WUHAN GENERAL GROUP (CHINA), INC. Nonqualified Stock Option Agreement for Directors
Exhibit
10.2
2007
STOCK OPTION PLAN
Nonqualified
Stock Option Agreement for Directors
No.
of
Shares subject to
Nonqualified
Stock Option: ___
THIS
NONQUALIFIED STOCK OPTION AGREEMENT FOR DIRECTORS (this “Agreement”) dated as of
the ____ day of ___________, 20__, by and between Wuhan General Group (China),
Inc., a Nevada corporation (the “Company”), and ___________________________ (the
“Participant”), is made pursuant and subject to the provisions of the Company’s
2007 Stock Option Plan (the “Plan”), a copy of which is attached hereto. All
terms used herein that are defined in the Plan have the same meaning given
them
in the Plan.
1. Grant
of Option.
Pursuant to the Plan, the Company, on ____________, 20__ (the “Date of Grant”),
granted to the Participant, subject to the terms and conditions of the Plan
and
subject further to the terms and conditions set forth herein, the right and
option to purchase from the Company all or any part of an aggregate of
__________ shares of the common stock of the Company, par value $.0001 per
share
(“Common Stock”), at the exercise price of $___________ per share. Such price
per share is not less than the Fair Market Value of a share of Common Stock
on
the Date of Grant. This Option is exercisable as hereinafter
provided.
2. Terms
and Conditions.
This
Option is subject to the following terms and conditions:
(a) Expiration
Date.
This
Option shall expire at 11:59 p.m. on ___________ __, 20__ (the “Expiration
Date”) or such earlier time as set forth in paragraphs 3, 4 or 5 of this
Agreement. In no event shall the Expiration Date be later than 10 years from
the
Date of Grant.
(b) Exercise
of Option.
Except
as provided in the Plan and in paragraphs 3, 4 or 5 of this Agreement, this
Option shall become exercisable at the time or times set forth on Exhibit
A,
attached hereto. Once this Option has become exercisable, it shall continue
to
be exercisable until the earlier of the termination of the Participant’s rights
hereunder pursuant to paragraphs 3, 4 or 5 of this Agreement or until the
Expiration Date. A partial exercise of this Option shall not affect the
Participant’s right to exercise the Option with respect to the remaining shares
of Common Stock, subject to the conditions of the Plan and this
Agreement.
(c) Method
of Exercise and Payment for Shares.
This
Option shall be exercised by delivering written notice of exercise to the
attention of the Company’s Secretary at the Company’s address specified in
paragraph 10 below. The exercise date shall be the date of delivery of the
notice of exercise. Such notice must be accompanied by payment of the Option
price in full. The Participant may pay part or all of the Option price and
any
applicable withholdings (i) in cash, (ii) by certified or bank cashier’s check,
(iii) by surrendering shares of Common Stock to the Company that the Participant
already owns, (iv) by a cashless exercise through a broker, (v) by any other
method the Committee authorizes or (vi) by any combination of the aforementioned
methods of payment. If shares of Common Stock are used to pay part or all of
the
Option price, the sum of the cash and cash equivalent and the Fair Market Value
(determined as of the day preceding the date of exercise) of the shares of
Common Stock surrendered must not be less than the Option price of the shares
of
Common Stock for which the Option is being exercised.
(d) Transferability.
Except
as provided herein, this Option is nontransferable. During the Participant's
lifetime, only the Participant may exercise this Option. This Option may be
transferred by will or the laws of descent and distribution and, notwithstanding
the foregoing, during the Participant's lifetime, may be transferred by the
Participant to the Participant's children, grandchildren, spouse, one or more
trusts for the benefit of such family members or a partnership in which such
family members are the only partners, on such terms and conditions as the
Committee may provide. Any such transfer will be permitted only if (i) the
Participant does not receive any consideration for the transfer and (ii) the
Committee expressly approves the transfer. Any transferee to whom this Option
is
transferred shall be bound by the same terms and conditions that govern this
Option; provided, however, that the transferee may not transfer this Option
except by will or the laws of descent and distribution. No right or interest
of
the Participant in this Option shall be liable for, or subject to, any lien,
obligation or liability of the Participant.
3. Exercise
in the Event of Death.
