Document:

Exhibit
        10.2

       

      CHINA
        ARCHITECTURAL ENGINEERING, INC. 

       

      NOTICE
        OF GRANT OF STOCK OPTION

       

      Notice
        is
        hereby given of the following option grant (the “Option”)
        to
        purchase shares of the Common Stock of China Architectural Engineering, Inc.
        (the “Corporation”):

       

      Optionee:
        _______________________________________________________________________

       

      Grant
        Date:
        ______________________________________________________________________

       

      Vesting
        Commencement Date:
        ________________________________________________________

       

      Exercise
        Price: 
        $_________________________ per share

       

      Number
        of Option Shares:
        _________________ shares of Common Stock

       

      Expiration
        Date:
        __________________________________________________________________

       

      Type
        of Option :
        __________  Incentive
        Stock Option  
         

      

        
__________  Non-Statutory
        Stock Option

       

      Date
        Exercisable:
        

       

      Vesting
        Schedule:
        The
        Option Shares shall initially be unvested and subject to repurchase by the
        Corporation at the lower
        of
        (i) the
        exercise price paid per share or (ii) Fair Market Value per share at the
        time of
        Optionee’s cessation of Service. Optionee shall acquire a vested interest in,
        and the Corporation’s repurchase right shall accordingly lapse with respect to,
        (i) ______________ percent (___%) of the Option Shares upon Optionee’s
        completion of one (__) year of Service measured from the Vesting Commencement
        Date and (ii) the balance of the Option Shares in a series of _______ (___)
        successive equal monthly installments upon Optionee’s completion of each
        additional month of Service over the ________ (___)-month period measured
        from
        the first anniversary of the Vesting Commencement Date. In no event shall
        any
        additional Option Shares vest after Optionee’s cessation of
        Service.

       

      Optionee
        understands and agrees that the Option is granted subject to and in accordance
        with the terms of the China Architectural Engineering, Inc. 2007 Equity
        Incentive Plan (the “Plan”).
        Optionee hereby acknowledges receipt of a copy of the Plan in the form attached
        hereto as Exhibit
        A.
        Optionee further agrees to be bound by the terms of the Plan and the terms
        of
        the Option as set forth in the Stock Option Agreement attached hereto as
        Exhibit
        B.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      [Optionee
        understands that any Option Shares purchased under the Option will be subject
        to
        the terms set forth in the Stock Purchase Agreement attached hereto as
Exhibit
        C.]
        

       

      REPURCHASE
        RIGHTS.
        OPTIONEE HEREBY AGREES THAT ALL OPTION SHARES ACQUIRED UPON THE EXERCISE
        OF THE
        OPTION SHALL BE SUBJECT TO CERTAIN REPURCHASE RIGHTS EXERCISABLE BY THE
        CORPORATION AND ITS ASSIGNS. THE TERMS OF SUCH RIGHTS ARE SPECIFIED IN THE
        ATTACHED STOCK PURCHASE AGREEMENT. 

       

      At
        Will Employment.
        Nothing
        in this Notice or in the attached Stock Option Agreement or Plan shall confer
        upon Optionee any right to continue in Service for any period of specific
        duration or interfere with or otherwise restrict in any way the rights of
        the
        Corporation (or any Parent or Subsidiary employing or retaining Optionee)
        or of
        Optionee, which rights are hereby expressly reserved by each, to terminate
        Optionee’s Service at any time for any reason, with or without
        cause.

       

      Definitions.
        All
        capitalized terms in this Notice shall have the meaning assigned to them
        in this
        Notice or in the attached Stock Option Agreement.

       

      DATED:
        ________________, _______

       

      
        	 	 	 
	 	
                CHINA
                  ARCHITECTURAL ENGINEERING, INC.

