Exhibit 10.1
SINO PHARMACEUTICALS CORPORATION
2001 STOCK OPTION PLAN
The following definitions shall be applicable throughout the Plan:
(a) "Board" means the Board of Directors of the Company.
(b) "Articles of Incorporation" means the Company's Articles of Incorporation,
as amended or restated from time to time.
(c) "Code" means the Internal Revenue Code of 1986, as amended from time to
time. Reference in the Plan to any Section of the Code shall be deemed to
include any amendments or successor provisions to such Section and any rules or
regulations under such Section.
(d) "Committee" means the committee appointed by the Board to administer the
Plan as referred to in Article V.
(e) "Commission" means the Securities and Exchange Commission or any successor
agency.
(f) "Company" means Sino Pharmaceuticals Corporation, a Wyoming corporation.
(g) "Date of Grant" means the date on which the granting of an Option is
authorized by the Board or such later date as may be specified by the Board in
such authorization as referred to in Article V.
(h) "Eligible Employee" means any person regularly employed by the Company or a
Subsidiary on a full-time salaried basis who satisfies all of the requirements
of Article IX.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and the rules and regulations promulgated thereunder.
(j) "Fair Market Value" is defined in Article IV.
(k) "Holder" means an employee of the Company or a Subsidiary who has been
granted an Option.
(l) "Incentive Stock Option" means any Option intended to be and designated as
an "incentive stock option" within the meaning of ss.422 of the Code.
(m) "Non-Employee Director" means a member of the Board who qualifies as a
"Non-Employee Director" as defined in Rule 16b-3, as promulgated by the
Commission under the Exchange Act or any successor definition adopted by the
Commission.
(n) "Non-Incentive Options" means an Option which is not an Incentive Stock
Option
(o) "Normal Termination" means termination at retirement pursuant to the Company
or Subsidiary retirement plan then in effect.
(p) "Option" means an award granted under Article IX of the Plan and includes
both Non-Incentive Options and Incentive Stock Options.
(q) "Plan" means this 2001 Stock Option Plan.
(r) "Securities Act" means the Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder.
(s) "Share" means a share of Stock.
(t) "Stock" means common stock of the Company as described in the Articles of
Incorporation.
(u) "Subsidiary" means "subsidiary corporation" as defined inss.424(f) of the
Code.
(v) "Termination" means separation from employment with the Company or any of
its Subsidiaries for any reason except due to death.
(w) "Treasury" means the Department of the Treasury of the United States of
America.
ARTICLE I.
Designation and Purpose of the Plan
The Plan shall be known as the "2001 Stock Option Plan." The purpose of
the Plan is to provide additional incentives to Employees and Non-Employee
Directors of the Company to achieve financial results aimed at increasing
shareholder value and to attract and retain the best available personnel for
positions of responsibility within the Company through the grant of options to
purchase shares of the Company's Common Stock. The Plan was approved by the
Board, subject to the approval by the shareholders of the Company, on October
31, 2001. Subject to the determination of the Board or a Committee appointed by
the Board, Options granted under this Plan may be Incentive Stock Options or
Non-Incentive Options.
ARTICLE II.
Shares Available for Purchase
2.1 A maximum of 1,000,000 authorized but unissued shares of the Company's
common stock may be issued upon the exercise of Options granted pursuant to the
Plan. Shares reserved for issuance shall be deemed to have been used in the
exercise of Options whether actually delivered or whether the Fair Market Value
equivalent of such Shares is paid in cash. If an Eligible Employee pays the
exercise price of any given Option by having shares withheld which, upon
exercise, would have a Fair Market Value at the time the Option is exercised
equal to the Option price, then the withheld shares will not be deducted from
those shares reserved for issuance under the Plan. Also, if the Company, at any
time during the effective period of this plan, repurchases Shares on the open
market, then the Board may, but is not required to, add such Shares to the pool
of Shares reserved for issuance under this Plan. However, the number of shares
authorized for issuance under the Plan may never exceed 1,000,000 at any given
time.
2.2 In the event that any Option granted under the Plan expires or
terminates for any reason whatsoever without having been exercised in full, the
Shares subject to, but not delivered under such Option shall become available
for other Options which may be granted under the Plan; or shall be available for
any other lawful corporate purpose.