This
Option shall be exercisable for all or part of the number of shares of Common
Stock that the Participant is entitled to purchase pursuant to paragraph 2(b)
as
of the date of the Participant’s death, reduced by the number of shares for
which the Participant previously exercised the Option, in the event the
Participant dies while serving as a member of the Board of Directors of the
Company or any Affiliate, as applicable, and prior to the Expiration Date and
the termination of the Participant’s rights under paragraphs 4 or 5 of this
Agreement. In that event, this Option may be exercised by the Participant’s
estate, or the person or persons to whom his rights under this Option shall
pass
by will or the laws of descent and distribution, for the remainder of the period
preceding the Expiration Date or within one year of the date the Participant
dies, whichever period is shorter.
4. Exercise
in the Event of Disability.
This
Option shall be exercisable for all or part of the number of shares of Common
Stock that the Participant is entitled to purchase pursuant to paragraph 2(b)
as
of the date the Participant becomes “Disabled,” as defined below, reduced by the
number of shares for which the Participant previously exercised the Option,
if
the Participant becomes Disabled while serving as a member of the Board of
Directors of the Company or any Affiliate, as applicable, and prior to the
Expiration Date and the termination of the Participant’s rights under paragraphs
3 or 5 of this Agreement. In that event, the Participant may exercise this
Option for the remainder of the period preceding the Expiration Date or within
one year of the date he ceases to serve as a member of the Board of Directors
of
the Company or any Affiliate, as applicable, on account of being Disabled,
whichever period is shorter. “Disabled” means unable
to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result
in
death or which has lasted or can be expected to last for a continuous period
of
not less than 12 months. The
Committee, in its sole discretion, shall determine whether the Participant
is
Disabled for purposes of this Agreement.
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5. Exercise
After Termination of Service.
This
Option shall be exercisable for all or part of the number of shares of Common
Stock that the Participant is entitled to purchase pursuant to paragraph 2(b)
as
of the date the Participant ceases to serve as a member of the Board of
Directors of the Company or any Affiliate, as applicable, reduced by the number
of shares for which the Participant previously exercised the Option, if the
Participant ceases to serve as a member of the Board of Directors of the Company
or any Affiliate, as applicable, other than on account of death or becoming
Disabled prior to the Expiration Date and the termination of the Participant’s
rights under paragraphs 3 or 4 of this Agreement. In that event, the Participant
may exercise this Option for the remainder of the period preceding the
Expiration Date or until the date that is three months after the date he ceases
to serve as a member of the Board of Directors of the Company or any Affiliate,
as applicable, whichever period is shorter.
6. Agreement
to Terms of the Plan and Agreement.
The
Participant has received a copy of the Plan, has read and understands the terms
of the Plan and this Agreement, and agrees to be bound by their terms and
conditions.
7. Minimum
Exercise.
This
Option may not be exercised for less than 1,000 shares of Common Stock unless
it
is exercised for the full number of shares of Common Stock that remain subject
to the Option.
8. Fractional
Shares.
Fractional shares shall not be issuable hereunder, and
when
any provision hereof may entitle the Participant to a fractional share, such
fractional share shall be disregarded.
9. Change
in Capital Structure.
The
terms of this Option shall be adjusted in accordance with the terms and
conditions of the Plan as the Committee determines is equitably required in
the
event the Company effects one or more stock dividends, stock splits,
subdivisions or consolidations of shares or other similar changes in
capitalization.
10. Notice.
Any
notice or other communication given pursuant to this Agreement, or in any way
with respect to this Option, shall be in writing and shall be personally
delivered or mailed by United States registered or certified mail, postage
prepaid, return receipt requested, to the following addresses:
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If
to the Company:
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Canglongdao
Science Park of Wuhan
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East
Lake Hi-Tech Development Zone
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Wuhan,
Hubei 430200
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People’s
Republic of China
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If
to the Participant:
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11. No
Right to Continued Service.
This
Option does not confer upon the Participant any right with respect to continued
service on the Board of Directors of the Company or any Affiliate, nor shall
it
interfere in any way with the right of the Company or any Affiliate, or any
of
their directors or stockholders, to terminate the Participant’s service on the
Board of Directors at any time as otherwise permitted by applicable
law.
12. No
Stockholder Rights.
The
Participant shall not have any rights as a stockholder with respect to shares
of
Common Stock subject to the Option until the date of exercise of the Option
and
the issuance of the shares that are being acquired.
13. Binding
Effect.
Subject
to the limitations stated above and in the Plan, this Agreement shall be binding
upon and inure to the benefit of the legatees, distributees, transferees and
personal representatives of the Participant and the successors of the
Company.
14. Conflicts.
In the
event of any conflict between the provisions of the Plan and the provisions
of
this Agreement, the provisions of the Plan shall govern. All references herein
to the Plan shall mean the Plan as in effect on the date hereof.
