Filed
Pursuant to Rule 424(b)(3)
File No.
333-130380
PROSPECTUS
SUPPLEMENT NO. 6 DATED DECEMBER 31, 2008
TO
PROSPECTUS DATED MAY 12, 2008
PUDA
COAL, INC.
29,551,660
Shares of Common Stock
This
Prospectus Supplement No. 6 supplements and amends the prospectus dated May 12,
2008, as supplemented and amended by Prospectus Supplement No. 1 dated May 15,
2008, Prospectus Supplement No. 2 dated July 2, 2008, Prospectus Supplement No.
3 dated July 24, 2008, Prospectus Supplements No. 4 and No. 5 dated November 18,
2008, which we refer to collectively as the Prospectus. This prospectus relates
to the offer for sale of up to 29,551,660 shares of our common stock by certain
existing holders of the securities, referred to as Selling Security
Holders.
On
December 31, 2008, we filed with the Securities and Exchange Commission our
Current Report on Form 8-K for the amendment of certain directors contracts,
adoption of our 2008 Equity Incentive Plan and execution of certain grant
agreements under the plan. A copy of such Current Report on Form 8-K is attached
to and constitutes an integral part of this Prospectus Supplement No.
6.
This
Prospectus Supplement No. 6 should be read in conjunction with the
Prospectus, which are to be delivered with this Prospectus Supplement
No. 6. This Prospectus Supplement No. 6 is qualified by reference to
the Prospectus except to the extent that the information in this Prospectus
Supplement No. 6 supersedes the information contained in the
Prospectus.
In
reviewing the Prospectus and this Prospectus Supplement No. 6, you should
carefully consider the risks under “Risk Factors” beginning on page 6 of the
Prospectus, dated May 12, 2008, as updated by the risk factors discussed in
Item 1A of Part II of our subsequent Quarterly Reports on Form
10-Q.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if the Prospectus or
this Prospectus Supplement No. 6 is truthful or complete. Any
representation to the contrary is a criminal offense.
The
date of this Prospectus Supplement No. 6 is December 31, 2008
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of
earliest event reported): December 29,
2008
Puda
Coal, Inc.
(Exact
name of registrant as specified in its charter)
333-85306
(Commission
File Number)
|
Florida
|
|
65-1129912
|
|
(State
or other jurisdiction of
incorporation)
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|
(I.R.S.
Employer Identification No.)
|
426 Xuefu Street, Taiyuan,
Shanxi Province,
The
People’s Republic of China
(Address
of principal executive offices, with zip code)
011
86 351 228 1302
(Registrant's
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions ( see
General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement.
On
December 29, 2008, Puda Coal, Inc. (the “Company”) entered
into an amendment to the Director’s Contract with Lawrence S. Wizel dated
August 3, 2007. Pursuant to the amendment, in consideration of
his continued service to the Company as an independent director, the annual
stock compensation to Mr. Wizel will be $25,000 worth of shares of common
stock of the Company, calculated based on the closing sale price of the
Company’s common stock as quoted by OTCBB on the date the board of directors
(the “Board”)
authorized to grant the shares (August 11, 2008) and then, each anniversary date
of the grant date, and such stock grants to Mr. Wizel are subject to the
Company’s 2008 Equity Incentive Plan (the “2008
Plan”). The Director’s Contract otherwise remains unchanged
and in full force and effect.
On
December 29, 2008, the Company entered into an amendment to Director’s Contract
with Jianfei Ni dated June 29, 2007. Pursuant to the amendment,
in consideration of his continued service to the Company as an independent
director, the annual stock compensation to Mr. Ni will be $25,000 worth of
shares of common stock, calculated based on the closing sale price of the
Company’s common stock as quoted by OTCBB on the date the Board authorized to
grant the shares (August 11, 2008) and then, each anniversary date of the grant
date, and such stock grants to Mr. Ni are subject to the 2008
Plan. The Director’s Contract otherwise remains unchanged and in full
force and effect.
On
December 29, 2008, the Company entered into an amendment to Director’s Contract
with C. Mark Tang dated October 9, 2007, effective on the same
date. Pursuant to the amendment, in consideration of his continued
service to the Company as an independent director, the stock compensation to
Dr. Tang will be $15,000 worth of shares of common stock of the Company,
calculated based on the closing sale price of the Company’s common stock as
quoted by OTCBB on the date the Board authorized to grant the shares (October 9,
2008) and then each anniversary date of the grant date, and such stock grants to
Dr. Tang are subject to the 2008 Plan. The Director’s Contract
otherwise remains unchanged and in full force and effect.
The above
amendments are filed as Exhibits 10.1, 10.2 and 10.3 to this report
and are incorporated in this report in their entirety. Terms of the
Director’s Contracts were described in the current reports on Form 8-K
filed on August 9, July 6 and October 9, 2007, respectively, and such
disclosures are incorporated herein by reference. The description of
the terms and conditions of the amendments and the Director’s Contracts in this
report is modified and supplemented by such references.
On
December 29, 2008, the Company entered into restricted stock unit grant
agreements with the above directors under the 2008 Plan adopted by the
shareholders on December 29, 2008. The stock grants under the
Directors’ Contracts described above are subject to the 2008 Plan and the grant
agreements. Please see the disclosures under Item 5.02
below. There has been no material relationship between the Company or
its affiliates and the directors other than their being independent directors of
the Company and their director contracts and grant agreements with the
Company.
In order
to reward their hard work and contributions to the Company in the past two years
the Company, the Company granted each of Wenwei Tian, COO of the Company since
2006, and Ming Zhao, CEO of the Company until his resignation in June 2008 and
Chairman of the Board, 20,000 shares of common stock on
August 11, 2008 and 40,000 shares of common stock on December 11,
2008, respectively. Mr. Zhao owns approximately 49% of the Company’s
total outstanding shares of common stock, and together with his brother, he owns
approximately 61% of the Company’s total outstanding shares of common
stock. The shares granted to Mr. Tian vested in full on their
respective grant dates, and the shares granted to Mr. Zhao will vest on the
dates that are the one-year anniversary of their respective grant dates and are
subject to the restricted stock unit grant agreement under the 2008
Plan. Until the distribution date as defined in the agreement, the
shares may not be sold, transferred, pledged, assigned or otherwise alienated at
any time.
Below is
a schedule of the grants made to the directors and officers as summarized
above:
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Name
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Title
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No.
of
Shares
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|
Grant Date
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Jianfei
Ni
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Director
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59,524
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August
11, 2008
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Lawrence
Wizel
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Director
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59,524
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August
11, 2008
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C.
Mark Tang
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Director
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75,000
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|
October
9, 2008
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|
Wenwei
Tian
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Chief
Operating Officer;
Director
of Investors Relation
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20,000
40,000
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|
August
11, 2008
December
11, 2008
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|
Ming
Zhao
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Chairman
of the Board; Former
Chief
Executive Officer;
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20,000
40,000
|
|
August
11, 2008
December
11,
2008
|
The above
awards are subject to the 2008 Plan and the terms and conditions in the form
grant agreements, as applicable, filed as Exhibits 10.4 to
10.7 to this
report.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of Certain
Officers.
On
December 29, 2008, the shareholders of the Company approved a Puda Coal, Inc.
2008 Equity Incentive Plan, or the 2008 Plan, by written consent in lieu of
meeting, at the recommendation of the Board. The purpose of the 2008
plan is to promote the success of the Company and to increase shareholder value
by providing an additional means through the grant of equity incentive awards to
attract, motivate, retain and reward employees and directors.
Any
employee or director of the Company is eligible to participate in the 2008 Plan
and may be granted stock awards and/or options (collectively, “Awards”) by the
administrator of the 2008 Plan, which is the Board, the Compensation Committee
or their delegates. The 2008 Plan became effective upon its approval
by the shareholders of the Company and will continue in effect for a term of ten
years unless terminated by the administrator of the 2008 Plan
earlier. The aggregate number of shares of commons stock that may be
issued pursuant to the Awards under the 2008 Plan is 5,000,000
shares. The aggregate number of shares subject to the Awards under
the 2008 Plan during any calendar year to any one awardee will not exceed
500,000 shares, except that in connection with the awardee’s initial service, he
may be granted Awards covering up to an additional 500,000
shares. The fair market value of the common stock should be
determined by the administrator of the 2008 Plan in good faith using a
reasonable valuation method in a reasonable manner in accordance with Section
409A of the Internal Revenue Code of 1986, as amended. Whenever
possible, the determination of fair market value should be based upon the
average of the highest and lowest quoted sales prices for such common stock as
of such date as reported in sources as determined by the administrator. The
administrator of the 2008 Plan also has the authority to, in its discretion,
select employees or directors to whom Awards are to be granted, determine the
number of shares under the grant, determine the type of Awards, approve forms of
award agreements for use under the 2008 Plan, determine the terms and conditions
of any Award granted under the 2008 Plan so far as they are not inconsistent
with the terms of the 2008 Plan, interpret the terms of the 2008 Plan, adopt
rules and procedures relating to the operations and administration of the 2008
Plan, impose restrictions, conditions or limitations as to the timing and manner
of any resale by an awardee or subsequent transfers, and make other
determinations deemed necessary or advisable for administering the 2008 Plan and
any Award granted under the 2008 Plan.
The
administrator may amend or discontinue the 2008 Plan or any award agreement
under the 2008 Plan, but any material amendment to the 2008 Plan is subject to
the approval of the shareholders. Unless approved by the
shareholders, no amendment to the 2008 Plan should materially increase the
maximum number of shares reserved under the 2008 Plan, reduce the minimum
purchase price for options or change or expand the class of persons eligible to
receive Awards under the 2008 Plan. No amendment, suspension or
termination of the 2008 Plan should impair the rights under any Award, unless
mutually agreed otherwise between the awardee and the administrator in
writing. In the event of a recapitalization or reclassification of
the common stock of the Company, the administrator will make appropriate and
equitable adjustments to the number and kind of shares covered by each
outstanding Awards as well as the price per share. In the event of a
dissolution or liquidation of the Company, the administrator will notify the
awardees as soon as practicable prior to the effective date of the proposed
transaction and may, in its discretion, provide for an option to be fully vested
and exercisable until ten days prior to such transaction. In the
event there is a change in control of the Company, the administrator may, in its
discretion, provide for the assumption or substitution of, or adjustments to
each outstanding Award, accelerate the vesting of options and terminate any
restrictions on stock awards, and/or provide for the cancellation of Awards for
a cash payment to the awardee. No person will have any claim or right
to be granted an Award and the grant of any Award will not be construed as
giving an awardee the right to continue in the employment of the Company or its
affiliates.
On
December 29, 2008, the shareholders of the Company approved the forms of
Director Restricted Stock Unit Grant Agreement, Employee Restricted Stock Unit
Grant Agreement and Stock Option Agreement under the 2008 Plan (collectively,
the “Form
Agreements”), which were recommended to the shareholders by the
Board.
The 2008
Plan and the Form Agreements are filed as Exhibits 10.4,
10.5, 10.6 and 10.7 to this report
and are incorporated in this report in their entirety. The description of
the terms and conditions of the 2008 Plan and the Form Agreements in this report
is modified and supplemented by such reference.
Item 9 Financial Statements and
Exhibits
The
exhibits listed in the following Exhibit Index are filed as part of this
report.
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Exhibit No.
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Description
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| |
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10.1
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Amendment
No. 1 to Director’s Contract, dated December 29, 2008, between the
Company and Lawrence S. Wizel
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| |
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10.2
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Amendment
No. 1 to Director’s Contract, dated December 29, 2008 between the
Company and Jianfei Ni
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10.3
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Amendment
No. 1 to Director’s Contract, dated December 29, 2008, between the
Company and C. Mark Tang
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10.4
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Puda
Coal, Inc. 2008 Equity Incentive Plan
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10.5
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Form
of Director Restricted Stock Unit Grant Agreement
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10.6
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Form
of Employee Restricted Stock Unit Grant Agreement
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10.7
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Form
of Stock Option
Agreement
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date:
December 29, 2008
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| |
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By:
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/s/
Liping Zhu
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Liping
Zhu
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Chief
Executive Officer and
President
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Ex.
10.1
AMENDMENT
NO. 1 TO INDEPENDENT DIRECTOR’S CONTRACT
THIS
Amendment No. 1 to Independent Director’s Contract (this “Amendment”) is made
as of December 29, 2008 by and between Puda Coal, Inc., a Florida
corporation (the “Company”), and
Lawrence S. Wizel (the “Director”), who are
signatories to the Independent Director’s Contract dated August 3, 2007 (the
“Agreement”).
