Document:

cphi10qex102063010.htm

 

CHINA PHARMA HOLDINGS, INC.

2010 SHARES OPTION AGREEMENT

This 2010 Shares Option Agreement (the “Agreement”) is made as of April 28, 2010 between China Pharma Holdings, Inc., a company incorporated in Delaware (the "Company"), and Frank Waung (the "Optionee").  Unless otherwise defined in this Agreement, the terms used in this Agreement shall have the same meanings defined in the China Pharma Holdings, Inc. 2009 Stock Option Plan (the “Plan”).

 

 

1.  Notice of Shares Option Grant

You (the “Optionee”) have been granted an option to subscribe for, acquire and purchase common shares in the Company (the “Common Shares”), subject to the terms and conditions of the Plan of the Company and the Agreement. The terms of your grant are set forth below:

 

 

 

	 	Name of Optionee:  	Frank Waung 
	 	 	 
	 	Type of Options: 	Nonqualified Shares Option 
	 	 	 
	 	Date of Grant 	April 28, 2010 
	 	 	 
	 	Number of Option Shares Granted: 	200,000 (“Option”)
	 	 	 
	 	Exercise Price Per Share: 	 US$ 3.47     (“Exercise Price”) 
	 	 	 
	 	Number of Options Vested Immediately 	0 
	 	 	 
	 	Number of Options Subject to Vesting Schedule	200,000 
	 	 	 
	 	Vesting Commencement Dates: 	April 28, 2011 
	 	 	 
	 	Term/Expiration Dates:  	Two years from each Vesting Commencement Date 

 

  

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Exercise and Vesting Schedule:

The Shares subject to this option shall vest according to the following schedule:

 

 

	 	 
(1)

	 
75% of the Option, 150,000 shares of Common Shares (“First Option”), is vested on April 28, 2011;

	 	 	 	 
	 	 
(2)

	 
The remaining 25% of the Option, 50,000 shares of Common Shares (“Second Option”), is vested on April 28, 2011; provided that the Company has consummated an offering of its securities at the minimum amount of $10 million (“Qualified Financing”) since April 28, 2010 by that time. If no Qualified Financing is consummated by December 31, 2010, the Second Option shall be forfeited.

 

 

2. Option Period.   This option shall be exercisable only during the Option Period (as defined below) provided that the Optionee maintains a continuous employment or service relationship with the Company, and during such Option Period, the exercisability of the Option shall be subject to the limitations of Section 3 hereof.  The Option Period for the First Option shall commence on April 28, 2011 (“First Vesting Commencement Date”), and except as otherwise provided in this Agreement, shall terminate after the expiration of two (2) years.  The Option Period for the Second Option shall commence on April 28, 2011 (“Second Vesting Commencement Date”), unless the Company has not consummated any Qualified Financing until December 31, 2010 in which case such option shall be forfeited, and except as otherwise provided in this Agreement, shall terminate after the expiration of two (2) years.

3. Limits on Option Period.   The Option Period for each option may end before each Termination Date, as follows:

 

 

  

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(a)  Termination of Status as Service Provider.    If the Optionee ceases to be a Service Provider to the Company for any reason other than disability within the meaning of subsections (c) or death within the meaning of subsection (b) during the Option Period, the Option Period shall terminate ninety (90) days after the date when Optionee ceases to be a Service Provider, and the option shall be exercisable only to the extent exercisable under Section 1 hereof on the date that the Optionee ceases to be a Service Provider.  The Optionee shall be deemed to be a Service Provider so long as the Optionee continues to render services to the Company in the same or greater capacity that he renders them as of the date of this Agreement, whether as an employee, consultant, or service provider.

(b)  Death.  If the Optionee dies while in the employ of the Company or any or its Affiliates (as defined in the Plan), the Option Period shall end twelve (12) months after the date of death, and the Optionee's executor or administrator or the person or persons to whom the Optionee's rights under this option shall pass by will or by the applicable laws of descent and distribution may exercise this option to the extent exercisable under Section 1 hereof on the date of Optionee's death.

(c)  Disability.  If the Optionee's employment or service relationship is terminated by reason of temporary disability, the Option Period shall end twelve (12) months after the date of the Optionee's cessation of employment, and the option shall be exercisable only to the extent exercisable under Section 1 hereof on the date of the Optionee's cessation of employment.

