|
CHINA
ENERGY CORPORATION
2008 STOCK OPTION
PLAN |
The purpose of this 2008 Stock
Option Plan (the " Plan
") is to assist China Energy
Corporation (the "
Company ") and any parent or subsidiary (together with the
Company, the " Companies ")
in the continued employment or service
of officers, employees, consultants and directors, by
offering them a greater stake in the
Companies' success and a closer identity with the
Companies, and to aid in attracting
individuals whose employment or services would be helpful
to the Companies and would contribute
to their success.
This Plan shall at all times be subject
to all legal requirements relating to the administration of
stock option plans, if any, under
applicable corporate laws, applicable United States federal
and state securities laws, the
Code (as hereinafter defined), the rules of any applicable stock
exchange or stock quotation
system, and the rules of any foreign jurisdiction applicable to
Options granted to residents
therein (collectively, the “ Applicable Laws ”).
| (a)
|
"
Board " means the board of directors of the
Company. |
| |
| (b)
|
"
Code " means the Internal Revenue Code of 1986 , as amended. |
| |
| (c)
|
"
Committee
" means the committee described in
Section 5. |
| |
| (d)
|
"
Companies
" means the Company and any parent or
subsidiary, as defined in Sections 424(e) and 424(f) of the
Code. |
| |
| (e)
|
"
Date of Grant
" means the date on which an Option is
granted, or on which the exercise price of an outstanding Option is
modified. |
| |
| (f)
|
"
Exercise Price
" means the price per Share that an
Optionee must pay in order to exercise an Option. |
| |
| (g)
|
"
Incentive Stock
Option " shall mean an
Option granted under the Plan, designated at the time of such grant
as an incentive stock option (and qualifying as such under Section
422 of the Code) and containing the terms specified herein for
incentive stock options. |
| |
| (h)
|
"
Non-Qualified
Option " shall mean an
Option granted under the Plan, which is designated at the time of
such grant as a non-qualified option, which contains the terms
specified herein for non-qualified options, and which fails to
qualify as an Incentive Stock Option within the meaning of Section
422 of the Code. |
| |
| (i)
|
"
Option " means any stock option granted under the Plan
and described either in Section 3(a) or 3(b). |
| |
| (j)
|
"
Option Agreement
" shall have the meaning set forth in
Section 7. |
| |
| (k)
|
"
Optionee
" means a person to whom an Option has
been granted under the Plan, which Option has not been exercised
and has not expired or terminated. |
| |
| (l)
|
“OTC
BB” means the
Over-the-Counter Bulletin Board in the United States; |
| |
| (m)
|
"
Shares " means common shares of the Company. |
| |
| (n)
|
"
Ten Percent
Shareholder " means a
person who on the Date of the Grant owns, either directly or within
the meaning of the attribution rules contained in Section 424(d) of
the Code, stock possessing more than ten percent of the total
combined voting power of all classes of stock of his or her
employer corporation or of its parent or subsidiary corporations,
as defined respectively in Sections 424(e) and (f) of the
Code. |
| |
| (o)
|
"
Value " means on any given date, the fair market value
of the Shares as determined by the Board or the Committee, taking
into account all information that the Board or the Committee
considers relevant, including applicable provisions of the Code and
rulings and regulations thereunder. |
| |
3.
RIGHTS TO BE
GRANTED
Rights that may be
granted under the Plan are:
| (a)
|
Incentive Stock
Options, that give the Optionee the right for a specified time
period to purchase a specified number of Shares at an Exercise
Price not less than that specified in Section 7(a). |
| |
| (b)
|
Non-Qualified Options,
that give the Optionee the right for a specified time period to
purchase a specified number of Shares at an Exercise Price not less
than that specified in Section 7(a). |
| |
The maximum number of
Shares that may be issued under the Plan is 4,500,000 Shares,
subject to adjustment pursuant to the provisions of Section 10. If
an Option terminates without having been exercised in whole or
part, other Options may be granted covering the Shares as to which
the Option was not exercised. Notwithstanding anything to the
contrary contained in the Plan, the aggregate number of Shares
issued to an Optionee on the exercise of Options granted under the
Plan, or reserved for issuance to an Optionee on the exercise of
Options granted under the Plan, may not exceed twenty five percent
(25%) of the maximum number of Shares authorized to be issued on
the exercise of Options under the Plan.
| 5.
ADMINISTRATION OF
PLAN |
| (a)
|
The Plan shall be
administered, and the grant of Options under this Plan shall be
approved in advance, by the Board, or if the Board by resolution so
decides, by a stock option committee (the " Committee ") designated by the Board, the members of which shall be
appointed by and serve on such Committee at the pleasure of the
Board. |
| |
- 2 -
(b)
|
To the extent required for transactions under the Plan to
qualify for exemptions available under Rule 16b-3 promulgated under
the U.S. Securities Act (" Rule 16b- 3 "), if the
Board shall delegate its authority to the Committee then each
member of the Committee will be a " Non-Employee Director " within the meaning of Rule 16b-3. To the extent required for compensation realized from the
exercise of options issued under the Plan to be deductible by the
Company or any of the Companies pursuant to Section 162(m) of the
Code, the members of said Committee will be " outside directors " within the meaning of Section 162(m) of the
Code. |
|
| |
(c)
|
The Committee shall have the powers and authority vested in the
Board hereunder (including the power and authority to interpret any
provision of the Plan or of any Option). The members of any such
Committee shall serve at the pleasure of the Board.
