, will not entitle the Grantee to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment or services as provided in Section 4 below
or under the Plan.
Nothing contained in this Option Agreement or the Plan constitutes a
continued employment or service commitment by the Corporation or any of its
Subsidiaries, affects the Grantee's status, if he or she is an employee, as an
employee at will who is subject to termination without cause, confers upon the
Grantee any right to remain employed by or in service to the Corporation or any
Subsidiary, interferes in any way with the right of the Corporation or any
Subsidiary at any time to terminate such employment or service, or affects the
right of the Corporation or any Subsidiary to increase or decrease the Grantee's
other compensation.
3. METHOD OF EXERCISE OF OPTION.
The Option shall be exercisable by the delivery to the Secretary of the
Corporation (or such other person as the Committee may require pursuant to such
administrative exercise procedures as the Committee may implement from time to
time) of:
o a written notice, in the form approved by the Company, stating the
number of Ordinary Shares to be purchased pursuant to the Option or by
the completion of such other administrative exercise procedures as the
Committee may require from time to time,
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o payment in full for the Exercise Price of the shares to be purchased
in cash, check or by electronic funds transfer to the Corporation, or
(subject to compliance with all applicable laws, rules, regulations
and listing requirements and further subject to such rules as the
Administrator may adopt as to any non-cash payment) by notice and
third party payment in such manner as may be authorized by the
Administrator or in Ordinary Shares already owned by the Grantee,
valued at their Fair Market Value on the exercise date, provided,
however, that any shares initially acquired upon exercise of a stock
option or otherwise from the Corporation must have been owned by the
Grantee for at least six (6) months before the date of such exercise;
o any written statements or agreements required pursuant to Section 8.1
of the Plan; and
o satisfaction of the tax withholding provisions of Section 8.5 of the
Plan.
4. EARLY TERMINATION OF OPTION.
4.1 POSSIBLE TERMINATION OF OPTION UPON CHANGE IN CONTROL. The Option is
subject to termination in connection with a Change in Control Event or certain
similar reorganization events as provided in Section 7.4 of the Plan.
4.2 TERMINATION OF OPTION UPON A TERMINATION OF GRANTEE'S EMPLOYMENT OR
SERVICES. Subject to earlier termination on the Expiration Date of the Option or
pursuant to Section 4.1 above, if the Grantee ceases to be employed by or ceases
to provide services to the Corporation or a Subsidiary, the following rules
shall apply (the last day that the Grantee is employed by or provides services
to the Corporation or a Subsidiary is referred to as the Grantee's "SEVERANCE
DATE"):
o other than as expressly provided below in this Section 4.2, the
Grantee will have until the date that is [ ] days after his or her
Severance Date to exercise the Option (or portion thereof) to the
extent that it was vested on the Severance Date, (b) the Option, to
the extent not vested on the Severance Date, shall terminate on the
Severance Date, and (c) the Option, to the extent exercisable for the
[ ]-day period following the Severance Date and not exercised during
such period, shall terminate at the close of business on the last day
of the [ ]-day period;
o if the termination of the Grantee's employment or service is the
result of the Grantee's voluntary Retirement (as defined below and
other than a termination by the Corporation or a Subsidiary for cause
as provided below), then the Grantee will have until the date that is
[ ] years after his or her Severance Date to exercise the Option (or
portion thereof) to the extent that it was vested on the Severance
Date, (b) the Option, to the extent not vested on the Severance Date,
shall terminate on the Severance Date, and (c) the Option, to the
extent exercisable for the [ ]-year period following the Severance
Date and not exercised during such period, shall terminate at the
close of business on the last day of the [ ]-year period;
o if the termination of the Grantee's employment or service is the
result of the Grantee's death or Disability (as defined below), then
the Grantee (or his beneficiary or personal representative, as the
case may be) will have until the date that is [ ] years after the
Grantee's Severance Date to exercise the Option, (b) the Option, to
the extent not vested on the Severance Date, shall terminate on the
Severance Date, and (c) the Option, to the extent exercisable for the
[ ]-year period following the
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Severance Date and not exercised during such period, shall terminate
at the close of business on the last day of the [ ]-year period;
o if the termination of the Grantee's employment or service is the
result of a termination by the Corporation or a Subsidiary for Cause
(as defined below), the Option (whether vested or not) shall terminate
on the Severance Date.
