Document:

exh10-55.htm

Exhibit 10.55

BIG TREE GROUP, INC.

2014 EMPLOYEE AND CONSULTANT COMPENSATION PLAN

1.           Purpose.

1.1           Purpose. The purpose of the Big Tree Group, Inc. 2014 Employee and Consultant Compensation Plan is to enable the Company to offer to its employees, officers, directors and consultants whose past, present and/or potential contributions to the Company and its Subsidiaries have been, are or will be important to the success of the Company, an opportunity to acquire a proprietary interest in the Company. The types of long-term incentive Awards that may be provided under the Plan will enable the Company to respond to changes in compensation practices, tax laws, accounting regulations and the size and diversity of its businesses.

2.           Definitions.

2.1           Definitions. For purposes of the Plan, the following terms shall be defined as set forth below:

(a)           “Agreement” means the agreement between the Company and the Holder setting forth the terms and conditions of an Award under the Plan. Agreements shall be in the form(s) attached hereto.

(b)           “Award” means Stock Options, Restricted Stock and/or other Stock Based Awards awarded under the Plan.

(c)           “Board” means the Board of Directors of the Company.

(d)           “Code” means the Internal Revenue Code of 1986, as amended from time to time.

(e)           “Committee” means the Board or any committee of the Board that the Board may designate to administer the Plan or any portion thereof.  If no Committee is so designated, then all references in this Plan to “Committee” shall mean the Board.

(f)           “Common Stock” means the common stock of the Company, $0.00001 par value per share.

(g)           “Company” means Big Tree Group, Inc., a corporation organized under the laws of the State of Colorado.

(h)           “Disability” means physical or mental impairment as determined under procedures established by the Committee for purposes of the Plan.

(i)           “Effective Date” means the date set forth in Section 12.1, below.

(j)           “Fair Market Value”, means, as of any given date: (i) if the Common Stock is listed on a national securities exchange, the closing price of the Common Stock in the principal trading market for the Common Stock on such date, as reported by the exchange (or on the last preceding trading date if such security was not traded on such date); (ii) if the Common Stock is not listed on a national securities exchange, but is traded in the over-the-counter market, the closing bid price for the Common Stock on such date, as reported by the OTC Bulletin Board or the OTC Markets Inc. or similar publisher of such quotations; and (iii) if the fair market value of the Common Stock cannot be determined pursuant to clause (i) or (ii) above, such price as the Committee shall determine, in good faith.

(k)           “Holder” means a person who has received an Award under the Plan.

  

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(l)           “Normal Retirement” means retirement from active employment with the Company or any Subsidiary, other than for Cause or due to death or disability, of a Holder who; (i) has reached the age of 65; (ii) has reached the age of 62 and has completed five years of service with the Company; or (iii) has reached the age of 60 and has completed 10 years of service with the Company.

(m)           “Other Stock-Based Award” means an Award under Section 9, below, that is valued in whole or in part by reference to, or is otherwise based upon, Common Stock.

(n)           “Parent” means any present or future “parent corporation” of the Company, as such term is defined in Section 424(e) of the Code.

(o)           “Plan” means the Sunwin Stevia Internatoinal, Inc. 2014 Equity Compensation Plan, as hereinafter amended from time to time.

(p)           “Repurchase Value” shall mean the Fair Market Value in the event the Award to be repurchased under Section 10.2 is comprised of shares of Common Stock and the difference between Fair Market Value and the Exercise Price (if lower than Fair Market Value) in the event the Award is a Stock Option or Stock Appreciation Right; in each case, multiplied by the number of shares subject to the Award.

(q)           “Restricted Stock” means Common Stock, received under an Award made pursuant to Section 8, below that is subject to restrictions under said Section 8.

(r)           “SAR Value” means the excess of the Fair Market Value (on the exercise date) over the exercise price that the participant would have otherwise had to pay to exercise the related Stock Option, multiplied by the number of shares for which the Stock Appreciation Right is exercised.

(s)           “Stock Appreciation Right” means the right to receive from the Company, on surrender of all or part of the related Stock Option, without a cash payment to the Company, a number of shares of Common Stock equal to the SAR Value divided by the Fair Market Value (on the exercise date).

(t)           “Stock Option” or “Option” means any option to purchase shares of Common Stock that is granted pursuant to the Plan.

(u)           “Subsidiary” means any present or future “subsidiary corporation” of the Company, as such term is defined in Section 424(f) of the Code.

3.           Administration.

3.1           Committee Membership. The Plan shall be administered by the Board or a committee designated by the Board. Committee members shall serve for such term as the Board may in each case determine, and shall be subject to removal at any time by the Board. The Committee members, to the extent deemed to be appropriate by the Board, shall be “non-employee directors” as defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”).

3.2           Powers of Committee. The Committee shall have the authority and responsibility to recommend to the Board for approval, Awards for Board members, executive officers, non-executive employees and consultants of the Company, pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, and/or (iv) Other Stock-Based Awards. For purposes of illustration and not of limitation, the Committee shall have the authority (subject to the express provisions of this Plan):

(a)           to select the officers, employees, directors and consultants of the Company or any Subsidiary to whom Stock Options, Stock Appreciation Rights, Restricted Stock, and/or Other Stock-Based Awards may from time to time be awarded hereunder.

  

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(b)           to determine the terms and conditions, not inconsistent with the terms of the Plan or requisite Board approval, of any Award granted hereunder including, but not limited to, number of shares, share exercise price or types of consideration paid upon exercise of Stock Options and the purchase price of Common Stock awarded under the Plan (including without limitation by a Holder’s conversion of deferred salary or other indebtedness of the Company to the Holder), such as other securities of the Company or other property, any restrictions or limitations, and any vesting, exchange, surrender, cancellation, acceleration, termination, exercise or forfeiture provisions, as the Committee shall determine;

(c)           to determine any specified performance goals or such other factors or criteria which need to be attained for the vesting of an Award granted hereunder;

(d)           to determine the terms and conditions under which Awards granted hereunder are to operate on a tandem basis and/or in conjunction with or apart from other equity awarded under this Plan and cash Awards made by the Company or any Subsidiary outside of this Plan; and

(e)           to determine the extent and circumstances under which Common Stock and other amounts payable with respect to an Award hereunder shall be deferred that may be either automatic or at the election of the Holder; and

3.3           Interpretation of Plan.

Subject to Section 11, below, the Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and any Award issued under the Plan (and to determine the form and substance of all Agreements relating thereto), and to otherwise supervise the administration of the Plan. Subject to Section 11, below, all decisions made by the Committee pursuant to the provisions of the Plan shall be made in the Committee’s sole discretion, subject to Board authorization if indicated, and shall be final and binding upon all persons, including the Company, its Subsidiaries and Holders.

4.           Stock Subject to Plan.

4.1           Number of Shares. The total number of shares of Common Stock reserved and available for issuance under the Plan shall be four million (4,000,000) shares. Shares of Common Stock under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.  The number of shares of Common Stock available for issuance under the Plan shall automatically increase on the first trading day of January each calendar year during the term of the Plan, beginning with fiscal year 2015, by an amount equal to one and one-half percent (1.5%) of the total number of shares of Common Stock outstanding on the last trading day in December of the immediately preceding calendar year, but in no event shall any such annual increase exceed 300,000 shares of Common Stock.  If any share of Common Stock that have been granted pursuant to a Stock Option ceases to be subject to a Stock Option, or if any shares of Common Stock that are subject to any Stock Appreciation Right, Restricted Stock, Deferred Stock Award, or Other Stock-Based Award granted hereunder are forfeited or any such Award otherwise terminates without a payment being made to the Holder in the form of Common Stock, such shares shall again be available for distribution in connection with future grants and Awards under the Plan.

4.2           Adjustment Upon Changes in Capitalization, Etc. In the event of any dividend (other than a cash dividend) payable on shares of Common Stock, stock split, reverse stock split, combination or exchange of shares, or other similar event (not addressed in Section 4.3, below) occurring after the grant of an Award, which results in a change in the shares of Common Stock of the Company as a whole, (i) the number of shares issuable in connection with any such Award and the purchase price thereof, if any, shall be proportionately adjusted to reflect the occurrence of any such event and (ii) the Committee shall determine whether such change requires an adjustment in the aggregate number of shares reserved for issuance under the Plan or to retain the number of shares reserved and available under the Plan in their sole discretion. Any adjustment required by this Section 4.2 shall be made by the Committee, in good faith, subject to Board authorization if indicated, whose determination will be final, binding and conclusive.

