As filed with the Securities and Exchange
Commission on April 13, 2015
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Tantech Holdings Ltd
(Exact name of registrant
as specified in its charter)
British Virgin Islands |
Not applicable |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
c/o Zhejiang Tantech Bamboo Technology
Co., Ltd
No. 10 Cen Shan Road, Shuige Industrial
Zone
Lishui City, Zhejiang Province 323000
People’s Republic of China
+86-578-226-2305
(Address of Principal Executive Offices)
(ZIP Code) |
CT Corporation System
111 Eighth Avenue
New York, New York 10011
(800) 624-0909
(Name, address, including zip code, and
telephone number, including area code, of agent for service) |
Tantech Holdings Ltd 2014 Share Incentive
Plan
(Full title of the plan)
With copies to:
Anthony W. Basch, Esq.
Kaufman & Canoles, P.C.
Two James Center
1021 East Cary Street, Suite 1400
Richmond, Virginia 23219
(804) 771-5700
(Name and address of agent for service)
(Telephone number, including area code, of agent for service)
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer |
o |
Accelerated filer |
o |
Non-accelerated filer (Do not check if a smaller reporting company) |
o |
Smaller reporting company |
o |
Calculation of Registration Fee
Title of securities to be registered | |
Amount to be registered(1)(2) | | |
Proposed maximum offering price per share(3) | | |
Proposed maximum aggregate offering price(4) | | |
Amount of registration fee(4) | |
Common shares, par value $ 0.001 per share | |
| 1,200,000 | | |
$ | 12.87 | | |
$ | 15,444,000 | | |
$ | 1,795 | (5) |
(1) |
Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement includes an indeterminate number of additional shares which may be issuable in accordance with the 2014 Share Incentive Plan (the “Plan”) to prevent dilution from stock splits, stock dividends or similar transactions. |
(2) |
The 1,200,000 shares registered hereby represent common shares issuable pursuant to the Plan, either directly or upon exercise of options or warrants issued under the Plan. |
(3) |
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(h) and 457(c) under the Securities Act based on the average of the high and low prices reported for the Registrant’s common shares on the NASDAQ Capital Market on April 10, 2015, which were $11.25 and $14.49, respectively. |
(4) |
Determined in accordance with Rule 457(h). |
(5) |
Paid herewith. |
EXPLANATORY NOTE
Tantech Holdings Ltd (the “Registrant”)
has prepared this Registration Statement in accordance with the requirements of Form S-8 under the Securities Act to register
its common shares, par value $0.001 per share, issuable pursuant to the Plan. The Registrant’s stockholders approved
the Plan on December 14, 2014. This Registration Statement is being filed in order to register the Registrant’s common
shares that may be offered or sold to participants under the Plan, either directly or upon exercise of options or warrants issued
under the Plan. Please note that, while the Plan consists of 2,160,000 common shares and securities exercisable or convertible
into common shares, this Registration Statement on Form S-8 is being filed to register only 1,200,000 of such shares; accordingly,
the Registrant may in the future file one or more further Registration Statements to register the balance of the Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The documents containing the information
specified in this Item 1 will be sent or given to employees, officers, directors or others as specified by Rule 428(b)(1)
under the Securities Act. In accordance with the rules and regulations of the Securities and Exchange Commission (the
“SEC”) and the instructions to Form S-8, such documents are not being filed with the SEC either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act.
Item 2. Registration Information and Employee
Plan Annual Information.
The documents containing the information
specified in this Item 2 will be sent or given to employees, officers, directors or others as specified by Rule 428(b)(1)
under the Securities Act. In accordance with the rules and regulations of the SEC and the instructions to Form S-8,
such documents are not being filed with the SEC either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 under the Securities Act. Such documents, together with the documents incorporated
by reference herein pursuant to Item 3 of Part II of this Registration Statement on Form S-8, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act, and are available upon written request to: Secretary,
Tantech Holdings Ltd, No. 10 Cen Shan Road, Shuige Industrial Zone, Lishui City, Zhejiang Province 323000, People’s Republic
of China, +86-578-226-2305.
