Ex.
10.7

     

    PUDA
COAL, INC.

     

    2008
EQUITY INCENTIVE PLAN

     

    STOCK OPTION
AGREEMENT


     

    
      
        
          
            
              
                
                  
                    
                      	
                              Name
      and Address of Awardee:

                            	
                              (the
      “Awardee”)

                            
	 
      	 
      
	
                              Board
      Approval Date:

                            	
                               

                            
	 
      	 
      
	
                              Grant
      Date:

                            	
                              (the
      “Grant
      Date”)

                            
	 
      	 
      
	
                              Exercise
      Price Per Share:

                            	
                              the
      (“Exercise
      Price”)

                            
	 
      	 
      
	
                              No. of Underlying
      Shares:

                            	
                              shares
      of Common Stock (the “Shares”)

                            
	 
      	 
      
	
                              Type
      of Option:

                            	
                              Shares
      Incentive Stock Option

                            
	 
      	 
      
	 
      	
                              Shares
      Nonstatutory Stock Option

                            
	 
      	 
      
	
                              Expiration
      Date:

                            	
                              (the
      “Expiration
      Date”)

                            
	 
      	 
      
	
                              Vesting
      Commencement Date:

                            	
                              (the
      “Vesting
      Commencement Date”)

                            
	 
      	 
      
	
                              Transferability:

                            	
                              This
      Option may not be
transferred.

                            


                    

                  

                

              

            

          

        

      

    

     

    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.


    
      
         


      

      
        -2-

        
          

        

      

      
         


      

    


    (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.


    
      
         


      

      
        -3-

        
          

        

      

      
         


      

    


    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.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        AWARDEE:

                                      	 
      	
                                        PUDA
      COAL, INC.

                                      
	 
      	 
      	 
      
	 
      	 
      	
                                        By:

                                      	 
      
	
                                         

                                      	 
      	
                                        Name:

                                      	 
      
	 
      	 
      	
                                        Title:

                                      	 
      
	 
      	 
      	 
      
	
                                        Print
      Name

                                      	 
      	 
      


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         


      

      
        -4-

        
          

        

      

      
         


      

    


    EXHIBIT
A

    


    NOTICE OF
EXERCISE

    


    
      	
              To:

            	
              Puda
      Coal, Inc.

            


    

    
      	
              Attn:

            	
              Plan
      Administrator

            


    

    
      	
              Subject:

            	
              Notice of Intention to
      Exercise Stock Option

            


    

    


    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:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 
      	
                                      Grant
      Number:

                                    	 
      	 
	 	 	 	 
	 
      	
                                      Date
      of Purchase:

                                    	 
      	 
	 	 	 	 
	 
      	
                                      Number
      of Shares:

                                    	 
      	 
	 	 	 	 
	 
      	
                                      Purchase
      Price:

                                    	 
      	 
	 	 	 	 
	 
      	
                                      Method
      of Payment

                                    	 
      	 
	 
      	
                                      of
      Purchase Price:

                                    	 
      	 


                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        	 
      	
                Social
      Security No.:

              	 
      


      

    

     

    The
shares should be issued as follows:

     

    
      
        
          
            
              
                
                  
                    	 
      	
                            Name:

                          	 
      	 
	 
      	 
      	 
      	 
	 
      	
                            Address:

                          	 
      	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                            Signed:

                          	 
      	 
	 
      	 
      	 
      	 
	 
      	
                            Date: