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EXHIBIT 10.1 Panda Ethanol, Inc. Nonqualified
Stock Option Agreement This
Nonqualified Stock Option Agreement (the " Agreement
") is made and entered into as of __________________(the
"Date of Grant" ) by and between Panda Ethanol, Inc.,
a Nevada corporation (the " Company "), and
__________________(the " Participant "). Capitalized
terms not otherwise defined in this Agreement shall have the
meanings given in the Company’s 2006 Amended and Restated
Long-Term Incentive Plan, as amended from time to time.
1. Grant of Option .
Subject to all of the terms, restrictions and conditions of this
Agreement and the Plan, the Company hereby grants to Participant an
option (the " Option ") to purchase the total number
of shares of Common Stock of the Company (the "
Shares ") at the Option Price per share set forth on
Exhibit A attached to this Agreement, which is
incorporated into and made a part of this Agreement. The Option is
not intended to qualify as an Incentive Stock Option within the
meaning of Section 422 of the Internal Revenue Code of 1986,
as amended. 2.
Expiration . The Option shall continue in effect until the
Expiration Date set forth on Exhibit A to this
Agreement, unless earlier terminated as provided in Section 3
of this Agreement or pursuant to Article 12 of the Plan, and
may be exercised from time to time to purchase the Shares as to
which it has become exercisable in accordance with the vesting
schedule set forth on Exhibit A to this Agreement.
3. Termination of Employment
or Service .
3.1
Termination for Any Reason Except Death, Disability or Cause
. If Participant’s employment or other service is terminated
for any reason other than because of death, Total and Permanent
Disability or for Cause, the Option may be exercised by Participant
at any time before the earlier of thirty (30) days after the
date of termination or the Expiration Date, but only to the extent
that the Option would have been exercisable by Participant on the
date of termination.
3.2
Termination Because of Death or Disability . If
Participant’s employment or other service is terminated
because of death or Total and Permanent Disability of Participant,
the Option may be exercised by Participant (or Participant’s
legal representative) at any time before the earlier of twelve
(12) months after the date of termination or the Expiration
Date, but only to the extent that the Option would have been
exercisable by Participant on the date of termination.
3.3
Termination for Cause. If Participant’s employment or
other service is terminated for Cause, then the Option shall be
deemed immediately forfeited and cancelled in its entirety upon
such termination of employment or service without any payment or
consideration being due from the Company or any Subsidiary. For
purposes of this Agreement, "Cause" shall mean, if the Participant
is a party to an employment agreement or agreement for services
with the Company or its Subsidiaries and such agreement provides
for a definition of Cause, the definition therein contained, or, if
no such agreement or definition exists, it shall mean a
Participant’s (i) commission of theft, embezzlement or any
other act of material dishonesty
relating to the Company or any Subsidiary; (ii) conviction
of, or plea of guilty or nolo contendere to, a felony or any
lesser crime having as its predicate element fraud, dishonesty,
misappropriation or moral turpitude; (iii) gross negligence or
willful misconduct with respect to any significant Company policy,
which in any such case could reasonably be expected to result in an
adverse affect on the Company or any Subsidiary; or
(iv) willful and continued failure to perform substantially
the duties reasonably assigned or appropriate to
Participant’s position of employment with the Company or any
Subsidiary. The Committee, in good faith, shall determine all
matters and questions relating to whether a Participant has been
discharged for Cause. 4.
Manner of Exercise .
4.1
Notice . To exercise this Option, in whole or in part,
Participant must deliver written notice to the Company, which shall
specify (a) Participant’s election to exercise the
Option, (b) the number of Shares with respect to which the
Option is being exercised, and (c) the Exercise Date, which
may not be less than three (3) or more than thirty
(30) days after delivery of notice. If someone other than
Participant exercises the Option, then such person must submit
documentation reasonably acceptable to the Company verifying that
such person has the legal right to exercise the Option.
4.2
Payment of Option Price . On or before the Exercise Date,
Participant must deliver to the Company full payment of th
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