Exhibit 10.1

1994 STOCK OPTION PLAN

as amended as of July 17, 2001

of

U.S.-CHINA INDUSTRIAL EXCHANGE, INC.

 

PURPOSES OF THE PLAN. This stock option plan (the "Plan") is designed to provide
an incentive to key employees (including officers and directors who are key
employees), Outside Directors (as defined in Paragraph 19) and consultants of
U.S.-China Industrial Exchange, Inc., a New York corporation (the "Company"),
and its present and future subsidiary corporations, as defined in Paragraph 19
("Subsidiaries"), and to offer an additional inducement in obtaining the
services of such individuals. The Plan provides for the grant of "incentive
stock options" ("ISOs") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and nonqualified stock options
("NQSOs"), but the Company makes no warranty as to the qualification of any
option as an "incentive stock option" under the Code.

 

STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph 12, the
aggregate number of shares of Common Stock, $.0l par value per share, of the
Company ("Common Stock") for which options may be granted under the Plan shall
not exceed 288,750 (which number gives effect to (i) the one-for-eight reverse
stock split effective as of December 30, 1998, and (ii) the 10% stock dividend
effective as of September 13, 2000). Such shares of Common Stock may, in the
discretion of the Board of Directors of the Company (the "Board of Directors"),
consist either in whole or in part of authorized but unissued shares of Common
Stock or shares of Common Stock held in the treasury of the Company. The Company
shall at all times during the term of the Plan reserve and keep available such
number of shares of Common Stock as will be sufficient to satisfy the
requirements of the Plan. Subject to the provisions of Paragraph 13, any shares
of Common Stock subject to an option which for any reason expires, is canceled
or is terminated unexercised or which ceases for any reason to be exercisable
shall again become available for the granting of options under the Plan.

 

ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Board of
Directors which, to the extent it shall determine, may delegate its powers with
respect to the administration of the Plan to a committee of the Board of
Directors (the "Committee") consisting of not less than two Directors (or such
greater number as required by law), each of whom shall be a "non-employee
director" within the meaning of Rule 16b-3 (or any successor rule or regulation)
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). References in the Plan to determinations or actions by the Committee
shall be deemed to include determinations and actions by the Board of Directors.
A majority of the members of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a quorum is
present, and any acts approved in writing by all members without a meeting,
shall be the acts of the Committee.

Subject to the express provisions of the Plan, the Committee shall have the
authority, in its sole discretion, to determine the key employees, Outside
Directors and consultants who shall receive options; the times when they shall
receive options; whether an option granted to an employee shall be an ISO or a
NQSO; the number of shares of Common Stock to be subject to each option; the
term of each option; the date each option shall become exercisable; whether an
option shall be exercisable in whole, in part or in installments, and, if in
installments, the number of shares of Common Stock to be subject to each
installment; whether the installments shall be cumulative; the date each
installment shall become exercisable and the term of each installment; whether
to accelerate the date of exercise of any installment; whether shares of Common
Stock may be issued on exercise of an option as partly paid, and, if so, the
dates when future installments of the exercise price shall become due and the
amounts of such installments; the exercise price of each option; the form of
payment of the exercise price; the amount, if any, necessary to satisfy the
Company's obligation to withhold taxes; whether to restrict the sale or other
disposition of the shares of Common Stock acquired upon the exercise of an
option and to waive any such restriction; whether to subject the exercise of all
or any portion of an option to the fulfillment of contingencies as specified in
the Contract (as described in Paragraph 11), including without limitations,
contingencies relating to entering into a covenant not to compete with the
Company and its Parent and Subsidiaries, to financial objectives for the
Company, a Subsidiary, a division, a product line or other category, and/or the
period of continued employment of the optionee with the Company or its
Subsidiaries, and to determine whether such contingencies have been met; to
construe the respective Contracts and the Plan; with the consent of the
optionee, to cancel or modify an option, provided such option as modified would
be permitted to be granted on such date under the terms of the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; and to
make all other determinations necessary or advisable for administering the Plan.
The determinations of the Committee on the matters referred to in this Paragraph
3 shall be conclusive. No member or former member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any option granted hereunder.