RECITALS
WHEREAS,
the Company and the Director wish to amend the Agreement to adjust the
compensation of the Director pursuant to paragraph 3 of the Agreement and in
consideration of the Director’s continued services as an independent director of
the Company;
NOW,
THEREFORE, in consideration for the foregoing, the mutual promises contained
herein and other good and valuable consideration, the adequacy and receipt of
which are hereby acknowledged, the Company and the Director hereby agree as
follows:
1. Amendment to the
Agreement. Paragraph 3 of the Agreement is hereby amended and
restated in its entirety to read as follows:
“3. COMPENSATION. For all services
to be rendered by the Director in any capacity hereunder, the Company agrees to
pay the Director an annual fee of (i) $40,000 in cash and (ii) $25,000 worth of
shares of common stock of the Company, calculated based on the closing sale
price of the Company’s common stock as quoted by OTCBB on August 11, 2008 (the
“Grant Date”)
and each anniversary date of the Grant Date thereafter. The initial fee should
be 50% of the annual fee, which is considered earned when paid and is
nonrefundable. The initial payment for the services of the Director for services
rendered is due upon execution of this Agreement; thereafter, payment of 50% of
the annual fee shall be due on or before the first date of each six
succeeding months after the Grant Date. Such fee may be adjusted from time to
time as agreed by the parties. The stock grants under this Agreement
shall be subject to the Company’s equity incentive plan then in
effect.”
2. General. Except
for the amendments effected by this Amendment, which shall become effective as
of the date hereof, the terms and provisions of the Agreement shall remain
unchanged and in full force and effect. To avoid any confusion, this
Amendment has no retroactive effect. This Amendment together with the
Agreement constitute the full and entire understanding and agreement between the
parties with regard to the subjects related to the Director’s services as a
director of the Company. This Amendment may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and signed as of the day and year first above written.
|
|
PUDA
COAL, INC.
a
Florida corporation
|
|
|
|
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By:
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/s/
Liping Zhu
|
|
|
Liping
Zhu
President
and Chief Executive
Officer
|
|
|
DIRECTOR
|
|
|
|
|
|
|
By:
|
/s/
Lawrence S. Wizel
|
|
|
Lawrence
S. Wizel
|
Ex.
10.2
AMENDMENT
NO. 1 TO INDEPENDENT DIRECTOR’S CONTRACT
THIS
Amendment No. 1 to Independent Director’s Contract (this “Amendment”) is made
as of December 29, 2008 by and between Puda Coal, Inc., a Florida
corporation (the “Company”), and
Jianfei Ni (the “Director”), who are
signatories to the Independent Director’s Contract dated June 29, 2007 (the
“Agreement”).
RECITALS
WHEREAS,
the Company and the Director wish to amend the Agreement to adjust the
compensation of the Director pursuant to paragraph 3 of the Agreement and in
consideration of the Director’s continued services as an independent director of
the Company;
NOW,
THEREFORE, in consideration for the foregoing, the mutual promises contained
herein and other good and valuable consideration, the adequacy and receipt of
which are hereby acknowledged, the Company and the Director hereby agree as
follows:
1. Amendment to the
Agreement. Paragraph 3 of the Agreement is hereby amended and
restated in its entirety to read as follows:
“3. COMPENSATION. “For
all services to be rendered by the Director in any capacity hereunder, the
Company agrees to pay the Director $25,000 worth of shares of common stock of
the Company per year, calculated based on the closing sale price of the
Company’s common stock as quoted by OTCBB on August 11, 2008 (the “Grant Date”) and each
anniversary date of the Grant Date thereafter.
The
initial fee should be 50% of the annual fee, which is considered earned when
paid and is nonrefundable. The initial payment for the services of the Director
for services rendered is due upon execution of this Agreement; thereafter,
payment of 50% of the annual fee shall be due on or before the first
date of each six succeeding months. Such fee may be adjusted from time to
time as agreed by the parties. The stock grants under this Agreement
shall be subject to the Company’s equity incentive plan then in
effect.
2. General. Except
for the amendments effected by this Amendment, which shall become effective as
of the date hereof, the terms and provisions of the Agreement shall remain
unchanged and in full force and effect. To avoid any confusion, this
Amendment has no retroactive effect. This Amendment together with the
Agreement constitute the full and entire understanding and agreement between the
parties with regard to the subjects related to the Director’s services as a
director of the Company. This Amendment may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and signed as of the day and year first above written.
|
|
PUDA
COAL, INC.
a
Florida corporation
|
|
|
|
|
|
|
By:
|
/s/
Liping
Zhu |
|
|
|
Liping
Zhu
President
and Chief Executive
Officer
|
|
|
DIRECTOR
|
|
|
|
|
|
|
By:
|
/s/
Jianfei Ni
|
|
|
|
Jianfei
Ni
|
Ex.
10.3
AMENDMENT
NO. 1 TO INDEPENDENT DIRECTOR’S CONTRACT
THIS
Amendment No. 1 to Independent Director’s Contract (this “Amendment”) is made
as of December 29, 2008 by and between Puda Coal, Inc., a
Florida corporation (the “Company”), and C.
Mark Tang (the “Director”), who are
signatories to the Independent Director’s Contract dated October 9, 2007 (the
“Agreement”).
RECITALS
WHEREAS,
the Company and the Director wish to amend the Agreement to adjust the
compensation of the Director pursuant to paragraph 3 of the Agreement and in
consideration of the Director’s continued services as an independent director of
the Company;
NOW,
THEREFORE, in consideration for the foregoing, the mutual promises contained
herein and other good and valuable consideration, the adequacy and receipt of
which are hereby acknowledged, the Company and the Director hereby agree as
follows:
1.
Amendment to the
Agreement. Paragraph 3 of the Agreement is hereby amended and
restated in its entirety to read as follows:
“3. COMPENSATION. For all services
to be rendered by the Director in any capacity hereunder, the Company agrees to
pay the Director an annual fee of (i) $25,000 in cash and (ii) $15,000 worth of
shares of common stock of the Company, calculated based on the closing sale
price of the Company’s common stock as quoted by OTCBB on October 9, 2008 (the
“Grant Date”)
and each anniversary date of the Grant Date thereafter. The initial fee should
be 50% of the annual fee, which is considered earned when paid and is
nonrefundable. The initial payment for the services of the Director for services
rendered is due upon execution of this Agreement; thereafter, payment of 50% of
the annual fee shall be due on or before the first date of each six
succeeding months after the Grant Date. Such fee may be adjusted from time to
time as agreed by the parties. The stock grants under this Agreement
shall be subject to the Company’s equity incentive plan then in
effect.”
2.
General. Except
for the amendments effected by this Amendment, which shall become effective as
of the date hereof, the terms and provisions of the Agreement shall remain
unchanged and in full force and effect. To avoid any confusion, this
Amendment has no retroactive effect. This Amendment together with the
Agreement constitute the full and entire understanding and agreement between the
parties with regard to the subjects related to the Director’s services as a
director of the Company. This Amendment may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and signed as of the day and year first above written.
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PUDA
COAL, INC.
a
Florida corporation
|
|
|
|
|
|
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By:
|
/s/ Liping Zhu |
|
|
Liping
Zhu
President
and Chief Executive
Officer
|
|
|
|
|
|
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DIRECTOR
|
|
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|
|
|
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By:
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/s/
C. Mark Tang
|
|
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C.
Mark Tang
|
Ex.
10.4
PUDA
COAL, INC.
2008
EQUITY INCENTIVE PLAN
The
purpose of this 2008 Equity Incentive Plan (the “Plan”) is to promote the
success of the Company and to increase shareholder value by providing an
additional means through the grant of Awards to attract, motivate, retain and
reward Employees and Directors.
As used
herein, the following definitions shall apply:
(a) “Administrator” means the
Board, any Committees or such delegates as shall be administering the Plan in
accordance with Section 4 of the Plan.
(b) “Affiliate” means any entity
that is directly or indirectly controlled by the Company or any entity in which
the Company has a significant ownership interest as determined by the
Administrator.
(c) “Applicable Laws” means the
requirements relating to the issuance and administration of stock option and
stock award plans under U.S. federal and state laws, any stock exchange or
quotation system on which the Company has listed or submitted for quotation the
Common Stock to the extent provided under the terms of the Company’s agreement
with such exchange or quotation system and, with respect to Awards subject to
the laws of any foreign jurisdiction where Awards are, or will be, granted under
the Plan, the laws of such jurisdiction (including without limitation the
applicable laws, rules and regulations of the PRC).
(d) “Award” means a Stock Award or
Option granted in accordance with the terms of the Plan.
(e) “Awardee” means an Employee or
Director of the Company or any Affiliate who has been granted an Award under the
Plan or any person (including an estate) to whom an Award has been assigned or
transferred as permitted hereunder.
(f) “Award Agreement” means a
Stock Award Agreement or Option Agreement, which may be in written or electronic
format, in such form and with such terms and conditions as may be specified by
the Administrator, evidencing the terms and conditions of an individual
Award. Each Award Agreement is subject to the terms and conditions of
the Plan.
(g) “Board” means the Board of
Directors of the Company.
(h) “Cause” means, unless such
term or an equivalent term is otherwise defined with respect to an Award by the
Awardee’s Option Agreement, Stock Award Agreement or written contract of
employment or service, any of the following: (i) the Awardee’s theft,
dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or
falsification of any Company or Affiliate documents or records; (ii) the
Awardee’s material failure to abide by a Company’s or Affiliate’s code of
conduct or other policies (including without limitation, policies relating to
confidentiality and reasonable workplace conduct); (iii) the Awardee’s
unauthorized use, misappropriation, destruction or diversion of any tangible or
intangible asset or corporate opportunity of the Company or an Affiliate
(including, without limitation, the Awardee’s improper use or disclosure of
confidential or proprietary information); (iv) the Awardee’s violation of
any noncompetition, non-solicitation or confidentiality agreement with the
Company or an Affiliate; (v) any intentional act by the Awardee which has a
material detrimental effect on the Company or an Affiliate’s reputation or
business; (vi) the Awardee’s repeated failure or inability to perform any
reasonable assigned duties after written notice from the Company or an
Affiliate, and a reasonable opportunity to cure, such failure or inability;
(vii) any material breach by the Awardee of any employment or service
agreement between the Awardee and the Company or an Affiliate, which breach is
not cured pursuant to the terms of such agreement; or (vii) the Awardee’s
conviction (including any plea of guilty or nolo contendere) of any criminal act
involving fraud, dishonesty, misappropriation or moral turpitude, or which
impairs the Awardee’s ability to perform his or her duties with the Company or
an Affiliate.
(i)
“Change in
Control” means any of the following, unless the Administrator provides
otherwise:
i. any
merger or consolidation in which the Company shall not be the surviving entity
(or survives only as a subsidiary of another entity whose shareholders did not
own all or substantially all of the Common Stock in substantially the same
proportions as immediately prior to such transaction),
ii. the
sale of all or substantially all of the Company’s assets to any other person or
entity (other than a wholly-owned subsidiary),
iii. the
acquisition of beneficial ownership of a controlling interest (including,
without limitation, power to vote) the outstanding shares of Common Stock by any
person or entity (including a “group” as defined by or under
Section 13(d)(3) of the Exchange Act),
iv. the
dissolution or liquidation of the Company, or
v. any
other event specified by the Board or a Committee, regardless of whether at the
time an Award is granted or thereafter.
(j)
“Code” means the
United States Internal Revenue Code of 1986, as amended.
(k) “Committee” means the
Compensation Committee of the Board or a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.
(l)
“Common Stock” means the
common stock of the Company.
(m) “Company” means Puda Coal,
Inc., a Florida corporation, or its successor.
(n) “Conversion Award” has the
meaning set forth in Section 4(b)(xiii) of the Plan.
(o) “Director” means a member of
the Board.
(p) “Employee” means a regular,
active employee of the Company or any Affiliate, with the status of employment
determined based upon such factors as are deemed appropriate by the
Administrator in its discretion, subject to the Applicable
Laws. Within the limitations of Applicable Laws, the Administrator
shall have the discretion to determine the effect upon an Award and upon an
individual’s status as an Employee in the case of (i) any individual who is
classified by the Company or its Affiliate as leased from or otherwise employed
by a third party or as intermittent or temporary, even if any such
classification is changed retroactively as a result of an audit, litigation or
otherwise, (ii) any leave of absence approved by the Company or an
Affiliate, (iii) any transfer between locations of employment with the
Company or an Affiliate or between the Company and any Affiliate or between any
Affiliates, (iv) any change in the Awardee’s status from an Employee to a
Director or consultant, and (v) at the request of the Company or an
Affiliate an employee becomes employed by any partnership, joint venture or
corporation not meeting the requirements of an Affiliate in which the Company or
an Affiliate is a party. The payment of the Company of a director’s
fee to a Director shall not be sufficient to constitute “employment” of such
Director by the Company.
