Exhibit 10.1
 
YAYI INTERNATIONAL INC.
 
2010 EMPLOYEE STOCK OPTION AND STOCK AWARD PLAN
 
(As amended and restated on February 10, 2012)
 
1.Purpose.
 
The purpose of the Yayi International Inc. 2010 Employee Stock Option and Stock
Award Plan (the “Plan”) is to enhance the long-term stockholder value of Yayi
International Inc., a Delaware corporation (the “Company”), by offering
opportunities to employees and directors of the Company and its Subsidiaries (as
defined in Section  2) to participate in the Company’s growth and success, and
to encourage them to remain in the service of the Company and its Subsidiaries
and to acquire and maintain stock ownership in the Company.
 
2.Definitions.
 
For purposes of the Plan, the following terms shall be defined as set forth
below:
 
2.1           “Award” means an award or grant made pursuant to the Plan,
including, awards or grants of Options or Incentive Stock Awards.
 
2.2           “Board” means the Board of Directors of the Company.
 
2.3           “Cause” means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), as provided
under applicable law, in each case as determined by the Plan Administrator, and
its determination shall be conclusive and binding.
 
2.4           “Code” means the United States Internal Revenue Code of 1986, as
amended from time to time.
 
2.5           “Common Stock” means the common stock, par value $.001 per share,
of the Company.
 
2.6            “Disability” means “permanent and total disability” as that term
is defined for purposes of Section 22(e)(3) of the Code.
 
2.7            “Exchange Act” means the United States Securities Exchange Act of
1934, as amended.
 
2.8           “Fair Market Value” shall be established in good faith by the Plan
Administrator or if the Common Stock is listed on the Nasdaq Global Market or
the Nasdaq Capital Market, the average of the high and low per share sales
prices for the Common Stock as reported by the Nasdaq Global Market or the
Nasdaq Capital Market (as the case may be) for a single trading.  If there is no
such reported price for the Common Stock for the date in question, then such
price on the last preceding date for which such price exists shall be
determinative of the Fair Market Value.  Notwithstanding anything in this Plan
to the contrary, to the extent applicable, the determination of the Fair Market
Value of a share of Common Stock shall be determined in a manner which complies
with Section 409A of the Code and the applicable Treasury Regulations
promulgated thereunder.
 
 
1

--------------------------------------------------------------------------------

 
 
2.9           “Grant Date” means the date the Plan Administrator adopted the
granting resolution and all conditions precedent to the grant have been
satisfied; provided that conditions to the exercisability or vesting of Awards
shall not defer the Grant Date. If, however, the Plan Administrator designates
in a resolution a later date as the date an Award is to be granted, then such
later date shall be the “Grant Date.”
 
2.10           “Incentive Stock Award” means an Option to purchase Common Stock
granted under Section 7.
 
2.11            “Nonqualified Stock Option” means an Option to purchase Common
Stock granted under Section 7.
 
2.12           “Option” means the right to purchase Common Stock granted under
Section 7.
 
2.13           “Participant” means (a) the person to whom an Award is granted;
(b) for a Participant who has died, the personal representative of the
Participant’s estate, the person(s) to whom the Participant’s rights under the
Award have passed by will or by the applicable laws of descent and distribution,
or the beneficiary designated in accordance with Section 9; or (c) person(s) to
whom an Award has been transferred in accordance with Section 9.
 
2.14            “Plan Administrator” means the Board or a committee (which term
includes subcommittees) appointed by the Board to administer the Plan under
Section 3.1.
 
2.15           “PRC” means the People’s Republic of China, which, for the
purpose of this Plan, shall exclude Hong Kong, the Macau Special Administrative
Region of the PRC and Taiwan.
 
2.16           “Restricted Stock Award” means shares of Common Stock granted
under Section 8, the rights of ownership of which may be subject to restrictions
prescribed by the Plan Administrator.
 