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated
herein by reference:
| · | The description of the
common shares, $0.001 par value per share, contained in the Registrant’s registration statement on Form F-1 filed with the
SEC on September 16, 2014 (File Number 333-198788), as amended from time to time thereafter, and declared effective by the SEC
on March 18, 2015, and any amendment or report filed with the SEC for purposes of updating such description. |
All documents that we file with the SEC
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior
to the filing of a post-effective amendment to this Registration Statement (that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold) shall be deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
British Virgin Islands law does not limit
the extent to which a company’s articles of association may provide for indemnification of officers and directors, except
to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy, such as to provide
indemnification against civil fraud or the consequences of committing a crime. Under the memorandum and articles of
association of the Registrant, the Registrant may indemnify its directors, officers and liquidators against all expenses, including
legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal,
administrative or investigative proceedings to which they are party or are threatened to be made a party by reason of their acting
as our director, officer or liquidator. To be entitled to indemnification, these persons must have acted honestly and
in good faith with a view to the best interest of the Registrant and, in the case of criminal proceedings, they must have had no
reasonable cause to believe their conduct was unlawful.
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Registrant pursuant
to the foregoing provisions, the Registrant has been informed that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The Exhibit Index is hereby incorporated
by reference.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be
reflected in the form of a prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) That, for the purposes of determining liability under the
Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be in the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing
this Registration Statement on Form S-8 and has duly caused it to be signed on its behalf by the undersigned, thereunto duly authorized
in the City of Lishui, China on April 13, 2015.
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Tantech Holdings Ltd |
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By: |
/s/ Zhengyu Wang |
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Name: Zhengyu Wang |
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Title: Chairman and Chief Executive Officer |
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Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that
each person whose signature appears below constitutes and appoints Ping Chen, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and re-substitution, for him or her and in his or her name, place and stead, in any and all capacities,
to sign any or all amendments to this Registration Statement and any and all related registration statements and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, the following persons in the capacities and on the dates indicated have signed this Registration Statement on Form
S-8.
Signature |
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Title |
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Date |
/s/ Zhengyu Wang
Zhengyu Wang |
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Chairman and Chief Executive Officer
(Principal Executive Officer) |
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April 13, 2015 |
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/s/ Ningfang Liang
Ningfang Liang |
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Chief Financial Officer (Principal Financial and Accounting Officer) and Authorized
Representative in the United States |
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April 13, 2015 |
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Yefang Zhang |
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Director |
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April 13, 2015 |
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Wencai Pan |
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Director |
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April 13, 2015 |
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Hongdao Qian |
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Director |
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April 13, 2015 |
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Shudong Wang |
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Director |
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April 13, 2015 |
EXHIBIT INDEX
Exhibit Number |
Description of Exhibit |
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4.1 |
Specimen Share Certificate(1) |
5.1 |
Opinion of Kaufman & Canoles, P.C., British Virgin Islands Counsel(2) |
23.1 |
Consent of Friedman LLP (2) |
23.2 |
Consent of Kaufman & Canoles, P.C., British Virgin Islands Counsel (contained in Exhibit 5.1)(2) |
24.1 |
Powers of Attorney (included in Part II of this Registration Statement)(2) |
99.1 |
Tantech Holdings Ltd 2014 Share Incentive Plan(2) |
(1) |
Incorporated by reference to the Company’s registration statement on Form F-1, file No. 333-198788, filed on September 16, 2014, as amended. |
(2) |
Filed herewith. |
Exhibit 5.1
![](image_001.jpg) |
Kaufman & Canoles, P.C.
Two James Center
1021 East Cary Street, Suite 1400
Richmond, VA 23219
Mailing Address
Post Office Box 27828
Richmond, VA 23261
T (804) 771.5700
F (804) 771.5777
kaufCAN.com |
April 13, 2015
Tantech Holdings Ltd
c/o Zhejiang Forest Bamboo Technology Co.,
Ltd.
No. 10 Cen Shan Road, Shuige Industrial
Zone
Lishui City, Zhejiang Province 323000
People’s Republic of China
Re: Tantech Holdings Ltd Form S-8
Dear Sir:
We are British Virgin Islands counsel for
Tantech Holdings Ltd, a British Virgin Islands corporation (the “Company”), in connection with the registration and
offering of a number of the Company’s common shares, US$0.001 par value per share (the “Common Shares”) in an
aggregate dollar amount of US$15,444,000 offered for sale under the Securities Act of 1933, as amended, through a Registration
Statement on Form S-8 (“Registration Statement”) as to which this opinion is a part, to be filed with the United States
Securities and Exchange Commission (the “Commission”).