 

ELIGIBILITY; GRANTS. The Committee may, consistent with the purposes of the
Plan, grant options from time to time, to key employees (including officers and
directors who are key employees), Outside Directors and consultants of the
Company or any of its Subsidiaries. Options granted shall cover such number of
shares of Common Stock as the Committee may determine; provided, however, that
the maximum number of shares subject to options that may be granted to any
employee in any fiscal year of the Company under the Plan (the "162(m) Maximum")
may not exceed 100,000; and further, provided, that the aggregate market value
(determined at the time the option is granted) of the shares of Common Stock for
which any eligible employee may be granted ISOs under the Plan or any other plan
of the Company, or of a Parent or a Subsidiary of the Company, which are
exercisable for the first time by such optionee during any calendar year shall
not exceed $100,000. The $100,000 ISO limitation shall be applied by taking ISOs
into account in the order in which they were granted. Any option (or the portion
thereof) granted in excess of such amount shall be treated as a NQSO.

 

EXERCISE PRICE. The exercise price of the shares of Common Stock under each
option shall be determined by the Committee; provided, however, that the
exercise price shall not be less than 100% of the fair market value of the
Common Stock subject to such option on the date of grant; and further provided,
that if, at the time an ISO is granted, the optionee owns (or is deemed to own
under Section 424(d) of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, of any of its
Subsidiaries or of a Parent, the exercise price of such ISO shall not be less
than 110% of the fair market value of the Common Stock subject to such ISO on
the date of grant.

The fair market value of a share of Common Stock on any day shall be (a) if the
principal market for the Common Stock is a national securities exchange, the
average between the high and low sales prices per share of the Common Stock on
such day as reported by such exchange or on a consolidated tape reflecting
transactions on such exchange, (b) if the principal market for the Common Stock
is not a national securities exchange and the Common Stock is quoted on the
National Association of Securities Dealers Automated Quotations System
("NASDAQ"), and (i) if actual sales price information is available with respect
to the Common Stock, the average between the high and low sales prices per share
of the Common Stock on such day on NASDAQ, or (ii) if such information is not
available, the average between the highest bid and the lowest asked prices for
the Common Stock on such day on NASDAQ, or (c) if the principal market for the
Common Stock is not a national securities exchange and the Common Stock is not
quoted on NASDAQ, the average between the highest bid and lowest asked prices
per share for the Common Stock on such day as reported on the NASDAQ OTC
Bulletin Board Service, National Quotation Bureau, Incorporated or a comparable
service; provided that if clauses (a), (b) and (c) of this Paragraph are all
inapplicable, or if no trades have been made or no quotes are available for such
day, the fair market value of a share of Common Stock shall be determined by the
Committee by any method consistent with applicable regulations adopted by the
Treasury Department relating to stock options. The determination of the
Committee shall be conclusive in determining the fair market value of the stock.

 

TERM. The term of each option granted pursuant to the Plan shall be such term as
is established by the Committee, in its sole discretion, at or before the time
such option is granted; provided, however, that the term of each ISO granted
pursuant to the Plan shall be for a period not exceeding 10 years from the date
of grant thereof, and further, provided, that if, at the time an ISO is granted,
the optionee owns (or is deemed to own under Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, of any of its Subsidiaries or of a Parent, the term of the
ISO shall be for a period not exceeding five years from the date of grant.
Options shall be subject to earlier termination as hereinafter provided.