2.17           “Retirement” means retirement on or after the individual’s normal
retirement date under PRC law or the law of such individual’s other jurisdiction
of employment unless otherwise defined by the Plan Administrator from time to
time for purposes of the Plan.
 
2.18           “Securities Act” means the United States Securities Act of 1933,
as amended.
 
2.19           “Subsidiary” means any entity that is directly or indirectly
controlled by the Company or in which the Company has a significant ownership
interest, as determined by the Plan Administrator, and any entity that may
become a direct or indirect subsidiary of the Company.
 
 
2

--------------------------------------------------------------------------------

 
 
2.20           “Termination” means the termination of the Participant’s
relationship as an officer, director or employee, or as a service provider to
the Company.
 
3.Administration.
 
3.1           Plan Administrator. The Plan shall be administered by the Board or
a committee (which term includes subcommittees) appointed by the Board. If and
so long as the Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, the Board shall consider in selecting the Plan Administrator and
the membership of any committee acting as Plan Administrator, with respect to
any persons subject or likely to become subject to Section 16 of the Exchange
Act, the provisions regarding “non employee directors” as contemplated by Rule
16b-3 under the Exchange Act. The Plan Administrator may delegate the
responsibility for administering the Plan with respect to designated classes of
eligible persons to different committees consisting of one or more members of
the Board, subject to such limitations as the Board deems appropriate. Committee
members shall serve for such term as the Board may determine, subject to removal
by the Board at any time. To the extent consistent with applicable law, the Plan
Administrator may authorize one or more officers of the Company to grant Awards
to designated classes of eligible persons, within the limits specifically
prescribed by the Plan Administrator.
 
3.2           Administration and Interpretation by the Plan
Administrator.  Except for the terms and conditions explicitly set forth in the
Plan, the Plan Administrator shall have exclusive authority, in its discretion,
to determine all matters relating to Awards under the Plan, including the
selection of individuals to be granted Awards, the type of Awards, the number of
shares of Common Stock subject to an Award, all terms, conditions, restrictions
and limitations, if any, of an Award and the terms of any instrument that
evidences the Award. The Plan Administrator shall also have exclusive authority
to interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan’s administration. The Plan
Administrator’s interpretation of the Plan and its rules and regulations, and
all actions taken and determinations made by the Plan Administrator pursuant to
the Plan, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company’s officers as it so determines.
 
4.Stock Subject to the Plan.
 
4.1           Authorized Number of Shares.  Subject to adjustment from time to
time as provided in Section 10.1, the number of shares of Common Stock that
shall be available for issuance under the Plan shall be 2,359,974 shares.  The
maximum aggregate number of shares of Common Stock that may be issued under the
Plan pursuant to the exercise or vesting of Awards shall be the number
determined pursuant to the preceding sentence, as adjusted from time to time
pursuant to Section 10.1.  Shares issued under the Plan shall be drawn from
authorized and unissued shares or shares now held or subsequently acquired by
the Company as treasury shares.
 
 
3

--------------------------------------------------------------------------------

 
 
4.2           Reuse of Shares.  Any shares of Common Stock that have been made
subject to an Award that cease to be subject to the Award (other than by reason
of exercise or payment of the Award to the extent it is exercised for or settled
in shares), and/or shares of Common Stock subject to repurchase or forfeiture
which are subsequently reacquired by the Company, shall again be available for
issuance in connection with future grants of Awards under the Plan.
 
5.Eligibility.
 
Awards may be granted under the Plan to those officers, directors and employees
of the Company and its Subsidiaries as the Plan Administrator from time to time
selects. Awards may also be granted to consultants, agents, advisors and
independent contractors who provide services to the Company and its
Subsidiaries.
 
6.Awards.
 
6.1           Form and Grant of Awards.  The Plan Administrator shall have the
authority, in its sole discretion, to determine the type or types of Awards to
be made under the Plan. Such Awards may include Nonqualified Stock Options or
Incentive Stock Awards. Awards may be granted singly or in combination.
 