  

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4.3           Certain Mergers and Similar Transactions. In the event of (a) a dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the shareholders of the Company or their relative stock holdings and the Awards granted under this Plan are assumed, converted or replaced by the successor corporation, which assumption will be binding on all Awardees), (c) a merger in which the Company is the surviving corporation but after which the shareholders of the Company immediately prior to such merger (other than any shareholder that merges, or which owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company, (d) the sale of substantially all of the assets of the Company, or (e) the acquisition, sale, or transfer of more than 50% of the outstanding shares of the Company by tender offer or similar transaction, any or all outstanding Awards may be assumed, converted or replaced by the successor corporation (if any), which assumption, conversion or replacement will be binding on all Awardees. In the alternative, the successor corporation may substitute equivalent Awards or provide substantially similar consideration to Awardees as was provided to shareholders (after taking into account the existing provisions of the Awards). The successor corporation may also issue, in place of outstanding Shares of the Company held by the Holder, substantially similar shares or other property subject to repurchase restrictions no less favorable to the Holder. In the event such successor corporation (if any) refuses or otherwise declines to assume or substitute Awards, as provided above, (i) the vesting of any or all Awards granted pursuant to this Plan will accelerate immediately prior to the effective date of a transaction described in this Section 4.3 and (ii) any or all Stock Options granted pursuant to this Plan will become exercisable in full prior to the consummation of such event at such time and on such conditions as the Committee determines. If such Stock Options are not exercised prior to the consummation of the corporate transaction, they shall terminate at such time as determined by the Committee. Subject to any greater rights granted to Awardees under the foregoing provisions of this Section 4.3, in the event of the occurrence of any transaction described in this Section 4.3, any outstanding Awards will be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets.

5.           Eligibility.

Awards may be made or granted to employees, officers, directors and consultants who are deemed to have rendered or to be able to render significant services to the Company or its Subsidiaries and who are deemed to have contributed or to have the potential to contribute to the success of the Company. Notwithstanding anything to the contrary contained in the Plan, Awards covered or to be covered under a registration statement on Form S-8 may be made under the Plan only if (a) they are made to natural persons, (b) who provide bona fide services to the Company or its Subsidiaries, and (c) the services are not in connection with the offer and sale of securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s securities.

6.           Stock Options.

6.1           Grant and Exercise. Any Stock Option granted under the Plan shall contain such terms, not inconsistent with this Plan as the Committee may from time to time approve.

6.2           Terms and Conditions. Stock Options granted under the Plan shall be subject to the following terms and conditions:

(a)           Option Term. The term of each Stock Option shall be fixed by the Committee.

(b)           Exercise Price. The exercise price per share of Common Stock purchasable under a Stock Option shall be determined by the Committee at the time of grant and may not be less than 50% of the Fair Market Value on the day of grant.

  

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(c)           Exercisability. Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee and as set forth in Section 10, below. If the Committee provides, in its discretion, that any Stock Option is exercisable only in installments, i.e., that it vests over time, the Committee may waive such installment exercise provisions at any time at or after the time of grant in whole or in part, based upon such factors as the Committee shall determine.

 

 

(d)           Method of Exercise. Subject to whatever installment, exercise and waiting period provisions are applicable in a particular case, Stock Options may be exercised in whole or in part at any time during the term of the Stock Option, by giving written notice of exercise to the Company specifying the number of shares of Common Stock to be purchased. Such notice shall be accompanied by payment in full of the purchase price, which shall be in cash or, if provided in the Agreement, either in shares of Common Stock (including Restricted Stock and other contingent Awards under this Plan) or partly in cash and partly in such Common Stock, or such other means which the Committee determines are consistent with the Plan’s purpose and applicable law. Cash payments shall be made by wire transfer, certified or bank check or personal check, in each case payable to the order of the Company; provided, however, that the Company shall not be required to deliver certificates for shares of Common Stock with respect to which an Option is exercised until the Company has confirmed the receipt of good and available funds in payment of the purchase price thereof. Payments in the form of Common Stock shall be valued at the Fair Market Value on the date prior to the date of exercise. Such payments shall be made by delivery of stock certificates in negotiable form that are effective to transfer good and valid title thereto to the Company, free of any liens or encumbrances. A Holder shall have none of the rights of a shareholder with respect to the shares subject to the Option until such shares shall be transferred to the Holder upon the exercise of the Option.

(e)           Transferability. Except as may be set forth in the Agreement, no Stock Option shall be transferable by the Holder other than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the Holder’s lifetime, only by the Holder (or, to the extent of legal incapacity or incompetency, the Holder’s guardian or legal representative).

(f)           Termination by Reason of Death. If a Holder’s employment by the Company or a Subsidiary terminates by reason of death, any Stock Option held by such Holder, unless otherwise determined by the Committee at the time of grant and set forth in the Agreement, shall thereupon automatically terminate, except that the portion of such Stock Option that has vested on the date of death may thereafter be exercised by the legal representative of the estate or by the legatee of the Holder under the will of the Holder, for a period of one year (or such other greater or lesser period as the Committee may specify at grant) from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter.

(g)           Termination by Reason of Disability. If a Holder’s employment by the Company or any Subsidiary terminates by reason of Disability, any Stock Option held by such Holder, unless otherwise determined by the Committee at the time of grant and set forth in the Agreement, shall there upon automatically terminate, except that the portion of such Stock Option that has vested on the date of termination may thereafter be exercised by the Holder for a period of one year (or such other greater or lesser period as the Committee may specify at the time of grant) from the date of such termination of employment or until the expiration of the stated term of such Stock Option, whichever period is the shorter.

(h)           Other Termination. Subject to the provisions of Section 13, below, and unless otherwise determined by the Committee at the time of grant and set forth in the Agreement, if a Holder is an employee of the Company or a Subsidiary at the time of grant and if such Holder’s employment by the Company or any Subsidiary terminates for any reason other than death or Disability, the Stock Option shall thereupon automatically terminate, except that if the Holder’s employment is terminated by the Company or a Subsidiary without cause or due to normal retirement, then the portion of such Stock Option that has vested on the date of termination of employment may be exercised for the lesser of three months after termination of employment or the balance of such Stock Option’s term.

  

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(i)           Buyout and Settlement Provisions. The Committee may at any time, subject to Board authorization, if indicated, offer to repurchase a Stock Option previously granted, based upon such terms and conditions as the Committee shall establish and communicate to the Holder at the time that such offer is made.

7.           Stock Appreciation Rights.

7.1           Grant and Exercise. The Committee, subject to Board authorization, if indicated, may grant Stock Appreciation Rights to participants who have been, or are being granted, Stock Options under the Plan as a means of allowing such participants to exercise their Stock Options without the need to pay the exercise price in cash. A Stock Appreciation Right may be granted either at or after the time of the grant of such Stock Option.

7.2           Terms and Conditions. Stock Appreciation Rights shall be subject to the following terms and conditions:

(a)           Exercisability. Stock Appreciation Rights shall be exercisable as shall be determined by the Committee and set forth in the Agreement.

(b)           Termination. A Stock Appreciation Right shall terminate and shall no longer be exercisable upon the termination or exercise of the related Stock Option.

(c)           Method of Exercise. Stock Appreciation Rights shall be exercisable upon such terms and conditions as shall be determined by the Committee and set forth in the Agreement and by surrendering the applicable portion of the related Stock Option. Upon such exercise and surrender, the Holder shall be entitled to receive a number of shares of Common Stock equal to the SAR Value divided by the Fair Market Value on the date the Stock Appreciation Right is exercised.

(d)           Shares Affected Upon Plan. The granting of a Stock Appreciation Right shall not affect the number of shares of Common Stock available for Awards under the Plan. The number of shares available for Awards under the Plan will, however, may be reduced by the number of shares of Common Stock acquirable upon exercise of the Stock Option to which such Stock Appreciation Right relates.

