Document:

Unassociated Document

 

RESTRICTED STOCK AWARD AGREEMENT

CHINA CLEAN ENERGY INC.

2011 LONG-TERM INCENTIVE PLAN

1.           Grant of Award.  Pursuant to the China Clean Energy Inc. 2011 Long-Term Incentive Plan (the “Plan”) for Employees, Contractors, and Outside Directors of China Clean Energy Inc., a Delaware corporation (the “Company”),

_________________________________

(the “Participant”)

has been granted a Restricted Stock Award in accordance with Section 6.4 of the Plan.  The number of shares of Common Stock awarded under this Award Agreement (this “Agreement”)  is _________ shares (the “Awarded Shares”).  The “Date of Grant” of this Award is ______________, 20___.  [Delete if no purchase price: The purchase price per share for the Awarded Shares is $_________ per share.]

2.           Subject to Plan.  This Agreement is subject to the terms and conditions of the Plan, and the terms of the Plan shall control to the extent not otherwise inconsistent with the provisions of this Agreement.  The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan.  This Agreement is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

3.           Vesting.  Except as specifically provided in this Agreement and subject to certain restrictions and conditions set forth in the Plan, the Awarded Shares shall be vested as follows:

a.           ______________________of the total Awarded Shares shall vest on ______________________, provided the Participant is employed by (or if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

b.           _____________________ of the total Awarded Shares shall vest on ______________________, provided the Participant is employed by (or if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

c.           _____________________ of the total Awarded Shares shall vest on ______________________, provided the Participant is employed by (or if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

d.           _____________________ of the total Awarded Shares shall vest ______________________, provided the Participant is employed by (or if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

Notwithstanding the foregoing, the vesting of all Awarded Shares shall automatically accelerate in full upon (i) the Participant’s death; (ii) the Participant’s Termination of Service as a result of his Total and Permanent Disability; or (iii) the occurrence of a Change in Control.

 

  

  

  

 

4.           Forfeiture of Awarded Shares.  Awarded Shares that are not vested in accordance with Section 3 shall be forfeited on the date of the Participant’s Termination of Service. Upon forfeiture, all of the Participant’s rights with respect to the forfeited Awarded Shares shall cease and terminate, without any further obligations on the part of the Company.  [Delete if no purchase price: The Company [shall be obligated to] [may, in its sole discretion, elect to] pay the Participant, as soon as practicable after the event causing forfeiture, in cash, an amount equal to the lesser of the total consideration paid by the Participant for such forfeited shares or the Fair Market Value of such forfeited shares as of the date of Termination of Service, as the Committee, in its sole discretion shall select.]

5.           Restrictions on Awarded Shares.  Subject to the provisions of the Plan and the terms of this Agreement, from the Date of Grant until the date the Awarded Shares are vested in accordance with Section 3 and are no longer subject to forfeiture in accordance with Section 4 (the “Restriction Period”), the Participant shall not be permitted to sell, transfer, pledge, hypothecate, margin, assign or otherwise encumber any of the Awarded Shares.  Except for these limitations, the Committee may in its sole discretion, remove any or all of the restrictions on such Awarded Shares whenever it may determine that, by reason of changes in applicable laws or changes in circumstances after the date of this Agreement, such action is appropriate.

6.           Legend.  The following legend shall be placed on all certificates issued representing Awarded Shares:

On the face of the certificate:

“Transfer of this stock is restricted in accordance with conditions printed on the reverse of this certificate.”

On the reverse:

“The shares of stock evidenced by this certificate are subject to and transferable only in accordance with that certain China Clean Energy Inc. 2011 Long-Term Incentive Plan, a copy of which is on file at the principal office of the Company in Fuqing City, Fujian, China and that certain Restricted Stock Award Agreement dated as of _______, by and between China Clean Energy Inc. and _______________.  No transfer or pledge of the shares evidenced hereby may be made except in accordance with and subject to the provisions of said Plan and Restricted Stock Award Agreement.  By acceptance of this certificate, any holder, transferee or pledgee hereof agrees to be bound by all of the provisions of said Plan and Restricted Stock Award Agreement.”