6.2           Settlement of Awards.  The Company may settle Awards through the
delivery of shares of Common Stock, cash payments, the granting of replacement
Awards or any combination thereof as the Plan Administrator shall determine. Any
Award settlement, including payment deferrals, may be subject to such
conditions, restrictions and contingencies as the Plan Administrator shall
determine. The Plan Administrator may permit or require the deferral of any
Award payment, subject to such rules and procedures as it may establish, which
may include provisions for the payment or crediting of interest, or dividend
equivalents, including converting such credits into deferred stock equivalents.
 
7.Terms and Conditions of Awards. 
 
7.1           Grant of Awards.  The Plan Administrator is authorized under the
Plan, in its sole discretion, to issue Awards, which shall be appropriately
designated.
 
7.2           Exercise Price.  The exercise price for shares purchased under an
Award shall be as determined by the Plan Administrator.
 
7.3           Term.  The term of each Award shall be as established by the Plan
Administrator or, if not so established, shall be 10 years from the Grant Date.
 
7.4           Exercise and Vesting.  The Plan Administrator shall establish and
set forth in each instrument that evidences an Award the time at which, or the
installments in which, the Award shall vest and become exercisable, which
provisions may be waived or modified by the Plan Administrator at any time. To
the extent that an Award has become exercisable, the Award may be exercised from
time to time by written notice to the Company, in accordance with procedures
established by the Plan Administrator, setting forth the number of shares with
respect to which the Award is being exercised and accompanied by payment in full
as described in Section 7.6. The Plan Administrator may determine at any time
that an Award may not be exercised as to less than any number of shares at any
one time for vested shares and any number in its discretion for unvested shares
(or the lesser number of remaining shares covered by the Award).
 
 
4

--------------------------------------------------------------------------------

 
 
7.5           Performance Conditions.  The Plan Administrator is authorized to
subject an Award to performance requirements (which may be based on continuous
service with the Company or the achievement of performance goals related to
profits or loss, revenue or profit growth or loss reduction, profit or loss
related return ratios, other balance sheet or income statement targets or
ratios, market share, project completion, operational or productivity efficiency
gains, cash flow, share price appreciation or total stockholder return, where
such goals may be stated in absolute terms or relative to comparison companies),
as the Plan Administrator shall determine, in its sole discretion, must be
satisfied as a condition of the Award becoming vested and exercisable.  Such
performance requirements shall be set forth in the instrument evidencing the
Award.
 
7.6           Payment of Exercise Price.  The exercise price for shares
purchased under an Award shall be paid in full to the Company by delivery of
consideration equal to the product of the Award exercise price and the number of
shares purchased. Such consideration must be paid in cash unless the Company
adopts a “cashless” exercise method.
 
7.7           Post-Termination Exercises.  The Plan Administrator shall
establish and set forth in each instrument that evidences an Award whether the
Award will continue to be exercisable, and the terms and conditions of such
exercise, if a Participant ceases to be employed by, or to provide services to,
the Company or its Subsidiaries, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Award, the Award will be exercisable according to the following
terms and conditions, which may be waived or modified by the Plan Administrator
at any time.
 
