EXHIBIT
10.5
NON-QUALIFIED STOCK OPTION AGREEMENT
This NON-QUALIFIED
STOCK OPTION AGREEMENT (this "Agreement") is made, and dated
and effective
as of the day of April
2007 ("Grant Date"), by China Direct
Trading Corporation, a Florida corporation (the "Company"), and
____________, a
senior officer of the Company ("Participant") pursuant to the terms
of the China
Direct Trading
Corporation
Stock Option Plan of 2007 (the "Plan"). All
capitalized terms used
but not defined herein shall have the meanings set forth
therefore in the Plan.
Company and Participant may hereinafter also be referred
to individually as a "party" and collectively as the "parties."
1 GRANT OF
OPTION. To carry out
the purposes
of the Plan,
by affording
Participant the
opportunity to purchase shares of Common Stock, $0.0001
par
value per share of the Company ("Common Stock"), and in
consideration
of
the mutual agreements
and other matters set forth herein and in
the
Plan, the Company hereby grants to Participant the right and option
("Option") to
purchase
all or any part of an aggregate of
_________________________ shares of Common Stock, effective as of the
Grant Date on
the terms and
conditions set forth herein and in the Plan,
which Plan
is incorporated herein by reference as a part of this
Agreement. The
Compensation Committee shall administer the Plan and this
Option. This Option
shall not be treated
as an incentive
stock option
within the meaning of
section 422(b) of the
Internal Revenue Code of
1986, as amended (the "Code").
2 PURCHASE
PRICE AND TERM.
The purchase
price of Common Stock
purchased
pursuant to the exercise of this Option shall be $______per share.
Unless
sooner terminated
as provided
herein, this Option shall expire if
not
exercised within ten (10) years from the Grant Date.
3 EXERCISE
OF OPTION. This Option shall be exercisable in the manner
described below:
a.
25%
of total grant vests 1 year after grant date; and
b.
remaining grant vests in 12 equal consecutive calendar
quarterly
installments;
provided, however,
that this Option may
be exercised only
prior to its
expiration date and,
except as otherwise provided below, only while
Participant remains
an Employee, Service Provider or Non-Employee
Director of the
Company. This Option will terminate and cease to be
exercisable upon
Participant's
termination of
employment or separation
from
service with the Company, except that:
(a)
if Participant's
employment
with the Company terminates by
reason other
than death, Disability or Cause, all Options
exercisable
immediately prior
to such termination may be
exercised for a period after termination that shall end on the
earlier of (i) the
expiration date set
forth in this Agreement
or (ii) the date
that occurs three (3) months after such
termination date.
(b)
if Participant's
employment
with the Company terminates by
reason of death or
Disability,
all Options, whether or not
exercisable
immediately prior to
Participant's
Disability or
death, may be exercised for a period of 12 months following
such
termination;
(c)
except as provided in (b) above, any Options that are not
exercisable
immediately prior to
Participant's
termination of
employment or
service shall terminate immediately upon
Participant's termination of employment or service; and
(d)
all Options, whether
or not exercisable
immediately
prior to
Participant's
termination of
employment
or service shall
terminate as of 12:01
a.m. EST on
Participant's
last date of
employment or service
if Participant's
employment
or service
with the Company is terminated for Cause.
<PAGE>
Notwithstanding the
foregoing, the
Compensation Committee
shall have
the discretion
to provide that the
Options may be exercised prior to
the dates set forth above and for the continuation of any Options for
any period following
termination of employment, but not to exceed the
term of the Option, upon such terms and conditions as may be
determined
by the Compensation Committee in its sole discretion. Further
notwithstanding the
foregoing,
the Options may be accelerated or
terminated in accordance with the terms of the Plan.
4 MANNER OF
EXERCISE. In order to
exercise this Option,
the Participant
shall deliver to the President or other designated officer of the
Company
payment in full for (i) the shares being purchased and (ii) unless
other
arrangements have
been made with the Plan Committee, any required
withholding taxes.
The payment of the exercise price for each Option
shall be either in cash or by check payable and acceptable to the
Company; PROVIDED,
HOWEVER,
payment of the exercise price and/or
withholding may be
made in accordance
with the terms of the Plan by (x)
tendering to the Company shares of Common Stock having an
aggregate Fair
Market Value as of the date of exercise that is not greater than
the full
exercise price for the
shares with respect to
which the Option is being
exercised and the amount required to be withheld, or (y) the Company may
deliver certificates
for the shares of Common Stock for which the Option
is
being exercised to a broker for sale on behalf of Participant,
provided that Participant has irrevocably instructed such broker to
remit
directly to the Company on Participant's behalf from the proceeds
of such
sale
the full amount of the exercise price, plus all required
withholding
taxes. In the
event that Participant, with the consent of the Plan
Committee, elects to
make payment as allowed under clause (x) above, the
Compensation Committee
may, upon confirming
that Participant
owns the
number of shares being tendered, authorize the issuance of a new
certificate for the
number of shares
being acquired pursuant to the
exercise of the Option, less the number of shares being tendered
upon the
exercise, and return
to Participant
(or not require
surrender of) the
certificate for the shares being tendered upon the exercise.
5 SERVICE
RELATIONSHIP. For
purposes of this Agreement, Participant shall
be
considered to be in the service of the Company as long as
Participant
remains an Employee,
Consultant or
Non-Employee Director
of either the
Company, a parent or subsidiary corporation (as defined in section
424 of
the
Code) of the Company,
or a corporation or a
parent or subsidiary of
such
corporation
assuming or
substituting a new option for this Option.
Any
question as to whether and when there has been a
separation
from
service, and the cause
of such separation,
shall be determined by the
Compensation Committee
in its sole
discretion,
and its determination
shall be final.
6
WITHHOLDING OF TAX. To
the extent that the exercise of this Option or the
disposition of shares
of Common Stock acquired by exercise of this Option
results in
compensation income to
Participant for federal or state income
or
employment tax or withholding