8.           Restricted Stock.

8.1           Grant. Shares of Restricted Stock may be awarded either alone or in addition to other Awards granted under the Plan. The Committee, subject to Board authorization, if indicated, shall determine the eligible persons to whom, and the time or times at which, grants of Restricted Stock will be awarded, the number of shares to be awarded, the price (if any) to be paid by the Holder, the time or times within which such Awards may be subject to forfeiture (“Restriction Period”), the vesting schedule and rights to acceleration thereof, and all other terms and conditions of the Awards.

8.2           Terms and Conditions. Each Restricted Stock Award shall be subject to the following terms and conditions:

(a)           Certificates. Restricted Stock, when issued, will be represented by a stock certificate or certificates registered in the name of the Holder to whom such Restricted Stock shall have been awarded. During the Restriction Period, certificates representing the Restricted Stock and any securities constituting Retained Distributions (as defined below) shall bear a legend to the effect that ownership of the Restricted Stock (and such Retained Distributions), and the enjoyment of all rights appurtenant thereto, are subject to the restrictions, terms and conditions provided in the Plan and the Agreement. Such certificates shall be deposited by the Holder with the Company, together with stock powers or other instruments of assignment, each endorsed in blank, which will permit transfer to the Company of all or any portion of the Restricted Stock and any securities constituting Retained Distributions that shall be forfeited or that shall not become vested in accordance with the Plan and the Agreement.

  

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(b)           Rights of Holder. Restricted Stock shall constitute issued and outstanding shares of Common Stock for all corporate purposes. The Holder will have the right to vote such Restricted Stock, to receive and retain all regular cash dividends and other cash equivalent distributions as the Board may in its sole discretion designate, pay or distribute on such Restricted Stock and to exercise all other rights, powers and privileges of a holder of Common Stock with respect to such Restricted Stock, with the exceptions that (i) the Holder will not be entitled to delivery of the stock certificate or certificates representing such Restricted Stock until the Restriction Period shall have expired and unless all other vesting requirements with respect thereto shall have been fulfilled; (ii) the Company will retain custody of the stock certificate or certificates representing the Restricted Stock during the Restriction Period; (iii) other than regular cash dividends and other cash equivalent distributions as the Board may in its sole discretion designate, pay or distribute, the Company will retain custody of all distributions (“Retained Distributions”) made or declared with respect to the Restricted Stock (and such Retained Distributions will be subject to the same restrictions, terms and conditions as are applicable to the Restricted Stock) until such time, if ever, as the Restricted Stock with respect to which such Retained Distributions shall have been made, paid or declared shall have become vested and with respect to which the Restriction Period shall have expired; (iv) a breach of any of the restrictions, terms or conditions contained in this Plan or the Agreement or otherwise established by the Committee with respect to any Restricted Stock or Retained Distributions will cause a forfeiture of such Restricted Stock and any Retained Distributions with respect thereto.

(c)           Vesting; Forfeiture. Upon the expiration of the Restriction Period with respect to each Award of Restricted Stock and the satisfaction of any other applicable restrictions, terms and conditions (i) all or part of such Restricted Stock shall become vested in accordance with the terms of the Agreement, subject to Section 10, below, and (ii) any Retained Distributions with respect to such Restricted Stock shall become vested to the extent that the Restricted Stock related thereto shall have become vested, subject to Section 10, below. Any such Restricted Stock and Retained Distributions that do not vest shall be forfeited to the Company and the Holder shall not thereafter have any rights with respect to such Restricted Stock and Retained Distributions that shall have been so forfeited.

9.           Other Stock-Based Awards.

Other Stock-Based Awards may be awarded, subject to limitations under applicable law, that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, purchase rights, shares of Common Stock awarded which are not subject to any restrictions or conditions, or other rights convertible into shares of Common Stock and Awards valued by reference to the value of securities of or the performance of specified Subsidiaries. Other Stock-Based Awards may be awarded either alone or in addition to or in tandem with any other Awards under this Plan or any other plan of the Company. Each other Stock-Based Award shall be subject to such terms and conditions as may be determined by the Committee.

10.           Accelerated Vesting and Exercisability.

10.1           Non-Approved Transactions. If any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as referred in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding securities in one or more transactions, and the Board does not authorize or otherwise approve such acquisition, then the vesting periods of any and all Stock Options and other Awards granted and outstanding under the Plan shall be accelerated and all such Stock Options and Awards will immediately and entirely vest, and the respective holders thereof will have the immediate right to purchase and/or receive any and all Common Stock subject to such Stock Options and Awards on the terms set forth in this Plan and the respective agreements respecting such Stock Options and Awards.

  

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10.2           Approved Transactions. The Committee may, subject to Board authorization, if indicated, in the event of an acquisition of substantially all of the Company’s assets or at least 50% of the combined voting power of the Company’s then outstanding securities in one or more transactions (including by way of merger or reorganization) which has been approved by the Company’s Board of Directors, (i) accelerate the vesting of any and all Stock Options and other Awards granted and outstanding under the Plan, and (ii) require a Holder of any Award granted under this Plan to relinquish such Award to the Company upon the tender by the Company to Holder of cash in an amount equal to the Repurchase Value of such Award.

11.           Amendment and Termination.

The Board may at any time, and from time to time, amend alter, suspend or discontinue any of the provisions of the Plan, but no amendment, alteration, suspension or discontinuance shall be made that would impair the rights of a Holder under any Agreement theretofore entered into hereunder, without the Holder’s consent.

12.           Term of Plan.

12.1           Effective Date. The Plan shall become effective at such time as the Plan is approved and adopted by the Company’s Board of Directors (the “Effective Date”).

12.2           Termination Date. Unless otherwise terminated by the Board, this Plan shall continue to remain effective until the earlier of ten (10) years from the Effective Date or such time as no further Awards may be granted and all Awards granted under the Plan are no longer outstanding.

13.           General Provisions.

13.1           Written Agreements. Each Award granted under the Plan shall be confirmed by, and shall be subject to the terms, of the Agreement executed by the Company and the Holder. The Committee may terminate any Award made under the Plan if the Agreement relating thereto is not executed and returned to the Company within 10 days after the Agreement has been delivered to the Holder for his or her execution.

13.2           Unfunded Status of Plan. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Holder by the Company, nothing contained herein shall give any such Holder any rights that are greater than those of a general creditor of the Company.

13.3           Employees.

 

 

(a)           Engaging in Competition with the Company; Disclosure of Confidential Information. If a Holder’s employment with the Company or a Subsidiary is terminated for any reason whatsoever, and within three months after the date thereof such Holder either (i) accepts employment with any competitor of, or otherwise engages in competition with, the Company or (ii) discloses to anyone outside the Company or uses any confidential information or material of the Company in violation of the Company’s policies or any agreement between the Holder and the Company, the Committee, in its sole discretion, may require such Holder to return to the Company the economic value of any Award that was realized or obtained by such Holder at any time during the period beginning on that date that is six months prior to the date such Holder’s employment with the Company is terminated.

(b)           Termination for Cause. If a Holder’s employment with the Company or a Subsidiary is terminated for cause, subsequent to the grant of any Award under this Plan to such employee, the Committee, in its sole discretion, may require such Holder to return to the Company the economic value of any Award that was realized or obtained by such Holder at any time following the grant date of such Award.

  

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(c)           No Right of Employment. Nothing contained in the Plan or in any Award hereunder shall be deemed to confer upon any Holder who is an employee of the Company or any Subsidiary any right to continued employment with the Company or any Subsidiary, nor shall it interfere in any way with the right of the Company or any Subsidiary to terminate the employment of any Holder who is an employee at any time.

13.4.           Investment Representations; Company Policy. The Committee may require each person acquiring shares of Common Stock pursuant to a Stock Option or other Award under the Plan to represent to and agree with the Company in writing that the Holder is acquiring the shares for investment without a view to distribution thereof. Each person acquiring shares of Common Stock pursuant to a Stock Option or other Award under the Plan shall be required to abide by all policies of the Company in effect at the time of such acquisition and thereafter with respect to the ownership and trading of the Company’s securities.

13.5           Additional Incentive Arrangements. Nothing contained in the Plan shall prevent the Board from adopting such other or additional incentive arrangements as it may deem desirable, including, but not limited to, the granting of Stock Options and the Awarding of Common Stock and cash otherwise than under the Plan; and such arrangements may be either generally applicable or applicable only in specific cases.