In case of termination of the Participant’s employment or services other than by
reason of death or Cause, the Option shall be exercisable, to the extent of the
number of shares vested at the date of such termination, only (a) within one
year if the termination of the Participant’s employment or services is
coincident with Retirement, at the Company’s request or Disability or (b) within
three months after the date the Participant ceases to be an employee or director
of the Company or a Subsidiary if termination of the Participant’s employment or
services is for any reason other than Retirement, at the Company’s request or
Disability, but in no event later than the remaining term of the Option. Any
Option exercisable at the time of the Participant’s death may be exercised, to
the extent of the number of shares vested at the date of the Participant’s
death, by the personal representative of the Participant’s estate, the person(s)
to whom the Participant’s rights under the Option have passed by will or the
applicable laws of descent and distribution or the beneficiary designated
pursuant to Section 9 at any time or from time to time within one year after the
date of death, but in no event later than the remaining term of the Option. Any
portion of an Option that is not vested on the date of termination of the
Participant’s employment or services shall terminate on such date, unless the
Plan Administrator determines otherwise. In case of termination of the
Participant’s employment or services for Cause, the Option shall automatically
terminate upon first notification to the Participant of such termination, unless
the Plan Administrator determines otherwise. If a Participant’s employment or
services with the Company are suspended pending an investigation of whether the
Participant shall be terminated for Cause, all the Participant’s rights under
any Option likewise shall be suspended during the period of investigation.
 
 
5

--------------------------------------------------------------------------------

 
 
7.8           Leave of Absence.  Unless otherwise determined by the Plan
Administrator, for purpose of this Section 7, the service of a Participant shall
be deemed to continue while the Participant is on a bona fide leave of absence,
if such leave was approved by the Company in writing. Unless otherwise
determined by the Plan Administrator and subject to applicable laws, vesting of
an Option shall be suspended during any unpaid leave of absence.
 
7.9           Prohibition on Repricing.  The Company shall not reprice an option
issued under the Plan by lowering the exercise price or by cancellation of an
outstanding Award with a subsequent replacement or re-grant of an option with a
lower exercise price without prior approval of the Company's
stockholders.  Notwithstanding the foregoing, if the Company’s shares of Common
Stock are not listed on the New York Stock Exchange, the NYSE Amex, the NASDAQ
Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or any
other exchange that would require stockholder approval as a result of such a
repricing, then no such prior stockholder approval shall be required.
 
7.10           Incentive Stock Awards.  The Plan Administrator may designate an
Award as an Incentive Stock Award, in which case it may not be subject to
time-based vesting but instead subject only to specific performance conditions
to become vested and exercisable, as designated by the Plan Administrator and
forth in the instrument evidencing the Award.  For removal of doubt, an
Incentive Stock Award is not intended to be an Incentive Stock Option under the
Code.
 
8.Restricted Stock Awards
 
8.1           Grant of Restricted Stock Awards. The Plan Administrator is
authorized to make Awards of Common Stock on such terms and conditions and
subject to such restrictions and/or requirements, as the Plan Administrator
shall determine, in its sole discretion, which terms, conditions and
restrictions shall be set forth in the instrument evidencing the Award. The
terms, conditions and restrictions that the Plan Administrator shall have the
power to determine shall include, without limitation, the manner in which shares
subject to Restricted Stock Awards are held during the periods they are subject
to restrictions and the circumstances under which forfeiture of the Restricted
Stock Award shall occur by reason of termination of the Participant’s employment
or service relationship.
 
8.2           Issuance of Shares.  Upon the satisfaction of any terms,
conditions and restrictions prescribed in respect to a Restricted Stock Award,
or upon the Participant’s release from any terms, conditions and restrictions of
a Restricted Stock Award, as determined by the Plan Administrator, the Company
shall release, as soon as practicable, to the Participant or, in the case of the
Participant’s death, to the personal representative of the Participant’s estate
or as the appropriate court directs, the appropriate number of shares of Common
Stock.
 
8.3           Waiver of Restrictions.  Notwithstanding any other provisions of
the Plan, the Plan Administrator may, in its sole discretion, waive the
forfeiture period and any other terms, conditions or restrictions on any
Restricted Stock Award under such circumstances and subject to such terms and
conditions as the Plan Administrator shall deem appropriate; provided, however,
that the Plan Administrator may not adjust performance goals for any Restricted
Stock Award intended to be exempt under Section 162(m) of the Code for the year
in which the Restricted Stock Award is settled in such a manner as would
increase the amount otherwise payable to a Participant.
 