The following legend shall be inserted on a certificate evidencing Common Stock issued under the Plan if the shares were not issued in a transaction registered under the applicable federal and state securities laws:

“Shares of stock represented by this certificate have been acquired by the holder for investment and not for resale, transfer or distribution, have been issued pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered for sale, sold or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon an opinion of counsel satisfactory to the Company.”

 

  

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All Awarded Shares owned by the Participant shall be subject to the terms of this Agreement and shall be represented by a certificate or certificates bearing the foregoing legend.

7.           Delivery of Certificates.  Certificates for Awarded Shares free of restriction under this Agreement shall be delivered to the Participant promptly after, and only after, the Restriction Period has expired without forfeiture pursuant to Section 4.  The Participant, by his acceptance of the Awarded Shares and execution of this Agreement, irrevocably grants the Company a power of attorney to transfer any shares forfeited pursuant to Section 4 to the Company and agrees to execute any documents requested by the Company in connection with any such forfeiture and transfer.

8.           Rights of a Stockholder.  Except as provided in Section 4 and Section 5.a. above, the Participant shall have, with respect to his Awarded Shares, all of the rights of a stockholder of the Company, including the right to vote the shares, and the right to receive any dividends thereon.  Any stock dividends paid with respect to Awarded Shares (whether vested or unvested) shall at all times be treated as Awarded Shares and shall be subject to all restrictions placed on Awarded Shares; any such stock dividends paid with respect to Awarded Shares shall vest as the unvested Awarded Shares become vested.

9.           Voting.  The Participant, as record holder of the Awarded Shares, has the exclusive right to vote, or consent with respect to, such Awarded Shares until such time as the Awarded Shares are transferred in accordance with this Agreement; provided, however, that this Section 9 shall not create any voting right where the holders of such Awarded Shares otherwise have no such right.

10.           Adjustment to Number of Awarded Shares.  The number of Awarded Shares shall be subject to adjustment in accordance with Articles 11-13 of the Plan.

11.           Specific Performance.  The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance.  The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

12.           Participant’s Representations.  Notwithstanding any of the provisions hereof, the Participant hereby agrees that he or she will not acquire any Awarded Shares, and that the Company will not be obligated to issue any Awarded Shares to the Participant hereunder, if the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority.  Any determination in this connection by the Company shall be final, binding, and conclusive.  The rights and obligations of the Company and the rights and obligations of the Participant are subject to all Applicable Laws, rules, and regulations.

 

13.           Investment Representation.  Unless the Awarded Shares are issued in a transaction registered under applicable federal, provincial, and state securities laws, by his or her execution hereof, the Participant represents and warrants to the Company that all Common Stock which may be purchased and or received hereunder will be acquired by the Participant for investment purposes for his or her own account and not with any intent for resale or distribution in violation of federal, provincial or state securities laws.  Unless the Common Stock is issued to him or her in a transaction registered under the applicable federal, provincial, and state securities laws, all certificates issued with respect to the Common Stock shall bear an appropriate restrictive investment legend and shall be held indefinitely, unless they are subsequently registered under the applicable federal, provincial, and state securities laws or the Participant obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel, that such registration is not required.

 

  

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14.           Participant’s Acknowledgments.  The Participant acknowledges that a copy of the Plan has been made available for his review by the Company, and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all the terms and provisions thereof.  The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement.

15.           Law Governing.  This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware (excluding any conflict of laws rule or principle of Delaware law that might refer the governance, construction, or interpretation of this agreement to the laws of another state).

16.           No Right to Continue Service or Employment.  Nothing herein shall be construed to confer upon the Participant the right to continue in the employ or to provide services to the Company or any Subsidiary, whether as an Employee or as a Contractor or as an Outside Director, or interfere with or restrict in any way the right of the Company or any Subsidiary to discharge the Participant as an Employee, Contractor, or Outside Director at any time.

