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EXHIBIT 10.15
1996 STOCK OPTION PLAN
OF
EURO TECH HOLDINGS COMPANY LIMITED
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan") is
designed to provide an incentive to employees (including directors and officers
who are employees) and to consultants who are not employees of Euro Tech
Holdings Company Limited, a British Virgin Islands company (the "Company"), and
its present and future subsidiary companies, as defined in Paragraph 17
("Subsidiaries"), and to offer an additional inducement in obtaining the
services of such employees and consultants.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Paragraph 12, the aggregate number of shares of Common Stock, $.01 par value
per share, of the Company ("Common Stock") for which options may be granted
under the Plan shall not exceed 150,000. Such shares of Common Stock may, in
the discretion of the Board of Directors of the Company (the "Board of
Directors"), consist either in whole or in part of authorized but unissued
shares of Common Stock or shares of Common Stock held as treasury shares of the
Company. Subject to the provisions of Paragraph 13, any shares of Common Stock
subject to an option which for any reason expires, is canceled or is terminated
unexercised or which ceases for any reason to be exercisable shall again become
available for the granting of options under the Plan. The Company shall at all
times during the term of the Plan reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of the
Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by
the Board of Directors or, to the extent the Board of Directors may determine,
a committee of the Board of Directors (the "Committee") consisting of not less
than two directors. A majority of the members of the Committee shall constitute
a quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present, and any acts approved in writing by all members
without a meeting, shall be the acts of the Committee. All references in the
Plan to determinations or actions of the Committee shall be deemed to include
determinations and actions by the Committee or the Board of Directors.
Subject to the express provisions of the Plan, the Committee shall
have the authority, in its sole discretion, to determine the
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employees and the consultants who shall be granted options; the times when
options shall be granted; the number of shares of Common Stock to be subject to
each option; the term of each option; the date each option shall become
exercisable; whether an option shall be exercisable in whole, in part or in
installments and, if in installments, the number of shares of Common Stock to
be subject to each installment, whether the installments shall be cumulative,
the date each installment shall become exercisable and the term of each
installment; whether to accelerate the date of exercise of any option or
installment; whether shares of Common Stock may be issued upon the exercise of
an option as partly paid and, if so, the dates when future installments of the
exercise price shall become due and the amounts of such installments; the form
of payment of the exercise price; the fair market value of a share of Common
Stock; whether to restrict the sale or other disposition of the shares of
Common Stock acquired upon the exercise of an option and, if so, whether to
waive any such restriction; whether to subject the exercise of all or any
portion of an option to the fulfillment of contingencies as specified in the
contract referred to in Paragraph 11 (the "Contract"), including without
limitation, contingencies relating to entering into a covenant not to compete
with the Company, any of its Subsidiaries or a Parent (as defined in Paragraph
17), to financial objectives for the Company, any of its Subsidiaries or a
Parent (except as stated in Paragraph 6 hereof), a division of any of the
foregoing, a product line or other category, and/or the period of continued
employment of the optionee with the Company, any of its Subsidiaries or a
Parent, and to determine whether such contingencies have been met; the amount,
if any, necessary to satisfy the Company's obligation to withhold taxes or
other amounts; whether an optionee is disabled; to construe the respective
Contracts and the Plan; with the consent of the optionee, to cancel or modify
an option, provided such modified provision would be permitted to be included
in an option on the date of modification; to prescribe, amend and rescind rules
and regulations relating to the Plan; and to make all other determinations
necessary or advisable for administering the Plan. Any controversy or claim
arising out of or relating to the Plan, any option granted under the Plan or
any Contract shall be determined unilaterally by the Committee in its sole
discretion. The determinations of the Committee on the matters referred to in
this Paragraph 3 shall be conclusive and binding on the parties. No member or
former member of the Committee shall be liable for any action, failure to act
or determination made in good faith with respect to the Plan or any option
hereunder.
4. ELIGIBILITY. The Committee may from time to time, in its sole
discretion, consistent with the purposes of the Plan, grant options to
employees, officers and directors of, and to consultants to, the Company or any
of its Subsidiaries. Such options granted shall cover such number of shares of
Common Stock as the Committee
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may determine in its sole discretion.