(d)  Leave of Absence.  If the Optionee is on a leave of absence from the Company because of his or her temporary disability, or for the purpose of serving the government of the country in which the principal place of employment of the Optionee is located, either in a military or civilian capacity, or for such other purpose or reason as the Committee may approve, the Optionee shall not be deemed during the period of such absence, by virtue of such absence alone, to have terminated employment or service relationship with the Company except as the Committee may otherwise expressly provide.

4. Manner of Exercising Option.

(a)  To exercise the Option with respect to all or any portion of the Common Shares for which the option is at the time exercisable, the Optionee (or in the case of exercise after the Optionee's death, the Optionee's executor, administrator, heir or legatee, as the case may be) must take the following actions:

 

 

  

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(i)  Execute and deliver to the chief executive officer of the Company: (a) a written notice duly signed by the Optionee indicating that the Optionee is exercising the First Option or the Second Option; and (b) Investment Representation, described below in sub-Section (c), upon the Company’s request.

	
  

	
(ii)  Make payment equal to the aggregate Exercise Price of the shares purchased upon the exercise of the Option (a) in cash in the form of currency or check; (b) with options granted hereby valued at the amount by which the Fair Market Value of the Common Stock subject to these options exceeds the exercise price provided on such options; provided that options used to satisfy the exercise price shall be surrendered to and cancelled by the Company; (c) by delivery of a promissory note of the Optionee to the Company on terms accepted by the Board; or (d) by delivery of an irrevocable direction to a securities broker to sell the shares purchased and to deliver all or part of the sale proceeds to the Company in payment of the aggregate exercise price and, if applicable, the amount necessary to satisfy the Company’s withholding obligations.

	
  

	
(iii) Furnish to the Company appropriate documentation that the person or persons exercising the Option, if other than the Optionee, has or have the right to exercise the Option.  The Optionee may exercise the option with respect to all or any part of the Common Shares then subject to such exercise at the minimum increment of 1,000 shares. :

(b)  Execution of Agreements.  The Optionee shall be required, as a condition precedent to acquiring Common Shares through exercise of the Option, to execute agreements relating to obligations in connection with ownership of the Common Shares or restrictions on transfer of the Common Shares no less restrictive than the obligations and restrictions to which the other members of the Company are subject to at the time of such exercise.

 

 

  

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(c)  Investment Representations.  If required by the Administrator (as defined in the Plan) of the Company administering the Plan, the Optionee shall give the Company satisfactory assurance in writing, signed by the Optionee or his or her legal representative, as the case may be, that such Common Shares are being purchased for investment and not with a view to any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), provided that such assurance shall be deemed inapplicable to (1) any sale of such Common Shares by such Optionee made in accordance with the terms of a registration statement covering such sale, which may hereafter be filed and become effective under the Securities Act, and with respect to which no stop order suspending the effectiveness thereof has been issued, and (2) any other sale of such Common Shares with respect to which in the opinion of counsel for the Company, such assurance is not required to be given in order to comply with the provisions of the Securities Act.

(d)  Updating of Share Register and Delivery of Certificates.   As soon as practicable after receipt of the documents and payments required in sub-Section (a) above and satisfaction of the conditions set forth in sub-Section (b) and (c) above, the Company shall, without transfer or issue tax and without other incidental expense to the Optionee, allot and issue to the Optionee all such Common Shares as he or she is entitled under this option and in connection therewith the Company shall update its share register to reflect the allotment and issue to the Optionee of such Common Shares and deliver to the Optionee at the office of the Company, or such other place as may be mutually acceptable to the Company and the Optionee, a certificate or certificates of such Common Shares; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with applicable registration requirements under the Securities Act, the Securities Exchange Act of 1934, as amended, any applicable listing requirements of any national securities exchange, and requirements under any other law or regulation applicable to the issuance or transfer of such Common Shares.

 

 

  

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5. Adjustments for Changes in Common Shares.   If there should be any change in the rights attaching to the Common Shares subject to this option, through merger, consolidation, reorganization, recapitalization, continuation or a change in domicile by the Company, division of shares, dividend of shares or other change in the capital structure of the Company, the Company shall make appropriate adjustments in the number of Common Shares subject to this option and in the price per share. Any new, substituted or additional securities or property which is distributed with respect to the Common Shares shall be immediately subject to the provisions of Section 5 hereunder, but only to the extent the Common Shares are at such time covered by such provisions. Any adjustment made pursuant to this Section as a consequence of a change in the capital structure of the Company shall not entitle the Optionee to acquire a number of Common Shares or shares of any successor company greater than the number of Common Shares the Optionee would receive if, prior to such change, the Optionee had actually held such number of Common Shares equal to the number of Common Shares then subject to this option.