 

EXERCISE. An option (or any part or installment thereof), to the extent then
exercisable, shall be exercised by giving written notice to the Company at its
principal office (at present 7201 Wisconsin Avenue, Bethesda, Maryland 20814,
Attn.: Chairman of the Board), stating which ISO or NQSO is being exercised,
specifying the number of shares of Common Stock as to which such option is being
exercised and accompanied by payment in full of the aggregate exercise price
therefor (or the amount due on exercise if the Contract permits installment
payments) (a) in cash or by certified check or (b) if the Contract at the time
of grant so permits, with the authorization of the Committee, with previously
acquired shares of Common Stock having an aggregate fair market value, on the
date of exercise, equal to the aggregate exercise price of all options being
exercised, or with any combination of cash, certified check or shares of Common
Stock.

The Committee may, in its discretion, permit payment of the exercise price of an
option by delivery by the optionee of a properly executed exercise notice,
together with a copy of his irrevocable instructions to a broker acceptable to
the Committee to deliver promptly to the Company the amount of sale or loan
proceeds sufficient to pay such exercise price. In connection therewith, the
Company may enter into agreements for coordinated procedures with one or more
brokerage firms.

A person entitled to receive Common Stock upon the exercise of an option shall
not have the rights of a shareholder with respect to such shares of Common Stock
until the date of issuance of a stock certificate to him for such shares;
provided, however, that until such stock certificate is issued, any option
holder using previously acquired shares of Common Stock in payment of an option
exercise price shall continue to have the rights of a shareholder with respect
to such previously acquired shares.

 

TERMINATION OF RELATIONSHIP. Any employee to whom an option was granted under
the Plan whose employment with the Company (and its Parent and Subsidiaries) has
terminated for any reason other than his death or Disability (as defined in
Paragraph 19) may exercise such option, to the extent exercisable on the date of
such termination, at any time within three months after the date of termination,
but not thereafter and in no event after the date the option would otherwise
have expired; provided, however, that if his employment shall be terminated
either (a) for cause, or (b) without the consent of the Company, said option
shall terminate immediately. Options granted under the Plan shall not be
affected by any change in the status of the holder so long as he continues to be
a full-time employee of the Company, its Parent or any of the Subsidiaries
(regardless of having been transferred from one corporation to another).

For purposes of the Plan, an employment relationship shall be deemed to exist
between an individual and a corporation if, at the time of the determination,
the individual was an employee of such corporation for purposes of Section
422(a) of the Code. As a result, an individual on military, sick leave or other
bona fide leave of absence shall continue to be considered an employee for
purposes of the Plan during such leave if the period of the leave does not
exceed 90 days, or, if longer, so long as the individual's right to reemployment
with the Company (or a related corporation) is guaranteed either by statute or
by contract. If the period of leave exceeds 90 days and the individual's right
to reemployment is not guaranteed by statute or by contract, the employment
relationship shall be deemed to have terminated on the 91st day of such leave.
In addition, for purposes of the Plan, an optionee's employment with a
Subsidiary or Parent of the Company shall be deemed to have terminated on the
date such corporation ceases to be a Subsidiary or Parent of the Company.

The termination of an optionee's relationship as a consultant or Outside
Director of the Company or of a Subsidiary of the Company shall not affect the
option except as may otherwise be provided in the Contract.

Nothing in the Plan or in any option granted under the Plan shall confer on any
individual any right to continue in the employ or as a consultant or director of
the Company, its Parent or any of its Subsidiaries, or interfere in any way with
the right of the Company, its Parent or any of its Subsidiaries to terminate
such relationship at any time for any reason whatsoever without liability to the
Company, its Parent or any of its Subsidiaries.

 

DEATH OR DISABILITY OF AN OPTIONEE. If an optionee dies (a) while he is employed
by the Company, its Parent or any of its Subsidiaries, (b) within three months
after the termination of his employment (unless such termination was for cause
or without the consent of the Company) or (c) within one year following the
termination of his employment by reason of Disability, the option may be
exercised, to the extent exercisable on the date of his death, by his executor,
administrator or other person at the time entitled by law to his rights under
such option, at any time within one year after death, but not thereafter and in
no event after the date the option would otherwise have expired.