17.           Legal Construction.  In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

18.           Covenants and Agreements as Independent Agreements. Each of the covenants and agreements that are set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement.  The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

19.           Entire Agreement.  This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter.  All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement.  Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.

20.           Parties Bound.  The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein.  No person shall be permitted to acquire any Awarded Shares without first executing and delivering an agreement in the form satisfactory to the Company making such person or entity subject to the restrictions on transfer contained herein.

 

  

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21.           Modification.  No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties.  Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by the Plan.

22.           Headings.  The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

23.           Gender and Number.  Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

24.           Notice.  Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

a.           Notice to the Company shall be addressed and delivered as follows:

China Clean Energy Inc.

_______________________

_______________________

Attn: ___________________

Fax:  ___________________

b.           Notice to the Participant shall be addressed and delivered as set forth on the signature page.

25.           Tax Requirements.  The Participant is hereby advised to consult immediately with his or her own tax advisor regarding the tax consequences of this Agreement, the method and timing for filing an election to include this Agreement in income under Section 83(b) of the Code, and the tax consequences of such election. By execution of this Agreement, the Participant agrees that if the Participant makes such an election, the Participant shall provide the Company with written notice of such election in accordance with the regulations promulgated under Section 83(b) of the Code. The Company or, if applicable, any Subsidiary (for purposes of this Section 25, the term “Company” shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any Federal, state, provincial, local, or other taxes required by law to be withheld in connection with this Award.  The Company may, in its sole discretion, also require the Participant receiving shares of Common Stock issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to this Award.  Such payments shall be required to be made when requested by Company and may be required to be made prior to the delivery of any certificate representing shares of Common Stock.  Such payment may be made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the Participant to the Company of shares of Common Stock, other than (A) Restricted Stock, or (B) Common Stock that the Participant has acquired from the Company within six (6) months  prior thereto, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares to be delivered upon the vesting of this Award, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (iv) any combination of (i), (ii), or (iii).  The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.

  

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* * * * * * * * * *

[Remainder of Page Intentionally Left Blank.

Signature Page Follows]

  

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his or her consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.

 

COMPANY:

CHINA CLEAN ENERGY INC.

 

By: ____________________________________

Name: __________________________________                                                                          

Title: ___________________________________

PARTICIPANT:

 

_______________________________________

Signature

Name: __________________________________

Address: ________________________________

                 ________________________________

7Unassociated Document

 

CHINA CLEAN ENERGY INC.

Jiangyin Industrial Zone, Jiangyin Town

Fuqing City, Fujian Province

People’s Republic of China

 

January 7, 2011

 

Dr. Constantine Konstans

3904 Gettysburg Circle

Plano, Texas 75023

Re: Offer of Board Position

Dear Dr. Konstans:

 

We are pleased to offer you a position as a member of the board of directors of China Clean Energy Inc. (the “Company”).  

 

Term of Service:  January 7, 2011 through December 31, 2011 or until your successor is duly elected and qualified, whichever is later (the “Termination Date”); provided, however, that this letter agreement and the obligations of the Company hereunder shall automatically terminate and be of no further force and effect if you resign or are removed prior to the Termination Date.

Fees:  Fees for board and committee service shall be paid in United States dollars (USD) and in cash, comprised of three parts: (i) an annual retainer for service as a member of the board of directors; (ii) an annual retainer for service on the compensation committee and the nominating and corporate governance committee; and (iii) a meeting attendance fee.  Fees will be wire transferred to designated accounts.

Annual Retainer for Board Service: As a retainer for board related services to be performed, you will be entitled to receive $20,000 (twenty thousand dollars) per year, paid in four (4) equal installments, in advance of and by the first day of each calendar quarter.