6. Limitations on Transfer of Option.   This option shall, during the Optionee's lifetime, be exercisable only by the Optionee, and neither this option nor any right hereunder shall be transferable by the Optionee by operation of law or otherwise other than by will or the laws of descent and distribution. In the event of any attempt by the Optionee to alienate, assign, pledge, hypothecate, or otherwise dispose of this option or of any right hereunder, except as provided for in this Agreement, or in the event of the levy of any attachment, execution, or similar process upon the rights or interest hereby conferred, the Company at its election may terminate this option by notice to the Optionee and this option shall thereupon be null and void.

7. No Member Rights.   Neither Optionee nor any person entitled to exercise the Optionee's rights in the event of his or her death shall have any of the rights of a member of the Company with respect to the Common Shares subject to this option except to the extent the name of the Optionee has been entered on the share register of the Company and share certificate(s) for such Common Shares shall have been issued upon the exercise of this option.

8. NO EFFECT ON TERMS OF EMPLOYMENT OR SERVICE CONTRACT.  SUBJECT TO THE TERMS OF ANY WRITTEN EMPLOYMENT OR SERVICE CONTRACT TO THE CONTRARY, THE COMPANY SHALL HAVE THE RIGHT TO TERMINATE OR CHANGE THE TERMS OF EMPLOYMENT OR SERVICE OF THE OPTIONEE AT ANY TIME AND FOR ANY REASON WHATSOEVER, WITH OR WITHOUT CAUSE.  FURTHERMORE, NOTHING IN THIS AGREEMENT OR IN THE PLAN SHALL CONFER UPON THE OPTIONEE ANY RIGHT TO CONTINUE IN THE SERVICE OF THE COMPANY FOR ANY PERIOD OF SPECIFIC DURATION.

 

 

  

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9. Notice.   Any notice required to be given to a party under the terms of this Agreement shall be addressed to the party at the address given herein or at the address beneath the party’s signature as set out below, or at such other address as either party to this Agreement may hereafter designate in writing to the other.  Any such notice shall be deemed to have been duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, express or certified and deposited (postage or certification fee prepaid) in a post office or branch post office or branch post office regularly maintained by the Post Office of the British Virgin Islands, the United States of America or the People’s Republic of China.

10. Company Decisions Conclusive.   All decisions of the Company upon any question arising under the Plan or under this Agreement shall be conclusive.

11. Successors.  This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company. Where the context permits, "Optionee" as used in this Agreement shall include the Optionee's executor, administrator or other legal representative or the person or persons to whom the Optionee's rights pass by will or the applicable laws of descent and distribution.

12. Restrictive Legends.  All certificates for Common Shares shall bear the legends as set forth below, or legends sub­stan­tially equivalent thereto, together with any other legends that may be required by the Company or any applicable laws:

	
  

	
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

	 

 

 

 

 

  

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13. 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 express terms and provisions of the Plan.  All decisions of the Committee 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 the option.

14. Governing Law.   The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware.

15. Copy of Plan.  The Optionee hereby acknowledges receipt of a copy of the Plan.

16. Entire Agreement The Company and the Optionee agree that this Agreement constitutes the entire agreement between the Company and the Optionee, and supersede any and all other prior agreement, oral or written, entered into between the Company or its subsidiary and the Optionee regarding the granting of shares option.

IN WITNESS WHEREOF, the Company and the Optionee have executed this Agreement as of the date first written above.

	
China Pharma Holdings, Inc.

	
Optionee:

	
 

	  
	
By: /s/ Zhilin Li

	
/s/ Frank Waung

	  	  
	
Print Name:    Zhilin Li

	
Frank Waung

	  	  
	
Title: President and CEO 

	  

 

 

 

  

8ex101.htm

Exhibit 10.1

 

 

FOREX INTERNATIONAL TRADING CORP.

1061 1⁄2 N Spaulding Ave.

West Hollywood, California 90046

August 6, 2010

 

William Glass

 

Letter of Appointment – Board of Directors

 

Dear Mr. Glass,

 

We are pleased to offer you the position of Director on the Board of Directors (the “Board”) of Forex International Trading Corp., (the “Company”).  This letter contains the terms and agreement of your appointment as Director of the Company and will be effective from the date of the signing of this letter.

 

	
1.  