13.6           Withholding Taxes. Not later than the date as of which an amount must first be included in the gross income of the Holder for Federal income tax purposes with respect to any option or other Award under the Plan, the Holder shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any Federal, state and local taxes of any kind required by law to be withheld or paid with respect to such amount. If permitted by the Committee, tax withholding or payment obligations may be settled with Common Stock, including Common Stock that is part of the Award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be conditioned upon such payment or arrangements and the Company or the Holder’s employer (if not the Company) shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Holder from the Company or any Subsidiary.

13.7           Governing Law. The Plan and all Awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Florida.

13.8           Other Benefit Plans. Any Award granted under the Plan shall not be deemed compensation for purposes of computing benefits under any retirement plan of the Company or any Subsidiary and shall not affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation (unless required by specific reference in any such other plan to Awards under this Plan).

13.9           Non-Transferability. Except as otherwise expressly provided in the Plan or the Agreement, no right or benefit under the Plan may be alienated, sold, assigned, hypothecated, pledged, exchanged, transferred, encumbered or charged, and any attempt to alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the same shall be void.

13.10           Applicable Laws. The obligations of the Company with respect to all Stock Options and Awards under the Plan shall be subject to (i) all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the Securities Act of 1933, as amended, and (ii) the rules and regulations of any securities exchange on which the Common Stock may then be listed.

13.11           Conflicts.  If any of the terms or provisions of any Agreement conflicts with any terms or provisions of the Plan, then such terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of the Plan. Additionally, if any Agreement does not contain any provision required to be included therein under the Plan, such provision shall be deemed to be incorporated therein with the same force and effect as if such provision had been set out at length therein.

  

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13.12           Non-Registered Stock. The shares of Common Stock to be distributed under this Plan have not been, as of the Effective Date, registered under the Securities Act of 1933, as amended, or any applicable state or foreign securities laws and the Company has no obligation to any Holder to register the Common Stock or to assist the Holder in obtaining an exemption from the various registration requirements, or to list the Common Stock on a national securities exchange or any other trading or quotation system.

  

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Plan Amendments

	
 

Date Approved by Board

	
Date Approved by Shareholders, if necessary

	
 

Sections Amended

	
 

 

 

Description of Amendment(s)

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

  

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FORM OF OPTION AWARD AGREEMENT

Big Tree Group, Inc.

South Part 1-101, Nanshe Area, Pengnan Industrial Park,

North Yingbinbei Road, Waisha Town, Longhu District,

Shantou, Guangdong, China

[DATE]

_________________

_________________

_________________

Re:           Stock Option

Dear __________:

We are pleased to advise you that, on [_______], the Board of Directors of Big Tree Group, Inc. (the “Company”) authorized the Award to you of an option to purchase [_______] shares of our common stock, par value $0.001 per share (the “Option”), upon the following terms and conditions:

1.           The Option is granted in accordance with and subject to the terms and conditions of the Company’s 2014 Employee and Consultant Compensation Plan (the “Plan”).

2.           The Option is exercisable commencing on [__________] and terminating at 5:00 pm New York, New York time on [__________].

3.           The price at which the Option may be exercised is $[_____] per share.

4.           The Option is non-transferable and may be exercised, in whole or in part, during the exercise period, only by you, except that upon your death, the Option may be exercised strictly in accordance with the terms and conditions of the Plan.

5.           The exercise price and number of shares issuable upon exercise of the Option (the “Option Shares”) are subject to adjustment in accordance with the Plan in the event of stock splits, dividends, reorganizations and similar corporate events.

6.           If, neither the Option nor the Option Shares have been registered under the Securities Act of 1933, as amended (the “Act”), and the Option Shares may not be sold, assigned, pledged, transferred or otherwise disposed of absent registration under the Act or the availability of an applicable exemption from registration.  All certificates evidencing the Option Shares will contain a legend describing this restriction on resale of the Option Shares. There is no assurance that there will be a public market into which you may sell the Option Shares or that you will be able to sell your Option Shares at a profit or at all.

7.           In order to exercise the Option, you must provide us with written notice that you are exercising all or a portion of your Option. The written notice must specify the number of Option Shares that you are exercising your Option for, and must be accompanied by the exercise price described in paragraph 3, above. Your Option Shares will be issued to you within approximately one week following our receipt of your exercise notice and cleared funds evidencing the exercise price.

8.           No rights or privileges of a shareholder of the Company are conferred by reason of the grant of the Option to you. You will have no rights of a shareholder until you have delivered your exercise notice to us and we have received the exercise price of the Option in cleared funds.

  

- 12 -

  

You understand that the Plan contains important information about your Option and your rights with respect to the Option. The Plan includes terms relating to your right to exercise the Option; important restrictions on your ability to transfer the Option or Option Shares; provisions relating to adjustments in the number of Option Shares and the exercise price; and early termination of the Option following the occurrence of certain events; including the termination of your relationship with us. By signing below, you acknowledge your receipt of a copy of the Plan. By acceptance of your Option, you agree to abide by the terms and conditions of the Plan.

9.           Our business is subject to many risks and uncertainties. The exercise of your Option is a speculative investment and there is no assurance that you will realize a profit on the sale of Option Shares received upon exercise of your Option.

10.           The Option will become effective upon your acknowledgment of the terms and conditions of this Agreement and your delivery to us of a signed counterpart of this Agreement.

11.           This Agreement and Plan contain all of the terms and conditions of your Option and supersedes all prior agreements or understandings relating to your Option. This Agreement shall be governed by the laws of the State of Colorado without regard to the conflicts of law provisions thereof.

12.           This Agreement may not be amended orally.

Very truly yours,

__________________________

Wei Lin

Chief Executive Officer

AGREED TO AND ACCEPTED THIS

_____ DAY OF ________ 20__

________________________________

(Signature)

_________________________________

(Print Name)

  

- 13 -

  

 

Amendment No. 1

to the

2014 Employee and Consultant Compensation Plan

On June 12, 2014, by the unanimous written consent of the Board of Directors of Big Tree Group, Inc., a Colorado corporation (the “Company”), Section 4.1 of the Company’s 2014 Employee and Consultant Compensation Plan (the “2014 Plan”) deleted in its entirety and replaced with the following:

4.1           Number of Shares. The total number of shares of Common Stock reserved and available for issuance under the Plan shall be five million (5,000,000) shares. Shares of Common Stock under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.  The number of shares of Common Stock available for issuance under the Plan shall automatically increase on the first trading day of January each calendar year during the term of the Plan, beginning with fiscal year 2015, by an amount equal to one and one-half percent (1.5%) of the total number of shares of Common Stock outstanding on the last trading day in December of the immediately preceding calendar year, but in no event shall any such annual increase exceed 500,000 shares of Common Stock.  If any share of Common Stock that have been granted pursuant to a Stock Option ceases to be subject to a Stock Option, or if any shares of Common Stock that are subject to any Stock Appreciation Right, Restricted Stock, Deferred Stock Award, or Other Stock-Based Award granted hereunder are forfeited or any such Award otherwise terminates without a payment being made to the Holder in the form of Common Stock, such shares shall again be available for distribution in connection with future grants and Awards under the Plan.

IN WITNESS WHEREOF, the undersigned duly authorized officer as executed this Amendment No. 1 to the Big Tree Group, Inc. 2014 Employee and Consultant Compensation Plan as of June 12, 2014.

Big Tree Group, Inc.

By: /s/ Wei Lin

                               Wei Lin, Chief Executive OfficerExhibit 10.1 - PSUAgreement

Exhibit 10.1

Annual Grant Form

MEAD JOHNSON NUTRITION COMPANY
2009 AMENDED AND RESTATED STOCK AWARD AND INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT
____-   ____Performance Share Award
The Participant has been granted a Performance Share Award under the terms of the Mead Johnson Nutrition Company 2009 Amended and Restated Stock Award and Incentive Plan (the “Plan”), subject to the terms and conditions set forth in this Agreement, including all exhibits and appendices hereto which are incorporated herein (the “Agreement”) and the summary of the grant (the “Grant Summary”) on the Morgan Stanley Smith Barney website at www.benefitaccess.com.  To the extent applicable, the terms of the Performance Shares are modified as described in Exhibits I and II (relating to non-U.S. Participants).  Capitalized terms not defined herein shall have the meaning specified in the Plan or in the Grant Summary.
	