              
	 
 	 
 	 
 
	
              	By:  	
              
	
                 

                 Title:  

              	
                
                  

                

              
	
                 

              	
                
 
	 	
                

                ,
                  OPTIONEE

              

      

       

      Attachments:

      Exhibit
        A - 2007 Equity Incentive Plan

      Exhibit
        B - Stock Option Agreement 

      [Exhibit
        C - Stock Purchase Agreement]Exhibit
      10.3

     

    CHINA
      ARCHITECTURAL ENGINEERING, INC.

     

    STOCK
      OPTION AGREEMENT

     

    RECITALS

     

    A. The
      Board
      has adopted the Plan for the purpose of retaining the services of selected
      Employees, non-employee members of the Board or the board of directors of any
      Parent or Subsidiary and consultants and other independent advisors in the
      service of the Corporation (or any Parent or Subsidiary).

     

    B. Optionee
      is to render valuable services to the Corporation (or a Parent or Subsidiary),
      and this Agreement is executed pursuant to, and is intended to carry out the
      purposes of, the Plan in connection with the Corporation’s grant of an option to
      Optionee.

     

    C. All
      capitalized terms in this Agreement shall have the meaning assigned to them
      in
      the attached Appendix.

     

    NOW,
      THEREFORE,
      it is
      hereby agreed as follows:

     

    1. Grant
      of Option.
      The
      Corporation hereby grants to Optionee, as of the Grant Date, an option to
      purchase up to the number of Option Shares specified in the Grant Notice. The
      Option Shares shall be purchasable from time to time during the option term
      specified in Paragraph 2 at the Exercise Price.

     

    2. Option
      Term.
      This
      option shall have a term of [__] years measured from the Grant Date and shall
      accordingly expire at the close of business on the Expiration Date, unless
      sooner terminated in accordance with Paragraph 5 or 6.

     

    3. Limited
      Transferability.
      

     

    (a) This
      option shall be neither transferable nor assignable by Optionee other than
      by
      will or the laws of inheritance following Optionee’s death and may be exercised,
      during Optionee’s lifetime, only by Optionee. However, Optionee may designate
      one or more persons as the beneficiary or beneficiaries of this option, and
      this
      option shall, in accordance with such designation, automatically be transferred
      to such beneficiary or beneficiaries upon the Optionee’s death while holding
      this option. Such beneficiary or beneficiaries shall take the transferred option
      subject to all the terms and conditions of this Agreement, including (without
      limitation) the limited time period during which this option may, pursuant
      to
      Paragraph 5, be exercised following Optionee’s death.

     

    (b) If
      this
      option is designated a Non-Statutory Option in the Grant Notice, then this
      option may be assigned in whole or in part during Optionee’s lifetime to the
      Optionee’s family members as a gift, whether directly or indirectly, or by means
      of a trust or partnership or otherwise, or pursuant to a qualified domestic
      relations order as defined in the Code or Title 1 of the Employee Retirement
      Income Security Act of 1974, as amended, provided,
      that,
      if the
      Corporation is subject to the reporting requirements of Section 13 or 15(d)
      of
      the Exchange Act, then as otherwise permitted pursuant to General Instructions
      A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended, or any
      successor thereto. For purposes of this Agreement, unless otherwise determined
      by the Plan Administrator, "family
      member"
      shall
      have the meaning given to such term in Rule 701 promulgated under the Securities
      Act, provided,
      that,
      if the
      Corporation is subject to the reporting requirements of Section 13 or 15(d)
      of
      the Exchange Act, then it shall have the meaning given to such term in General
      Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended,
      or any successor thereto. The assigned portion shall be exercisable only by
      the
      person or persons who acquire a proprietary interest in the option pursuant
      to
      such assignment. The terms applicable to the assigned portion shall be the
      same
      as those in effect for this option immediately prior to such assignment.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4. Dates
      of Exercise.
      This
      option shall become exercisable for the Option Shares in one or more
      installments as specified in the Grant Notice. As the option becomes exercisable
      for such installments, those installments shall accumulate, and the option
      shall
      remain exercisable for the accumulated installments until the Expiration Date
      or
      sooner termination of the option term under Paragraph 5 or 6.