15. Counterparts.
This
Agreement may be executed in a number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one in the same
instrument.
16. Miscellaneous.
The
parties agree to execute such further instruments and take such further actions
as may be necessary to carry out the intent of the Plan and this Agreement.
This
Agreement and the Plan shall constitute the entire agreement of the parties
with
respect to the subject matter hereof.
17. Governing
Law.
This
Agreement shall be governed by the laws of the State of Nevada, except to the
extent federal law or the laws of the P.R.C. apply.
18. Tax
Consequences and Section 409A.
The
Participant acknowledges that there may be tax consequences upon the acquisition
and disposition of shares of Common Stock acquired upon exercise of this Option,
and that the Participant should consult a tax adviser prior to such acquisition
or disposition. The Option is intended to be exempt from the requirements of
Section 409A of the Code. Notwithstanding the preceding, the Company and its
Affiliates shall not be liable to the Participant or any other person if the
Internal Revenue Service or any court or other authority having jurisdiction
over such matter determines for any reason that this Agreement is subject to
taxes, penalties or interest as a result of failing to comply with Section
409A
of the Code.
19. Withholding
Obligations.
The
Participant shall be responsible for satisfying all applicable income and
employment tax withholding obligations, if any, with respect to the exercise
of
the Option (i) in cash, (ii) by certified or bank cashier’s check, (iii) by
surrendering shares of Common Stock to the Company that the Participant already
owns, (iv) by a cashless exercise through a broker, (v) by any other method
the
Committee authorizes or (vi) by any combination of the aforementioned methods
of
payment.
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IN
WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly
authorized officer, and the Participant has affixed his signature
hereto.
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Name:
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Title:
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PARTICIPANT:
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Participant
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EXHIBIT
A
Vesting
Provisions
Except
as
provided in paragraphs
3, 4 or
5 of the Agreement, this Option shall become exercisable as set forth below.
1. Regular
Vesting
Service-Based
Vesting
[
] The
Option shall become exercisable with respect to [_______]
percent
([___]%)
of the
shares of Common Stock subject to the Option on the [_______]
annual
anniversaries of the Date of Grant and then with respect to the remaining
[_______]
([____]%)
percent of the shares of Common Stock subject to the Option on the [_______]
annual
anniversary of the Date of Grant, provided the Participant is still serving
as a
member of the Board of Directors of the Company or any Affiliate, as applicable,
at each such time.
Performance
and Service-Based Vesting
[
] The
Option
shall become exercisable with respect to the percentage of shares of Common
Stock set forth below with respect to each applicable vesting date, provided
that, at each such time, (a) the Participant is still serving as a member of
the
Board of Directors of the Company or any Affiliate, as applicable, and (b)
the
performance measures set forth below have been met. Notwithstanding the
foregoing, if the applicable performance measures are not met at a specified
vesting date, but the cumulative performance measures are met at a subsequent
vesting date, then the Option shall become exercisable with respect to that
percentage of shares of Common Stock specified for the applicable vesting date
plus the percentage of shares of Common Stock for prior vesting dates that
did
not become exercisble solely because of a failure to meet the performance
measures for the prior vesting dates.
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Vesting Date
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Performance Target
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Percentage of Shares
for which Option may
be Exercised
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Cumulative
Performance
Target
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2. Accelerated
Vesting
Vesting
upon Death
[
] Notwithstanding the foregoing, the Option shall become exercisable with
respect to one-hundred percent (100%) of the shares of Common Stock subject
to
the Option if the Participant dies while serving as a member of the Board of
Directors of the Company or any Affiliate, as applicable,
Vesting
upon Disability
[
] Notwithstanding the foregoing, the Option shall become exercisable with
respect to one-hundred percent (100%) of the shares of Common Stock subject
to
the Option if the Participant becomes Disabled while serving as a member of
the
Board of Directors of the Company or any Affiliate, as applicable.
Vesting
upon Retirement
[
] Notwithstanding the foregoing, the Option shall become exercisable with
respect to one-hundred percent (100%) of the shares of Common Stock subject
to
the Option if the Participant retires from serving as a member of the Board
of
Directors of the Company and its Affiliates after reaching age 65.
Vesting
upon a Change in Control
[
] Notwithstanding the foregoing, the Option shall become exercisable with
respect to one-hundred percent (100%) of the shares of Common Stock subject
to
the Option upon a Change in Control, provided the Participant is still serving
as a member of the Board of Directors of the Company or any Affiliate, as
applicable, at such time.
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