	
	Performance Period:   The three (3) year period commencing on January 1 of the calendar year in which the Performance Share Award is made (Y1) and ending on December 31 of the third calendar year (Y3) thereafter.
Performance Year(s):  The three calendar years which, together, comprise the Performance Period (Y1, Year 2 (Y2) and Y3).

Performance Shares:
The number of shares of Stock that may be earned upon the achievement of certain Performance Goal(s).

Total Target Performance Share Award:
The target number of Performance Shares that may be earned for the Performance Period, which target number shall be detailed in the Grant Summary.

Target Number of Performance Shares to be Earned for Each Performance Year:
Y1 Target Performance Shares:  One-third of Total Target Performance Share Award
Y2 Target Performance Shares:  One-third of Total Target Performance Share Award
Y3 Target Performance Shares:  One-third of Total Target Performance Share Award

Range at Which Performance Shares May be Earned in Each of Y1, Y2 and Y3:
Threshold:   40%
Target:    100%
Maximum:   200%

Performance Goal(s):
Separate Performance Goal(s) will be set for each Performance Year within the Performance Period.  Such Performance Goal(s) shall be set by a date on or prior to March 30 of the applicable Performance Year (the “Performance Goal(s) Specification Date”), specifying the number of Performance Shares that may be earned for that Performance Year based on specified levels of performance.

1.Award.  The Performance Shares granted to the Participant hereunder represent the opportunity for the Participant to earn the Performance Shares for each of Y1, Y2 and Y3 in accordance with the following:
		
	(a)
	Except as otherwise provided herein, the opportunity to earn the Performance Shares for any Performance Year shall be effective only if the Participant’s Termination Date has not occurred prior to the Performance Goal(s) Specification Date for that Performance Year.  

		
	(b)
	Notwithstanding the provisions of subparagraph (a), in the event of a Change in Control during the Performance Period, the Participant’s opportunity to earn the Performance Shares for any Performance Year in which or following the date on which the Change in Control occurs shall be effective only if the Participant’s Termination Date has not occurred prior to the Change in Control and in accordance with the following: 

		
	(i)
	if the Change in Control occurs prior to the Performance Goal(s) Specification Date for the Performance Year in progress on the date on which the Change in Control occurs, the Performance Goal(s) Specification Date will be deemed to occur on the date of the Change in Control; 

		
	(ii)
	in the case of any Performance Year beginning after the year in which the Change in Control occurs, the Performance Goal(s) Specification Date shall be deemed to occur as of the beginning of such Performance Year; and

		
	(iii)
	the Performance Goal(s) for any Performance Year occurring after a Change in Control shall be reasonably achievable and not more difficult to achieve in relation to the Company’s budget for the applicable Performance Year than the Performance Goal(s) for any earlier Performance Year was in relation to the budget for that earlier Performance Year.  

		
	(c)
	If a Participant’s employment terminates on or after the date of a Change in Control and during the Protected Period, the Participant’s opportunity to earn the Performance Shares for any Performance Year in which or following the date of the Change in Control shall be governed by the provisions of subparagraph 3(d).

2.    Dividend Equivalents.  No Dividend Equivalents will accrue or be payable in connection with Performance Shares.
3.    Earning of Performance Shares.  For each Performance Year, the Committee shall determine and certify in writing in accordance with the terms of the Plan the extent to which the Performance Shares for that Performance Year have been earned on the basis of the Company’s actual performance in relation to the applicable established Performance Goal(s), which determination and certification shall occur as of the date, not later than March 15 of the year following the applicable Performance Year, specified by the Committee (which date shall be referred to as the “Earning Date”).  Except as otherwise provided by the Committee and in this Agreement, any portion of the Performance Shares that are not earned on the Participant’s Termination Date and any Performance Shares for a Performance Year that are not otherwise earned by the Participant for that Performance Year based on the satisfaction of Performance Goal(s) (or otherwise) shall immediately expire and shall be forfeited and the Participant shall have no further rights with respect thereto.  Notwithstanding the foregoing:
		
	(a)
	Disability.  If the Participant incurs a Disability and if the period of Disability exceeds 26 weeks in the aggregate during one or more Performance Years, the Participant will earn 

2

only a Pro Rata Portion of the Performance Shares that the Participant would otherwise have actually earned for such affected Performance Year(s). 
		
	(b)
	Death or Retirement.  If the Participant’s Termination Date occurs due to death or Retirement one (1) year or more after the first day of the Performance Period and prior to the date on which the Performance Shares for any Performance Year are otherwise settled the Participant will earn:

		
	(i)
	 in the case of Performance Shares relating to a Performance Year completed before the Participant’s Termination Date, the Completed Year Performance Share Payout; and 

		
	(ii)
	in the case of Performance Shares relating to a Performance Year in progress on the Participant’s Termination Date, the Pro Rata Performance Share Payout. 

For these purposes, if the Participant’s Termination Date occurs before the Performance Goal(s) Specification Date for the Performance Year in progress on the Termination Date, the Participant shall have a right to the Performance Shares for such Performance Year in accordance with the foregoing and the other terms and conditions of this Agreement, which Performance Shares shall have the same performance terms as those applicable to participants whose Termination Date has not yet occurred.   
		
	(c)
	Termination by Company other than for Cause; Termination by Participant for Good Reason—Other than During Protected Period.  If the Participant’s Termination Date occurs by reason of termination by the Company or an Affiliate or Subsidiary for reasons other than for Cause or by Participant for Good Reason other than during the Protected Period and prior to the date on which the Performance Shares for any Performance Year are otherwise settled, the Participant will earn:

		
	(i)
	in the case of Performance Shares relating to a Performance Year completed before the Participant’s Termination Date, the Completed Year Performance Share Payout; and 

		
	(ii)
	in the case of Performance Shares relating to a Performance Year in progress on the Participant’s Termination Date, the Pro Rata Performance Share Payout; and

For these purposes, if the Participant’s Termination Date occurs before the Performance Goal(s) Specification Date for the Performance Year in progress on the Termination Date, the Participant shall have a right to the Performance Shares for such Performance Year in accordance with the foregoing and the other terms and conditions of this Agreement, which Performance Shares shall have the same performance terms as those applicable to participants whose Termination Date has not yet occurred.  
		
	(d)
	Termination by Company other than for Cause; Termination by Participant for Good Reason—During Protected Period.  If the Participant’s Termination Date occurs by reason of termination by the Company or an Affiliate or Subsidiary for reasons other than for Cause or by Participant for Good Reason during the Protected Period, the Participant will earn:

		
	(i)
	in the case of Performance Shares relating to a Performance Year completed prior to the Change in Control and prior to the Participant’s Termination Date, the Completed Year Performance Share Payout; 

3

		
	(ii)
	in the case of Performance Shares relating to a Performance Year beginning after the Change in Control and completed prior to the Participant’s Termination Date, the Completed Year Performance Share Payout; 

		
	(iii)
	in the case of Performance Shares relating to a Performance Year in progress on the date of the Change in Control and on the Participant’s Termination Date, the Target Level Performance Share Payout; 

		
	(iv)
	in the case of Performance Shares relating to a Performance Year beginning after the date of the Change in Control and in progress on the Participant’s Termination Date, the Target Level of Performance Share Payout; and 

		
	(v)
	in the case of Performance Shares relating to a Performance Year beginning after the date of the Change in Control and after the Participant’s Termination Date, the Target Level of Performance Share Payout.

If the provisions of this paragraph 3(d) apply and if the Change in Control is a Section 409A Change in Control, the “Earning Date” shall be the Participant’s Termination Date. 
		
	(e)
	Termination for Cause; Voluntary Termination Other than for Good Reason.  If the Participant’s Termination Date occurs by reason of termination by the Company or an Affiliate or Subsidiary for Cause or by Participant other than for Good Reason and, in either case, prior to the Earning Date for a Performance Year, then, as of the Participant’s Termination Date, all of the Performance Shares for that Performance Year and any future Performance Years during the Performance Period shall be canceled and forfeited and the Participant shall have no further rights with respect thereto. 

