Yayi International Inc.: Exhibit 10.1 - Prepared by newsfilecorp.com





Exhibit 10.1

YAYI INTERNATIONAL INC.  

2010 EMPLOYEE STOCK OPTION AND STOCK AWARD PLAN
 

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. 


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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. 


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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. 

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. 


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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). 


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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.



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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.
An option issued under the Plan may not, without prior approval of the
Company's stockholders at a duly-constituted meeting, be repriced 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. 

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.



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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.



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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. 

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. 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. 


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13.4
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. 

13.5
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. 

13.6
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. 

13.7
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. 

13.8
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. 


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