For purposes of the Option, "Disability" means a permanent disability
(within the meaning of Section 22(e)(3) of the Code or as otherwise determined
by the Administrator). For purposes of the Option, "Retirement" means a
termination of employment or service by the Grantee that occurs upon or after
the Grantee's attainment of age 65 and in accordance with the retirement
policies of the Corporation (or the Subsidiary that employs the Grantee) then in
effect. For purposes of the Option, "Cause" means that the Grantee: (a) has been
repeatedly negligent in the discharge of his or her duties to the Corporation or
a Subsidiary or has refused to perform stated or assigned duties (other than by
reason of a disability or analogous condition); (b) has been dishonest or
committed or engaged in an act of theft, embezzlement or fraud, a breach of
confidentiality, an unauthorized disclosure or use of inside information,
customer lists, trade secrets or other confidential information; (c) has
breached a fiduciary duty, or violated any other duty, law, rule, regulation or
policy of the company or an affiliate; (d) has been convicted of, or plead
guilty or nolo contendere to, a felony or misdemeanor (other than minor traffic
violations or similar offenses); (e) has materially breached any of the
provisions of any agreement with the Corporation or a Subsidiary; (f) has
engaged in unfair competition with, or otherwise acted intentionally in a manner
injurious to the reputation, business or assets of, the Corporation or a
Subsidiary; or has improperly induced a vendor or customer to break or terminate
any contract with the Corporation or a Subsidiary or induced a principal for
whom the Corporation or a Subsidiary acts as agent to terminate such agency
relationship.
In all events the Option is subject to earlier termination on the
Expiration Date of the Option or as contemplated by Section 4.1. The
Administrator shall be the sole judge of whether the Grantee continues to render
employment or services for purposes of this Option Agreement.
5. NON-TRANSFERABILITY.
The Option and any other rights of the Grantee under this Option Agreement
or the Plan are nontransferable and exercisable only by the Grantee, except as
set forth in Section 5.7 of the Plan. Any Ordinary Shares issued on exercise of
the Option are subject to substantial restrictions on transfer, and are subject
to other rights in favor of the Corporation as set forth herein.
6. SECURITIES LAW COMPLIANCE.
The Grantee acknowledges that the Option and Ordinary Shares are not being
registered under the Securities Act, based, in part, in reliance upon an
exemption from registration under Securities and Exchange Commission Rule 701
promulgated under the Securities Act of 1933, and a comparable exemption from
qualification under applicable state securities laws, as each may be amended
from time to time. The Grantee, by executing this Option Agreement, hereby makes
the following representations to the Corporation and acknowledges that the
Corporation's reliance on federal and state securities law exemptions from
registration and qualification is predicated, in substantial part, upon the
accuracy of these representations:
o The Grantee is acquiring the Option and, if and when he/she exercises
the Option, will acquire Ordinary Shares solely for the Grantee's own
account, for investment purposes only, and not with a view to or an
intent to sell, or to offer for resale in connection with
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any unregistered distribution, all or any portion of the shares within
the meaning of the Securities Act, or other applicable state
securities laws.
o The Grantee has had an opportunity to ask questions and receive
answers from the Corporation regarding the terms and conditions of the
Option and the restrictions imposed on any Ordinary Shares purchased
upon exercise of the Option. The Grantee has been furnished with,
and/or has access to, such information as he or she considers
necessary or appropriate for deciding whether to exercise the Option
and purchase Ordinary Shares. However, in evaluating the merits and
risks of an investment in the Ordinary Shares, the Grantee has and
will rely upon the advice of his/her own legal counsel, tax advisors,
and/or investment advisors.
o The Grantee is aware that the Option may be of no practical value,
that any value it may have depends on its vesting and exercisability
as well as an increase in the Fair Market Value of the underlying
Ordinary Shares to an amount in excess of the Exercise Price, and that
any investment in common shares of a closely held corporation such as
the Corporation is non-marketable, non-transferable and could require
capital to be invested for an indefinite period of time, possibly
without return, and at substantial risk of loss.