     

    5. Cessation
      of Service.
      The
      option term specified in Paragraph 2 shall terminate (and this option shall
      cease to be outstanding) prior to the Expiration Date should any of the
      following provisions become applicable:

     

    (a) Should
      Optionee cease to remain in Service for any reason (other than death, Disability
      or Misconduct) while this option is outstanding, then Optionee (or any person
      or
      persons to whom this option is transferred pursuant to a permitted transfer
      under Paragraph 3) shall have a period of thirty (30) days (commencing with
      the date of such cessation of Service) during which to exercise this option,
      but
      in no event shall this option be exercisable at any time after the Expiration
      Date.

     

    (b) Should
      Optionee die while this option is outstanding, then the personal representative
      of Optionee’s estate or the person or persons to whom the option is transferred
      pursuant to Optionee’s will or the laws of inheritance following Optionee’s
      death or to whom the option is transferred during Optionee’s lifetime pursuant
      to a permitted transfer under Paragraph 3 shall have the right to exercise
      this option. However, if Optionee dies while holding this option and has an
      effective beneficiary designation in effect for this option at the time of
      his
      or her death, then the designated beneficiary or beneficiaries shall have the
      exclusive right to exercise this option following Optionee’s death. Any such
      right to exercise this option shall lapse, and this option shall cease to be
      outstanding, upon the earlier
      of (i)
      the expiration of the six (6)-month period measured from the date of Optionee’s
      death or (ii) the Expiration Date.

     

    (c) Should
      Optionee cease Service by reason of Disability while this option is outstanding,
      then Optionee (or any person or persons to whom this option is transferred
      pursuant to a permitted transfer under Paragraph 3) shall have a period of
      six (6) months (commencing with the date of such cessation of Service) during
      which to exercise this option. In no event shall this option be exercisable
      at
      any time after the Expiration Date.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Note:
      Exercise of this option on a date later than three (3) months following
      cessation of Service due to Disability will result in loss of favorable
      Incentive Option treatment, unless
      such
      Disability constitutes Permanent Disability. In the event that Incentive Option
      treatment is not available, this option will be taxed as a Non-Statutory Option
      upon exercise.

     

    (d) During
      the limited period of post-Service exercisability, this option may not be
      exercised in the aggregate for more than the number of Option Shares in which
      Optionee is, at the time of Optionee’s cessation of Service, vested pursuant to
      the Vesting Schedule specified in the Grant Notice or the special vesting
      acceleration provisions of Paragraph 6. Upon the expiration of such limited
      exercise period or (if earlier) upon the Expiration Date, this option shall
      terminate and cease to be outstanding for any vested Option Shares for which
      the
      option has not been exercised. To the extent Optionee is not vested in one
      or
      more Option Shares at the time of Optionee’s cessation of Service, this option
      shall immediately terminate and cease to be outstanding with respect to those
      shares.

     

    (e) Should
      Optionee’s Service be terminated for Misconduct or should Optionee otherwise
      engage in Misconduct while this option is outstanding, then this option shall
      terminate immediately and cease to remain outstanding.

     

    6. Change
      of Control Assumption.

     

    (a) If
      this
      option is assumed in connection with a Change in Control or otherwise continued
      in effect, then this option shall be appropriately adjusted, immediately after
      such Change in Control, to apply to the number and class of securities which
      would have been issuable to Optionee in consummation of such Change in Control
      had the option been exercised immediately prior to such Change in Control,
      and
      appropriate adjustments shall also be made to the Exercise Price, provided
      the
      aggregate Exercise Price shall remain the same. To the extent that the actual
      holders of the Corporation’s outstanding Common Stock receive cash consideration
      for their Common Stock in consummation of the Change in Control, the successor
      corporation may, in connection with the assumption of this option, substitute
      one or more shares of its own common stock with a fair market value equivalent
      to the cash consideration paid per share of Common Stock in such Change in
      Control.

     

    (b) This
      Agreement shall not in any way affect the right of the Corporation 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.