In connection with this opinion, we have
examined the Registration Statement, the Company’s Articles and Memorandum of Association, as amended to date, and the originals,
or copies certified to our satisfaction, of such records, documents, certificates, memoranda and other instruments as in our judgment
are necessary or appropriate to enable us to render the opinions expressed below (collectively, the “Documents”).
The following opinion is given only as
to matters of British Virgin Islands law, and we express no opinion with respect to any matters governed by or construed in accordance
with the laws of any jurisdiction other than the British Virgin Islands. We have assumed that there is nothing under any law (other
than the laws of the British Virgin Islands) that would affect or vary the following opinion. We offer no opinion in relation to
any representation or warranty given by any party to the Documents save as specifically hereinafter set forth. This opinion is
strictly limited to the matters stated in it, does not apply by implication to other matters, and only relates to (1) those circumstances
or facts specifically stated herein and (2) the laws of the British Virgin Islands, as they respectively exist at the date hereof.
In giving this opinion we have assumed,
without independent verification:
(a) the
genuineness of all signatures and seals, the authenticity of all documents submitted to us as originals, the conformity of all
copy documents or the forms of documents provided to us to their originals or, as the case may be, to the final form of the originals
and that any markings showing revisions or amendments to documents are correct and complete;
(b) that
the copies produced to us of minutes of meetings and/or of resolutions are true copies and correctly record the proceedings of
such meetings and/or the subject matter which they propose to record and that all factual statements therein contained are true
and correct and that any meetings referred to in such copies were duly convened and held and that all resolutions set out in such
copy minutes or resolutions were duly passed and are in full force and effect and that all factual statements made in such resolutions,
the Director’s Certificate and any other certificates and documents on which we have relied are true and correct (and continue
to be true and correct);
(c) that
the statutory registers of directors and officers, members, mortgages and charges and the minute book of the Company are true,
complete, accurate and up to date;
(d) the
accuracy of all representations, warranties and covenants as to factual matters made by the parties to the Documents; and
(e) that
there is no contractual or other prohibition (other than as may arise by virtue of the laws of the British Virgin Islands) binding
on the Company or on any other party prohibiting it from entering into and performing its obligations.
Based upon the foregoing and in reliance
thereon, it is our opinion that the common shares of the Company will, upon the receipt of full payment, issuance and delivery
in accordance with the terms of the offering described in the Registration Statement and registration in the register of members
(shareholders) of the Company, be fully and validly authorized, legally issued, fully paid and non-assessable.
The foregoing opinion is subject to the
following reservations and qualifications:
1. In
the event that the Documents are executed in or brought within the jurisdiction of the British Virgin Islands (e.g., for the purposes
of enforcement or obtaining payment), stamp duty may be payable.
2. We
neither express nor imply any opinion as to any representation or warranty given by the Company in the Documents as to its capability
(financial or otherwise) to undertake the obligations assumed by it under the Documents.
3. To
maintain the Company in good standing under the laws of the British Virgin Islands annual fees must be paid and annual returns
made. The annual fees are payable by the Company and will not affect the non-assessable nature of the common shares.
We hereby consent to the use of this opinion
as an exhibit to the Registration Statement and to the use of our name under the caption “Legal Matters” in the Prospectus
constituting a part thereof. In giving such consent, we do not thereby admit that we come within the category of persons whose
consent is required under section 7 of the U.S. Securities Act of 1933, as amended, or the Rules and Regulations of the Commission
thereunder.
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Sincerely,
/s/ Kaufman & Canoles, P.C.
Kaufman & Canoles, P.C. |
Exhibit 23.1
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CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
We hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of our report dated June 26, 2014, except for Notes 2, 10, 14, as
to which the date is September 15, 2014 and Note 20, as to which the date is December 2, 2014, relating to the financial statements
of Tantech Holdings Ltd. for the years ended December 31, 2013 and 2012, which appears in Amendment No.7 to the Registration Statement
on Form F-1/A (No. 333-198788) of Tantech Holdings Ltd.
/s/Friedman LLP
New York, New York
April 13, 2015
Exhibit 99.1
TANTECH HOLDINGS LTD
2014 SHARE INCENTIVE PLAN
1. Purpose and Effective Date.
(a) The purpose of the Tantech
Holdings Ltd 2014 Share Incentive Plan (the “Plan”) is to further the long term stability and financial success of
Tantech Holdings Ltd (the “Company”) by attracting and retaining personnel, including employees, non-employee directors,
and consultants, through the use of stock incentives. It is believed that ownership of Company stock will stimulate the efforts
of those employees upon whose judgment, interest and efforts the Company is and will be largely dependent for the successful conduct
of its business.