(q) “Exchange Act” means the
United States Securities Exchange Act of 1934, as amended.
(r)
“Fair Market Value” means, as
of any date, the fair market value of the Common Stock, as determined by the
Administrator in good faith using a reasonable valuation method in a reasonable
manner in accordance with Section 409A of the Code. Whenever
possible, the determination of Fair Market Value shall be based upon the average
of the highest and lowest quoted sales prices for such Common Stock as of such
date (or if no sales were reported on such date, the average on the last
preceding day on which a sale was made), as reported in such source as the
Administrator shall determine.
(s) “Grant Date” means the date
upon which an Award is granted to an Awardee pursuant to this Plan.
(t)
“Incentive Stock Option” means
an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated
thereunder.
(u) “Nonstatutory Stock Option”
means an Option not intended to qualify as an Incentive Stock
Option.
(v) “Officer” means a person who
is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.
(w) “Option” means a right granted
under Section 8 to purchase a number of Shares or Stock Units at such
exercise price, at such times, and on such other terms and conditions as are
specified in the agreement or other documents evidencing the Option (the “Option
Agreement”). Both Options intended to qualify as Incentive
Stock Options and Nonstatutory Stock Options may be granted under the
Plan.
(x) “Plan” means this Puda Coal,
Inc. 2008 Equity Incentive Plan.
(y) “PRC” means the People’s
Republic of China.
(z) “Qualifying Performance
Criteria” shall have the meaning set forth in Section 13(b) of the
Plan.
(aa) “Share” means a share of the
Common Stock, as adjusted in accordance with Section 14 of the
Plan.
(bb) “Stock Award” means an award
or issuance of Shares or Stock Units made under Section 11 of the Plan, the
grant, issuance, retention, vesting and/or transferability of which is subject
during specified periods of time to such conditions (including continued
employment or performance conditions) and terms as are expressed in the
agreement or other documents evidencing the Award (the “Stock Award
Agreement”).
(cc) “Stock Unit” means a
bookkeeping entry representing an amount equivalent to the Fair Market Value of
one Share, payable in cash, property or Shares. Stock Units represent an
unfunded and unsecured obligation of the Company, except as otherwise provided
for by the Administrator.
(dd)
“Subsidiary” means any
company (other than the Company) in an unbroken chain of companies beginning
with the Company, provided each company in the unbroken chain (other than the
Company) owns, at the time of determination, stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
companies in such chain.
(ee) “Termination of Employment or
Service” shall mean ceasing to be an Employee or Director as determined
in the sole discretion of the Administrator. However, solely for
purposes of determining whether an Option is an Incentive Stock Option,
Termination of Employment or Service will occur when the Awardee ceases to be an
“employee” (as determined in accordance with Section 3401(c) of the Code
and the regulations promulgated thereunder) of the Company or one of its
Subsidiaries. The Administrator shall determine whether any corporate
transaction, such as a sale or spin-off of a division or business unit, or a
joint venture, shall be deemed to result in a Termination of Employment or
Service.
(ff) “Total and Permanent Disability”
shall have the meaning set forth in Section 22(e)(3) of the
Code.
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3.
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Stock
Subject to the Plan.
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(a) Aggregate
Limits. Subject to the provisions of Section 14 of the
Plan, the aggregate number of Shares that may be issued pursuant to Awards
granted under the Plan is 5,000,000 Shares. Shares subject to Awards
that are cancelled, expire or are forfeited without Shares thereunder being
issued shall be available for re-grant under the Plan. If an Awardee
pays the exercise or purchase price of an Award through the tender of Shares, or
if Shares are tendered or withheld to satisfy any Company withholding
obligations, the number of Shares so tendered or withheld shall become available
for re-issuance thereafter under the Plan. The Shares issued pursuant
to the Plan may be either Shares reacquired by the Company, including Shares
purchased in the open market, or authorized but unissued Shares.
(b) Code Section 162(m)
Limits. Subject to the provisions of Section 14 of the
Plan, the aggregate number of Shares subject to Awards granted under this Plan
during any calendar year to any one Awardee shall not exceed 500,000, except
that in connection with his or her initial service, an Awardee may be granted
Awards covering up to an additional 500,000 Shares. Notwithstanding
anything to the contrary in the Plan, the limitations set forth in this
Section 3(b) shall be subject to adjustment under Section 14(a) of the
Plan only to the extent that such adjustment will not affect the status of any
Award intended to qualify as “performance based compensation” under Code
Section 162(m) or the ability to grant or the qualification of Incentive
Stock Options under the Plan.
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4.
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Administration
of the Plan.
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(a) Procedure.
i. The
Plan shall be administered by the Board, a Committee and/or their
delegates.
ii. To
the extent that the Administrator determines it to be desirable to qualify
Awards granted hereunder as “performance-based compensation” within the meaning
of Section 162(m) of the Code, Awards to “covered employees” within the
meaning of Section 162(m) of the Code or Employees that the Committee
determines may be “covered employees” in the future shall be made by a Committee
of two or more “outside directors” within the meaning of Section 162(m) of
the Code.
iii. To
the extent desirable to qualify transactions hereunder as exempt under
Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”), Awards
to Officers and Directors shall be made by the entire Board or a Committee of
two or more “non-employee directors” within the meaning of
Rule 16b-3. In addition, the Plan will be administered in a
manner that complies with applicable stock exchange listing
requirements.
iv. The
Board or a Committee may delegate to an authorized officer or officers of the
Company the power to approve Awards to persons eligible to receive Awards under
the Plan who are not (A) subject to Section 16 of the Exchange Act or
(B) at the time of such approval, “covered employees” under
Section 162(m) of the Code.
v. Except
to the extent prohibited by Applicable Laws, the Administrator may delegate to
one or more individuals the day-to-day administration of the Plan and any of the
functions assigned to it in this Plan. Such delegation may be revoked at any
time.
(b) Powers of the
Administrator. Subject to the
provisions of the Plan and, in the case of a Committee or delegates acting as
the Administrator, subject to the specific duties delegated to such Committee or
delegates, the Administrator shall have the authority, in its
discretion:
i. to
determine the Fair Market Value of the Common Stock, in accordance with Section
2(q) of the Plan, provided that such determination shall be applied consistent
with respect to Awardees under the Plan;
ii. to
select the Employees or Directors to whom Awards are to be granted
hereunder;
iii. to
determine the number of shares of Common Stock to be covered by each Award
granted hereunder;
iv. to
determine the type of Award to be granted to the selected Employees or
Directors;
v. to
approve forms of Award Agreements for use under the Plan;
vi. to
determine the terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted hereunder. Such terms and conditions include, but are not
limited to, the exercise and/or purchase price (if applicable), the time or
times when an Award may be exercised (which may or may not be based on
performance criteria), the vesting schedule, any vesting and/or exercisability
acceleration or waiver of forfeiture restrictions, the acceptable forms of
consideration, the term, and any restriction or limitation regarding any Award
or the Shares relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine and may be established at
the time an Award is granted or thereafter;
vii. to
correct administrative errors;
viii. to
construe and interpret the terms of the Plan (including sub-plans and Plan
addenda) and Awards granted pursuant to the Plan;
ix. to
adopt rules and procedures relating to the operation and administration of the
Plan to accommodate the specific requirements of local laws and procedures.
Without limiting the generality of the foregoing, the Administrator is
specifically authorized (A) to adopt the rules and procedures regarding the
conversion of local currency, withholding procedures and handling of stock
certificates which vary with local requirements and (B) to adopt sub-plans
and Plan addenda as the Administrator deems desirable, to accommodate foreign
laws, regulations and practice (including without limitation the laws,
regulations and practice of PRC);
x. to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans and Plan
addenda;
xi. to
modify or amend each Award, including, but not limited to, the acceleration of
vesting and/or exercisability, provided, however, that any such amendment is
subject to Section 15 of the Plan and may not impair any outstanding Award
unless agreed to in writing by the Awardee, except as set forth in that
section;
xii. to
allow Awardees to satisfy any applicable withholding tax amounts by electing to
have the Company withhold from the Shares to be issued upon exercise of a
Nonstatutory Stock Option or vesting of a Stock Award that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined in such manner and
on such date that the Administrator shall determine or, in the absence of
provision otherwise, on the date that the amount of tax to be withheld is to be
determined. All elections by an Awardee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may provide;
xiii. to
authorize conversion or substitution under the Plan of any or all stock options,
stock appreciation rights or other stock awards held by service providers of an
entity acquired by the Company (the “Conversion Awards”). Any conversion or
substitution shall be effective as of the close of the merger, acquisition or
other transaction. The Conversion Awards may be Nonstatutory Stock
Options or Incentive Stock Options, as determined by the Administrator, with
respect to options granted by the acquired entity; provided, however, that with
respect to the conversion of stock appreciation rights in the acquired entity,
the Conversion Awards shall be Nonstatutory Stock Options. Unless otherwise
determined by the Administrator at the time of conversion or substitution, all
Conversion Awards shall have the same terms and conditions as Awards generally
granted by the Company under the Plan;
xiv. to
authorize any person to execute on behalf of the Company any instrument required
to effect the grant of an Award previously granted by the
Administrator;
xv. to
impose such restrictions, conditions or limitations as it determines appropriate
as to the timing and manner of any resales by an Awardee or other subsequent
transfers by the Awardee of any Shares issued as a result of or under an Award,
including without limitation, (A) restrictions under an insider
trading policy and (B) restrictions as to the use of a specified brokerage
firm for such resales or other transfers;
xvi. to
provide, either at the time an Award is granted or by subsequent action, that an
Award shall contain as a term thereof, a right, either in tandem with the other
rights under the Award, without payment to the Company, a number of Shares, the
amount of which is determined by reference to the value of the
Award;
xvii. to
cause the Company to comply with any applicable disclosure requirements with
respect to compensation plans under the Exchange Act, the rules adopted by the
United States Securities and Exchange Commission and the stock exchange listing
rules. Notwithstanding the foregoing, it is the sole responsibility of the
Awardee to comply with any applicable reporting obligations under the Exchange
Act, including without limitation the obligations under Section 16 and Rule
16b-3; and
xviii. to
make all other determinations deemed necessary or advisable for administering
the Plan and any Award granted hereunder.
(c) Effect of Administrator’s
Decision. All decisions, determinations and interpretations by
the Administrator regarding the Plan, any rules and regulations under the Plan
and the terms and conditions of any Award granted hereunder, shall be final and
binding on all Awardees and on all other persons. The Administrator
shall consider such factors as it deems relevant, in its sole and absolute
discretion, to making such decisions, determinations and interpretations
including, without limitation, the recommendations or advice of any officer or
other employee of the Company and such attorneys, consultants and accountants as
it may select.
(d) Reliance on
Experts. In making any determination or in taking or not
taking any action under this Plan, the Administrator may obtain and may rely
upon the advice of experts, including employees and professional advisors to the
Company. To the extent permitted under the applicable laws, no
director, officer or agent of the Company shall be liable for any such action or
determination taken or made or omitted in good faith.
(a) Recipients of
Grants. Nonstatutory Stock Options may be granted to Employees
or Directors. Incentive Stock Options may be granted only to
Employees.
(b) Type of
Option. Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option.
(c) No Employment
Rights. The Plan shall not confer upon any Awardee any right
with respect to continuation of an employment relationship with, or services to,
the Company, nor shall it interfere in any way with such Awardee’s right or the
Company’s right to terminate the employment relationship or services on the
Board at any time, for any reason.
The Plan
shall become effective upon its approval by shareholders of the
Company. It shall continue in effect for a term of 10 years from the
later of the date the Plan or any amendment to add shares to the Plan is
approved by shareholders of the Company unless terminated earlier under
Section 15 of the Plan.
The term
of each Award shall be determined by the Administrator and stated in the Award
Agreement. In the case of an Option, the term shall be 10 years from
the Grant Date or such shorter term as may be provided in the Award Agreement;
provided that the term may be 10 1/2 years or a shorter period in the case of
Options granted to Employees or Directors in certain jurisdictions outside the
United States as determined by the Administrator.
The
Administrator may grant an Option or provide for the grant of an Option, either
from time to time in the discretion of the Administrator or automatically upon
the occurrence of specified events, including, without limitation, the
achievement of performance goals, the satisfaction of an event or condition
within the control of the Awardee or within the control of others.