5. EXERCISE PRICE. The exercise price of the shares of Common
Stock under each option shall be determined by the Committee in its sole
discretion; provided, however, the exercise price of an option shall not be
less than Five dollars and fifty cents ($5.50).
6. TERM. The term of each option granted pursuant to the Plan
shall be such term as is established by the Committee, in its sole discretion;
provided, however, that the term of each option granted pursuant to the Plan
shall be for a period not exceeding six years from the date of grant thereof
and 50,000 and 100,000 of the options shall automatically terminate unless the
Company achieves net income of not less than $990,000 and $1,800,000,
respectively, during its fiscal years ended December 31, 1997 and 1998.
7. EXERCISE. An option (or any part or installment thereof), to
the extent then exercisable, shall be exercised by giving written notice to the
Company at its principal office stating which option is being exercised,
specifying the number of shares of Common Stock as to which such option is
being exercised and accompanied by payment in full of the aggregate exercise
price therefor (or the amount due on exercise if the Contract permits
installment payments) (a) in cash or by certified check or (b) if the
applicable Contract permits, with previously acquired shares of Common Stock
having an aggregate fair market value on the date of exercise (determined in
accordance with this Paragraph 7) equal to the aggregate exercise price of all
options being exercised, or with any combination of cash, certified check or
shares of Common Stock
The Committee may, in its sole discretion, permit payment of the
exercise price of an option by delivery by the optionee of a properly executed
notice, together with a copy of the optionee's irrevocable instructions to a
broker acceptable to the Committee to deliver promptly to the Company the
amount of sale or loan proceeds sufficient to pay such exercise price. In
connection therewith, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms.
A person entitled to receive Common Stock upon the exercise of an
option shall not have the rights of a shareholder with respect to such shares
of Common Stock until the date of issuance of a share certificate to him for
such shares; provided, however, that until such share certificate is issued,
any optionee using previously acquired shares of Common Stock in payment of an
option exercise price shall continue to have the rights of a shareholder with
respect to such previously acquired shares.
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In no case may a fraction of a share of Common Stock be purchased or
issued under the Plan.
The fair market value of a share of Common Stock on any day shall be
(a) if the principal market for the Common Stock is a national securities
exchange, the average of the highest and lowest sales prices per share of
Common Stock on such day as reported by such exchange or on a composite tape
reflecting transactions on such exchange, (b) if the principal market for the
Common Stock is not a national securities exchange and the Common Stock is
quoted on The Nasdaq Stock Market ("Nasdaq"), (i) if closing bid and asked
price information is available with respect to the Common Stock the average of
the closing bid and asked prices per share of Common Stock on such day on
Nasdaq, or (ii) if such information is not available, the average of the
highest bid and lowest asked prices per share of Common Stock on such day on
Nasdaq, or (c) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on Nasdaq, the average
of the highest bid and lowest asked prices per share of Common Stock on such
day as reported on the OTC Bulletin Board Service or by National Quotation
Bureau, Incorporated or a comparable service; provided, however, that if
clauses (a), (b) and (c) of this Paragraph are all inapplicable, or if no
trades have been made or no quotes are available for such day, the fair market
value of the Common Stock shall be determined by the Board by any method
consistent with generally accepted accounting principles.
8. TERMINATION OF RELATIONSHIP. Except as may otherwise be
expressly provided in the applicable Contract, any optionee whose relationship
with the Company, its Subsidiaries and Parent as an employee or consultant has
terminated for any reason (other than his death or disability) may exercise
such option, to the extent exercisable on the date of such termination, at any
time within three months after the date of termination, but not thereafter and
in no event after the date the option would otherwise have expired; provided,
however, that if such relationship is terminated either (a) for cause, or (b)
without the consent of the Company, such option shall terminate immediately.