	
Your Duties:

 

	
a)  

	
You will be expected to attend all meetings (either in person or by teleconference) of the Board of the Company, of which we expect to hold approximately four per annum, as well as perform all such formalities as required by the Company’s governing documents.  In addition, you will be expected to perform such other duties as are reasonably agreed upon between you and the Company from time to time.

 

	
b)  

	
As Director you will:

 

	
i)  

	
Perform to the best of your abilities and knowledge the duties reasonably assigned to you by the Board from time to time, whether during or outside business hours and at such places as the Board reasonably requires;

 

	
ii)  

	
Use all reasonable efforts to promote the interests of the Company;

 

	
iii)  

	
Attend directors’ meetings;

 

	
iv)  

	
Act in the best interests of the Company; and

 

	
v)  

	
Work closely with the Chairman of the Board of Directors and the Chief Executive Officer.

 

	
c)  

	
As you will appreciate, however, your time commitment will ultimately be a product of the matters confronting the Company from time to time and matters properly requiring your attention as a director of the Company.

 

	
2.  

	
Remuneration:

 

	
a)  

	
Fees

 

	
i)  

	
The Company will issue you on an annual basis at the commencement of each term shares of common stock of the Company registered on a Form S-8 Registration Statement equal to $6,000 divided by the Company’s market price discounted by 25%; provided, however, you hereby acknowledge that the initial issuance of shares of common stock shall not be issued until such time that the Company files the Form S-8 Registration Statement.

 

  

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ii)  

	
No part of Director’s compensation shall be subject to withholding by the Company for the payment of social security, federal, state or any other employee payroll taxes.  The Company will regularly report all amounts paid to Director by filing Form 1099-Misc, or by such other reports as mutually agreed upon by Director and the Company.

 

	
3.  

	
Expenses:  Subject to you providing the Company with receipts or other evidence of payment, the Company will pay for or reimburse you for all travelling, hotel and other expenses reasonably incurred by you in connection with attending and returning from Board, Committee, Company, meetings or otherwise in connection with the Company's business that are pre-approved in writing by the Company.  Reasonable travel and out of pocket expenses used in connection with the business of the Group shall include:

 

	
a)  

	
Cell phone bills;

 

	
b)  

	
Domestic and international travel (economy class under 4 hours and business class over 4 hours); and

 

	
c)  

	
Hotel accommodation.

 

	
4.  

	
Termination of Appointment:

 

	
a)  

	
Your appointment as the Director may be terminated at any time by the vote of the stockholders of the Company in accordance with the certificate of incorporation and bylaws of the Company.

 

	
b)  

	
You acknowledge and agree that if the shareholders of the Company terminate your appointment, you will have no claim of any kind against the Company by reason of the termination.

 

	
c)  

	
You are at liberty to terminate the appointment at any time by notice at any time in writing to the Company.

 

	
5.  

	
What happens after termination of appointment?

 

	
  

	
If your appointment is terminated for any reason or you resign for any reason:

 

	
a)  

	
The Company shall pay you all amounts outstanding, and the Company may set off any amounts you owe the Company against any amounts the Company owes to you as a Director at the date of termination except for amounts the Company is not entitled by law to set off;

 

	
b)  

	
You must return all the Company's property (including property leased by the Company) to the Company on termination including all written or machine readable material, software, computers, credit cards, keys and vehicles; and

 

	
c)  

	
You must not record any confidential information in any form after termination.

 

	
6.  

	
Prohibited Activities:

 

	
a)  

	
You undertake to the Company that you will not during the term of your appointment engage in a business or an activity that would place you in a position of conflict in respect of the performance of your duties.

 

 

  

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b)  

	
The terms of your appointment do not restrict you from accepting appointment as director of any other company outside of the Company’s industry, providing consulting services or any other business or other activity whatsoever.  The Company acknowledges and accepts your current roles as a director.

 

	
7.  

	
Notices and Other Communications                                                           :

 

	
a)  

	
Service of Notices

 

	
  

	
A notice, demand, consent, approval or communication under this letter (collectively a “Notice”) must be:

 

	
i)  

	
In writing and in English directed to the address advised by the recipient for notices, as varied by any notice; and

 

	
ii)  

	
Hand delivered or sent by prepaid post or facsimile to that address.