(a) Option Agreement. Each Option
Agreement shall contain provisions regarding (i) the number of Shares that
may be issued upon exercise of the Option, (ii) the type of Option,
(iii) the exercise price of the Shares and the means of payment for the
Shares, (iv) the term of the Option, (v) such terms and conditions on
the vesting and/or exercisability of an Option as may be determined from time to
time by the Administrator, (vi) restrictions on the transfer of the Option
and forfeiture provisions and (vii) such further terms and conditions, in
each case not inconsistent with this Plan as may be determined from time to time
by the Administrator.
(b) Exercise Price. The per share
exercise price for the Shares to be issued pursuant to exercise of an Option
shall be determined by the Administrator, subject to the following:
i. In
the case of an Incentive Stock Option, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the Grant Date; provided,
however, that in the case of an Incentive Stock Option granted to an Employee
who on the Grant Date owns stock representing more than 10% of the voting power
of all classes of stock of the Company or any Subsidiary, the per Share exercise
price shall be no less than 110% of the Fair Market Value per Share on the Grant
Date.
ii. In
the case of a Nonstatutory Stock Option, the per Share exercise price shall be
determined by the Board on the Grant Date, provided that in the case of a
Nonstatutory Stock Option intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the Grant Date.
iii. Notwithstanding
the foregoing, at the Administrator’s discretion, Conversion Awards may be
granted in substitution and/or conversion of options of an acquired entity, with
a per Share exercise price of less than 100% of the Fair Market Value per Share
on the date of such substitution and/or conversion.
(c) Vesting Period and Exercise
Dates. Options granted under this Plan shall vest and/or be
exercisable at such time and in such installments during the period prior to the
expiration of the Option’s term as determined by the Administrator. The
Administrator shall have the right to make the timing of the ability to exercise
any Option granted under this Plan subject to continued employment, the passage
of time and/or such performance requirements as deemed appropriate by the
Administrator. At any time after the grant of an Option, the Administrator may
reduce or eliminate any restrictions surrounding any Awardee’s right to exercise
all or part of the Option.
(d) Form of Consideration. The
Administrator shall determine the acceptable form of consideration for
exercising an Option, including the method of payment, either through the terms
of the Option Agreement or at the time of exercise of an Option. Acceptable
forms of consideration may include:
i. cash;
ii. check
or wire transfer (denominated in U.S. Dollars);
iii. subject
to any conditions or limitations established by the Administrator, other Shares
which (A) in the case of Shares acquired upon the exercise of an Option,
have been owned by the Awardee for more than six months on the date of surrender
and (B) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised;
iv. consideration
received by the Company under a broker-assisted sale and remittance program
acceptable to the Administrator;
v. such
other consideration and method of payment for the issuance of Shares to the
extent permitted by Applicable Laws; or
vi. any
combination of the foregoing methods of payment.
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9.
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Incentive
Stock Option Limitations/Terms.
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(a) Eligibility. Only
employees (as determined in accordance with Section 3401(c) of the Code and
the regulations promulgated thereunder) of the Company or any of its
Subsidiaries may be granted Incentive Stock Options.
(b) $100,000
Limitation. Notwithstanding the designation “Incentive Stock
Option” in an Option Agreement, if and to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Awardee during any calendar year (under
all plans of the Company and any of its Subsidiaries) exceeds U.S. $100,000,
such Options shall be treated as Nonstatutory Stock Options. For purposes of
this Section 9(b), Incentive Stock Options shall be taken into account in
the order in which they were granted. The Fair Market Value of the Shares shall
be determined as of the Grant Date.
(c) Transferability. An
Incentive Stock Option may not be sold, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent or
distribution. The designation of a beneficiary by an Awardee will not
constitute a transfer. An Incentive Stock Option may be exercised
during the lifetime of the Awardee only by such Awardee.
(d) Exercise Price. The
per Share exercise price of an Incentive Stock Option shall be determined by the
Administrator in accordance with Section 8(b)(i) of the Plan.
(e) Other Terms. Option Agreements
evidencing Incentive Stock Options shall contain such other terms and conditions
as may be necessary to qualify, to the extent determined desirable by the
Administrator, with the applicable provisions of Section 422 of the
Code.
(f) Term. An Incentive
Stock Option granted to an Employee who on the Grant Date owns stock
representing more than 10% of the voting power of all classes of stock of the
Company or any Subsidiary shall have a term of no more than 5 years from the
Grant Date.
(a) Procedure for Exercise; Rights as a
Shareholder.
i. Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the respective Award Agreement. Unless the Administrator
provides otherwise: (A) no Option may be exercised during any leave of
absence other than an approved personal or medical leave with an employment
guarantee upon return, (B) an Option shall continue to vest during any
authorized leave of absence and such Option may be exercised to the extent
vested and exercisable upon the Awardee’s return to active employment
status.
ii. Option
shall be deemed exercised when the Company receives (A) written or
electronic notice of exercise (in accordance with the Award Agreement) from the
person entitled to exercise the Option; (B) full payment for the Shares
with respect to which the related Option is exercised; and (C) with respect
to Nonstatutory Stock Options, payment of all applicable withholding
taxes.
iii. Shares
issued upon exercise of an Option shall be issued in the name of the Awardee or,
if requested by the Awardee, in the name of the Awardee and his or her spouse.
Unless provided otherwise by the Administrator or pursuant to this Plan, until
the Shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to the Shares subject to an Option, notwithstanding the exercise of the
Option.
iv. The
Company shall issue (or cause to be issued) such Shares as administratively
practicable after the Option is exercised. An Option may not be exercised for a
fraction of a Share.
(b) Effect of Termination of Employment
or Service on Options.
i. Generally. Unless
otherwise provided for by the Administrator, upon an Awardee’s Termination of
Employment or Service other than as a result of circumstances described in
Sections 10(b)(ii), (iii) and (iv) below, any outstanding Option
granted to such Awardee, that is vested and exercisable as of the date of the
Awardee’s Termination of Employment or Service, may be exercised by the Awardee
until the earlier of thirty (30) days from the Termination of Employment or
Service or the expiration date of the Option; provided, however, that the
Administrator may in the Option Agreement specify a period of time (but not
beyond the expiration date of the Option) following Termination of Employment or
Service during which the Awardee may exercise the Option as to Shares that were
vested and exercisable as of the date of Termination of Employment or
Service. To the extent such a period following Termination of
Employment or Service is specified, the Option shall automatically terminate at
the end of such period to the extent the Awardee has not exercised it within
such period.
ii. Disability or Retirement of
Awardee. Unless otherwise provided for by the Administrator,
upon an Awardee’s Termination of Employment or Service as a result of the
Awardee’s disability or retirement due to age in accordance with the Company’s
or its Subsidiaries’ policies, all outstanding Options granted to such Awardee
that were vested and exercisable as of the date of the Awardee's Termination of
Employment may be exercised for a period of twelve (12) months following the
date of the Awardee’s Termination of Employment or Service as a result of
Awardee’s disability, including Total and Permanent Disability, or retirement;
provided, however, that in no event shall an Option be exercisable after the
expiration of the term of such Option. If the Awardee does not exercise such
Option within the time specified, the Option (to the extent not exercised) shall
automatically terminate.
iii. Death of
Awardee. Unless otherwise provided for by the Administrator,
upon an Awardee’s Termination of Employment or Service as a result of the
Awardee’s death, all outstanding Options granted to such Awardee that were
vested and exercisable as of the date of the Awardee's death may be exercised
until the earlier of (A) twelve (12) months following the date of the
Awardee’s death or (B) the expiration of the term of such Option. If an
Option is held by the Awardee when he or she dies, the Option may be exercised
by the beneficiary designated by the Awardee (as provided in Section 16 of
the Plan), the executor or administrator of the Awardee’s estate or, if none, by
the person(s) entitled to exercise the Option under the Awardee’s will or the
laws of descent or distribution. If the Option is not so exercised within the
time specified, such Option (to the extent not exercised) shall automatically
terminate.
iv. Termination of Employment for
Cause. The Administrator has the authority to cause all
outstanding Awards held by an Awardee to terminate immediately in their entirety
(including as to vested Options) upon first notification to the Awardee of the
Awardee’s Termination of Employment for Cause. If an Awardee’s
employment with or services to the Company is suspended pending an investigation
of whether the Awardee shall be terminated for Cause, the Administrator has the
authority to cause all the Awardee’s rights under all outstanding Awards to be
suspended during the investigation period in which event the Awardee shall have
no right to exercise any outstanding Awards.
(c) Leave of Absence
The
Administrator shall have the discretion to determine whether and to what extent
the vesting of Options shall be tolled during any unpaid leave of absence;
provided, however, that in the absence of such determination, vesting of Options
shall be tolled during any leave that is not a leave required to be provided to
the Awardee under Applicable Laws.
(a) Stock Award
Agreement. Each Stock Award Agreement shall contain provisions
regarding (i) the number of Shares subject to such Stock Award or a formula
for determining such number, (ii) the purchase price of the Shares, if any,
and the means of payment for the Shares, (iii) the performance criteria
(including Qualifying Performance Criteria), if any, and level of achievement
versus these criteria that shall determine the number of Shares granted, issued,
retainable and/or vested, (iv) such terms and conditions on the grant,
issuance, vesting and/or forfeiture of the Shares as may be determined from time
to time by the Administrator, (v) restrictions on the transferability of
the Stock Award and (vi) such further terms and conditions in each case not
inconsistent with this Plan as may be determined from time to time by the
Administrator.
(b) Restrictions and Performance
Criteria. The grant, issuance, retention and/or vesting of
each Stock Award may be subject to such performance criteria and level of
achievement versus these criteria as the Administrator shall determine, which
criteria may be based on financial performance, personal performance evaluations
and/or completion of service by the Awardee. Notwithstanding anything to the
contrary herein, the performance criteria for any Stock Award that is intended
to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code shall be established by the Administrator based
on one or more Qualifying Performance Criteria selected by the Administrator and
specified in writing not later than ninety (90) days after the commencement
of the period of service to which the performance goals relates, provided that
the outcome is substantially uncertain at that time.
(c) Forfeiture. Unless
otherwise provided for by the Administrator, upon the Awardee’s Termination of
Employment or Service, the Stock Award and the unvested Shares subject thereto
shall be forfeited, provided that to the extent that the Awardee purchased or
earned any such Shares, the Company shall have a right to repurchase the
unvested Shares at the original price paid by the Awardee. For the
avoidance of any confusion, upon the Awardee’s Termination of Employment or
Service, his vested Shares that are no longer subject to the Stock Awards will
not be forfeited.
(d) Rights as a
Shareholder. Unless otherwise provided by the Administrator,
the Awardee shall have the rights equivalent to those of a shareholder and shall
be a shareholder only after Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company, to the Awardee. Unless otherwise provided by the
Administrator, an Awardee holding Stock Units shall be entitled to receive
dividend payments as if he or she was an actual shareholder.
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13.
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Other
Provisions Applicable to
Awards.
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(a) Non-Transferability of
Awards. Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by beneficiary designation, will or by the laws of
descent or distribution. Notwithstanding the above, the Administrator
may in its own discretion make an Award transferable to an Awardee’s family
member or any other person or entity. If the Administrator makes an Award
transferable, either at the time of grant or thereafter, such Award shall
contain such additional terms and conditions as the Administrator deems
appropriate, and any transferee shall be deemed to be bound by such terms upon
acceptance of such transfer.
(b) Qualifying Performance
Criteria. For purposes of this Plan, the term “Qualifying
Performance Criteria” shall mean any one or more of the following performance
criteria, either individually, alternatively or in any combination, applied to
either the Company as a whole or to a business unit, Affiliate or business
segment, either individually, alternatively or in any combination, and measured
either annually or cumulatively over a period of years, on an absolute basis or
relative to a pre-established target, to previous years’ results or to a
designated comparison group, in each case as specified by the Committee in the
Award: (i) cash flow; (ii) earnings (including gross margin, earnings
before interest and taxes, earnings before taxes, and net earnings);
(iii) earnings per share; (iv) growth in earnings or earnings per
share; (v) stock price; (vi) return on equity or average shareholders’
equity; (vii) total shareholder return; (viii) return on capital;
(ix) return on assets or net assets; (x) return on investment;
(xi) revenue; (xii) income or net income; (xiii) operating income
or net operating income; (xiv) operating profit or net operating profit;
(xv) operating margin; (xvi) return on operating revenue;
(xvii) market share; (xviii) contract awards or backlog;
(xix) overhead or other expense reduction; (xx) growth in shareholder
value relative to the moving average of the S&P 500 Index or a peer group
index; (xxi) credit rating; (xxii) strategic plan development and
implementation; (xxiii) improvement in workforce diversity, and
(xxiv) any other similar criteria. The Committee may appropriately adjust
any evaluation of performance under a Qualifying Performance Criteria to exclude
any of the following events that occurs during a performance period:
(A) asset write-downs; (B) litigation or claim judgments or
settlements; (C) the effect of changes in tax law, accounting principles or
other such laws or provisions affecting reported results; (D) accruals for
reorganization and restructuring programs; and (E) any extraordinary
non-recurring items as described in Accounting Principles Board Opinion
No. 30 and/or in management’s discussion and analysis of financial
condition and results of operations appearing in the Company’s annual report to
shareholders for the applicable year.