     

    7. Adjustment
      in Option Shares.
      Should
      any change be made to the Common Stock by reason of any stock split, stock
      dividend, recapitalization, combination of shares, exchange of shares or other
      change affecting the outstanding Common Stock as a class without the
      Corporation’s receipt of consideration, appropriate adjustments shall be made to
      (i) the total number and/or class of securities subject to this option and
      (ii)
      the Exercise Price in order to reflect such change and thereby preclude a
      dilution or enlargement of benefits hereunder.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    8. Stockholder
      Rights.
      The
      holder of this option shall not have any stockholder rights with respect to
      the
      Option Shares until such person shall have exercised the option, paid the
      Exercise Price and become the record holder of the purchased
      shares.

     

    9. Manner
      of Exercising Option.

     

    (a) In
      order
      to exercise this option with respect to all or any part of the Option Shares
      for
      which this option is at the time exercisable, Optionee (or any other person
      or
      persons exercising the option) must take the following actions:

     

    (i) Execute
      and deliver to the Corporation a [Purchase Agreement/Exercise Notice] for the
      Option Shares for which the option is exercised.

     

    (ii) Pay
      the
      aggregate Exercise Price for the purchased shares in one or more of the
      following forms:

     

    (A) cash
      or
      check made payable to the Corporation; or

     

    (B) a
      promissory note payable to the Corporation, but only to the extent authorized
      by
      the Plan Administrator in accordance with Paragraph 14.

     

    Should
      the Common Stock be registered under Section 12 of the 1934 Act at the time
      the
      option is exercised, then the Exercise Price may also be paid as
      follows:

     

    (C) in
      shares
      of Common Stock held by Optionee (or any other person or persons exercising
      the
      option) for the requisite period necessary to avoid a charge to the
      Corporation’s earnings for financial reporting purposes and valued at Fair
      Market Value on the Exercise Date; or 

     

    (D) to
      the
      extent the option is exercised for vested Option Shares and unless prohibited
      by
      Section 402 of the Sarbanes Oxley Act of 2002, through payment in accordance
      with a brokerage transaction as permitted under the provisions of Regulation
      T
      applicable to cashless exercises promulgated by the Federal Reserve Board out
      of
      the sale proceeds available on the settlement date of sufficient funds to cover
      the aggregate exercise price payable for the purchased shares plus all
      applicable income and employment taxes required to be withheld by the
      Corporation by reason of such exercise and the Optionee (or any other person
      or
      persons exercising the option) shall concurrently provide irrevocable
      instructions to the Corporation to deliver the certificates for the purchased
      shares directly to a brokerage firm in order to complete the sale.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (iii) Furnish
      to the Corporation appropriate documentation that the person or persons
      exercising the option (if other than Optionee) have the right to exercise this
      option.

     

    (iv) Execute
      and deliver to the Corporation such written representations as may be requested
      by the Corporation in order for it to comply with the applicable requirements
      of
      applicable securities laws.

     

    (v) Make
      appropriate arrangements with the Corporation (or Parent or Subsidiary employing
      or retaining Optionee) for the satisfaction of all applicable income and
      employment tax withholding requirements applicable to the option
      exercise.

     

    (b) As
      soon
      as practical after the Exercise Date, the Corporation shall issue to or on
      behalf of Optionee (or any other person or persons exercising this option)
      a
      certificate for the purchased Option Shares, with the appropriate legends
      affixed thereto.

     

    10. Compliance
      with Laws and Regulations.

     

    (a) The
      exercise of this option and the issuance of the Option Shares upon such exercise
      shall be subject to compliance by the Corporation and Optionee with all
      applicable requirements of law relating thereto and with all applicable
      regulations of any stock exchange (or the Nasdaq National Market, if applicable)
      on which the Common Stock may be listed for trading at the time of such exercise
      and issuance.