Notwithstanding the foregoing, except as may otherwise be expressly
provided in the applicable Contract, options granted under the Plan shall not
be affected by any change in the status of the optionee so long as the optionee
continues to be an employee of, or a consultant to, the Company, any of its
Subsidiaries or a Parent (regardless of having changed from one to the other or
having been transferred from one corporation to another).
Nothing in the Plan or in any option granted under the Plan shall
confer on any optionee any right to continue in the employ of, or as a
consultant to, the Company, its Parent or any of its
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Subsidiaries, or interfere in any way with any right of the Company, its Parent
or any of its Subsidiaries to terminate the optionee's relationship at any time
for any reason whatsoever without liability to the Company, its Parent or any
of its Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. Except as may otherwise be
expressly provided in the applicable Contract, if an individual optionee dies
(a) while he is an employee of, or a consultant to, the Company, any of its
Subsidiaries or a Parent, (b) within three months after the termination of such
relationship (unless such termination was for cause or without the consent of
the Company) or (c) within one year following the termination of such
relationship by reason of disability (as determined by the Board of Directors),
his option may be exercised, to the extent exercisable on the date of his
death, by his Legal Representative (as defined in Paragraph 17) at any time
within one year after death, but not thereafter and in no event after the date
the option would otherwise have expired.
Except as may otherwise be expressly provided in the applicable
Contract, any optionee whose relationship as an employee of, or a consultant
to, the Company, its Parent or any Subsidiary has terminated by reason of
disability (as determined by the Board of Directors) may exercise his option,
to the extent exercisable upon the effective date of such termination, at any
time within one year after such date, but not thereafter and in no event after
the date the option would otherwise have expired.
10. COMPLIANCE WITH SECURITIES LAWS. It is a condition to the
exercise of any option that the optionee agree not to sell, transfer or
otherwise dispose of any shares so purchased by him except in compliance with
the United States Securities Act of 1933, as amended (the "Securities Act") and
the rules and regulations thereunder and the optionee further agrees that all
certificates evidencing any of such shares shall be appropriately legended to
reflect such restriction. The Company does not obligate itself to register any
shares under the Securities Act.
The Committee may require, in its sole discretion, as a condition to
the exercise of any option that the optionee execute and deliver to the Company
his representations and warranties, in form, substance and scope satisfactory
to the Committee, which the Committee determines are necessary or convenient to
facilitate the perfection of an exemption from the registration requirements of
the Securities Act or other legal requirement, including without limitation
that (a) the shares of Common Stock to be issued upon the exercise of the
option are being acquired by the optionee for his own account, for investment
only and not with a view to the resale or distribution thereof, and (b) any
subsequent resale or
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distribution of shares of Common Stock by such optionee will be made only
pursuant to (i) a Registration Statement under the Securities Act which is
effective and current with respect to the shares of Common Stock being sold, or
(ii) a specific exemption from the registration requirements of the Securities
Act, but in claiming such exemption, the optionee shall prior/to any offer of
sale or sale of such shares of Common Stock provide the Company with a
favorable written opinion of counsel satisfactory to the Company, in form,
substance and scope satisfactory to the Company, as to the applicability of
such exemption to the proposed sale or distribution.
In addition, if at any time the Committee shall determine, in its sole
discretion, that the listing or qualification of the shares of Common Stock
subject to such option on any securities exchange, Nasdaq or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition to, or in connection with, the
granting of an option or the issue of shares of Common Stock thereunder, such
option may not be exercised in whole or in part unless such listing,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.
11. STOCK OPTION CONTRACTS. Each option shall be evidenced by an
appropriate Contract which shall be duly executed by the Company and the
optionee, and shall contain such terms, provisions and conditions not
inconsistent herewith as may be determined by the Committee.
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any
other provision of the Plan, in the event of a stock dividend, split-up,
combination, reclassification, recapitalization, spin-off, merger in which the
Company is the surviving corporation, or exchange of shares or the like which
results in a change in the number or kind of those shares of Common Stock which
are outstanding immediately prior to such event, the aggregate number and kind
of shares subject to the Plan, the aggregate number and kind of shares subject
to each outstanding option and the exercise price thereof, whose determination
shall be conclusive and binding on all parties. Such adjustment may provide for
the elimination of fractional shares which might otherwise be subject to
options without payment thereto.