(c) Certification. Prior
to the payment of any compensation under an Award intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, the
Committee shall certify the extent to which any Qualifying Performance Criteria
and any other material terms under such Award have been satisfied (other than in
cases where such relate solely to the increase in the value of the Common
Stock).
(d) Discretionary Adjustments Pursuant to
Section 162(m). Notwithstanding satisfaction of any
completion of any Qualifying Performance Criteria, to the extent specified at
the time of grant of an Award to “covered employees” within the meaning of
Section 162(m) of the Code, the number of Shares, Options or other benefits
granted, issued, retainable and/or vested under an Award on account of
satisfaction of such Qualifying Performance Criteria may be reduced by the
Committee on the basis of such further considerations as the Committee in its
sole discretion shall determine.
(e) Tax Withholding. As a
condition of the grant, issuance, vesting, exercise or settlement of an Award
granted under the Plan, the Awardee shall make such arrangements as the
Administrator may require for the satisfaction of any applicable federal, state,
local or foreign withholding tax obligations that may arise in connection with
such grant, issuance, vesting, exercise or settlement of the Award. The Company
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Awardee. The Company shall not
be required to issue any Shares under the Plan until such obligations are
satisfied.
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14.
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Adjustments
upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.
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(a) Changes in
Capitalization. Subject to any required action by the
shareholders of the Company, in the event of a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company, the Board shall make
appropriate and equitable adjustments to (i) the number and kind of Shares
covered by each outstanding Award, (ii) the price per Share subject to each
such outstanding Award and (iii) the Share limitations set forth in
Section 3 of the Plan; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Subject to the foregoing
requirement, the specific form of any such adjustments shall be determined by
the Board. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an
Award.
(b) Dissolution or
Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Awardee as soon
as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Option to be fully vested and
exercisable until ten (10) days prior to such transaction. In addition, the
Administrator may provide that any restrictions on any Award shall lapse prior
to the transaction, provided the proposed dissolution or liquidation takes place
at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Award will terminate immediately prior to the
consummation of such proposed transaction.
(c) Change in
Control. In the event there is a Change in Control of the
Company, as determined by the Board or a Committee, the Board or Committee may,
in its discretion, (i) provide for the assumption or substitution of, or
adjustment (including to the number and type of Shares and exercise price or
purchase price applicable) to, each outstanding Award; (ii) accelerate the
vesting of Options and terminate any restrictions on Stock Awards; and/or
(iii) provide for the cancellation of Awards for a cash payment to the
Awardee. For the purposes of this Section 14(c), an Award shall be considered
assumed, without limitation, if, at the time of issuance of the stock or other
consideration upon a Change in Control, as the case may be, each holder of an
Award would be entitled to receive upon exercise of the Award the same number
and kind of shares of stock or the same amount of property, cash or securities
as such holder would have been entitled to receive upon the occurrence of the
transaction if the holder had been, immediately prior to such transaction, the
holder of the number of Shares covered by the Award at such time (after giving
effect to any adjustments in the number of Shares covered by the Award as
provided for in Section 14(a)); provided that if such consideration received in
the transaction is not solely common stock of the successor corporation, the
Administrator may, with the consent of the successor corporation provide for the
consideration to be received upon exercise of the Award to be solely common
stock of the successor corporation equal to the Fair Market Value of the per
Share consideration received by holders of Common Stock in the
transaction.
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15.
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Amendment
and Termination of the Plan.
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(a) Amendment and
Termination. The Administrator may amend, alter or discontinue
the Plan or any Award Agreement, but any such amendment shall be subject to
approval of the shareholders of the Company in the manner and to the extent
required by Applicable Laws. In addition, without limiting the foregoing, unless
approved by the shareholders of the Company, no such amendment shall be made
that would:
i. materially
increase the maximum number of Shares for which Awards may be granted under the
Plan, other than an increase pursuant to Section 14 of the
Plan;
ii. reduce
the minimum exercise price for Options granted under the Plan; or
iii. change
or expand the class of persons eligible to receive Awards under the
Plan.
(b) Effect of Amendment or
Termination. No amendment, suspension or termination of the
Plan shall impair the rights of any Award, unless mutually agreed otherwise
between the Awardee and the Administrator, which agreement must be in writing
and signed by the Awardee and the Company, provided further that the
Administrator may amend an outstanding Award in order to conform it to the
Administrator’s intent (in its sole discretion) that such Award be subject to
Code Section 409A(a)(i)(B). Termination of the Plan shall not affect
the Administrator’s ability to exercise the powers granted to it hereunder with
respect to Awards granted under the Plan prior to the date of such
termination.
(c) Effect of the Plan on Other
Arrangements. Neither the adoption of the Plan by the Board or
a Committee nor the submission of the Plan to the shareholders of the Company
for approval shall be construed as creating any limitations on the power of the
Board or any Committee to adopt such other incentive arrangements as it or they
may deem desirable, including without limitation, the granting of restricted
stock or stock options otherwise than under the Plan, and such arrangements may
be either generally applicable or applicable only in specific
cases.
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16.
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Designation
of Beneficiary.
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(a) An
Awardee may file a written designation of a beneficiary who is to receive
the Awardee’s rights pursuant to Awardee’s Award. As an alternative,
the Awardee may include his or her Awards in an omnibus beneficiary designation
for all benefits under the Plan. To the extent that Awardee has completed a
designation of beneficiary while employed with the Company, such beneficiary
designation shall remain in effect with respect to any Award hereunder until
changed by the Awardee to the extent enforceable under Applicable
Laws.
(b) Such
designation of beneficiary may be changed by the Awardee at any time by written
notice. In the event of the death of an Awardee and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such
Awardee’s death, the Company shall allow the executor or administrator of the
estate of the Awardee to exercise the Award, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the Company,
in its discretion, may allow the spouse or one or more dependents or relatives
of the Awardee known to the Company to exercise the Award to the extent
permissible under Applicable Laws, or if no spouse, dependent or relative is
known to the Company, then to such other person as the Company may
designate.
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17.
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No
Right to Awards or to Employment.
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No person
shall have any claim or right to be granted an Award and the grant of any Award
shall not be construed as giving an Awardee the right to continue in the employ
of the Company or its Affiliates. Further, the Company and its Affiliates
expressly reserve the right, at any time, to dismiss any Employee at any time
without liability or any claim under the Plan, except as provided herein or in
any Award Agreement entered into hereunder.
Shares
shall not be issued pursuant to the exercise of an Option or Stock Award unless
the exercise of such Option or Stock Award and the issuance and delivery of such
Shares shall comply with Applicable Laws and shall be further subject to the
approval of counsel for the Company with respect to such
compliance.
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19.
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Inability
to Obtain Authority.
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To the
extent the Company is unable to or the Administrator deems it infeasible 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, the Company shall be relieved of any liability
with respect to the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
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20.
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Reservation
of Shares.
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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.
Any
written notice to the Company required by any provisions of this Plan shall be
addressed to the Secretary of the Company and shall be effective when
received.
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22.
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Governing
Law; Interpretation of Plan and
Awards.
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(a) This
Plan and all determinations made and actions taken pursuant hereto shall be
governed by the substantive laws, but not the choice of law rules, of the state
of Florida.
(b) In
the event that any provision of the Plan or any Award granted under the Plan is
declared to be illegal, invalid or otherwise unenforceable by a court of
competent jurisdiction, such provision shall be reformed, if possible, to the
extent necessary to render it legal, valid and enforceable, or otherwise
deleted, and the remainder of the terms of the Plan and/or Award shall not be
affected except to the extent necessary to reform or delete such illegal,
invalid or unenforceable provision.
(c) The
headings preceding the text of the sections hereof are inserted solely for
convenience of reference, and shall not constitute a part of the Plan, nor shall
they affect its meaning, construction or effect.
(d) The
terms of the Plan and any Award shall inure to the benefit of and be binding
upon the parties hereto and their respective permitted heirs, beneficiaries,
successors and assigns.
(e) All
questions arising under the Plan or under any Award shall be decided by the
Administrator in its total and absolute discretion.
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23.
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Limitation
on Liability.
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The
Company and any Affiliate which is in existence or hereafter comes into
existence shall not be liable to an Awardee or any other persons as
to:
(a) The Non-Issuance of
Shares. The non-issuance or sale of Shares as to which the
Company has been unable to obtain from any regulatory body having jurisdiction
the authority deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any shares hereunder; and
(b) Tax
Consequences. Any tax consequence expected, but not realized,
by any Awardee or other person due to the receipt, exercise or settlement of any
Option or other Award granted hereunder. The Awardee is responsible for, and by
accepting an Award under the Plan agrees to bear, all taxes of any nature that
are legally imposed upon the Awardee in connection with the Award, and the
Company does not assume, and will not be liable to any party for, any cost or
liability arising in connection with such tax liability legally imposed on the
Awardee. In particular, Awards issued under the Plan may be characterized by the
Internal Revenue Service (the “IRS”) as “deferred compensation” under the Code
resulting in the additional taxes, including in some cases interest and
penalties. In the event that the IRS determines that an Award constitutes
deferred compensation under the Code or challenges any good faith
characterization made by the Company or any other party of the tax treatment
applicable to an Award, the Awardee will be responsible for the additional
taxes, and interests and penalties, if any, that are determined to apply if such
challenge succeeds, and the Company will not reimburse the Awardee for the
amount of any additional taxes, penalties or interests that result.
Insofar
as it provides for Awards, the Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Awardees who are granted Stock
Awards under this Plan, any such accounts will be used merely as a bookkeeping
convenience. The Company shall not be required to segregate any assets which may
at any time be represented by Awards, nor shall this Plan be construed as
providing for such segregation, nor shall the Company nor the Administrator be
deemed to be a trustee of stock to be awarded under the Plan. Any liability of
the Company to any Awardee with respect to an Award shall be based solely upon
any contractual obligations which may be created by the Plan; no such obligation
of the Company shall be deemed to be secured by any pledge or other encumbrance
on any property of the Company. Neither the Company nor the Administrator shall
be required to give any security or bond for the performance of any obligation
which may be created by this Plan.
Ex.
10.5
PUDA
COAL, INC.
2008
Equity Incentive Plan
Restricted
Stock Unit Director Grant Agreement
This
Restricted Stock Unit Director Grant Agreement (the “Agreement”) is
entered into between Puda Coal, Inc., a Florida corporation (the “Company”), and
________ (the “Director”).
Pursuant
to the terms of the 2008 Equity Incentive Plan (the “Plan”) the Company hereby
awards to Director restricted stock units (“Restricted Stock
Units”) on the terms and conditions as set forth in this Agreement and
the Plan. The grant date for this award is ________ (the “Grant
Date”). Capitalized terms used but not defined in this
Agreement shall have the meaning specified in the Plan.
In
consideration of the mutual promises set forth below, the parties hereto agree
as follows:
1. Award of Restricted Stock
Units. Subject to the terms and conditions of this Agreement
and the Plan (the terms of which are incorporated herein by reference) and
effective as of the Grant Date, the Company hereby grants to the
Director Restricted
Stock Units. The Restricted Stock Units relate on a one-for-one basis
to shares of the Company’s Common Stock (each such share, adjusted in accordance
with Section 14 of the Plan, a “Share”).
2. Vesting. Restricted
Stock Units vest (meaning that the Director’s right to the Restricted Stock
Units become nonforfeitable and no longer subject to any service requirement) in
two equal installments on
and
[every/the] six-month anniversary thereafter (each such date, a “Vesting Date”),
provided that with respect to each Vesting Date the Director remains in
continuous service on the Company’s Board of Directors (the “Board”) from the
Grant Date through the Vesting Date. The period between the Grant
Date and the earlier of (a) the second Vesting Date referred to in the preceding
sentence (b) the Termination Date (defined in Section 3 below), and (c) the date
the Restricted Stock Unit terminates under Section 5 below in conjunction with
Section 14(c) of the Plan (such date, the “Change in Control Date”) is referred
to as the “Restricted Period.”