o The Grantee understands that any Ordinary Shares acquired on exercise
of the Option will be characterized as "restricted securities" under
the federal securities laws, and that, under such laws and applicable
regulations, such securities may be resold without registration under
the Securities Act only in certain limited circumstances, including in
accordance with the conditions of Rule 144 promulgated under the
Securities Act, as presently in effect, with which the Grantee is
familiar.
o The Grantee has read and understands the restrictions and limitations
set forth in the Plan, this Option Agreement (including these Terms),
which are imposed on the Option and any Ordinary Shares which may be
acquired upon exercise of the Option.
o At no time was an oral representation made to the Grantee relating to
the Option or the purchase of Ordinary Shares and the Grantee was not
presented with or solicited by any promotional meeting or material
relating to the Option or the Ordinary Shares.
7. LOCK-UP AGREEMENT.
Neither the Grantee (nor any permitted transferee) may, directly or
indirectly, offer, sell or transfer or dispose of any of the Ordinary Shares
acquired upon exercise of the Option (the "SHARES") or any interest therein (or
agree to do any thereof) (collectively, a "TRANSFER") during the period
commencing as of [ ] days prior to and ending one year, or such lesser period of
time as the relevant underwriters may permit, after the effective date of a
registration statement covering any public offering of the Corporation's
securities of which the Grantee has notice. (The term "Grantee" includes, where
the context so requires, any permitted direct or indirect transferee of the
Grantee.) The Grantee shall agree and consent to the entry of stop transfer
instructions with the Corporation's transfer agent against the Transfer of the
Corporation's securities beneficially owned by the Grantee and shall conform the
limitations hereunder by agreement with and for the benefit of the relevant
underwriters by a lock-up agreement or other agreement in customary form.
Notwithstanding anything else herein to the contrary, this Section 7 shall not
be construed so as to prohibit the Grantee from participating in a registration
or a public offering of the Ordinary Shares with respect to any shares which he
or she may hold at that time, provided, however, that such participation shall
be at the sole discretion of the Board.
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8. NOTICES.
Any notice to be given under the terms of this Option Agreement shall be in
writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Grantee at the address last reflected on
the Corporation's payroll records, or at such other address as either party may
hereafter designate in writing to the other. Any such notice shall be given only
when received, but if the Grantee is no longer employed by the Corporation or a
Subsidiary, shall be deemed to have been duly given five business days after the
date mailed in accordance with the foregoing provisions of this Section 6.
9. PLAN.
The Option and all rights of the Grantee under this Option Agreement are
subject to, and the Grantee agrees to be bound by, all of the terms and
conditions of the Plan, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Option
Agreement and of the Plan, the terms and conditions of the Plan shall govern.
The Grantee agrees to be bound by the terms of the Plan and this Option
Agreement (including these Terms). The Grantee acknowledges having read and
understanding the Plan and this Option Agreement. Unless otherwise expressly
provided in other sections of this Option Agreement, provisions of the Plan that
confer discretionary authority on the Board or the Administrator do not and
shall not be deemed to create any rights in the Grantee unless such rights are
expressly set forth herein or are otherwise in the sole discretion of the Board
or the Administrator so conferred by appropriate action of the Board or the
Administrator under the Plan after the date hereof.
10. ENTIRE AGREEMENT.
This Option Agreement (including these Terms) and the Plan together
constitute the entire agreement and supersede all prior understandings and
agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Option Agreement may be amended pursuant to
Section 8.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Grantee hereunder, but no such waiver shall operate as or be
construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
11. GOVERNING LAW.
This Option Agreement shall be governed by and construed and enforced in
accordance with the laws of Hong Kong without regard to conflict of law
principles thereunder.
12. EFFECT OF THIS AGREEMENT.
Subject to the Corporation's right to terminate the Option pursuant to
Section 7.4 of the Plan, this Option Agreement shall be assumed by, be binding
upon and inure to the benefit of any successor or successors to the Corporation.
The Option does not place any limit on the corporate authority of the
Corporation as set forth in Section 8.12 of the Plan.
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13. COUNTERPARTS.
This Option Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
14. SECTION HEADINGS.
The section headings of this Option Agreement are for convenience of
reference only and shall not be deemed to alter or affect any provision hereof.
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