 

	
b)  

	
Effective on Receipt:  A Notice given in accordance with section 7a takes effect when received (or at a later time specified in the Notice), and is taken to be received:

 

	
i)  

	
If hand delivered, on delivery;

 

	
ii)  

	
If sent by prepaid post, two Business Days after the date of posting (or seven Business Days after the date of posting if posted to or from outside The United States of America);

 

	
iii)  

	
If sent by facsimile, when the sender's facsimile system generates a message confirming successful transmission of the entire Notice unless, within eight Business Hours after the transmission, the recipient informs the sender that it has not received the entire Notice;

 

	
  

	
but if the delivery, receipt or transmission is not on a Business Day or is after 5.00pm on a Business Day, the Notice is taken to be received at 9.00am on the Business Day after that delivery, receipt or transmission.

 

	
8.  

	
Miscellaneous

 

	
a)  

	
Alterations:  This letter may be altered only in writing signed by each party.

 

	
b)  

	
Approvals and consents:  Except where this letter expressly states otherwise, a party may, in its discretion, give conditionally or unconditionally or withhold any approval or consent under this letter.

 

	
c)  

	
Assignment:  This letter may NOT be assigned by either party.

 

	
d)  

	
Costs:  Each party must pay its own costs of negotiating, preparing and executing this letter.

 

	
e)  

	
Survival:  Any indemnity in this letter is independent and survives termination of this letter.  Any other provision by its nature intended to survive termination of this letter survives termination of this letter.

 

	
f)  

	
Counterparts:  This letter may be executed in counterparts.  All executed counterparts constitute one document.

 

 

  

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g)  

	
No Merger:  The rights and obligations of the parties under this letter do not merge on completion of any transaction contemplated by this letter.

 

	
h)  

	
Entire Agreement:  This letter constitutes the entire agreement between the parties in connection with its subject matter and supersedes all previous agreements or understandings between the parties in connection with its subject matter.

 

	
i)  

	
Further Action:  Each party must do, at its own expense, everything reasonably necessary (including executing documents) to give full effect to this letter and the transactions contemplated by it.

 

	
j)  

	
Waiver:  A party does not waive a right, power or remedy if it fails to exercise or delays in exercising the right, power or remedy.  A single or partial exercise of a right, power or remedy does not prevent another or further exercise of that or another right, power or remedy.  A waiver of a right, power or remedy must be in writing and signed by the party giving the waiver.

 

	
k)  

	
Relationship:  Except where this letter expressly states otherwise, it does not create a relationship of employment, agency or partnership between the parties.

 

	
l)  

	
Confidentiality:  A party may only use the confidential information of another party for the purposes of this letter, and must keep the existence of this letter and the terms of it and the confidential information of another party confidential information except where:

 

	
i)  

	
The information is public knowledge (but not because of a breach of this letter) or the party has independently created the information;or

 

	
ii)  

	
Disclosure is required by law or a regulatory body (including a relevant stock exchange).

 

	
m)  

	
Announcements:  A public announcement in connection with this letter or a transaction contemplated by it must be agreed by the parties before it is made, except if required by law or a regulatory body (including a relevant stock exchange).

 

	
9.  

	
Insurance and Indemnification:

 

	
a)  

	
The Company has directors' and officers' liability insurance under which you are covered in the US and elsewhere for all usual risks during the term of your appointment as the Director. The Company will maintain that cover for the full term of your appointment.  During the term of this appointment, and for a period of two (2) years thereafter, the Company shall provide directors’ liability insurance that shall pay for and insure against, dollar for dollar, any and all claims against Director arising out of, or in connection with, facts or events that occurred during the term of this appointment.  The terms of this paragraph survive termination.

 

	
b)  

	
During the term of this appointment, Company shall defend, indemnify and hold harmless the director against any and all claims, causes of action, changes, expenses, or any liabilities whatsoever, including amounts paid to settle an action or satisfy a judgment and amounts incurred by Director as a result of him acting as Director, arising out of or in any way connected with, facts or events that occurred during the term of this appointment, to the furthest extent permitted by law.  The terms of this indemnification shall survive termination of this appointment.

 

 

  

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10.  

	
Contract for Services:  This is a contract for services and is not a contract of employment.

 

	
11.  

	
Governing Law:  This Agreement shall be governed by the laws of the State of California (without giving effect to choice of law principles or rules thereof that would cause the application of the laws of any jurisdiction other than the State of California) and the invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Please sign the attached copy of this letter to indicate that you have read, understood and accept the terms of your appointment.

 

Yours Sincerely,

 

Forex International Trading Corp.

 

 

By:/s/ Darren C. Dunckel

Name: Darren C. Dunckel

Title: CEO

 

 

Agreed to and accepted by:

 

 

 

/s/ William Glass

William Glass

 

 

 

 

 

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