     

    (b) The
      inability of the Corporation to obtain approval from any regulatory body having
      authority deemed by the Corporation to be necessary to the lawful issuance
      and
      sale of any Common Stock pursuant to this option shall relieve the Corporation
      of any liability with respect to the non-issuance or sale of the Common Stock
      as
      to which such approval shall not have been obtained. The Corporation, however,
      shall use its best efforts to obtain all such approvals.

     

    11. Successors
      and Assigns.
      Except
      to the extent otherwise provided in Paragraphs 3 and 6, the provisions of this
      Agreement shall inure to the benefit of, and be binding upon, the Corporation
      and its successors and assigns and Optionee, Optionee’s assigns and the legal
      representatives, heirs and legatees of Optionee’s estate.

     

    12. Notices.
      Any
      notice required to be given or delivered to the Corporation under the terms
      of
      this Agreement shall be in writing and addressed to the Corporation at its
      principal corporate offices. Any notice required to be given or delivered to
      Optionee shall be in writing and addressed to Optionee at the address indicated
      below Optionee’s signature line on the Grant Notice. All notices shall be deemed
      effective upon personal delivery or upon deposit in the U.S. mail, postage
      prepaid and properly addressed to the party to be notified.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    13. Financing.
      The
      Plan Administrator may, in its absolute discretion and without any obligation
      to
      do so, permit Optionee to pay the Exercise Price for the purchased Option Shares
      by delivering a full-recourse promissory note bearing interest at a market
      rate
      and secured by those Option Shares. The payment schedule in effect for any
      such
      promissory note shall be established by the Plan Administrator in its sole
      discretion.

     

    Note:
      If the
      Optionee is a consultant, then the promissory note delivered in payment of
      the
      Exercise Price must be secured by collateral other than the purchased Option
      Shares.

     

    14. Construction.
      This
      Agreement and the option evidenced hereby are made and granted pursuant to
      the
      Plan and are in all respects limited by and subject to the terms of the Plan.
      All decisions of the Plan Administrator with respect to any question or issue
      arising under the Plan or this Agreement shall be conclusive and binding on
      all
      persons having an interest in this option.

     

    15. Governing
      Law.
      The
      interpretation, performance and enforcement of this Agreement shall be governed
      by the laws of the State of Delaware without resort to that State’s
      conflict-of-laws rules.

     

    16. Stockholder
      Approval.
      If the
      Option Shares covered by this Agreement exceed, as of the Grant Date, the number
      of shares of Common Stock which may be issued under the Plan as last approved
      by
      the stockholders, then this option shall be void with respect to such excess
      shares, unless stockholder approval of an amendment sufficiently increasing
      the
      number of shares of Common Stock issuable under the Plan is obtained in
      accordance with the provisions of the Plan.

     

    17. Additional
      Terms Applicable to an Incentive Option.
      In the
      event this option is designated an Incentive Option in the Grant Notice, the
      following terms and conditions shall also apply to the grant:

     

    (a) This
      option shall cease to qualify for favorable tax treatment as an Incentive Option
      if (and to the extent) this option is exercised for one or more Option Shares:
      (i) more than thirty (30) days after the date Optionee ceases to be an Employee
      for any reason other than death or Permanent Disability or (ii) more than six
      (6) months after the date Optionee ceases to be an Employee by reason of
      Permanent Disability.

     