(b) The Plan was recommended
for approval by the Board of Directors on December 14, 2014. The Plan was approved by the shareholders of the Company on December
14, 2014 (the “Effective Date”).
2. Definitions.
(a) Act. The Securities
Exchange Act of 1934, as amended.
(b) Affiliate.
The meaning assigned to the term “affiliate” under Rule 12b-2 of the Act.
(c) Applicable Withholding
Taxes. The aggregate amount of federal, state and local income and payroll taxes that the Company is required to withhold (based
on the minimum applicable statutory withholding rates) in connection with any exercise of an Option or the award, lapse of restrictions
or payment with respect to Restricted Stock.
(d) Award. The
award of an Option or Restricted Stock under the Plan.
(e) Beneficiary.
The person or persons entitled to receive a benefit pursuant to an Award upon the death of a Participant.
(f) Board. The
Board of Directors of the Company.
(g) Cause. Dishonesty,
fraud, misconduct, gross incompetence, gross negligence, breach of a material fiduciary duty, material breach of an agreement with
the Company, unauthorized use or disclosure of confidential information or trade secrets, or conviction or confession of a crime
punishable by law (except minor violations), in each case as determined by the Committee, which determination shall be binding.
Notwithstanding the foregoing, if “Cause” is defined in an employment agreement between a Participant and the Company,
“Cause” shall have the meaning assigned to it in such agreement.
(h) Change of Control.
(i) The acquisition by any
unrelated person of beneficial ownership (as that term is used for purposes of the Act) of 50% or more of the then outstanding
common shares of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors. The term “unrelated person” means any person other than (x) the Company
and its subsidiaries, (y) an employee benefit plan or related trust sponsored by the Company or its subsidiaries, and (z) a
person who acquires stock of the Company pursuant to an agreement with the Company that is approved by the Board in advance of
the acquisition. For purposes of this subsection, a “person” means an individual, entity or group, as that term is
used for purposes of the Act;
(ii) Any tender or exchange
offer, merger or other business combination, sale of assets or any combination of the foregoing transactions, and the Company is
not the surviving corporation; and
(iii) A liquidation of the
Company.
(i) Code. The Internal
Revenue Code of 1986, as amended.
(j) Committee.
The Compensation Committee of the Board.
(k) Company. Tantech
Holdings Ltd.
(l) Company Stock.
The common shares of the Company. In the event of a change in the capital structure of the Company (as provided in Section 12
below), the shares resulting from such a change shall be deemed to be Company Stock within the meaning of the Plan.
(m) Consultant.
A person rendering services to the Company who is not an “employee” for purposes of employment tax withholding under
the Code.
(n) Corporate Change.
A consolidation, merger, dissolution or liquidation of the Company, or a sale or distribution of assets or stock (other than in
the ordinary course of business) of the Company; provided that, unless the Committee determines otherwise, a Corporate Change shall
only be considered to have occurred with respect to Participants whose business unit is affected by the Corporate Change.
(o) Date of Grant.
The date as of which an Award is made by the Committee.
(p) Disability or Disabled.
As to an Incentive Stock Option, a Disability within the meaning of Code Section 22(e)(3). As to all other Incentive Awards,
the Committee shall determine whether a Disability exists and such determination shall be conclusive.
(q) Fair Market Value.
(i) If Company Stock is traded
on a national securities exchange, the average of the highest and lowest registered sales prices of Company Stock on such exchange;
(ii) If Company Stock is traded
in the over-the-counter market, the average between the closing bid and asked prices as reported by the NASDAQ Stock Market; or
(iii) If shares of Company
Stock are not publicly traded, the Fair Market Value shall be determined by the Committee using any reasonable method in good faith.
Fair Market Value shall be determined as of the applicable date
specified in the Plan or, if there are no trades on such date, the value shall be determined as of the last preceding day on which
Company Stock is traded.
(r) Incentive Stock
Option. An Option intended to meet the requirements of, and qualify for favorable Federal income tax treatment under, Code
Section 422.