ARTICLE III.
Limit on Value of Option Shares
In the case of an Incentive Stock Option, the aggregate Fair Market
Value (determined as of the time such Option is granted) of the Shares with
respect to which the Incentive Stock Option is exercisable for the first time by
an individual during any calendar year (under all plans of the Company) shall
not exceed $100,000.
ARTICLE IV.
Determination of Fair Market Value
As used herein the term "Fair Market Value" shall mean, with respect to
the date a given Option is granted or exercised, the value determined by the
Board or any Committee appointed in accordance with Article VI hereof in good
faith using a generally accepted valuation method and, in the case of an
incentive stock option, determined in accordance with applicable Treasury
regulations; provided, however, that where there is a public market for the
common stock of the Company, the Fair Market Value per share shall be the mean
of the final bid and asked prices of the Stock on the date of grant, as reported
in The Wall Street Journal (or, if not so reported, as otherwise reported by the
National Association of Securities Dealers Automated Quotation System) or, in
the event the stock is listed on a stock exchange, the fair market value per
share shall be the closing price on such exchange on the date of grant of the
option, as reported in The Wall Street Journal.
ARTICLE V.
Stock Options and Option Agreements
5.1 Stock Options under the Plan may be of two types: Incentive Stock Options
and Non-Incentive Options. Any Stock Option granted under the Plan will be in
such form as the Board may from time to time approve. The Board will have the
authority to grant any optionee Incentive Stock Options, Non-Incentive Options
or both types of Options. The Date of Grant of an Option will be the date the
Board by resolution selects an individual to be a participant in any grant of an
Option, determines the number of Shares to be subject to such Option to be
granted to such individual and specifies the terms and provisions of the Option.
Incentive Stock Options may only be granted to Eligible Employees. To the extent
that any Option is not designated as an Incentive Stock Option or even if so
designated does not qualify as an Incentive Stock Option, it will be deemed to
be a Non-Incentive Option. The Board may grant Non-Incentive Options to
Non-Employee Directors under the Plan. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock Options will be
interpreted, amended or altered nor shall any discretion or authority granted
under the Plan be exercised so as to disqualify the Plan under ss.422 of the
Code or, without the consent of the optionee, to disqualify any Incentive Stock
Option under such ss.422.
5.2 Each Option granted under the Plan shall be evidenced by an option agreement
("Option Agreement"), which shall indicate on its face whether it is an
agreement for an Incentive Stock Option or a Non-Incentive Option, or both and
shall be signed by an officer of the Company on behalf of the Company and by the
employee who was granted the Option and which shall contain such provisions as
may be approved by the Board or any Committee appointed by the Board according
to Article VI. The provisions shall be subject to the following terms and
conditions:
5.2.1 Any Option or portion thereof that is exercisable shall be exercisable as
to such number of Shares and at such times as set forth in the Stock Option
Agreement, except as limited by the terms of the Plan heretofore;
5.2.2 Every Share purchased through the exercise of an Option shall be paid for
in full at the time of the exercise. Each Option shall cease to be exercisable,
as to any Share, when the Holder purchases the Share, or when the Option lapses;
5.2.3 Options shall not be transferable by the Holder except by will, the laws
of descent and distribution or pursuant to a qualified domestic relations order
and shall be exercisable during the Holder's lifetime only by the Holder; and
5.2.4 An unexpired Option shall become immediately exercisable (1) automatically
on the Holder's Normal Termination, (2) at the discretion of the Board, in whole
or in part, on the date the Holder becomes eligible to receive early retirement
benefits, as defined under the retirement plan of the Company then in effect,
(3) upon any change in control of the Company, and (4) under such other
circumstances as the Board may direct.
5.3 The Option Agreements shall constitute binding contracts between the Company
and the employee. Every employee, upon acceptance and execution of such option
agreement, shall be bound by the terms and conditions of this Plan and of the
Option Agreement.
5.4 The terms and conditions of the Option Agreement shall be in accordance with
this Plan, but may include additional provisions and restrictions, provided that
the same are not inconsistent with the Plan.
ARTICLE VI.