    (b) This
      option shall not become exercisable in the calendar year in which granted if
      (and to the extent) the aggregate Fair Market Value (determined at the Grant
      Date) of the Common Stock for which this option would otherwise first become
      exercisable in such calendar year would, when added to the aggregate value
      (determined as of the respective date or dates of grant) of the Common Stock
      and
      any other securities for which one or more other Incentive Options granted
      to
      Optionee prior to the Grant Date (whether under the Plan or any other option
      plan of the Corporation or any Parent or Subsidiary) first become exercisable
      during the same calendar year, exceed One Hundred Thousand Dollars ($100,000)
      in
      the aggregate. To the extent the exercisability of this option is deferred
      by
      reason of the foregoing limitation, the deferred portion shall become
      exercisable in the first calendar year or years thereafter in which the One
      Hundred Thousand Dollar ($100,000) limitation of this Paragraph 17(b) would
      not be contravened, but such deferral shall in all events end immediately prior
      to the effective date of a Change in Control in which this option is not to
      be
      assumed or otherwise continued in effect, whereupon the option shall become
      immediately exercisable as a Non-Statutory Option for the deferred portion
      of
      the Option Shares.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (c) Should
      Optionee hold, in addition to this option, one or more other options to purchase
      Common Stock which become exercisable for the first time in the same calendar
      year as this option, then the foregoing limitations on the exercisability of
      such options as Incentive Options shall be applied on the basis of the order
      in
      which such options are granted.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    APPENDIX

     

    The
      following definitions shall be in effect under the Agreement:

     

    A. Agreement
      shall
mean this Stock Option Agreement.

     

    B. Board
      shall
      mean the Corporation’s Board of Directors.

     

    C. Change
      in Control
      shall
      mean a change in ownership or control of the Corporation effected through any
      of
      the following transactions: 

     

    (i) a
      merger,
      consolidation or other reorganization approved by the Corporation’s
      stockholders, unless
      securities representing more than fifty percent (50%) of the total combined
      voting power of the voting securities of the successor corporation are
      immediately thereafter beneficially owned, directly or indirectly and in
      substantially the same proportion, by the persons who beneficially owned the
      Corporation’s outstanding voting securities immediately prior to such
      transaction, or

     

    (ii) a
      stockholder-approved sale, transfer or other disposition of all or substantially
      all of the Corporation’s assets in complete liquidation or dissolution of the
      Corporation, or

     

    (iii) the
      acquisition, directly or indirectly by any person or related group of persons
      (other than the Corporation or a person that directly or indirectly controls,
      is
      controlled by, or is under common control with, the Corporation), of beneficial
      ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities
      possessing more than fifty percent (50%) of the total combined voting power
      of
      the Corporation’s outstanding securities pursuant to a tender or exchange offer
      made directly to the Corporation’s stockholders.

     

    In
      no
      event shall any public offering of the Corporation’s securities be deemed to
      constitute a Change in Control.

     

    D. Code
      shall
      mean the Internal Revenue Code of 1986, as amended.

     

    E. Common
      Stock
      shall
      mean the Corporation’s common stock.

     

    F. Corporation
      shall
      mean China Architectural Engineering, Inc., a Delaware corporation, and any
      successor corporation to all or substantially all of the assets or voting stock
      of China Architectural Engineering, Inc. which shall by appropriate action
      assume this option.

     

    G. Disability
      shall
      mean the inability of Optionee to engage in any substantial gainful activity
      by
      reason of any medically determinable physical or mental impairment and shall
      be
      determined by the Plan Administrator on the basis of such medical evidence
      as the Plan Administrator deems warranted under the circumstances. Disability
      shall be deemed to constitute Permanent
      Disability in
      the
      event that such Disability is expected to result in death or has lasted or
      can
      be expected to last for a continuous period of twelve (12) months or
      more.

     

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

     

    H. Employee
      shall
      mean an individual who is in the employ of the Corporation (or any Parent or
      Subsidiary), subject to the control and direction of the employer entity as
      to
      both the work to be performed and the manner and method of
      performance.

     

    I. Exercise
      Date
      shall
      mean the date on which the option shall have been exercised in accordance with
      Paragraph 9 of the Agreement.

     

    J. Exercise
      Price
      shall
      mean the exercise price payable per Option Share as specified in the Grant
      Notice.

     

    K. Expiration
      Date
      shall
      mean the date on which the option expires as specified in the Grant
      Notice.