Any optionee whose employment has terminated by reason of Disability may
exercise his option, to the extent exercisable upon the effective date of such
termination, at any time within one year after such date, but not thereafter and
in no event after the date the option would otherwise have expired.

The death or Disability of a consultant or Outside Director to whom an option
has been granted under the Plan shall not affect the option, except as may
otherwise be provided in the Contract.

 

COMPLIANCE WITH SECURITIES LAW. It is a condition to the exercise of any option
that either (a) a Registration Statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the shares of Common Stock to be
issued upon such exercise shall be effective and current at the time of
exercise, or (b) there is an exemption from registration under the Securities
Act for the issuance of shares of Common Stock upon such exercise. Nothing
herein shall be construed as requiring the Company to register shares subject to
any option under the Securities Act.

The Committee may require the optionee to execute and deliver to the Company his
representations and warranties, in form and substance satisfactory to the
Committee, that (i) the shares of Common Stock to be issued upon the exercise of
the option are being acquired by the optionee for his own account, for
investment only and not with a view to the resale or distribution thereof, and
(ii) any subsequent resale or distribution of shares of Common Stock by such
optionee will be made only pursuant to (a) a Registration Statement under the
Securities Act which is effective and current with respect to the shares of
Common Stock being sold, or (b) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption, the optionee
shall prior to any offer of sale or sale of such shares of Common Stock provide
the Company with a favorable written opinion of counsel, in form and substance
satisfactory to the Company, as to the applicability of such exemption to the
proposed sale or distribution.

In addition, if at any time the Committee shall determine in its discretion that
the listing or qualification of the shares of Common Stock subject to such
option on any securities exchange or under any applicable law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of an option, or the issuance
of shares of Common Stock thereunder, such option may not be exercised in whole
or in part unless such listing, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Committee.

 

STOCK OPTION CONTRACTS. Each option shall be evidenced by an appropriate
Contract which shall be duly executed by the Company and the optionee, and shall
contain such terms and conditions not inconsistent herewith as may be determined
by the Committee.

 

ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any other provisions
of the Plan, in the event of any change in the outstanding Common Stock by
reason of a stock dividend, recapitalization, merger or consolidation in which
the Company is the surviving corporation, split-up, spin-off, combination or
exchange of shares or the like, the aggregate number and kind of shares subject
to the Plan, the aggregate number and kind of shares subject to each outstanding
option and the exercise price thereof, and the number and kind of shares subject
to the 162(m) Maximum shall be appropriately adjusted by the Board of Directors,
whose determination shall be conclusive.

In the event of (a) the liquidation or dissolution of the Company, (b) a merger
or consolidation in which the Company is not the surviving corporation, or (c)
any other capital reorganization (other than a recapitalization) in which more
than 50% of the shares of Common Stock of the Company entitled to vote are
exchanged, any outstanding options shall terminate, unless other provision is
made therefor in the transaction.

 

AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by the Board of
Directors on April 27, 1994 and amended by the Board of Directors on July 29,
1994, January 9, 1997, September 26, 1997 and

September 11, 2000, and the Company's shareholders subsequently approved each
such amendment. No option may be granted under the Plan after April 26, 2004.
The Board of Directors, without further approval of the Company's shareholders,
may at any time suspend or terminate the Plan, in whole or in part, or amend it
from time to time in such respects as it may deem advisable, including, without
limitation, in order that ISO granted hereunder meet the requirements for
"incentive stock options" under the Code, to comply with the provisions of Rule
16b-3 promulgated under the Exchange Act, Section 162(m) of the Code and to
conform to any change in applicable law or to regulations or rulings of
administrative agencies; provided, however, that no amendment shall be effective
without the requisite prior or subsequent shareholder approval which would (a)
except as contemplated in Paragraph 12, increase the maximum number of shares of
Common Stock for which options may be granted under the Plan or the 162(m)
Maximum, (b) materially increase the benefits to participants under the Plan or
(c) change the eligibility requirements for individuals entitled to receive
options hereunder. No termination, suspension or amendment of the Plan shall,
without the consent of the holder of an existing option affected thereby,
adversely affect his rights under such option. The power of the Committee to
construe and administer any options granted under the Plan prior to the
termination or suspension of the Plan nevertheless shall continue after such
termination or during such suspension.