4.    Nonforfeitability and Settlement of Earned Performance Shares.  Except as otherwise provided herein, the Performance Shares that are earned for any Performance Year will be nonforfeitable from and after the Earning Date for the Performance Year and such Performance Shares will be settled on or Promptly following the Settlement Date by delivery of one share of Stock for each Performance Share being settled either in certificated form or in such other manner as the Company may reasonably determine, unless validly deferred in accordance with deferral terms then authorized by the Committee.  The number of Performance Shares earned for the Performance Period shall be rounded to the nearest whole number, unless otherwise determined by the Company officers responsible for the day-to-day administration of the Plan.  Notwithstanding the foregoing:
		
	(a)
	Retirement.  If the Participant’s Termination date occurs due to Retirement, the Performance Shares that are earned as of the Participant’s Termination Date shall be settled on or Promptly following the earliest of the following dates or events:  

		
	(i)
	the Settlement Date; 

		
	(ii)
	if a Section 409A Change in Control occurs prior to the Settlement Date: 

		
	(1)
	as to any Performance Shares earned prior to the Section 409A Change in Control, the date of the Section 409A Change in Control; and 

		
	(2)
	as to any Performance Shares that were not earned prior to the Section 409A Change in Control, the Earning Date with respect thereto; or 

4

		
	(iii)
	in the event of the Participant’s death following the Participant’s Termination Date, the Participant’s death or, with respect to any Performance Shares that were not earned as of the Participant’s death, the Earning Date with respect thereto. 

		
	(b)
	Death.  If the Participant’s Termination Date occurs due to death, the Performance Shares that are earned as of the Participant’s Termination Date shall be settled Promptly following the date or event determined in accordance with the following:

		
	(i)
	as to any Performance Shares earned pursuant to Section 3(b)(i), as of the Participant’s death; and 

		
	(ii)
	as to any Performance Shares earned pursuant to Section 3(b)(ii), the Earning Date with respect thereto.

		
	(c)
	Termination by Company other than for Cause; Termination by Participant for Good Reason.  If the Participant’s Termination Date occurs due to termination by the Company other than for Cause or termination by the Participant for Good Reason (whether during the Protected Period or otherwise), any Performance Shares that are earned as of the Participant’s Termination Date shall be settled on or Promptly following the earliest of the following dates or events:

		
	(i)
	the Settlement Date; 

		
	(ii)
	if a Section 409A Change in Control occurs prior to the Settlement Date:

		
	(1)
	as to any Performance Shares earned prior to the Section 409A Change in Control, the date of the Section 409A Change in Control; and

		
	(2)
	as to any Performance Shares that were not earned prior to the Section 409A Change in Control, the Earning Date with respect thereto; or 

		
	(iii)
	in the event of the Participant’s death following the Participant’s Termination Date, the Participant’s death or, with respect to any Performance Shares that were not earned as of the Participant’s death, the Earning Date with respect thereto.

5.    Withholding.  At such time as the Company or any Affiliate or Subsidiary is required to withhold taxes with respect to the Performance Shares, or at an earlier date as determined by the Company, the Participant shall make cash remittance to the Company or the Affiliate or Subsidiary that is the Participant’s employer the amount of the federal, state or local income tax or earnings tax or any other applicable tax or assessment (plus interest and penalties thereon, if any, caused by a delay in making such payment) incurred by reason of vesting or settlement of the Performance Shares.  The Company and its Subsidiaries and Affiliates shall, to the extent permitted by law, have the right to deduct such amount from any payment of any kind otherwise due to the Participant, including by means of mandatory withholding of shares deliverable in settlement of the Performance Shares, to satisfy the mandatory tax withholding requirements or to require the Participant to authorize the Company’s designated broker/agent to sell the shares of Stock acquired upon settlement of the Performance Shares and remit to the Company a sufficient portion of the sale proceeds to pay the applicable brokerage fees and any withholding and/or taxes and applicable fees resulting from such settlement (“sale to cover”).  In all cases, the Company shall determine the method by which payment of withholding taxes shall be satisfied.  Non-U.S. Participants see applicable Non-U.S. Participant Exhibit for special rules.

5

6.    Forfeiture Provisions.  The Participant acknowledges that the Participant’s continued employment with the Company, its Affiliates and its Subsidiaries, and the grant of the Performance Shares is sufficient consideration for the Agreement, including, without limitation, the restrictions imposed upon the Participant by this Section 6.  
		
	(a)
	In consideration of the Performance Shares awarded hereby, the Participant expressly agrees and covenants that, during the Restricted Period, the Participant shall not, without the prior consent of the Company, permit any Forfeiture Event to exist, directly or indirectly.

		
	(b)
	If the Committee determines that a Forfeiture Event has occurred or is ongoing, then the Participant covenants and agrees that the following forfeitures and related actions will occur:

		
	(i)
	Any portion of the Performance Shares that have not been settled shall be immediately canceled and forfeited and the Participant shall automatically forfeit any rights the Participant may have with respect to the Performance Shares as of the date of such determination; and 

		
	(ii)
	If any of the Performance Shares vested within the twelve (12) month period immediately preceding the occurrence of a Forfeiture Event (or following the date of the earliest Forfeiture Event), then, upon the Company’s demand, the Participant shall immediately deliver to the Company certificate(s) for the number of shares of Stock issued upon settlement of the Performance Shares or, if the shares have been sold, the Participant shall immediately remit to the Company, in cash, the proceeds of any such sale(s).  Any shares surrendered pursuant to this provision shall be treated as treasury shares and shall be added to the authorized and unissued shares available for issuance under the Plan.

7.    Performance Shares Not Contract of Employment or Service; No Rights as Stockholder.  The grant of the Performance Shares does not constitute a contract of employment or continued service, and the grant of the Performance Shares shall not give the Participant the right to be retained in the employ or service of the Company or any Affiliate or Subsidiary, nor any right or claim to any benefit under the Plan or the Agreement, unless such right or claim has specifically accrued under the terms of the Plan and the Agreement.  The Participant and the Participant’s beneficiary shall not have any rights with respect to Stock (including voting rights) issuable upon settlement of the Performance Shares prior to the date on which the Performance Shares are settled.
8.    Administration.  The authority to administer and interpret the Agreement shall be vested in the Committee, and the Committee shall have all the powers with respect to the Agreement as it has with respect to the Plan.  Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding on all persons.
9.    Transferability.  The Performance Shares are not transferable except as designated by the Participant by will or by the laws of descent and distribution.  
10.    Adjustment of Award.  The number of Performance Shares, the number and type of Stock subject to the Performance Shares and other related terms shall be adjusted by the Committee in accordance with Section 11(c) of the Plan (or a successor provision). 

6

11.    Waiver.  The waiver by the Company or an Affiliate or Subsidiary of any provision of the Agreement shall not operate as or be construed to be a subsequent waiver of the same provision or waiver of any other provision hereof.
12.    Governing Law.  The grant of the Performance Shares and the provisions of this Agreement are governed by, and subject to, the laws of the State of Delaware, without regard to the conflict of law provisions, as provided in the Plan.  For purposes of litigating any dispute that arises under this grant or this Agreement the parties hereby submit to and consent to the exclusive jurisdiction of the State of Illinois and agree that such litigation shall be conducted in the courts of Cook County, Illinois, or the federal courts for the United States for the Northern District of Illinois, where this grant is made and/or to be performed.
13.    Amendment; Entire Agreement; Successors.  This Agreement shall be subject to the terms of the Plan, as amended from time to time, except that the Award that is the subject of this Agreement may not be materially adversely affected by any amendment or termination of the Plan approved after the Grant Date without the Participant’s written consent. This Agreement and the Plan contain the entire understanding of the parties with respect to the Performance Shares and supersede any prior agreements or documents with respect to the Performance Shares.  This Agreement shall be binding up and inure to the benefit of the heirs, executors, administrators and successors of the parties.
14.    Code Section 409A.  Notwithstanding anything in the Plan or this Agreement to the contrary, if any payment with respect to any Performance Shares is subject to Code Section 409A and if such payment is to be paid or provided on account of Participant’s Termination Date (or other separation from service or termination of employment, other than death):
		
	(a)
	and if Participant is a specified employee (within the meaning of Code Section 409A) and if any such payment or benefit is required to be made or provided prior to the date which is six (6) months following Participant’s Termination Date, such payment or benefit shall be delayed until the date which is six (6) months and one (1) day following Participant’s Termination Date; provided, however, that if Participant dies prior to such six (6) month anniversary, all remaining payments shall be paid to his estate within ninety (90) days following his death; and 

		
	(b)
	the determination as to whether Participant has had a Termination Date (or other termination of employment or separation from service) shall be made in accordance with the provisions of Code Section 409A and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder.