     

    L. Fair
      Market Value
      per
      share of Common Stock on any relevant date shall be determined in accordance
      with the following provisions:

     

    (i) If
      the
      Common Stock is at the time traded on the Nasdaq National Market, then the
      Fair
      Market Value shall be the closing selling price per share of Common Stock on
      the
      date in question, as the price is reported by the National Association of
      Securities Dealers on the Nasdaq National Market and published in The
      Wall Street Journal.
      If
      there is no closing selling price for the Common Stock on the date in question,
      then the Fair Market Value shall be the closing selling price on the last
      preceding date for which such quotation exists.

     

    (ii) If
      the
      Common Stock is at the time listed on any Stock Exchange, then the Fair Market
      Value shall be the closing selling price per share of Common Stock on the date
      in question on the Stock Exchange determined by the Plan Administrator to be
      the
      primary market for the Common Stock, as such price is officially quoted in
      the
      composite tape of transactions on such exchange and published in The
      Wall Street Journal.
      If
      there is no closing selling price for the Common Stock on the date in question,
      then the Fair Market Value shall be the closing selling price on the last
      preceding date for which such quotation exists.

     

    (iii) If
      the
      Common Stock is at the time neither listed on any Stock Exchange nor traded
      on
      the Nasdaq National Market, then the Fair Market Value shall be determined
      by
      the Plan Administrator after taking into account such factors as the Plan
      Administrator shall deem appropriate.

     

    M. Grant
      Date
      shall
      mean the date of grant of the option as specified in the Grant
      Notice.

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

     

    N. Grant
      Notice
      shall
      mean the Notice of Grant of Stock Option accompanying the Agreement, pursuant
      to
      which Optionee has been informed of the basic terms of the option evidenced
      hereby.

     

    O. Incentive
      Option
      shall
      mean an option which satisfies the requirements of Code Section 422.

     

    P. Misconduct shall
      mean the commission of any act of fraud, embezzlement or dishonesty by Optionee,
      any unauthorized use or disclosure by Optionee of confidential information
      or
      trade secrets of the Corporation (or any Parent or Subsidiary), or any other
      intentional misconduct by Optionee adversely affecting the business or affairs
      of the Corporation (or any Parent or Subsidiary) in a material manner. The
      foregoing definition shall not in any way preclude or restrict the right of
      the
      Corporation (or any Parent or Subsidiary) to discharge or dismiss Optionee
      or
      any other person in the Service of the Corporation (or any Parent or Subsidiary)
      for any other acts or omissions, but such other acts or omissions shall not
      be
      deemed, for purposes of the Plan or this Agreement, to constitute grounds for
      termination for Misconduct. 

     

    Q. 1934
      Act
      shall
      mean the Securities Exchange Act of 1934, as amended.

     

    R. Non-Statutory
      Option
      shall
      mean an option not intended to satisfy the requirements of Code Section
      422.

     

    S. Option
      Shares
      shall
      mean the number of shares of Common Stock subject to the option.

     

    T. Optionee shall
      mean the person to whom the option is granted as specified in the Grant
      Notice.

     

    U. Parent
      shall
      mean any corporation (other than the Corporation) in an unbroken chain of
      corporations ending with the Corporation, provided each corporation in the
      unbroken chain (other than the Corporation) owns, at the time of the
      determination, stock possessing fifty percent (50%) or more of the total
      combined voting power of all classes of stock in one of the other corporations
      in such chain.

     

    V. Plan
      shall
      mean the Corporation’s 2007 Equity Incentive Plan.

     

    W. Plan
      Administrator
      shall
      mean either the Board or a committee of the Board acting in its capacity as
      administrator of the Plan.

     

    X. Purchase
      Agreement
      shall
      mean the stock purchase agreement in substantially the form of Exhibit C to
      the
      Grant Notice.

     

    Y. Service
      shall
      mean the Optionee’s performance of services for the Corporation (or any Parent
      or Subsidiary) in the capacity of an Employee, a non-employee member of the
      board of directors or an independent consultant.

     

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

     

    Z. Stock
      Exchange
      shall
      mean the American Stock Exchange or the New York Stock Exchange.

     

    AA. Subsidiary
      shall
      mean any entity in which, directly or indirectly through one or more
      intermediaries, the Corporation has at least a 50% ownership interest or, where
      permissible under Code Section 409A, at least a 20% ownership interest.