Compensation and Stock Option Committee
6.1 The Plan shall be administered by the Board or a Committee appointed by
the Board in accordance with Rule 16b-3 of the Exchange Act ("Rule 16b-3"). Any
Committee which has been delegated the duty of administering the Plan by the
Board shall be composed of two or more persons each of whom (i) is a
Non-Employee Director and (ii) is an "outside director" as defined in
ss.162(m)(4) of the Code. To the extent reasonable and practicable, the Plan
shall be consistent with the provisions of Rule 16b-3 to the degree necessary to
ensure that transactions authorized pursuant to the Plan are exempt from the
operation of Section 16(b) of the Exchange Act. If such a Committee is
appointed, the Committee shall have the same power and authority to construe,
interpret and administer the Plan and from time to time adopt such rules and
regulations for carrying out this Plan as it may deem proper and in the best
interests of the Company as does the Board. Any reference herein to the Board
shall, where appropriate, encompass a Committee appointed to administer the Plan
in accordance with this Article VI.
6.2 The Board shall, from time to time, in its discretion, determine which
of the Eligible Employees are to be granted Options and the form, amount and
timing of such Options and, unless otherwise provided herein, the terms and
provisions thereof and the form of payment of an Option, if applicable, and such
other matters specifically delegated to It under this Plan. Subject to the
express provisions of the Plan, the Board shall have authority to interpret the
Plan and Options granted hereunder, to prescribe, amend and rescind rules and
regulations relating to the Plan, and to make all other determinations necessary
or advisable in administering the Plan, all of which determinations shall be
final and binding upon all persons. A quorum of the Board shall consist of a
majority of its members and the Board may act by vote of a majority of its
members at a meeting at which a quorum is present, or without a meeting by a
written consent to the action taken signed by all members of the Board. No
member of the Board shall be liable for any action, interpretation or
construction made in good faith with respect to the Plan or any Option granted
hereunder.
ARTICLE VII.
Option Price
7.1 The Option price at which Shares may be purchased under an Option
granted pursuant to this Plan shall be set by the Board, but shall in no
instance be less than the Fair Market Value of such Shares on the Date of Grant
in the case of Incentive Stock Options. Such Fair Market Value shall be
determined by the criteria set forth in Article IV hereof. The Option price will
be subject to adjustments in accordance with provisions of Article X herein.
7.2 In the event that an employee granted an Incentive Stock Option
hereunder owns, directly or indirectly, immediately after such grant, more than
10% of the total combined voting power of all classes of the issued and
outstanding stock of the company, the option price shall be at least 110% of the
Fair Market Value of the stock subject to the Option and such Option by its
terms shall not be exercisable after the expiration of five (5) years from the
date such Option is granted.
ARTICLE VIII.
Exercise of Option
8.1 Subject to the provisions of Articles VII and IX the period during which
each Option may be exercised shall be fixed by the Board at the time such Option
is granted, subject to the following rules:
8.1.1 such Option is granted within ten (10) years from the date the Plan is
adopted, or the date such Plan is approved by the stockholders, whichever is
earlier;
8.1.2 such Option by its terms is not exercisable after the expiration of ten
(10) years (in the case if Incentive Stock Options, not to exceed five years for
Eligible Employees owning 10% or more of the combined voting power of all
classes of stock of the Company) from the Date of Grant as shall be set forth in
the Stock Option Agreement relating to such grant; and,
8.1.3 such Option by its terms states that a person's rights and interests under
the Plan, including amounts payable, may not be assigned, pledged, or
transferred except, in the event of an employee's death, to a designated
beneficiary as provided in the Plan, or in the absence of such designation, by
will or the laws of descent and distribution and pursuant to a qualified
domestic relations order.
8.2 An Option shall lapse under the following circumstances:
8.2.1 Ten (10) years after it is granted, three months after Normal Termination,
twelve months after the date of Termination if due to permanent disability,
three months after any other Termination or any earlier time set by the grant.
8.2.2 If the Holder dies within the Option period, the Option shall lapse unless
it is exercised within the Option period and in no event later than twelve
months after the date of his death by the Holder's legal representative or
representatives or by the person or persons entitled to do so under the Holder's
last will and testament or, if the Holder shall fail to make testamentary
disposition of such Option or shall die intestate, by the person or persons
entitled to receive said Option under the applicable laws of descent and
distribution.