3. Effect of Termination of
Service; Forfeiture. If the Director’s service as a member of
the Board terminates for any reason or under any circumstances (including death
or disability), the Director will vest in a pro rata portion of the Restricted
Stock Units through the date of such service termination (the “Termination
Date”) so that he or she will be treated as vested in that number of Restricted
Stock Units that vested on each Vesting Date occurring prior to the Termination
Date plus that additional number of Restricted Stock Units as he or she would
have been vested in as of the Termination Date if the award had been subject to
daily vesting for the 365-day period beginning on the last preceding Vesting
Date and ending on the Termination Date and the remainder of the Restricted
Stock Units shall be forfeited. Upon forfeiture of Restricted Stock
Units, the portion of the award so forfeited shall terminate and the Company
shall have no obligation to issue any Shares in settlement of that portion of
the award.
4. Distribution. Subject
to any limitations set forth in this Agreement (including Sections 7 and 17) and
the Plan, and subject to any deferral election made pursuant to Section 5 below,
a number of Shares of Common Stock will be issued (“distributed”) to the
Director in settlement of this Restricted Stock Unit equal to the number of
then-vested Restricted Stock Units on (or as soon as practicable after, but in
no later event later than the date that is forty-five (45) days after) the
earlier of (a) the Vesting Date, (b) the Termination Date, or (c) the Change in
Control Date (the earlier of such dates, and without regard to any deferral of
such date pursuant to Section 5, the “Distribution Date”). Subject to
any deferral election made pursuant to Section 5 below, upon or as soon as
practicable following the Distribution Date, stock certificates (including
electronic representations of the same, the “Certificate”) evidencing the Shares
issued upon settlement of vested Restricted Stock Units shall be issued and
registered in the Director’s name and delivered to (or appropriate notice in the
case of electronic Certificate delivered to) the Director (or in the case of the
Director’s death, to the Director’s beneficiary or estate).
5. Change in
Control. In the event of a Change in Control (as defined in
the Plan and as modified by Section 17 below), the Board or Committee may, in
its discretion, (i) provide for the assumption or substitution of, or
adjustment (including to the number and type of Shares and purchase price
applicable) to, each outstanding Award; (ii) terminate any restrictions on
Stock Awards; and/or (iii) provide for the cancellation of Awards for a
cash payment to the Director. For the purposes of this Section 14(c), an Award
shall be considered assumed, without limitation, if, at the time of issuance of
the stock or other consideration upon a Change in Control, as the case may be,
each holder of an Award would be entitled to receive upon exercise of the Award
the same number and kind of shares of stock or the same amount of property, cash
or securities as such holder would have been entitled to receive upon the
occurrence of the transaction if the holder had been, immediately prior to such
transaction, the holder of the number of Shares covered by the Award at such
time (after giving effect to any adjustments in the number of Shares covered by
the Award as provided for in Section 14(a)); provided that if such consideration
received in the transaction is not solely common stock of the successor
corporation, the Administrator may, with the consent of the successor
corporation provide for the consideration to be received upon exercise of the
Award to be solely common stock of the successor corporation equal to the Fair
Market Value of the per Share consideration received by holders of Common Stock
in the transaction.
6.
Deferral
Election. Subject to any conditions deemed appropriate from
time to time by the Committee (including suspension of the right to elect
deferrals or to make changes to any existing deferral election), the Director
may elect to defer the Distribution Date set forth in Section 4 above using the
form attached as Exhibit A (or
any successor form approved by the Administrator).
7. Dividends. Participants
holding Restricted Stock Units shall be entitled to receive credit for cash
dividends, stock dividends and other distributions paid during the Restricted
Period with respect to the corresponding number of Shares of Common Stock
underlying the Restricted Stock Units, provided that the fair market
value of any such dividends or distributions shall be converted into an
additional number of Restricted Stock Units (based on the Fair Market Value of
the Common Stock at the time of such payment or distribution), which additional
Restricted Stock Units shall be subject to the same forfeiture restrictions and
restrictions on transferability as apply to, and shall be settled at the same
time as, and subject to the same deferral elections as, the Restricted Stock
Units with respect to which they relate. Credit under this paragraph
for any dividends paid during the Restricted Period shall be done as soon as
practicable following the payment date for such dividend.
8. Tax Withholding
Obligations. In such rare circumstances in which withholding
is applicable, to meet any such obligations of the Company and Director that
might arise with respect to any withholding taxes, FICA contributions, or the
like under any federal, state, local or PRC statute, ordinance, rule, or
regulation in or connection with the award grant, vesting, deferral, or
settlement of the Restricted Stock Units, the Committee can, in the limited
circumstances where appropriate, require that the Company withhold a number of
shares of Common Stock otherwise deliverable having a Fair Market Value
sufficient to satisfy the statutory minimum (or such higher amount as is
allowable without adverse accounting consequences) of the Participant’s
estimated total federal, state, local or PRC tax obligations associated with
vesting or settlement of the Restricted Stock Units. In such rare
circumstances, the Company may also, in lieu of or in addition to the foregoing,
at its sole discretion, either require the Director to deposit with the Company
an amount of cash sufficient to meet the withholding requirements and/or
withhold the required amounts from the Director’s pay during the pay periods
next following the date on which any such applicable tax liability otherwise
arises. The Company shall not deliver any of the Certificates until
and unless the Director has made the deposit required herein or proper provision
for required withholding has been made. The Director hereby consents to any
action reasonably taken by the Company to meet the withholding
obligations.
9. Restriction on
Transferability. Until the Distribution Date, the Restricted
Stock Units may not be sold, transferred, pledged, assigned, or otherwise
alienated at any time. Any attempt to do so contrary to the
provisions hereof shall be null and void.
10. Rights as
Shareholder. Subject to Section 6 above with respect to
dividend rights, the Director shall not have voting or any other rights as a
stockholder of the Company with respect to the Restricted Stock Units prior to
the Distribution Date. Upon the Distribution Date, the Director will obtain full
voting and other rights as a shareholder of the Company.
11. Administration. The
Committee shall have the power to interpret the Plan and this Agreement and to
adopt such rules for the administration, interpretation, and application of the
Plan as are consistent therewith and to interpret or revoke any such
rules. All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Director, the Company,
and all other interested persons. No member of the Committee shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to the Plan or this Agreement.
12. Effect on Other Employee
Benefit Plans. The value of the Restricted Stock Units granted
pursuant to this Agreement shall not be included as compensation, earnings,
salaries, or other similar terms used when calculating the Director’s benefits
under any director or other benefit plan sponsored by the Company or any
Subsidiary except as such plan otherwise expressly provides. The
Company expressly reserves its rights to amend, modify, or terminate any of the
Company’s or any Subsidiary’s director or other benefit plans.
13. Amendment. This
Agreement may be amended only by a writing executed by the Company and the
Director which specifically states that it is amending this Agreement.
Notwithstanding the foregoing, this Agreement may be amended solely by the
Committee by a writing which specifically states that it is amending this
Agreement, so long as a copy of such amendment is delivered to the Director, and
provided that no such amendment adversely affects the rights of the Director
(but limiting the foregoing, the Committee reserves the right to change, by
written notice to the Director, the provisions of the Restricted Stock Units or
this Agreement in any way it may deem necessary or advisable to carry out the
purpose of the grant as a result of any change in applicable laws or regulations
or any future law, regulation, ruling, or judicial decision, provided that any
such change shall be applicable only to Restricted Stock Units which are then
subject to restrictions as provided herein). Notwithstanding anything
else to the contrary in this Section 12 or in the Plan, any amendment to this
Agreement shall be subject to the requirements of Section 16 below.
14. Notices. Any
notice to be given under the terms of this Agreement to the Company shall be
addressed to the Company in care of its stock administrator. Any notice to be
given to Director shall be addressed to Director at the address listed in the
Company’s records. By a notice given pursuant to this Section, either
party may designate a different address for notices. Any notice shall
have been deemed given when actually delivered.
15. Severability. If
all or any part of this Agreement or the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any portion of this Agreement or the Plan not
declared to be unlawful or invalid. Any Section of this Agreement (or
part of such a Section) so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of such
Section or part of a Section to the fullest extent possible while remaining
lawful and valid.
16. Construction. The
Restricted Stock Units are being issued pursuant to Section 11 of the Plan
and are subject to the terms of the Plan. A copy of the Plan has been
given to the Director, and additional copies of the Plan are available upon
request during normal business hours at the principal executive offices of the
Company. To the extent that any provision of this Agreement violates
or is inconsistent with an express provision of the Plan, the Plan provision
shall govern and any inconsistent provision in this Agreement shall be of no
force or effect.
17. Code Section 409A
Matters. This Restricted Stock Unit award is a nonqualified
deferred compensation arrangement subject to Code Section 409A. The
Company has attempted in good faith to structure this Restricted Stock Unit
award (including any deferral elections made in connection with such award) in a
manner that complies with Section 409A, including the exemptions from and rules
for permissible deferred payment rights thereunder. There can be no
assurance that the Internal Revenue Service will agree that this award complies
with Section 409A and to the extent it does not agree the Director shall be
fully responsible for any additional taxes, penalties and/or interest that might
apply as a result of such adverse determination. To the extent this
award contemplates multiple Distribution Dates, each amount to be paid (Shares
to be distributed) hereunder on any particular Distribution Date is designated
as a separate payment and such payments will not collectively be treated as a
single payment. Any subsequent deferral election shall comply with
the subsequent deferral election rules of Section 409A(a)(4)(C) (which, as
relevant to this award, are set forth on the election form attached hereto as
Exhibit
A). Notwithstanding anything else to the contrary in this
Agreement or in the Plan, the Company may accelerate distribution of Shares
under this Agreement only in accordance with Treas. Reg.
§1.401A-3(j)(4).
Notwithstanding
anything to the contrary contained in the Plan or this Agreement, any
acceleration of the Distribution Date that occurs pursuant to Section 5 above
and/or Section 14(c) of the Plan shall only occur on a Change in Control (as
defined in the Plan) that qualifies as a “change in ownership or effective
control,” or a “change in ownership of a substantial portion of the assets,” of
the Company, all as defined under Code Section 409A. In addition, for
all purposes under this Agreement and to the extent permitted under Code Section
409A, the Director shall have a “separation from service” as defined under Code
Section 409A upon the Termination Date.
18. Miscellaneous.
(a) This
Agreement shall be subject to all applicable laws, rules, and regulations, and
to such approvals by any governmental agencies or national securities exchanges
as may be required. The Company shall have no liability for failure
to issue Shares pursuant to this Agreement unless it is able to do so in
compliance with all Applicable Laws.
(b) All
obligations of the Company under the Plan and this Agreement, with respect to
the Restricted Stock Units, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.
(c) By
signing this Agreement, the Director acknowledges that his or her personal
employment or other service information regarding participation in the Plan and
information necessary to determine and pay, if applicable, benefits under the
Plan must be shared with other entities, including companies related to the
Company and persons responsible for certain acts in the administration of the
Plan. By signing this Agreement, the Director consents to such
transmission of personal data, as the Company believes is appropriate to
administer the Plan.
(d) To
the extent not preempted by federal law of the United States, this Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Florida.
IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective as of the day and year first above written.
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“Director”
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“Company”
Puda
Coal, Inc.
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By
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Name:
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Title:
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Exhibit
A
PUDA
COAL, INC.
RESTRICTED
STOCK UNIT
DEFERRAL
ELECTION
The
following election constitutes an election by the undersigned (“you”) to defer
payment of vested benefits and recognition of income pursuant to the Restricted
Stock Unit (“RSU”) Director Grant
Agreement (“Agreement”) between
you and Puda Coal, Inc. (“Company”) under the
Company’s 2008 Equity Incentive Plan. This Deferral Election may be
entered into prior to or, in limited circumstances (described below) following,
the grant of your RSU in 2008. Capitalized terms used but not defined
have the meanings set forth in the Company’s standard form Agreement for
Director RSU grants.
You
understand you are not obligated to make a deferral election in the manner
offered on this election form. If you do not make a deferral election
on this form, the Distribution Date of the RSU (the date the Shares subject to
vested
RSUs will be issued to you) will be the earlier
of:
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(a)
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the
Vesting Date of your RSU, or
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(b)
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your
Termination Date (see Sections 2, 3 and 4 of the Agreement),
or
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(c)
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the
Change in Control Date (see Sections 2, 4, 5 and 17 of the Agreement and
Section 14(c) of the Plan),
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or as
soon as practicable thereafter, but in no later event later than the date that
is forty-five (45) days after the relevant date.