(s) Nonstatutory Stock
Option. An Option that does not meet the requirements of Code Section 422, or that is otherwise not intended to be an
Incentive Stock Option and is so designated.
(t) Option. A right
to purchase Company Stock granted under the Plan, at a price determined in accordance with the Plan.
(u) Participant.
Any individual who receives an Award under the Plan.
(v) Restricted Stock.
Company Stock awarded upon the terms and subject to the restrictions set forth in Section 7 below.
(w) Rule 16b-3.
Rule 16b-3 of the Act, including any corresponding subsequent rule or any amendments to Rule 16b-3 enacted after the effective
date of the Plan.
(x) 10% Shareholder.
A person who owns, directly or indirectly, stock possessing more than 10% of the total combined voting power of all classes of
stock of the Company or an Affiliate. Indirect ownership of stock shall be determined in accordance with Code Section 424(d).
3. General. Awards of Options
and Restricted Stock may be granted under the Plan. Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options.
4. Stock. Subject to Section 12
of the Plan, there shall be reserved for issuance under the Plan a total of 2,160,000 shares of Company Stock. Shares allocable
to Options granted under the Plan that expire or otherwise terminate unexercised and shares that are forfeited pursuant to restrictions
on Restricted Stock awarded under the Plan may again be subjected to an Award under this Plan. For purposes of determining the
number of shares that are available for Awards under the Plan, such number shall, if permissible under Rule 16b-3, include the
number of shares surrendered by a Participant or retained by the Company (a) in connection with the exercise of an Option
or (b) in payment of Applicable Withholding Taxes.
5. Eligibility.
(a) Any employee of, non-employee
director of, or Consultant to the Company or its affiliates, who, in the judgment of the Committee, has contributed or can be expected
to contribute to the profits or growth of the Company is eligible to become a Participant. The Committee shall have the power and
complete discretion, as provided in Section 14, to select eligible Participants and to determine for each Participant the
terms, conditions and nature of the Award and the number of shares to be allocated as part of the Award; provided, however, that
any award made to a member of the Committee must be approved by the Board. The Committee is expressly authorized to make an Award
to a Participant conditioned on the surrender for cancellation of an existing Award.
(b) The grant of an Award shall
not obligate the Company to pay an employee any particular amount of remuneration, to continue the employment of the employee after
the grant or to make further grants to the employee at any time thereafter.
(c) Non-employee directors
and Consultants shall not be eligible to receive the Award of an Incentive Stock Option.
6. Stock Options.
(a) Whenever the Committee
deems it appropriate to grant Options, notice shall be given to the Participant stating the number of shares for which Options
are granted, the Option price per share, whether the options are Incentive Stock Options or Nonstatutory Stock Options, and the
conditions to which the grant and exercise of the Options are subject. This notice, when duly accepted in writing by the Participant,
shall become a stock option agreement between the Company and the Participant.
(b) The Committee shall establish
the exercise price of Options. The exercise price of an Incentive Stock Option shall be not less than 100% of the Fair Market Value
of such shares on the Date of Grant, provided that if the Participant is a 10% Shareholder, the exercise price of an Incentive
Stock Option shall be not less than 110% of the Fair Market Value of such shares on the Date of Grant. The exercise price of a
Nonstatutory Stock Option Award shall not be less than 100% of the Fair Market Value of the shares of Company Stock covered by
the Option on the Date of Grant.
(c) Options may be exercised
in whole or in part at such times as may be specified by the Committee in the Participant’s stock option agreement. The Committee
may impose such vesting conditions and other requirements as the Committee deems appropriate, and the Committee may include such
provisions regarding a Change of Control or Corporate Change as the Committee deems appropriate.
(d) The Committee shall establish
the term of each Option in the Participant’s stock option agreement. The term of an Incentive Stock Option shall not be longer
than ten years from the Date of Grant, except that an Incentive Stock Option granted to a 10% Shareholder may not have a term in
excess of five years. No option may be exercised after the expiration of its term or, except as set forth in the Participant’s
stock option agreement, after the termination of the Participant’s employment. The Committee shall set forth in the Participant’s
stock option agreement when, and under what circumstances, an Option may be exercised after termination of the Participant’s
employment or period of service; provided that no Incentive Stock Option may be exercised after (i) three months from the
Participant’s termination of employment with the Company for reasons other than Disability or death, or (ii) one year
from the Participant’s termination of employment on account of Disability or death. The Committee may, in its sole discretion,
amend a previously granted Incentive Stock Option to provide for more liberal exercise provisions, provided however that if the
Incentive Stock Option as amended no longer meets the requirements of Code Section 422, and, as a result the Option no longer
qualifies for favorable federal income tax treatment under Code Section 422, the amendment shall not become effective without
the written consent of the Participant.