It is the intent of this Agreement to comply with the requirements of Code Section 409A so that none of the Performance Shares provided under this Agreement or Stock issuable hereunder will be subject to the additional tax imposed under Code Section 409A, and any ambiguities herein will be interpreted to so comply.  None of the Company, any Affiliate or any Subsidiary, however, makes any representation regarding the tax consequences of this Award.

Mead Johnson Nutrition Company
By:    __________________________
Senior Vice President, General Counsel and Secretary

7

PARTICIPANT ACKNOWLEDGEMENT AND ACCEPTANCE

I have read this Agreement in its entirety. I understand that the Performance Shares have been or will be granted to provide a means for me to acquire and/or expand an ownership position in Mead Johnson Nutrition Company, and it is expected that I will retain the Stock I receive upon the settlement of the Performance Shares consistent with the Company’s Stock retention guidelines in effect at the time of settlement of the Performance Shares.  I acknowledge and agree that (i) the Performance Shares are nontransferable, except as provided in Section 9 hereof and Section 11(b) of the Plan, (ii) the Performance Shares are subject to forfeiture in the event of my Termination Date in certain circumstances, as specified in the Agreement, and (iii) sales of Stock will be subject to the Company’s policy regulating trading by employees.  In accepting this grant, I hereby agree that Morgan Stanley Smith Barney, or such other vendor as the Company may choose to administer the Plan, may provide the Company with any and all account information necessary to monitor my compliance with the Company’s Stock retention guidelines and other applicable policies.
I hereby agree to all the terms and conditions set forth in this Agreement and accept the grant of the Performance Shares subject thereto.  Where electronic acceptance is permitted under applicable law, electronic acceptance of the Performance Shares shall be binding on the Participant.
By: _______________________________
Participant Signature

8

APPENDIX A
SPECIAL DEFINITIONS
The following capitalized terms shall have the meaning specified for purposes of the Agreement.
		
	1.
	Cause.  The term “Cause” means:

		
	(a)
	with respect to a Termination Date that occurs other than during the Protected Period:

		
	(i)
	Failure or refusal by the Participant to substantially perform his duties with the Company or its Subsidiaries or Affiliates (except where the failure results from incapacity due to Disability); or

		
	(ii)
	Severe misconduct or activity deemed detrimental to the interests of the Company or a Subsidiary or Affiliate. This may include, but is not limited to, the following: acts involving dishonesty, violation of the Company’s or a Subsidiary’s or an Affiliate’s written policies (such as those related to alcohol or drugs, etc.), violation of safety rules, disorderly conduct, discrimination and/or discriminatory harassment, unauthorized disclosure of the Company’s or a Subsidiary’s or an Affiliate’s confidential information, or the entry of a plea of nolo contendere to, or the conviction of, a crime; and 

		
	(b)
	with respect to a Termination Date that occurs during the Protected Period:

		
	(i)
	The Participant’s willful and continued failure to substantially perform the Participant’s duties with the Company or its Subsidiaries or Affiliates (except where the failure results from incapacity due to Disability) for a period of thirty (30) consecutive days after a written demand for substantial performance is delivered to the Participant by the Committee, which demand specifically identifies the manner in which the Committee believes that the Participant has not substantially performed the Participant’s duties;

		
	(ii)
	Willful engaging by the Participant in conduct which is demonstrably and materially injurious to the Company or its Subsidiaries or Affiliates, monetarily or otherwise; or

		
	(iii)
	The Participant is convicted of, or has entered a plea of nolo contendere to, a felony.

For purposes of paragraphs (1)(b)(i) and (ii) above, no act, or failure to act, on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant’s act, or failure to act, was in the best interest of the Company.
For all purposes, “Cause” will be interpreted by the Committee in its sole discretion, and the Committee’s interpretation will be conclusive and binding on all parties.
2.Competitive Business.  The term “Competitive Business” means any person or entity that engages in any business activity that competes with the Company’s or an Affiliate’s or Subsidiary’s business in any way, in any geographic area in which the Company or an Affiliate or Subsidiary engages in business, including, without limitation, any state in the United States in which the Company or an Affiliate or Subsidiary sells or offers to sell its products from time to time.
3.Completed Year Performance Share Payout.  The term “Completed Year Performance Share Payout” means, with respect to any Performance Year that is completed prior to the Participant’s 

A-i

Termination Date, the number of Performance Shares that relate to such Performance Year and that have been determined or thereafter are determined by the Committee to have been earned (regardless of whether the Earning Date has occurred prior to the Participant’s Termination Date).
4.Disability Benefits.  The term “Disability Benefits” means income replacement benefits payable to the Participant under an accident and health plan of the Company or any Subsidiary or Affiliate, either in the United States or in a jurisdiction outside of the United States. In a jurisdiction outside of the United States, “Disability Benefits” shall also include payments under a mandatory or universal disability plan or program managed or maintained by the government.
5.Forfeiture Event.  A “Forfeiture Event” occurs if any of the following occur:
		
	(a)
	The Participant owns or has any financial interest in a Competitive Business or is actively connected with a Competitive Business by managing, operating, controlling, being an employee or consultant of (or accepting an offer to be an employee or consultant) or otherwise advising or assisting a Competitive Business in such a way that such connection might result in an increase in value or worth of any product, technology or service that competes with any product, technology or service upon which the Participant worked or about which the Participant became familiar as a result of the Participant’s employment with the Company or an Affiliate or Subsidiary; provided, however, that nothing in this clause shall prevent the Participant from owning one percent or less of the outstanding securities of any entity whose securities are traded on a U.S. national securities exchange (including NASDAQ) or an equivalent foreign exchange; and provided, further that, for periods after a Participant’s Termination Date, the Participant may be actively connected with a Competitive Business so long as the Participant’s connection to the business does not involve any product, technology or service that competes with any product, technology or service upon which the Participant worked or about which the Participant became familiar as a result of the Participant’s employment with the Company or an Affiliate or Subsidiary and the Company is provided written assurance of this fact from the Competitive Business prior to the Participant’s beginning such connection;

		
	(b)
	The Participant takes any action that might divert any opportunity from the Company or any Affiliate or Subsidiary, or any of their respective successors or assigns (the “Related Parties”) that is within the scope of the present or future operations or business of any of the Related Parties;

		
	(c)
	The Participant employs, solicits for employment, advises or recommends to any other person that they employ or solicit for employment or form an association with any person who is employed by the Company or an Affiliate or Subsidiary or who has been employed by the Company or an Affiliate or Subsidiary within one (1) year of the date the Participant’s Termination Date occurs for any reason; 

		
	(d)
	The Participant contacts, calls upon or solicits any (A) customer or (B) prospective customer of the Company or an Affiliate or Subsidiary that the Participant became aware of or was introduced to in the course of the Participant’s duties for the Company or an Affiliate or Subsidiary, or, in any case, otherwise attempts to divert or take away from the Company or an Affiliate or Subsidiary the business of any customer or prospective customer of the Company or an Affiliate or Subsidiary; or

		
	(e)
	The Participant engages in any activity that is harmful to the interests of the Company or an Affiliate or Subsidiary, including, without limitation, any conduct during the term of the 

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Participant’s employment that violates the Company’s standards of business conduct and ethics, securities trading policy and other policies.
6.Good Reason.  The term “Good Reason” means:
		
	(a)
	with respect to a Termination Date that occurs other than during the Protected Period, the occurrence of any one or more of the following events that occur without the Participant’s written consent:

		
	(i)
	A material reduction in the Participant’s base salary;

		
	(ii)
	A reduction in grade level, resulting in a material diminution of the Participant’s authority, duties, or responsibilities; or

		
	(iii)
	A change in the principal location of the Participant’s job or office, such that the Participant will be based at a location that is 50 miles or more further (determined in accordance with the Company’s relocation policy) from the Participant’s principal job or office location immediately prior to the proposed change in the Participant’s job or office.