 
6

--------------------------------------------------------------------------------

 
 
9.Assignability.
 
No Awards granted under the Plan or any interest therein may be assigned,
pledged or transferred by the Participant other than by will or by the
applicable laws of descent and distribution, and, during the Participant’s
lifetime, such Award may be exercised only by the Participant or a permitted
assignee or transferee of the Participant (as provided below).
 
10.Adjustments.
 
10.1           Adjustment of Shares.  In the event that, at any time or from
time to time, a stock dividend, stock split, spin-off, combination or exchange
of shares, recapitalization, merger, consolidation, distribution to stockholders
other than a normal cash dividend, or other change in the Company’s corporate or
capital structure results in (a) the outstanding shares, or any securities
exchanged therefor or received in their place, being exchanged for a different
number or class of securities of the Company or of any other corporation or (b)
new, different or additional securities of the Company or of any other
corporation being received by the holders of shares of Common Stock of the
Company, then the Plan Administrator shall make proportional adjustments in (i)
the maximum number and kind of securities subject to the Plan as set forth in
Sections 4.1; and (ii) the number and kind of securities that are subject to any
outstanding Award and the per share price of such securities, without any change
in the aggregate price to be paid therefor. The determination by the Plan
Administrator as to the terms of any of the foregoing adjustments shall be
conclusive and binding.
 
10.2           Limitations.  The grant of Awards will in no way affect the
Company’s right to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
 
10.3           Fractional Shares.  In the event of any adjustment in the number
of shares covered by any Award, each such Award shall cover only the number of
full shares resulting from such adjustment.
 
11.Withholding.
 
The Company may require the Participant to pay to the Company the amount of any
taxes or social insurance contributions that the Company is required to withhold
with respect to the grant, vesting or exercise of any Award. Subject to the Plan
and applicable law, the Plan Administrator may, in its sole discretion, permit
the Participant to satisfy withholding obligations, in whole or in part, (a) by
paying cash, (b) by electing to have the Company withhold shares of Common Stock
(up to the minimum required federal withholding rate), or (c) by transferring
shares of Common Stock to the Company (already owned by the Participant for the
period necessary to avoid a charge to the Company’s earnings for financial
reporting purposes), in such amounts as are equivalent to the Fair Market Value
of the withholding obligation. The Company shall have the right to withhold from
any shares of Common Stock issuable pursuant to an Award or from any cash
amounts otherwise due or to become due from the Company to the Participant an
amount equal to such taxes or social insurance contributions. The Company may
also deduct from any Award any other amounts due from the Participant to the
Company or a Subsidiary.
 
 
7

--------------------------------------------------------------------------------

 
 
12.Amendment and Termination of Plan.
 
12.1           Amendment of Plan.  The Plan may be amended only by the Board in
such respects as it shall deem advisable; however, to the extent required for
compliance with any applicable law or regulation, stockholder approval will be
required for any amendment that will (a) increase the total number of shares
available for issuance under the Plan, (b) modify the class of persons eligible
to receive Awards, or (c) otherwise require stockholder approval under any
applicable law or regulation.
 
12.2           Termination of Plan.  The Board may suspend or terminate the Plan
at any time.
 
12.3           Consent of Participant.  The amendment or termination of the Plan
shall not, without the consent of the Participant, impair or diminish any rights
or obligations under any Award theretofore granted under the Plan.
 
13.General.
 
13.1           Evidence of Awards.  Awards granted under the Plan shall be
evidenced by a written agreement that shall contain such terms, conditions,
limitations and restrictions as the Plan Administrator shall deem advisable and
that are not inconsistent with the Plan.
 
13.2           Continued Employment or Services; Rights in Awards.  None of the
Plan, participation in the Plan or any action of the Plan Administrator taken
under the Plan shall be construed as giving any person any right to be retained
in the employ of the Company or limit the Company’s right to terminate the
employment or services of any person.
 