8.2.3 Notwithstanding the foregoing, in no event shall the period of exercise be
less than thirty days after Normal Termination or the death of the Holder;
provided, however, that in no event shall an Incentive Stock Option be exercised
more than ten years after the Date of Grant.
8.3 No Shares shall be delivered pursuant to any exercise of an Option until the
requirements of such laws and regulations, as may be deemed by the Board to be
applicable, are satisfied and until payment in full of the option price
specified in the applicable Stock Option Agreement is received by the Company.
No employee shall be deemed to be an owner of any Shares subject to any Option
unless and until the certificate or certificates for them have been issued, as
reflected on the stock record and transfer books of the Company.
ARTICLE IX.
Eligibility
All employees of the Company, including officers and directors who are
salaried employees, shall be Eligible Employees eligible to participate under
this Plan. The fact that an employee has been granted an Option under this Plan
shall not in any way affect or qualify the right of the employee to terminate
his employment at any time. Nothing contained in this Plan shall be construed to
limit the right of the Company to grant Options otherwise than under the Plan
for any proper and lawful corporate purpose, including but not limited to
Options granted to employees. Employees to whom Options may be granted under the
Plan will be those selected by the Committee from time to time who, in the sole
discretion of the Committee, have contributed in the past or who may be expected
to contribute materially in the future to the successful performance of the
Company.
ARTICLE X.
Capital Adjustments Affecting Stock
10.1 If the outstanding Stock of the Company shall at any time be changed or
exchanged by declaration of a stock dividend, split-up, combination of Shares,
recapitalization, merger, consolidation, or other corporate reorganization in
which the Company is the surviving corporation, the number and kind of Shares
subject to the Plan or subject to any Options theretofore granted, and the
Option prices, shall be appropriately and equitably adjusted so as to maintain
the proportionate number of Shares without changing the aggregate Option price
and the Board may make any other adjustments as the Board deems appropriate for
purposes of the Plan. The determination of the Board as to the terms of any
adjustment shall be conclusive except to the extent governed by Treasury
regulations applicable to Incentive Stock Options.
10.2 In the event of a liquidation or dissolution of the Company, sale of all or
substantially all of its assets, or a merger, consolidation or other corporate
reorganization in which the Company is not the surviving corporation, or any
merger or other reorganization in which the Company is the surviving corporation
but the holders of its Stock receive securities of another corporation, or in
the event a person makes a tender offer to the stockholders of the Company, the
Board may, but need not, accelerate the time at which unexercised Options may be
exercised. Nothing herein contained shall prevent the substitution of a new
Option by the surviving or acquiring corporation.
ARTICLE XI.
Amendments, Suspension or Termination
11.1 The Board shall have the right, at any time, to amend, suspend or terminate
the Plan, and if suspended, reinstate the Plan in whole or in part in any
respect which it may deem to be in the best interests of the Company, provided,
however, no amendments shall be made in the Plan which:
11.1.1 Increase the total number of Shares for which Options may be granted
under this Plan for all employees or for any one of them except as provided in
Article X;
11.1.2 Change the minimum purchase price for the optioned Shares, except as
provided in Article X;
11.1.3 Affect outstanding Options or any unexercised rights thereunder, except
as provided in Article VIII;
11.1.4 Extend the option period provided in Article VIII or make an Option
exercisable earlier than as specified in Article VIII; or
11.1.5 Extend the termination date of the Plan.
11.2 The Board shall also have the right, with the express written consent of an
individual participant, to cancel, reduce or otherwise alter such participant's
outstanding Options under the Plan.
11.3 Any such amendment, termination, suspension, cancellation, reduction or
alteration shall be further approved by the shareholders of the Company if such
approval is required to preserve or comply with any exemption, whether under
Rule 16b-3 or otherwise, from Section 16(b) of the Exchange Act or to preserve
the status of Incentive Stock Options within the meaning of ss.422 of the Code.
ARTICLE XII.