For a termination to qualify as a termination for Good Reason under this provision, the Participant must notify the Company in writing of termination for Good Reason, specifying the event constituting Good Reason, within ten (10) business days after the occurrence of the event that the Participant believes constitutes Good Reason. Failure for any reason to give written notice of termination for Good Reason in accordance with the foregoing will be deemed a waiver of the right to voluntarily terminate employment for that Good Reason event. The Company will have a period of thirty (30) days after receipt of the Participant’s notice in which to cure the Good Reason. If the Good Reason is cured within this period, the Participant will not be entitled to terminate employment for Good Reason. If the Company waives its right to cure or does not, within the thirty (30) day period, cure the Good Reason, the Participant will be entitled to terminate employment for Good Reason, and the actual termination date will be determined in the sole discretion of the Company, but in no event will it be later than thirty (30) calendar days from the date the Company waives its right to cure or the end of the thirty (30) day period in which to cure the Good Reason, whichever is earlier.
		
	(b)
	with respect to a Termination Date that occurs during the Protected Period, the occurrence of any one or more of the following events that occur without the Participant’s express written consent:

		
	(i)
	if applicable, the assignment to the Participant of any duties materially inconsistent with the Participant’s status as an officer of the Company (e.g., no longer reporting to the CEO) or a substantial adverse alteration in the nature or status of the Participant’s authorities, duties or responsibilities from those in effect immediately prior to the Change in Control (e.g., reduction in signing authority);

		
	(ii)
	a material adverse change in the Participant’s reporting relationships;

		
	(iii)
	a material reduction by the Company, its Subsidiaries or its Affiliates in the Participant’s base salary or bonus from the levels in effect immediately prior to a Change in Control or as the same may be increased from time to time after a Change in Control;

		
	(iv)
	the relocation of the Participant’s principal place of employment to a location more than 50 miles from the location of such place of employment immediately prior to a Change in Control, except for required travel on the Company’s business to an 

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extent substantially consistent with the Participant’s business travel obligations prior to the Change in Control or, if the Participant has consented to a relocation, the failure by the Company to provide the Participant with all of the benefits of the Company’s relocation policy as in operation immediately prior to a Change in Control;
		
	(v)
	the failure of the Company, its Subsidiaries or its Affiliates to pay the Participant any material amount or portion of the Participant’s compensation or to pay the Participant any portion of an installment of deferred compensation under any deferred compensation program of the Company, its Subsidiaries or its Affiliates within seven (7) days of the date on which such compensation was due; or

		
	(vi)
	the failure by the Company, its Subsidiaries or its Affiliates to continue in effect any compensation or benefit plan which is material to the Participant’s compensation and in which the Participant participated immediately prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company, its Subsidiaries or its Affiliates to continue the Participant’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amounts of benefits provided and the level of the Participant’s participation relative to other participants, as existed at the time of the Change in Control.

For a termination to qualify as a termination for Good Reason under this provision, the Participant must notify the Company in writing of termination for Good Reason, specifying the event constituting Good Reason, within ninety (90) days after the Participant first becomes aware of the event that the Participant believes constitutes Good Reason. Failure for any reason to give written notice of termination of employment for Good Reason in accordance with the foregoing will be deemed a waiver of the right to terminate the Participant’s employment for that Good Reason event. The Company will have a period of thirty (30) days after receipt of the Participant’s notice in which to cure the Good Reason. If the Good Reason event is cured within this period, the Participant will not be entitled to terminate the Participant’s employment for Good Reason. If the Company waives its right to cure or does not, within the thirty (30) day period, cure the Good Reason event, the Participant may terminate the Participant’s employment for Good Reason within thirty (30) days following the earlier of the date on which the Company waives its right to cure or the end of the cure period. If the Participant does not terminate the Participant’s employment within such thirty (30) day period, the Participant will waive the Participant’s right to terminate the Participant’s employment for that Good Reason event.
7.Pro Rata Performance Share Payout.  The term “Pro Rata Performance Share Payout” means a Pro Rata Portion of the Performance Shares that the Participant would otherwise have actually earned for that Performance Year if his Termination Date had not occurred prior to the Earning Date for that Performance Year.
8.Pro Rata Portion.  The “Pro Rata Portion” for any Performance Year is calculated as follows:
Pro Rata Portion =  P  x  [M / 12]
Where:
P =        Number of Performance Shares relating to such Performance Year; and

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M =    Number of Months that the Participant was employed from the commencement of that Performance Year through the end of the month in which the Participant’s Termination Date occurred (but not more than 12).
For purposes of the foregoing calculation, the number of months that the Participant was employed during a Performance Year shall be reduced by the number of months of any period of Disability during such Performance Year in excess of 26 weeks since the commencement of the Disability. In the case of a Disability extending longer than 26 weeks, the “Pro Rata Portion” for any Performance Year is calculated as follows:

Pro Rata Portion =  A  x  [ (12 – D) / 12]
Where:
A =    Number of Performance Shares relating to a given Performance Year; and
D =    Number of months of Disability in excess of 26 weeks since the commencement of the Disability.
For purposes of the foregoing calculations, one (1) or more days worked in a given month is counted as a full month of active employment; and one or more days on Disability in a given month in which the duration of Disability has not yet exceeded 26 weeks is also counted as a full month of active employment.
9.Promptly.  With respect to any date or event, the term “Promptly” means within thirty (30) days after such date or event; provided, however, that with respect to any settlement of Performance Shares that is to occur as of the Settlement Date, “Promptly” means no later than March 15 of the year following the last year of the Performance Period. 
10.Protected Period.  The term “Protected Period” means the two (2)-year period following a Change in Control.
11.Restricted Period.  The term “Restricted Period” means the period during which the Participant is employed by the Company or an Affiliate or Subsidiary and twelve (12) months following the date that the Participant ceases to be employed by the Company or an Affiliate or Subsidiary for any reason whatsoever.
12.Section 409A Change in Control.  The term “Section 409A Change in Control” means a Change in Control with is also constitutes a change in control event within the meaning of Code Section 409A.
13.Settlement Date.  The “Settlement Date” shall be the Earning Date for the last Performance Year of the Performance Period.   
14.Target Level Performance Share Payout.  The term “Target Level Performance Share Payout” means, with respect to any Performance Year, the number of Performance Shares that the Participant would otherwise have actually earned for that Performance Year if his Termination Date had not occurred prior to the Earning Date for that Performance Year and had the Performance Goal(s) for that Performance Year been achieved at the target level.
15.Termination Date.  The term “Termination Date” means the date on which the Participant’s employment with the Company and any Affiliates and Subsidiaries terminates for any reason.  The Participant’s Termination Date shall not occur solely as a result of the following:

A-v

		
	(a)
	A transfer of the Participant’s employment from the Company to a Subsidiary or Affiliate, or vice versa, or from one Subsidiary or Affiliate to another;

		
	(b)
	A leave of absence, duly authorized in writing by the Company, for military service or sickness or for any other purpose approved by the Company if the period of such leave does not exceed ninety (90) days; 

		
	(c)
	A leave of absence in excess of ninety (90) days, duly authorized in writing, by the Company, provided the Participant’s right to reemployment is guaranteed either by a statute or by contract; or 

		
	(d)
	Any period that the Participant is receiving Disability Benefits due to the incurrence of a Disability prior to the date that would otherwise be the Participant’s Termination Date.  

However, the Participant’s Termination Date shall be deemed to occur upon the date that the Participant fails to return to active service with the Company or an Affiliate or Subsidiary at the end of an approved leave of absence or, if applicable, upon cessation of Disability Benefits.  
During a leave of absence as defined in paragraph (b) or (c), although the Participant will be considered to have been continuously employed by the Company or an Affiliate or Subsidiary and not to have incurred a Termination Date solely as a result thereof, the Committee may specify such leave period shall not be counted in determining the period of employment for purposes of the vesting of the Performance Shares. In such case, the vesting dates for the unvested portion of the Performance Shares shall be extended by the length of any such leave of absence.  
Upon the Participant’s Termination Date as determined hereunder, vesting of the Performance Shares shall be based on the Participant’s circumstances at the time of such termination; provided, however, that if the Participant’s Disability exceeds 26 weeks in the aggregate during one or more Performance Years, the provisions of Section 3(a) shall apply for purposes of determining the portion of the Performance Shares that the Participant will earn for any Performance Year.  

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