(e) An Incentive Stock Option,
by its terms, shall be exercisable in any calendar year only to the extent that the aggregate Fair Market Value (determined at
the Date of Grant) of Company Stock with respect to which Incentive Stock Options are exercisable by the Participant for the first
time during the calendar year does not exceed $100,000 (the “Limitation Amount”). Incentive Stock Options granted under
the Plan and all other plans of the Company and any parent or Subsidiary of the Company shall be aggregated for purposes of determining
whether the Limitation Amount has been exceeded. The Board may impose such conditions as it deems appropriate on an Incentive Stock
option to ensure that the foregoing requirement is met. If Incentive Stock Options that first become exercisable in a calendar
year exceed the Limitation Amount, the excess Options will be treated as Nonstatutory Stock Options to the extent permitted by
law.
(f) If a Participant dies and
if the Participant’s stock option agreement provides that part or all of the Option may be exercised after the Participant’s
death, then such portion may be exercised by the personal representative of the Participant’s estate during the time period
specified in the stock option agreement.
(g) If a Participant’s
employment or services is terminated by the Company for Cause, the Participant’s Options shall terminate as of the date of
the misconduct.
7. Restricted Stock Awards.
(a) Whenever the Committee
deems it appropriate to grant a Restricted Stock Award, notice shall be given to the Participant stating the number of shares of
Restricted Stock for which the Award is granted and the terms and conditions to which the Award is subject. This notice, when accepted
in writing by the Participant, shall become an Award agreement between the Company and the Participant. Certificates representing
the shares shall be issued in the name of the Participant, subject to the restrictions imposed by the Plan and the Committee. A
Restricted Stock Award may be made by the Committee in its discretion without cash consideration.
(b) The Committee may place
such restrictions on the transferability and vesting of Restricted Stock as the Committee deems appropriate, including restrictions
relating to continued employment and financial performance goals. Without limiting the foregoing, the Committee may provide performance
or Change of Control or Corporate Change acceleration parameters under which all, or a portion, of the Restricted Stock will vest
on the Company’s achievement of established performance objectives. Restricted Stock may not be sold, assigned, transferred,
disposed of, pledged, hypothecated or otherwise encumbered until the restrictions on such shares shall have lapsed or shall have
been removed pursuant to subsection (c) below.
(c) The Committee may provide
in a Restricted Stock Award, or subsequently, that the restrictions will lapse if a Change of Control or Corporate Change occurs.
The Committee may at any time, in its sole discretion, accelerate the time at which any or all restrictions will lapse or may remove
restrictions on Restricted Stock as it deems appropriate.
(d) A Participant shall hold
shares of Restricted Stock subject to the restrictions set forth in the Award agreement and in the Plan. In other respects, the
Participant shall have all the rights of a shareholder with respect to the shares of Restricted Stock, including, but not limited
to, the right to vote such shares and the right to receive all cash dividends and other distributions paid thereon. Certificates
representing Restricted Stock shall bear a legend referring to the restrictions set forth in the Plan and the Participant’s
Award agreement. If stock dividends are declared on Restricted Stock, such stock dividends or other distributions shall be subject
to the same restrictions as the underlying shares of Restricted Stock.
8. Method of Exercise of Options.
(a) Options may be exercised
by giving written notice of the exercise to the Company, stating the number of shares the Participant has elected to purchase under
the Option. Such notice shall be effective only if accompanied by the exercise price in full in cash; provided that, if the terms
of an Option so permit, the Participant may (i) deliver Company Stock that the Participant has owned for at least six months
(valued at Fair Market Value on the date of exercise), or (ii) exercise any applicable net exercise provision contained therein.
Unless otherwise specifically provided in the Option, any payment of the exercise price paid by delivery of Company Stock acquired
directly or indirectly from the Company shall be paid only with shares of Company Stock that have been held by the Participant
for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting
purposes).
(b) Notwithstanding anything
herein to the contrary, Awards shall always be granted and exercised in such a manner as to conform to the provisions of Rule 16b-3.