     

    BB. Vesting
      Schedule
      shall
      mean the vesting schedule specified in the Grant Notice pursuant to which the
      Optionee is to vest in the Option Shares in a series of installments over his
      or
      her period of Service.

     

    
      
         

      

      
        A-4

        
          

        

      

      
         

      

    

    ADDENDUM

    TO

    STOCK
      OPTION AGREEMENT

    

    The
      following provisions are hereby incorporated into, and are hereby made a part
      of, that certain Stock Option Agreement (the “Option
      Agreement”)
      by and
      between China Architectural Engineering, Inc. (the “Corporation”)
      and
      ________________________ (“Optionee”)
      evidencing the stock option (the “Option”)
      granted on this date to Optionee under the terms of the Corporation’s 2007
      Equity Incentive Plan, and such provisions shall be effective immediately.
      All
      capitalized terms in this Addendum, to the extent not otherwise defined herein,
      shall have the meanings assigned to them in the Option Agreement.

     

    INVOLUNTARY
      TERMINATION FOLLOWING

    A
      CHANGE IN CONTROL

     

    A. If
      the
      Option is to be assumed by the successor corporation (or the parent thereof)
      in
      connection with a Change in Control or is otherwise to be continued in full
      force and effect pursuant to the terms of the Change in Control transaction,
      then none of the Option Shares shall vest on an accelerated basis upon the
      occurrence of that Change in Control, and Optionee shall accordingly continue,
      over his or her period of Service following the Change in Control, to vest
      in
      the Option Shares in one or more installments in accordance with the provisions
      of the Option Agreement. However, upon an Involuntary Termination of Optionee’s
      Service within _________ (__) months following such Change in Control, all
      the
      Option Shares at the time subject to the Option shall automatically vest in
      full
      on an accelerated basis so that the Option shall immediately become exercisable
      for all the Option Shares as fully-vested shares and may be exercised for any
      or
      all of those Option Shares as vested shares. The Option shall remain so
      exercisable until the earlier
      of (i)
      the Expiration Date or (ii) the expiration of the one (1)-year period measured
      from the date of the Involuntary Termination. 

     

    B. For
      purposes of this Addendum, an Involuntary
      Termination
      shall
      mean the termination of Optionee’s Service by reason of:

     

    (a) Optionee’s
      involuntary dismissal or discharge by the Corporation for reasons other than
      for
      Misconduct, or

     

    (b) Optionee’s
      voluntary resignation following (A) a change in Optionee’s position with the
      Corporation (or Parent or Subsidiary employing Optionee) which materially
      reduces Optionee’s duties and responsibilities or the level of management to
      which he or she reports, (B) a reduction in Optionee’s level of compensation
      (including base salary, fringe benefits and target bonus under any
      corporate-performance based incentive programs) by more than fifteen percent
      (15%) or (C) a relocation of Optionee’s place of employment by more than
      fifty (50) miles, provided and only if such change, reduction or relocation
      is effected by the Corporation without Optionee’s consent.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    C. The
      provisions of Paragraph 1 of this Addendum shall govern the period for which
      the
      Option is to remain exercisable following the Involuntary Termination of
      Optionee’s Service within _____ (__) months after the Change in Control and
      shall supersede any provisions to the contrary in Paragraph 5 of the Option
      Agreement. 

     

    IN
      WITNESS WHEREOF,
      China
      Architectural Engineering, Inc. has caused this Addendum to be executed by
      its
      duly authorized officer as of the Effective Date specified below.

    

    
      	 	
              CHINA
                ARCHITECTURAL ENGINEERING, INC.

            
	 	 
	 	 
	 	
              By:

            	 
	 	 	 
	 	
              Title:

            	 

    

     

    EFFECTIVE
      DATE:
      ________________, _______

    

    
      
         

      

      
        2

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