13.3           Registration.  The Company shall be under no obligation to any
Participant to register for offering or resale or to qualify for exemption under
the Securities Act, or to register or qualify under state securities laws, any
shares of Common Stock, security or interest in a security paid or issued under,
or created by, the Plan, or to continue in effect any such registrations or
qualifications if made.
 
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with U.S.
federal and state securities laws.
 
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company’s counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.
 
 
8

--------------------------------------------------------------------------------

 
 
As a condition to the exercise of an Award, the Company may require the
Participant to represent and warrant at the time of any such exercise or receipt
that such shares are being purchased or received only for the Participant’s own
account and without any present intention to sell or distribute such shares if,
in the opinion of counsel for the Company, such a representation is required by
any relevant provision of the aforementioned laws. At the option of the Company,
a stop-transfer order against any such shares may be placed on the official
stock books and records of the Company, and a legend indicating that such shares
may not be pledged, sold or otherwise transferred, unless an opinion of counsel
is provided (concurred in by counsel for the Company) stating that such transfer
is not in violation of any applicable law or regulation, may be stamped on stock
certificates to ensure exemption from registration. The Plan Administrator may
also require such other action or agreement by the Participant as may from time
to time be necessary to comply with the federal and state securities laws.
 
13.4           No Rights as A Stockholder.  No Award shall entitle the
Participant to any dividend, voting or other right of a stockholder unless and
until the date of issuance under the Plan of the shares that are the subject of
such Award, free of all applicable restrictions.
 
13.5           Compliance with Laws And Regulations.  No Shares of Common Stock
shall be issued pursuant to an Award unless such issuance complies with all
applicable laws and regulations. Notwithstanding anything in the Plan to the
contrary, the Board, in its sole discretion, may bifurcate the Plan so as to
restrict, limit or condition the use of any provision of the Plan to
Participants who are officers or directors subject to Section 16 of the Exchange
Act without so restricting, limiting or conditioning the Plan with respect to
other Participants.
 
13.6           No Trust or Fund.  The Plan is intended to constitute an
“unfunded” plan. Nothing contained herein shall require the Company to segregate
any monies or other property, or shares of Common Stock, or to create any
trusts, or to make any special deposits for any immediate or deferred amounts
payable to any Participant, and no Participant shall have any rights that are
greater than those of a general unsecured creditor of the Company.
 
13.7           Severability.  If any provision of the Plan or any Award is
determined to be invalid, illegal or unenforceable in any jurisdiction, or as to
any person, or would disqualify the Plan or any Award under any law deemed
applicable by the Plan Administrator, such provision shall be construed or
deemed amended to conform to applicable laws, or, if it cannot be so construed
or deemed amended without, in the Plan Administrator’s determination, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, person or Award, and the remainder of the Plan and any
such Award shall remain in full force and effect.
 
13.8           Participants In Foreign Countries.  The Plan Administrator shall
have the authority to adopt such modifications, procedures and sub-plans as may
be necessary or desirable, after consideration of the provisions of the laws of
the PRC or other foreign countries in which the Company or its Subsidiaries may
operate, to ensure the viability of the benefits from Awards granted to
Participants employed in such countries and to meet the objectives of the
Plan.   The Plan Administrator may restrict the issuance of shares of Common
Stock pursuant to any Awards or delay the removal of restrictions on shares of
Common Stock pursuant to any Awards until it determines in its discretion that
the Company or its Subsidiaries has satisfied the legal or regulatory procedures
or requirements as may be necessary or desirable to ensure the viability of the
benefits of the Awards.
 
 
9

--------------------------------------------------------------------------------

 
 
13.9           Choice of Law.  The Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by the federal laws
of the United States, shall be governed by the laws of the State of Delaware
without giving effect to principles of conflicts of laws.
 
14.Effective Date.
 
The Plan’s effective date is the date on which it is adopted by the Board.
 
 
 
10