RESTRICTED SHARE AGREEMENT CHINA GERUI ADVANCED MATERIALS GROUP LIMITED
CHINA
GERUI ADVANCED MATERIALS GROUP LIMITED
2010
SHARE INCENTIVE PLAN
This Agreement is between
[_________] (the “Participant”) and China Gerui
Advanced Materials Group Limited (the “Corporation”). This
Agreement governs an award made to Participant pursuant to the Corporation’s
2010 Share Incentive Plan (the “Plan”). Capitalized
terms used but not defined herein shall have the meanings assigned to such terms
by the Plan, except as otherwise noted herein. The Corporation and
Participant agree as follows:
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X.
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XXXXX.
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The
Compensation Committee of the Board of Directors of the Corporation on
[___________, 20___] (the “Grant Date”) awarded the
Participant [____________] of the Corporation’s Ordinary Shares subject to the
vesting and other restrictions provided in this Agreement (the “Restricted
Shares”). No payment by the Participant is required for the
Restricted Shares.
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II.
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VESTING.
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The award
will vest on the following schedule.
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Period
of Continuous Service From
Grant Date
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Percentage
of
Restricted Shares Vested
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Each
installment shall vest and thereby all restrictions shall be removed on the
installment so long as the Participant has remained in Continuous Service (as
defined in the Plan) through the day immediately preceding the date on which the
installment is scheduled to vest. The remaining Restricted Shares
which have not already vested shall vest and all restrictions shall be removed
if the Participant’s termination of Continuous Service is because of death or
Disability (as defined in the Plan), or a Change in Control has occurred and the
Participant’s Continuous Service is terminated within six (6) months after the
date of such Change in Control by the Corporation or its successor without Cause
or by the Participant for Good Reason.. The number of shares that
shall vest on each vesting date shall be rounded down to the nearest whole
share; provided that, on the final date on which shares are scheduled to vest,
the number of shares shall be rounded up to the nearest whole
share. If the Participant has a termination of Continuous Service and
such termination event does not result in accelerated vesting of the Restricted
Shares, the portion of the Restricted Shares that has not vested shall be
forfeited and returned to the Corporation.
For
purposes of this Agreement, a termination for “Cause” or for “Good Reason” shall
have the meanings provided in the employment agreement then in effect between
the Participant and the Corporation or its successor, or if no such agreement is
then in effect, or an agreement is in effect but does not define such terms, the
meanings so provided in the Plan as then in effect, or to the extent the Plan as
then in effect does not define these terms, the last employment agreement in
effect defining such terms.
China
Gerui Advanced Materials Group Limited
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For
purposes of this Agreement, "Change in Control" means: (i) any person (as such
term is used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange
Act" and a “Person”)) who, on the
date of this Agreement, does not own five percent (5%) or more of the combined
voting power of the Corporation’s outstanding voting securities on a
fully-diluted basis (a "5%
Owner") and is not controlling, controlled by or under common control
with any such 5% Owner (and is other than (x) the Corporation, or (y) any
trustee or other fiduciary holding securities under an employee benefit plan of
the Corporation) shall become the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) (other than solely by reason of a repurchase of
voting securities by the Corporation) of more than 50% of the combined voting
power of the Corporation’s then total outstanding voting securities; (ii) there
is consummated a merger or consolidation of the Corporation with any other
corporation or other entity, other than (A) a merger or consolidation which
results in the voting securities of the Corporation outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 25% of the combined voting
power of the securities of the Corporation or such surviving entity or any
direct or indirect parent thereof outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Corporation (or similar transaction) in which no Person
(other than a Person who is a 5% Owner or is controlling, controlled by or under
common control with any such 5% Owner) is or becomes the beneficial owner,
directly or indirectly, of securities of the Corporation (not including in the
securities beneficially owned by such Person any securities acquired directly
from the Corporation or its affiliates) representing 50% or more of the combined
voting power of the Corporation's then outstanding securities; or (iii) the
shareholders of the Corporation approve a plan of complete liquidation or
dissolution of the Corporation.
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III.
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STOCK
CERTIFICATES AND
RESTRICTIONS.