Effective Date, Term and Approval
The effective date for this Amended Plan shall be upon approval by the
stockholders. Options may be granted as provided herein for a period of ten
years after such date unless an earlier termination date after which no Options
may be granted under the Plan is fixed by action of the Board, but any Option
granted prior thereto may be exercised in accordance with its terms. The grant
of any Options under the Plan is effective only upon approval of the Plan by the
stockholders. The Plan and all Options granted pursuant to it are subject to all
laws, approvals, requirements, and regulations of any governmental authority or
securities exchange which may be applicable thereto and, notwithstanding any
provisions of the Plan or option agreement, the Holder of an Option shall not be
entitled to exercise his Option nor shall the Company be obligated to issue any
Shares to the Holder if such exercise or issuance shall constitute a violation
by the Holder or the Company of any provisions of any such laws, approvals,
requirements, or regulations. The Plan shall continue in effect until all
matters relating to the payment of Options granted under the Plan and
administration of the Plan have been settled.
ARTICLE XIII.
General
13.1 Government and Other Regulations. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act, the
Exchange Act, and the requirements of any stock exchange upon which the Shares
may then be listed and shall be further subject to the approval of counsel for
the Company with respect to such compliance. Inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
13.2 Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
13.3 Tax Withholding. The employee or other person receiving Stock upon exercise
of an Option may be required to pay to the Company or to a Subsidiary, as
appropriate, the amount of any such taxes which the Company or Subsidiary is
required to withhold with respect to such Stock. In connection with such
obligation to withhold tax, the Company may defer making delivery of such Stock
unless and until indemnified on such withholding liability to its satisfaction.
13.4 Claim to Options and Employment Rights. No employee or other person shall
have any claim or right to be granted an Option under the Plan. Neither this
Plan nor any action taken hereunder shall be construed as giving any employee
any right to be retained in the employ of the Company or a Subsidiary.
13.5 Beneficiaries. Any issuance of shares upon exercise of Options issued under
this Plan to be made to a deceased participant shall be paid to the beneficiary
designated by the participant and filed with the Board. If no such beneficiary
has been designated or survives the participant, issuance shall be made to the
participant's legal representative. A beneficiary designation may be aged or
revoked by a participant at any time provided the change or revocation is filed
with the Board. The designation by a married participant of one or more persons
other than the participant's spouse must be consented to by the spouse.
13.6 Indemnification. Each person who is or shall have been a member of the
Board shall be indemnified and held harmless by the Company against and from any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him in connection with or resulting from any claim, action, suit, or
proceeding to which he may be a party or in which he may be involved by reason
of any action or failure to act under the Plan and against and from any and all
amounts paid by him in satisfaction of judgment in such action, suit, or
proceeding against him. He shall give the Company an opportunity, at its own
expense, to handle and defend the same before he undertakes to handle and defend
it on his own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Bylaws or Articles of Incorporation, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.
13.7 Reliance on Reports. Each member of the Board shall be fully justified in
relying or acting in good faith upon any report made by the independent public
accountants of the Company and its Subsidiaries and upon any other information
furnished in connection with the Plan by any person or persons other than
himself. In no event shall any person who is or shall have been a member of the
Board be liable for any determination made or other action taken, including the
furnishing of information, or failure to act, if in good faith.
13.8 Relationship to Other Benefits. No grant of any Options under the Plan
shall be taken into account in determining any benefits under any pension,
retirement, savings, profit sharing, group insurance, welfare or other benefit
plan of the Company or any Subsidiary.
13.8.1 Expenses. The expenses of administering the Plan shall be borne by the
Company and its Subsidiaries.
13.9 Pronouns. Masculine pronouns and other words of masculine gender shall
refer to both men and women.
13.10 Titles and Headings. The titles and headings of the Sections in the Plan
are for convenience of reference only, and in the event of any conflict, the
text of the Plan, rather than such titles or headings, shall control.
13.11 Fractional Shares. No fractional Shares shall be issued and the Board
shall determine whether cash shall be given in lieu of fractional Shares or
whether such fractional Shares shall be eliminated by rounding up or rounding
down unless otherwise provided in the Plan.
13.12 Construction of Plan. The place of administration of the Plan shall be in
the State of Arizona, and the validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined in accordance with the laws of
the State of Arizona.