Annual Retainer for Compensation Committee and Nominating and Corporate Governance Committee Service: As a retainer for service on the compensation committee and the nominating and corporate governance committee, you will be entitled to receive an aggregate of $5,000 (five thousand dollars) per year, paid in four (4) equal installments, in advance of and by the first day of each calendar quarter.

Meeting Attendance Fee:  For participation in full board meetings and board committee meetings, will be paid according to the following schedule:

Conference Call meetings - $1,000 (one thousand dollars) per meeting. Reasonable efforts will be made to combine committee business with board business when the same agenda is to be acted upon in the same day and it is appropriate to do so (example: when the sole agenda topic of the board meeting is to approve actions of the compensation committee at a previous meeting occurring the same day)

 

  

  

  

 

Offer of Board Position, Page 2

January 7, 2011

In-person (“face-to-face”) meetings in the PRC – an aggregate of $5,000 (five thousand dollars) for a series of meetings (including board and committee meetings) to occur in five (5) consecutive days (excluding Sunday).  You agree to attend at least one such series of face-to-face meetings in the PRC, to be held over a period of up to five (5) consecutive days (excluding Sunday), which shall be held in March or such other time as the board deems appropriate, for the purpose of approving prior year business, including financial statements, and approving appropriate filings with the U.S. Securities and Exchange Commission (the “SEC”), and which shall include meetings of all functioning board committees on which you are then serving, and the full board.  In the exercise of your fiduciary duties, it may be necessary to attend additional face-to-face meetings in the PRC.

Face-to-face meetings in the U.S. and other PRC meetings – $1,000 per day of meetings (including board and committee meetings) and $1,000 per day that you are reasonably required to travel to or from such series of meetings, up to two travel days per series of meetings.

All meetings will be subject to the reimbursement schedule set forth herein, and the total aggregate compensation for meeting participation will not be limited, except as set forth above.

Stock Options: As a director, you will also receive an option to purchase 120,000 shares of the Company’s common stock, which option will vest in accordance with the following schedule: 1/12 of the shares subject to the option shall vest on the date of grant, and 1/12 of the shares subject to the option will vest on the first day of each calendar quarter thereafter beginning on April 1, 2011, with the option being 100% vested on October 1, 2013, subject to you continuing to serve as a director of the Company through each such date.  Such option will be granted pursuant to, and subject to the terms of, the China Clean Energy Inc. 2011 Long-Term Incentive Plan (the “Plan”).  The price for such options will be contained in a separate agreement.

Expense Reimbursement:  All reasonable and properly documented expenses related to meeting participation will be fully reimbursed.  This includes business class airfare, round trip, from any city in the U.S. to a designated city in the PRC.  Travel in the U.S. will be in coach or economy class.  Expenses will be payable reasonably promptly upon presentation to the Company.

Current Events / Continuing Education Reimbursement:  The Company expects you to stay abreast of current/anticipated changes in rules and regulations which may affect the Company.  Therefore, the Company encourages you to attend seminars and continuing education classes in your area of responsibility, and will reimburse you for expenses reasonably incurred to attend such forums, provided such expenses are approved in advance by the Chairman of the Company’s board or the Company’s Chief Financial Officer.  Such expenses will be shared equally with all other companies on whose board you serve in a relevant capacity.

 

You agree to make every effort to attend appropriate continuing education on a local basis and avoid travel outside your home city if possible.

 

  

  

  

 

Offer of Board Position, Page 3

January 7, 2011

 

We look forward to you joining the Company’s board of directors.  We anticipate exciting times ahead filled with many challenges and opportunities.  We are confident that you will make significant contributions to the Company’s future success.

 

Very truly yours,

 

 

/s/ Tai-ming Ou

Tai-ming Ou

Chairman of the Board of Directors

China Clean Energy Inc.

Agreed to and accepted by the undersigned

the 7th day of January, 2011

 

/s/ Constantine Konstans                                                      

Constantine Konstans

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