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The full
number of the Restricted Shares has been deposited in an account for the
Participant at the Corporation’s transfer agent. The Corporation
reserves the right at its sole discretion to change the financial institution or
agent in which the shares are deposited or the certificates for shares are
held. These shares are nontransferable and are otherwise subject to
the Plan and this Agreement until the restrictions are removed or the shares are
returned to the Corporation and cancelled or maintained as treasury
shares. The Corporation may place such legends on any certificates
for Restricted Shares as it deems appropriate. The Participant has
the right to vote the full number of shares and to receive any declared
dividends or other distributions associated with the shares, except that a
dividend or distribution with respect to Restricted Shares which has not already
vested which is paid in shares or other property which constitutes a “derivative
security” or “equity security” (within the meaning of Section 16(a) of the
Securities Exchange Act of 1934) shall continue to be subject to the vesting and
other restrictions of this Agreement to the same extent as the Restricted Shares
to which such derivative security or equity security relates.
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IV.
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CORPORATE
EVENT.
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In the
event of the declaration of a stock dividend, the declaration of an
extraordinary dividend payable in a form other than stock, a spin-off, a stock
split, a recapitalization, a merger or a similar transaction affecting the
Corporation’s outstanding securities without receipt of consideration, any new,
substituted or additional securities or other property (including money paid
other than as an ordinary cash dividend) which are distributed to the
Participant with respect to Restricted Stock which has not already vested shall
immediately be subject to the vesting and other restrictions of this Agreement
to the same extent as the Restricted Shares to which such distributed property
relates.
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V.
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U.S.
TAXATION.
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If Participant is subject to taxation
in the United States, Participant understands that Section 83(a) of the Internal
Revenue Code of 1986, as amended (the “Code”), taxes as ordinary
compensation income the fair market value of the Restricted Shares on the date
as of which Participant’s right to retain the Restricted Shares
vests. Thus, the Restricted Shares will vest and be taxable in
increments on the first three annual anniversaries of the date of
grant. Accelerated vesting of the Restricted Shares will also
accelerate the date of taxation. Participant understands that
Participant may elect to be taxed on the fair market value of some or all of the
Restricted Shares at the time such shares are transferred to Participant, rather
than at those times when Participant’s right to retain the Restricted Shares
vests, by filing an election under Section 83(b) of the Code (a “Section
83(b) Election”) with the Internal Revenue
Service within 30 days from the date of the transfer of the Restricted Shares to
Participant. Participant understands that failure to file such an
election in a timely manner results in the inability to file such
election. Participant further understands that an additional copy of
such election form should be filed with Participant’s federal income tax return
for the calendar year to which such election applies. Participant acknowledges and agrees that the foregoing
is only a summary of the effects of United States federal income taxation with
respect to the Restricted Shares and does not purport to be
complete. Participant further acknowledges and agrees that the
Corporation has directed Participant to seek independent professional advice
regarding the tax consequences of receipt of the Restricted Shares under
federal, state and local law. Participant acknowledges and agrees that if the
Participant decides to file a Section 83(b) Election it is Participant’s sole
responsibility, and not the Corporation’s or its affiliate’s, to file a timely
election, even if Participant requests the
Corporation, its affiliate or its representatives to make the filing on
Participant’s behalf.
China
Gerui Advanced Materials Group Limited
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VI.
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TAX
WITHHOLDING.
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Participant
understands that upon occurrence of the taxable event with respect to the
Restricted Shares, Participant will be responsible for payment of taxes
due. No share certificates will be delivered unless acceptable
arrangements have been made by Participant with the Corporation (or its
affiliate by which Participant is employed) to pay withholding taxes that are
due as a result of vesting of the Restricted Shares. Unless the
Participant has made alternative arrangements acceptable to the Corporation, the
Participant shall pay applicable minimum required withholding taxes due by
having the Corporation withhold shares that would otherwise be released from
restrictions, in which case such withheld shares shall be transferred back to
the Corporation.
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VII.
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MISCELLANEOUS.
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A. No Employment
Agreement. This Agreement is not an employment
contract. This Agreement is, however, a contract creating enforceable
rights between the Corporation and the Participant regarding the Restricted
Stock.
B. Entire Agreement.
This Agreement represents the full and complete understanding between
Participant and the Corporation and this Agreement cannot be modified or changed
by any prior or contemporaneous or future oral agreement of the
parties. This Agreement can only be modified by the express written
agreement of the parties.
C. Governing
Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New York without regard to
its conflict of law principles.
D. Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns, including
any entity with which or into which the Corporation may be merged or which may
succeed to its assets or business or any entity to which the Corporation may
assign its rights and obligations under this Agreement.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement to be effective as of the Grant
Date.
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China
Gerui Advanced Materials Group Limited
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By:
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PARTICIPANT
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Participant
Signature
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China
Gerui Advanced Materials Group Limited
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