9. Applicable Withholding Taxes.
Each Participant shall agree, as a condition of receiving an Award, to pay to the Company, or make arrangements satisfactory to
the Company regarding the payment of, all Applicable Withholding Taxes with respect to the Award. Until the Applicable Withholding
Taxes have been paid or arrangements satisfactory to the Company have been made, no stock certificates (or, in the case of Restricted
Stock, no stock certificates free of a restrictive legend) shall be issued to the Participant. As an alternative to making a cash
payment to the Company to satisfy Applicable Withholding Tax obligations, the Committee may establish procedures permitting the
Participant to elect to (a) deliver shares of already owned Company Stock (subject to such restrictions as the Committee may
establish, including a requirement that any shares of Company Stock so delivered shall have been held by the Participant for not
less than six months) or (b) have the Company retain that number of shares of Company Stock that would satisfy all or a specified
portion of the Applicable Withholding Taxes. Any such election shall be made only in accordance with procedures established by
the Committee and in accordance with Rule 16b-3.
10. Nontransferability of Awards.
(a) In general, Awards, by
their terms, shall not be transferable by the Participant except by will or by the laws of descent and distribution or except as
described below. Options shall be exercisable, during the Participant’s lifetime, only by the Participant or by his guardian
or legal representative.
(b) Notwithstanding the provisions
of (a) and subject to federal and state securities laws, the Committee may grant Nonstatutory Stock Options that permit a
Participant to transfer the Options to one or more immediate family members, to a trust for the benefit of immediate family members,
or to a partnership, limited liability company, or other entity the only partners, members, or interest-holders of which are among
the Participant’s immediate family members. Consideration may not be paid for the transfer of Options. The transferee of
an Option shall be subject to all conditions applicable to the Option prior to its transfer. The agreement granting the Option
shall set forth the transfer conditions and restrictions. The Committee may impose on any transferable Option and on stock issued
upon the exercise of an Option such limitations and conditions as the Committee deems appropriate.
11. Termination, Modification,
Change. If not sooner terminated by the Board, this Plan shall terminate at the close of business on the tenth anniversary
of the Effective Date. No Awards shall be made under the Plan after its termination. The Board may terminate the Plan or may amend
the Plan in such respects as it shall deem advisable; provided that, if and to the extent required by Rule 16b-3, no change shall
be made that increases the total number of shares of Company Stock reserved for issuance pursuant to Awards granted under the Plan
(except pursuant to Section 12), expands the class of persons eligible to receive Awards, or materially increases the benefits
accruing to Participants under the Plan, unless such change is authorized by the shareholders of the Company. Notwithstanding the
foregoing, the Board may unilaterally amend the Plan and Awards as it deems appropriate to ensure compliance with Rule 16b-3 and
to cause Incentive Stock Options to meet the requirements of the Code and regulations thereunder. Except as provided in the preceding
sentence, a termination or amendment of the Plan shall not, without the consent of the Participant, adversely affect a Participant’s
rights under an Award previously granted to him.
12. Change in Capital Structure.
(a) In the event of a stock
dividend, stock split or combination of shares, spin-off, reclassification, recapitalization, merger or other change in the Company’s
capital stock (including, but not limited to, the creation or issuance to shareholders generally of rights, options or warrants
for the purchase of common shares or preferred stock of the Company), the number and kind of shares of stock or securities of the
Company to be issued under the Plan (under outstanding Awards and Awards to be granted in the future), the exercise price of options,
and other relevant provisions shall be appropriately adjusted by the Committee, whose determination shall be binding on all persons.
If the adjustment would produce fractional shares with respect to any Award, the Committee may adjust appropriately the number
of shares covered by the Award so as to eliminate the fractional shares.
(b) In the event the Company
distributes to its shareholders a dividend, or sells or causes to be sold to a person other than the Company or a Subsidiary
shares of stock in any corporation (a “Spinoff Company”) which, immediately before the distribution or sale, was a
majority owned Subsidiary of the Company, the Committee shall have the power, in its sole discretion, to make such adjustments
as the Committee deems appropriate. The Committee may make adjustments in the number and kind of shares or other securities to
be issued under the Plan (under outstanding Awards and Awards to be granted in the future), the exercise price of Options, and
other relevant provisions, and, without limiting the foregoing, may substitute securities of a Spinoff Company for securities of
the Company. The Committee shall make such adjustments as it determines to be appropriate, considering the economic effect of the
distribution or sale on the interests of the Company’s shareholders and the Participants in the businesses operated by the
Spinoff Company, and subject to the proviso that any such adjustments or new options shall not be made or granted, respectively,
that would result in subjecting the Plan to variable plan accounting treatment. The Committee’s determination shall be binding
on all persons. If the adjustment would produce fractional shares with respect to any Award, the Committee may adjust appropriately
the number of shares covered by the Award so as to eliminate the fractional shares.