 

NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan shall be
transferable otherwise than by will or the laws of descent and distribution, and
options may be exercised, during the lifetime of the holder thereof, only by him
or his legal representatives. Except to the extent provided above, options may
not be assigned, transferred, pledged, hypothecated or disposed of in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process.

 

WITHHOLDING TAXES. The Company may withhold cash and/or, with the authorization
of the Committee, shares of Common Stock to be issued with respect thereto
having an aggregate fair market value equal to the amount which it determines is
necessary to satisfy its obligation to withhold Federal, state and local income
taxes or other taxes incurred by reason of the grant or exercise of an option,
its disposition, or the disposition of the underlying shares of Common Stock.
Alternatively, the Company may require the holder to pay to the Company such
amount, in cash, promptly upon demand. The Company shall not be required to
issue any shares of Common Stock pursuant to any such option until all required
payments have been made. Fair market value of the shares of Common Stock shall
be determined in accordance with Paragraph 5.

 

LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such legend or legends
upon the certificates for shares of Common Stock issued upon exercise of an
option under the Plan and may issue such "stop transfer" instructions to its
transfer agent in respect of such shares as it determines, in its discretion, to
be necessary or appropriate to (a) prevent a violation of, or to perfect an
exemption from, the registration requirements of the Securities Act, (b)
implement the provisions of the Plan or any agreement between the Company and
the optionee with respect to such shares of Common Stock, or (c) permit the
Company to determine the occurrence of a "disqualifying disposition," as
described in Section 421(b) of the Code, of the shares of Common Stock
transferred upon the exercise of an ISO granted under the Plan.

The Company shall pay all issuance taxes with respect to the issuance of shares
of Common Stock upon the exercise of an option granted under the Plan, as well
as all fees and expenses incurred by the Company in connection with such
issuance.

 

USE OF PROCEEDS. The cash proceeds from the sale of shares of Common Stock
pursuant to the exercise of options under the Plan shall be added to the general
funds of the Company and used for its general corporate purposes as the Board of
Directors may determine.

 

SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN CONSTITUENT CORPORATIONS.
Anything in this Plan to the contrary notwithstanding, the Board of Directors
may, without further approval by the shareholders, substitute new options for
prior options of a Constituent Corporation (as defined in Paragraph 19) or
assume the prior options of such Constituent Corporation.

 

DEFINITIONS.

Subsidiary. The term "Subsidiary" shall have the same definition as "subsidiary
corporation" in Section 424(f) of the Code.

Parent. The term "Parent" shall have the same definition as "parent corporation"
in Section 424(e) of the Code.

Constituent Corporation. The term "Constituent Corporation" shall mean any
corporation which engages with the Company, its Parent or any Subsidiary in a
transaction to which Section 424(a) of the Code applies (or would apply if the
option assumed or substituted were an ISO), or any Parent or any Subsidiary of
such corporation.

Disability. The term "Disability" shall mean a permanent and total disability
within the meaning of Section 22(e)(3) of the Code.

Outside Director. The term "Outside Director" shall mean an individual who, on
the date of grant of a NQSO hereunder, is a director of the Company but is not a
common law employee of the Company or of any of its Subsidiaries or its Parent.

 

GOVERNING LAW. The Plan, such options as may be granted hereunder and all
related matters shall be governed by, and construed in accordance with, the laws
of the State of New York.

 

PARTIAL INVALIDITY. The invalidity or illegality of any provision herein shall
not affect the validity of any other provision.