Even if
you make a deferral election on this form, the Shares underlying your vested
RSUs will be distributed to you (or your heirs or estate) earlier than the
date(s) you elect in the event of (1) your death prior the elected distribution
date(s), or (2) a Change in Control of the Company in which your RSUs are
terminating under Section 5 of the Agreement.
I. Deferral Election Made Prior to Grant
Date of RSU. To defer the Distribution Date of the RSU beyond
the date specified in the second paragraph above, please select one of the following
choices (A-E).
You agree
to defer the Distribution Date applicable to your RSU so that the Shares
underlying your vested RSU will be issued to you:
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A.
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In one installment on January 15, 20__ (but not before the Third
Anniversary); or
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B.
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In _______ (not to exceed five) annual installments starting on January
15, 20__ (but not before the Third Anniversary);
or
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C.
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In one installment on the date that is thirty (30) days following your
Termination Date (the date that your service on the Company’s Board
terminates other than as a result of your death) that occurs after the
Third Anniversary; or
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D.
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In one installment on the earlier of (1) January 15 , 20__ (but not
before the Third Anniversary) or (2) the date that is thirty (30) days
following your Termination Date that occurs after the Third Anniversary;
or
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E.
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In _______ (not to exceed five) annual installments starting on January
15, 20__ (but not before the Third Anniversary), unless your Termination
Date occurs after the Third Anniversary but before distribution of the
final installment under this Section E, in which case any Shares related
to vested RSUs that have not yet been distributed shall be distributed in
a single installment on the date that is thirty (30) days following your
Termination Date.
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Your
election above shall become irrevocable as of the Grant Date and may be changed
only in accordance with the requirements of Section II below.
II. Deferral Election Made After the Date
of Grant. To defer the Distribution Date of the RSU beyond the
date specified at the Grant Date (including any Deferral Election you previously
made with respect to the RSU under Section I above), the following rules will
apply to your Deferral Election and, to the extent your election under this
Section II does not conform with these rules, your election will be void and the
original Distribution Date or your prior election, as applicable, will continue
to apply:
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·
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Your
Deferral Election under this Section II will become irrevocable as of
tenth (10th)
day after it is delivered to the Company, subject to the Company’s review
of the Deferral Election to ensure that it complies with all the
requirements set forth herein, in the Agreement and in the
Plan.
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·
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Your
Deferral Election under this Section II will not be given effect until
twelve (12) months and one day after the date on which it becomes
irrevocable.
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The
date specified in your Deferral Election under this Section II must be
after the date that is five (5) years after whichever of the following
date(s) (the “Prior Distribution Date”) would have applied in the absence
of your election under this Section II: (a) the Third
Anniversary, or (b) the last of the date(s) previously specified under a
Deferral Election under Section I
above.
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You agree
to defer the Distribution Date applicable to your RSU so that the Shares
underlying your vested RSU will be issued to you:
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A.
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________
In one installment on January 15 , 20__ (but not before the Prior
Distribution Date); or
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B.
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________
In _______ (not to exceed five) annual installments starting on January
15, 20__ (but not before the Prior Distribution Date);
or
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C.
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________
In one installment on the earlier of (1) January 15 , 20__ (but not
before the Prior Distribution Date) or (2) the date that is thirty (30)
days following the fifth (5th)
anniversary of your Termination Date (the date that your service on the
Company’s Board terminates other than as a result of your
death).
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The
Company shall have sole discretion to revise the terms of this election form, or
the procedures with respect to making this election or any election change, to
the extent the Company deems it helpful or appropriate to comply with applicable
law.
[Director
Name]
[Date]
Ex.
10.6
PUDA
COAL, INC.
2008
Equity Incentive Plan
Restricted
Stock Unit Grant Agreement
This
Restricted Stock Unit Agreement (the “Agreement”) is dated
as of _______ and entered into between Puda Coal, Inc., a Florida corporation
(the “Company”), and [name
of employee] (the “Employee”).
Pursuant
to the terms of the 2008 Equity Incentive Plan (the “Plan”) the Company
hereby awards to the Employee restricted stock units (“Restricted Stock
Units”) on the terms and conditions as set forth in this Agreement and
the Plan. The grant date of this award is ________ (the “Grant
Date”). Capitalized terms used but not defined in this
Agreement shall have the meaning specified in the Plan.
In
consideration of the mutual promises set forth below, the parties hereto agree
as follows:
1. Award of Restricted Stock
Units. Subject to the terms and conditions of this Agreement
and the Plan (the terms of which are incorporated herein by reference) and
effective as of the Grant Date, the Company hereby grants to the
Employee
Restricted Stock Units. The
Restricted Stock Units relate on a one-for-one basis to shares of the Company’s
Common Stock (each such share, adjusted in accordance with Section 14 of the
Plan, a “Share”).
2. Vesting. Restricted
Stock Units vest (meaning that the Employee’s right to the Restricted Stock
Units and the underlying Shares becomes nonforfeitable and no longer subject to
any continuing service obligation) on the one (1) year anniversary of the Grant
Date (the “Vesting
Date”), provided that continuously through the Vesting Date the following
requirements are met: (a) the Employee remains continuously employed by the
Company or a Subsidiary; (b) the Employee does not during the Restricted Period
(as defined below) become an employee of, or doing work outside the Company for,
a past or present competitor of the Company or a Subsidiary. The
period between the Grant Date and the earlier of (a) the Vesting Date, (b) the
date on which the Employee’s services with the Company or a Subsidiary
terminates as a result of his death or disability, including Total and Permanent
Disability (either, the “Termination Date”),
or (c) the date of any accelerated vesting as a result of Section 5 below (such
date, the “Change in Control Date”) is referred to as the “Restricted
Period.”
3. Effect of Termination of
Service or Leave of Absence. If the Employee’s service is
terminated by the Employee or by the Company or a Subsidiary for any reason
except the Employee’s death or disability (including Total and Permanent
Disability) before the Vesting Date, all Restricted Stock Units shall be
forfeited. Upon forfeiture of Restricted Stock Units under this
Agreement, the portion of the award so forfeited shall terminate and the Company
shall have no obligation to issue any Shares in settlement of that portion of
the award. If the Employee dies or becomes disabled (including Total
and Permanent Disability), a pro rata portion of the Employee’s Restricted Stock
Units through the Termination Date (measured as if the award had vested monthly
as to one-twelfth of the Restricted Stock Units commencing one month from the
Grant Date) shall vest immediately upon the Termination Date and the remainder
of the Restricted Stock Units shall be forfeited. If the Employee
returns to service immediately after the end of a leave of absence approved by
the Company, for the purpose of this Agreement only the Employee shall be
considered to have remained continuously employed by the Company through the
period of the leave of absence.
4. Distribution. Subject
to any limitations set forth in this Agreement (including Sections 7 and 8
below) and the Plan, a number of Shares will be issued (“distributed”) to the
Employee in settlement and full satisfaction of the Restricted Stock Units equal
to the number of then-vested Restricted Stock Units on the earlier to occur of
(a) the Vesting Date, (b) thirty (30) days after the Termination Date (but only
with respect to the portion of the award that vests as set forth in Section 3
above) or (c) the Change in Control Date (the earlier of such dates is referred
to as the “Distribution Date”). Stock certificates (including
electronic notations reflecting the same, the “Certificate”) evidencing the
Shares to be issued upon settlement of vested Restricted Stock Units shall be
issued and registered in the Employee’s name and delivered to (or appropriate
notice in the case of electronic Certificate delivered to) the Employee (or in
the case of the Employee’s death, to his beneficiary or estate) as soon as
practicable following the Distribution Date.
5. Change in
Control. In the event of a Change in Control (as defined in
the Plan), the Board or Committee may, in its discretion, (i) provide for
the assumption or substitution of, or adjustment (including to the number and
type of Shares and purchase price applicable) to, each outstanding Award;
(ii) terminate any restrictions on Stock Awards; and/or (iii) provide
for the cancellation of Awards for a cash payment to the Employee. For the
purposes of this Section 14(c), an Award shall be considered assumed, without
limitation, if, at the time of issuance of the stock or other consideration upon
a Change in Control, as the case may be, each holder of an Award would be
entitled to receive upon exercise of the Award the same number and kind of
shares of stock or the same amount of property, cash or securities as such
holder would have been entitled to receive upon the occurrence of the
transaction if the holder had been, immediately prior to such transaction, the
holder of the number of Shares covered by the Award at such time (after giving
effect to any adjustments in the number of Shares covered by the Award as
provided for in Section 14(a)); provided that if such consideration received in
the transaction is not solely common stock of the successor corporation, the
Administrator may, with the consent of the successor corporation provide for the
consideration to be received upon exercise of the Award to be solely common
stock of the successor corporation equal to the Fair Market Value of the per
Share consideration received by holders of Common Stock in the
transaction.
6. Dividends. To
the extent the Company pays any cash dividends, stock dividends or other
distributions on or with respect to Shares during the Restricted Period,
Employees holding Restricted Stock Units shall be entitled to receive credit for
cash dividends, stock dividends and other distributions paid during the
Restricted Period with respect to the corresponding number of Shares underlying
the Restricted Stock Units, provided that the fair market
value of any such dividends or distributions shall be converted into an
additional number of Restricted Stock Units (based on the Fair Market Value of
the Common Stock at the time of such payment or distribution), which additional
Restricted Stock Units shall be subject to the same forfeiture restrictions and
restrictions on transferability as apply to, and shall be settled at the same
time as the Restricted Stock Units with respect to which they
relate. Credit under this paragraph for any dividends paid during the
Restricted Period shall be done as soon as practicable following the payment
date for such dividend.
7. Tax Withholding
Obligations. In such circumstances in which withholding is
applicable, to meet any such obligations of the Company and Employee that might
arise with respect to any withholding taxes, social security contributions, or
the like under any federal, state, local or PRC statute, ordinance, rule, or
regulation in connection with the award grant, vesting, deferral, or settlement
of the Restricted Stock Units (including without limitation additional
Restricted Stock Unit, if any, provided to the Employee pursuant to Section 6
above), the Committee can, in the circumstances where appropriate, require that
the Company withhold a number of shares of Common Stock otherwise deliverable
having a Fair Market Value sufficient to satisfy the statutory minimum (or such
higher amount as is allowable without adverse accounting consequences) of the
Employee’s estimated total federal, state, local or PRC tax and other social
security contribution obligations associated with award, vesting or settlement
of the Restricted Stock Units. In such circumstances, the Company may
also, in lieu of or in addition to the foregoing, at its sole discretion, either
require the Employee to deposit with the Company an amount of cash sufficient to
meet such requirements and/or withhold the required amounts from the Employee’s
pay during the pay periods next following the date on which any such applicable
tax or social contribution liability otherwise arises. The Company
shall not deliver any of the Certificates until and unless the Employee has made
the deposit required herein or proper provision for required withholding or
contribution has been made. The Employee hereby consents to any action
reasonably taken by the Company to meet all or any of such
obligations.
8. Restriction on
Transferability. Until the Distribution Date, the Restricted
Stock Units may not be sold, transferred, pledged, assigned, or otherwise
alienated at any time. Any attempt to do so contrary to the
provisions hereof shall be null and void. Notwithstanding the above,
distribution can be made pursuant to will, the laws of descent and distribution,
intrafamily transfer instruments or to an inter vivos trust.
9. Rights as
Stockholder. Subject to Section 6 above with respect to
dividends, the Employee shall not have voting or any other rights as a
stockholder of the Company with respect to the Restricted Stock Units prior to
the Distribution Date. Upon the Distribution Date, the Employee will obtain full
voting and other rights as a stockholder of the Company.
10.
Administration. The
Committee shall have the power to interpret the Plan and this Agreement and to
adopt such rules for the administration, interpretation, and application of the
Plan as are consistent therewith and to interpret or revoke any such
rules. All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Employee, the Company,
and all other interested persons. No member of the Committee shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to the Plan or this Agreement.
11. Effect on Other Employee
Benefit Plans. The value of the Restricted Stock Units granted
pursuant to this Agreement shall not be included as compensation, earnings,
salaries, pensionable salary or other similar terms used when calculating the
Employee’s benefits under any employee benefit, pension plan or post-employment
payment or severance arrangement sponsored by the Company or any Subsidiary
except as such plan otherwise expressly provides. The Company
expressly reserves its rights to amend, modify, or terminate any of the
Company’s or any Subsidiary’s employee benefit plans or
arrangements.
12. No Employee
Rights.