In the event of (a) the liquidation or dissolution of the Company, or
(b) a merger in which the Company is not the surviving corporation or a
consolidation, any outstanding options shall terminate upon the earliest of any
such event, unless other provision is made therefor in the transaction.
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13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted
by the Board of Directors on November 5, 1996. No option may be granted under
the Plan after November 5, 2006. The Board of Directors, without further
approval of the Company's shareholders, may at any time suspend or terminate
the Plan, in whole or in part, or amend it from time to time in such respects
as it may deem advisable, including, without limitation, to comply with,
conform to, or adopt any change in applicable law, regulations, rulings or
interpretations of administrative agencies; provided, however, that no
amendment shall be effective without the requisite prior or subsequent
shareholder approval that would (a) except as contemplated in Paragraph 12,
increase the minimum number of shares of Common Stock for which options may be
granted under the Plan, (b) materially increase the benefits accruing to
participants under the Plan or (c) change the eligibility requirements to
receive options hereunder. No termination, suspension or amendment of the Plan
shall, without the consent of the holder of an existing and outstanding option
affected thereby, adversely affect his rights under such option. The power of
the Committee to construe and administer any options granted under the Plan
prior to the termination or suspension of the Plan nevertheless shall continue
after such termination or during such suspension.
14. NON-TRANSFERABILITY OF OPTIONS. No option granted under the
Plan shall be transferable otherwise than by will or the laws of descent and
distribution, and options may be exercised, during the lifetime of the
optionee, only by the optionee or his Legal Representatives. Except to the
extent provided above, options may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar
process, and any such attempted assignment, transfer, pledge, hypothecation or
disposition shall be null and void ab initio and of no force or effect.
15. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such
legend or legends upon the certificates for shares of Common Stock issued upon
exercise of an option under the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such shares as it determines,
in its discretion, to be necessary or appropriate to (a) prevent a violation
of, or to perfect an exemption from, the registration requirements of the
Securities Act and any applicable state securities laws or (b) implement the
provisions of the Plan or any agreement between the Company and the optionee
with respect to such shares of Common Stock.
The optionee shall pay all issuance taxes with respect to the issuance
of shares of Common Stock upon the exercise of an option granted under the
Plan.
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16. USE OF PROCEEDS. The cash proceeds from the sale of shares of
Common Stock pursuant to the exercise of options under the Plan shall be added
to the general funds of the Company and used for such corporate purposes as the
Board of Directors may determine.
17. DEFINITIONS. For purposes of the Plan, the following terms
shall be defined as set forth below:
(a) "Companies Ordinance" shall mean the Companies
Ordinance, Cap. 32, of Hong Kong.
(b) "Legal Representative" shall mean the executor,
administrator or other person who at the time is entitled by law to exercise
the rights of a deceased or incapacitated optionee with respect to an option
granted under the Plan.
(c) "Parent" shall mean a company that is a parent within
the meaning of the Companies Ordinance, whether incorporated in Hong Kong, the
British Virgin Islands or elsewhere.
(d) "Subsidiary" shall mean a company that is a
subsidiary within the meaning of the Companies Ordinance, whether incorporated
in Hong Kong, the British Virgin Islands or elsewhere.
18. GOVERNING LAW; CONSTRUCTION. The Plan, such options as may be
granted hereunder and all related matters shall be governed by, and construed
in accordance with, the laws of Hong Kong.
Neither the Plan nor any Contract shall be construed or interpreted
with any presumption against the Company by reason of the Company causing the
Plan or Contract to be drafted. Whenever from the context it appears
appropriate, any term stated in either the singular or plural shall include the
singular and plural, and any term stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter.
19. PARTIAL INVALIDITY. The invalidity, illegality or
unenforceability of any provision in the Plan or any Contract shall not affect
the validity, legality or enforceability of any other provision, all of which
shall be valid, legal and enforceable to the fullest extent permitted by
applicable law.
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