A majority of the members of the Committee shall constitute
a quorum, and all actions of the
Committee shall be taken by a majority of the members present. Any
action may be taken by a written instrument signed by all of the
members of the Committee and any action so taken shall be fully
effective as if it had been taken at a meeting. |
|
|
| |
| (d)
|
Subject to
the provisions of this Plan and any Applicable Laws, and with a
view to effecting its purpose, the Committee shall have sole
authority, in its absolute discretion, to: |
| |
| |
(i)
construe and interpret this Plan; |
| |
| |
(ii)
define the terms used in the Plan; |
| |
| |
(iii)
prescribe, amend and rescind the rules and regulations relating to
this Plan; |
| |
| |
(iv)
correct any defect, supply any omission or reconcile any
inconsistency in this Plan; |
| |
| |
(v) grant
Options under this Plan; |
| |
| |
(vi)
determine the individuals to whom Options shall be granted under
this Plan and whether the Option is an Incentive Stock Option or a
Non-Qualified Stock Option; |
| |
| |
(vii)
determine the time or times at which Options shall be granted under
this Plan; |
| |
| |
(viii)
determine the number of common shares subject to each Option, the
exercise price of each Option, the duration of each Option and the
times at which each Option shall become exercisable; |
| |
| |
(ix)
determine all other terms and conditions of the Options;
and |
| |
| |
(x) make
all other determinations and interpretations necessary and
advisable for the administration of the Plan. |
| |
| (e)
|
All
decisions, determinations and interpretations made by the Committee
shall be binding and conclusive on all participants in the Plan and
on their legal representatives, heirs and
beneficiaries. |
| |
- 3 -
| (a)
|
Subject to Section 7
hereof, the Company may, from time to time, designate: the
officers, employees, consultants and/or directors of any of the
Companies to whom Options may be granted; the number of Shares
covered by an Option; the relevant Exercise Price of an Option; the
vesting provisions of an Option; and the term of an
Option. |
| |
| (b)
|
An Incentive Stock
Option shall not be granted to a director or consultant of any of
the Companies unless, as of the Date of Grant, such director or
consultant is also an officer or key employee of any of the
Companies and also a U.S. resident. |
| |
| (c)
|
An Incentive Stock
Option shall not be granted to a Ten Percent Shareholder except on
such terms concerning the Exercise Price and period of exercise as
are provided in Section 7 with respect to such a
person. |
| |
| (d)
|
Any Option granted
under the Plan shall be subject to the requirement that, if at any
time counsel to the Company shall determine that the listing,
registration or qualification of the Shares subject to such Option
upon any securities exchange or other self-regulatory entity or
under any law or regulation of any jurisdiction, or the consent or
approval of any securities exchange or other self-regulatory entity
or any governmental or regulatory body, is necessary as a condition
of, or in connection with, the grant or exercise of such option or
the issuance or purchase of Shares hereunder, such option may not
be accepted or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Board. Nothing
herein shall be deemed to require the Company to apply for or to
obtain such listing, registration, qualification, consent or
approval. |
| |
7.
OPTION AGREEMENTS AND
TERMS
Each Option shall be
granted within ten (10) years of the date on which the Plan is
adopted by the Board or the date the Plan is approved by the
shareholders of the Company, whichever is earlier. Each Option
shall be evidenced by an option agreement that shall be executed on
behalf of the Company and by the respective Optionee ("
Option Agreement
"), in such form not inconsistent with
the Plan as the Board or the Committee may from time to time
determine, provided that the substance of this Section 7 be
included therein. The terms of each Option Agreement shall be
consistent with the following:
| (a)
|
Exercise
Price . In the case of a
Non-Qualified Option, the Exercise Price per Share shall not be
less than eighty-five percent (85%) of the Value of such Share on
the Date of Grant. In the case of an Incentive Stock Option, the
Exercise Price per share shall not be less than one hundred percent
(100%) of the Value of such Share on the Date of Grant; provided
that with respect to any Incentive Stock Options granted to a Ten
Percent Shareholder, the Exercise Price per Share shall not be less
than one hundred ten percent (110%) of the Value of such Share on
the Date of Grant. |
| |
| (b)
|
Restriction on
Transferability . No
Option granted hereunder shall be pledged, hypothecated, charged,
transferred, assigned or otherwise encumbered or disposed of by the
Optionee, whether voluntarily or by operation of law, otherwise
than by will or the laws of descent and distribution, and any
attempt to do so will cause such Option to |
| |
- 4 -
|
|
be null and void.
During the lifetime of the Optionee, an Option shall be exercisable
only by him. Upon the death of an Optionee, the person to whom the
rights shall have passed by will or by the laws of descent and
distribution may exercise any Option in accordance with the
provisions of Section 7(e). |
| |
| (c)
|
Payment . Full
payment for Shares purchased upon the exercise of an Option shall
be made in cash or by wire transfer (at the option of the
Optionee), certified check, cashier's check, personal check or
" cashless
exercise " (i.e., the
Company's retention of that number of Shares acquired by the
Optionee on exercise, which, at the time of exercise, has an
aggregate fair market value equal to the payment owed by the
Optionee to the Company under this Section 7(c)). Upon the exercise
of an Option, the Company shall have the right to require the
Optionee to remit to the Company, in cash or by wire transfer,
certified check, cashier's check or personal check, an amount
sufficient to satisfy all U.S. federal, state and local withholding
tax requirements prior to the delivery by the Company of any
certificate for Shares. |
| |
| (d)
|
Issuance of
Certificates . Upon
payment of the Exercise Price, a certificate for the number of
Shares shall be delivered to such Optionee by t |
|