(a) The
award of the Restricted Stock Units pursuant to this Agreement shall not give
the Employee any right to remain employed by the Company or a
Subsidiary. The award is granted completely within the discretion of
the Company. It is not made as a part of any ongoing element of
compensation or something which the Employee should expect to receive annually
or on any other periodic basis. It does not constitute part of the
Employee’s salary or wages and unless specifically agreed to otherwise with the
Company is not relevant for purpose of determining any post-employment payment
or severance.
(b) In
no circumstances shall the Employee on ceasing to hold the office or employment
by virtue of which the Employee is or may be eligible to participate in the Plan
be entitled to any compensation for any loss of any right or benefit or
prospective right or benefit under the Plan or this Agreement which the Employee
might otherwise have enjoyed (including, without limitation, the forfeiture of
Restricted Stock Units) by reason of the Employee’s ceasing to hold an office or
ceasing to be employed by the Company or any Subsidiary whether such
compensation is claimed by way of damages for wrongful dismissal or other breach
of contract or by way of compensation for loss of office or
otherwise. The Employee hereby waives all and any rights to
compensation or damages in consequence of the termination of his office or
employment for any reason whatsoever (including, without prejudice to the
generality of the foregoing, wrongful dismissal or dismissal in breach of
contract) insofar as those rights arise, or may arise, from the Employee’s
ceasing to have rights under this Agreement or forfeiting any Restricted Stock
Units as a result of such termination, or from the loss or diminution in value
of such rights or entitlements.
13. Amendment. This
Agreement may be amended only by a writing executed by the Company and the
Employee which specifically states that it is amending this Agreement.
Notwithstanding the foregoing, this Agreement may be amended solely by the
Committee by a writing which specifically states that it is amending this
Agreement, so long as a copy of such amendment is delivered to the Employee, and
provided that no such amendment adversely affects the rights of the Employee
(but limiting the foregoing, the Committee reserves the right to change, by
written notice to the Employee, the provisions of the Restricted Stock Units or
this Agreement in any way it may deem necessary or advisable to carry out the
purpose of the grant as a result of any change in Applicable Laws or regulations
or any future law, regulation, ruling, or judicial decision, provided that any
such change shall be applicable only to Restricted Stock Units which are then
subject to restrictions as provided herein).
14. Notices. Any
notice to be given under the terms of this Agreement to the Company shall be
addressed to the Company in care of its stock administrator. Any notice to be
given to the Employee shall be addressed to the Employee at the address listed
in the Company’s records. By a notice given pursuant to this Section,
either party may designate a different address for notices. Any
notice shall have been deemed given when actually delivered.
15. Severability. If
all or any part of this Agreement or the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any portion of this Agreement or the Plan not
declared to be unlawful or invalid. Any Section of this Agreement (or
part of such a Section) so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of such
Section or part of a Section to the fullest extent possible while remaining
lawful and valid.
16. Construction. The
Restricted Stock Units are being issued pursuant to Section 11 of the Plan
and are subject to the terms of the Plan. A copy of the Plan has been
given to the Employee, and additional copies of the Plan are available upon
request during normal business hours at the principal executive offices of the
Company. To the extent that any provision of this Agreement violates
or is inconsistent with an express provision of the Plan, the Plan provision
shall govern and any inconsistent provision in this Agreement shall be of no
force or effect.
17. Miscellaneous.
(a) Legal
Compliance. This Agreement shall be subject to all Applicable Laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required. The Company shall
have no liability for failure to issue Shares pursuant to this Agreement unless
it is able to do so in compliance with all Applicable Laws.
(b) Successors. All
obligations of the Company under the Plan and this Agreement, with respect to
the Restricted Stock Units, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.
(c) Data
Processing. By signing this Agreement, the Employee acknowledges that
his or her personal employment or other service information regarding
participation in the Plan and information necessary to determine and pay, if
applicable, benefits under the Plan must be shared with other entities,
including companies related to the Company and persons responsible for certain
acts in the administration of the Plan. By signing this Agreement,
the Employee consents to such transmission of personal data, as the Company
believes is appropriate to administer the Plan.
(d) Governing
Law. To the extent not preempted by federal law of the United States,
this Agreement shall be governed by, and construed in accordance with, the laws
of the State of Florida.
IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective as of the day and year first above written.
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“Employee”
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“Company”
Puda
Coal, Inc.
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By
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Name:
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Title:
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Ex.
10.7
PUDA
COAL, INC.
2008
EQUITY INCENTIVE PLAN
STOCK OPTION
AGREEMENT
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Name
and Address of Awardee:
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(the
“Awardee”)
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Board
Approval Date:
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Grant
Date:
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(the
“Grant
Date”)
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Exercise
Price Per Share:
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the
(“Exercise
Price”)
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No. of Underlying
Shares:
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shares
of Common Stock (the “Shares”)
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Type
of Option:
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Shares
Incentive Stock Option
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Shares
Nonstatutory Stock Option
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Expiration
Date:
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(the
“Expiration
Date”)
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Vesting
Commencement Date:
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(the
“Vesting
Commencement Date”)
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Transferability:
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This
Option may not be
transferred.
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1. Grant of
Option. Puda Coal, Inc.,
a Florida corporation (the “Company”), hereby
grants to Awardee an option (this “Option”) to purchase
the Shares at the above Exercise Price per Share subject to the terms,
definitions and provisions of the Puda Coal, Inc. 2008 Equity Incentive Plan
(the “Plan”),
which is incorporated into this Stock Option Agreement (this “Agreement”) by
reference. Unless otherwise defined in this Agreement, the terms used
in this Agreement shall have the meanings defined in the Plan.
2. Designation
of Option. This Option is
intended to be an Incentive Stock Option as defined in Section 422 of the
Code only to the extent so designated above, and to the extent it is not so
designated or to the extent this Option does not qualify as an Incentive Stock
Option, it is intended to be a Nonstatutory Stock Option.
Notwithstanding
the above, if designated as an “Incentive Stock Option,” this Option shall be
treated in accordance with Section 9(b) of the Plan.
3.
Vesting/Exercise
Schedule.
So
long as Awardee’s employment or consulting relationship
with the Company continues, this Option shall vest and become exercisable with
respect to the Shares in accordance with the following
schedule:
___________
of the Shares subject to this Option shall vest and become exercisable on the
________ month anniversary of the Vesting Commencement Date and _______ of the
total number of Underlying Shares subject to this Option shall vest and become
exercisable each month thereafter.
4. Exercise
of Option. This Option shall
be exercisable prior to the Expiration Date in accordance with the
Vesting/Exercise Schedule set forth in Section 3 above and Section 10 of
the Plan by delivering an Option exercise notice in the form attached hereto as
Exhibit A
indicating his or her election to purchase some or all of the Shares with
respect to which this Option is exercisable at the time of such notice and
further agrees that:
(a) As
a condition to the exercise of this Option, Awardee agrees to make arrangements
as the Administrator may require for tax withholding as set forth in Section 13
of the Plan; and
(b) The
Company is not obligated, and will have no liability for failure, to issue or
deliver any Shares upon exercise of this Option unless such issuance or delivery
would comply with the Applicable Laws, with such compliance determined by the
Company in consultation with its legal counsel. This Option may not be exercised
until such time as the Plan has been approved by the stockholders of the
Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, including any
rule under Part 221 of Title 12 of the Code of Federal Regulations as
promulgated by the Federal Reserve Board. As a condition to the
exercise of this Option, the Company may require Awardee to make any
representation and warranty to the Company as may be required by the Applicable
Laws. Assuming such compliance, for income tax purposes the Shares
shall be considered transferred to Awardee on the date on which this Option is
exercised with respect to such Shares.
5. Method of
Payment. Payment of the
Exercise Price shall be by any of the following, or a combination of the
following, at the election of Awardee:
(a) cash,
check or wire transfer (denominated in U.S. Dollars); or
(b) other
as set forth in Section 8 of the Plan.
6. Termination
of Relationship. Following the
date of termination of Awardee’s employment or service for any reason (the
“Termination
Date”), Awardee may exercise this Option only as set forth in Section 10
of the Plan.
7. Non-Transferability
of Option. This Option may
not be transferred in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of Awardee only
by such Awardee. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of
Awardee.
8. Tax
Consequences. Below is a brief
summary as of the date of this Option of certain of the U.S. federal tax
consequences of exercise of this Option and disposition of the Shares under the
laws in effect as of the Grant Date, which may or may not apply to you depending
on your tax status. THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. AWARDEE SHOULD CONSULT A TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
(a) Incentive
Stock Option.
(i) Tax
Treatment upon Exercise and Sale of Shares. If this Option
qualifies as an Incentive Stock Option, there will be no regular federal income
tax liability upon the exercise of this Option, although the excess, if any, of
the fair market value of the Shares on the date of exercise over the Exercise
Price will be treated as an adjustment to the alternative minimum tax for
federal tax purposes and may subject Awardee to the alternative minimum tax in
the year of exercise. If Shares issued upon exercise of an Incentive
Stock Option are held for at least one year after exercise and are disposed of
at least two years after this Option grant date, any gain realized on
disposition of the Shares will also be treated as long-term capital gain for
federal income tax purposes. If Shares issued upon exercise of an
Incentive Stock Option are disposed of within such one-year period or within two
years after this Option grant date, any gain realized on such disposition will
be treated as compensation income (taxable at ordinary income rates) to the
extent of the difference between the Exercise Price and the lesser of
(i) the fair market value of the Shares on the date of exercise, or
(ii) the sale price of the Shares.
(ii) Notice of
Disqualifying Dispositions. With respect to any Shares issued
upon exercise of an Incentive Stock Option, if Awardee sells or otherwise
disposes of such Shares on or before the later of (i) the date two years
after the Option grant date, or (ii) the date one year after the date of
exercise, Awardee shall immediately notify the Company in writing of such
disposition. Awardee acknowledges and agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized by Awardee from the early disposition by payment in cash or out of
the current earnings paid to Awardee.
(b) Nonstatutory
Stock Option. If this Option
does not qualify as an Incentive Stock Option, there may be a regular federal
(and state) income tax liability upon the exercise of this Option. Awardee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the fair market value of the Shares
on the date of exercise over the Exercise Price. If Awardee is an
Employee, the Company will be required to withhold from Awardee’s compensation
or collect from Awardee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income at the time of
exercise. If Shares issued upon exercise of a Nonstatutory Stock
Option are held for at least one year, any gain realized on disposition of the
Shares will be treated as long-term capital gain for federal income tax
purposes.
9. Effect of
Agreement. Awardee acknowledges receipt of a copy of the Plan
and represents that he or she is familiar with the terms and provisions thereof
(and has had an opportunity to consult counsel regarding the Option terms), and
hereby accepts this Option and agrees to be bound by its contractual terms as
set forth herein and in the Plan. Awardee hereby agrees to accept as
binding, conclusive and final all decisions and interpretations of the
Administrator regarding any questions relating to this Option. In the
event of a conflict between the terms and provisions of the Plan and the terms
and provisions of this Agreement, the Plan terms and provisions shall
prevail. This Agreement, including the Plan, constitutes the entire
agreement between Awardee and the Company on the subject matter hereof and
supersedes all proposals, written or oral, and all other communications between
the parties relating to such subject matter.
By your
signature and the signature of the Company’s representative below, you and the
Company agree that this Option is granted under and governed by the terms and
conditions of the Puda Coal, Inc. 2008 Equity Incentive Plan, which is attached
and made a part of this Agreement.
In
addition, you agree and acknowledge that your rights to any Shares underlying
this Option will be earned only as you provide services to the Company over
time, that the grant of this Option is not as consideration for services you
rendered to the Company prior to your Vesting Commencement Date, and that
nothing in this Agreement or Plan confers upon you any right to continue your
employment or consulting relationship with the Company for any period of time,
nor does it interfere in any way with your right or the Company’s right to
terminate that relationship at any time, for any reason, with or without
cause.
Capitalized
terms used but not defined in this Agreement have the meanings designated to
them in the Plan.
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AWARDEE:
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PUDA
COAL, INC.
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By:
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Name:
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Title:
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Print
Name
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EXHIBIT
A
NOTICE OF
EXERCISE
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Subject:
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Notice of Intention to
Exercise Stock Option
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This is
official notice that the undersigned (“Awardee”) intends to
exercise Awardee’s Option to purchase __________ shares of Common Stock of Puda
Coal, Inc. under and pursuant to the Puda Coal, Inc. 2008 Equity Incentive Plan
and the Stock Option Agreement dated ___________, as follows:
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Grant
Number:
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Date
of Purchase:
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Number
of Shares:
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Purchase
Price:
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Method
of Payment
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of
Purchase Price:
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The
shares should be issued as follows:
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Name:
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Address:
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Signed:
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Date:
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