(c) To the extent required
to avoid a charge to earnings for financial accounting purposes, adjustments made by the Committee pursuant to this Section 12
to outstanding Awards shall be made so that both (i) the aggregate intrinsic value of an Award immediately after the adjustment
is not greater than or less than the Award’s aggregate intrinsic value before the adjustment and (ii) the ratio of the
exercise price per share to the market value per share is not reduced.
(d) Notwithstanding anything
in the Plan to the contrary, the Committee may take the foregoing actions without the consent of any Participant, and the Committee’s
determination shall be conclusive and binding on all persons for all purposes. The Committee shall make its determinations consistent
with Rule 16b-3 and the applicable provisions of the Code.
13. Change of Control. In the
event of a Change of Control or Corporate Change, the Committee may take such actions with respect to Awards as the Committee deems
appropriate. These actions may include, but shall not be limited to, the following:
(a) At the time the Award is
made, provide for the acceleration of the vesting schedule relating to the exercise or realization of the Award so that the Award
may be exercised or realized in full on or before a date initially fixed by the Committee;
(b) Provide for the purchase
or settlement of any such Award by the Company for any amount of cash equal to the amount which could have been obtained upon the
exercise of such Award or realization of a Participant’s rights had such Award been currently exercisable or payable;
(c) Make adjustments to Awards
then outstanding as the Committee deems appropriate to reflect such Change of Control or Corporate Change; provided, however, that
to the extent required to avoid a charge to earnings for financial accounting purposes, such adjustments shall be made so that
both (i) the aggregate intrinsic value of an Award immediately after the adjustment is not greater than or less than the Award’s
aggregate intrinsic value before the Award and (ii) the ratio of the exercise price per share to the market value per share
is not reduced; or
(d) Cause any such Award then
outstanding to be assumed, or new rights substituted therefore, by the acquiring or surviving legal entity in such Change of Control
or Corporate Change.
14. Administration of the Plan.
(a) The Plan shall be administered
by the Committee, who shall be appointed by the Board. The Board may designate the Compensation Committee of the Board, or a subcommittee
of the Compensation Committee, to be the Committee for purposes of the Plan. If and to the extent required by Rule 16b-3, all members
of the Committee shall be “Non-Employee Directors” as that term is defined in Rule 16b-3, and the Committee shall be
comprised solely of two or more “outside directors” as that term is defined for purposes of Code section 162(m). If
any member of the Committee fails to qualify as an “outside director” or (to the extent required by Rule 16b-3) a “Non-Employee
Director,” such person shall immediately cease to be a member of the Committee and shall not take part in future Committee
deliberations. The Board of Directors may from time to time may appoint members of the Committee and fill vacancies, however caused,
in the Committee.
(b) The Committee shall have
the authority to impose such limitations or conditions upon an Award as the Committee deems appropriate to achieve the objectives
of the Award and the Plan. Without limiting the foregoing and in addition to the powers set forth elsewhere in the Plan, the Committee
shall have the power and complete discretion to determine (i) which eligible persons shall receive an Award and the nature
of the Award, (ii) the number of shares of Company Stock to be covered by each Award, (iii) whether Options shall be
Incentive Stock options or Nonstatutory Stock Options, (iv) the Fair Market Value of Company Stock, (v) the time or times
when an Award shall be granted, (vi) whether an Award shall become vested over a period of time, according to a performance-based
vesting schedule or otherwise, and when it shall be fully vested, (vii) the terms and conditions under which restrictions
imposed upon an Award shall lapse, (viii) whether a Change of Control or Corporate Change exists, (ix) the terms of incentive
programs, performance criteria and other factors relevant to the issuance of Incentive Stock or the lapse of restrictions on Restricted
Stock or Options, (x) when Options may be exercised, (xi) whether to approve a Participant’s election with respect
to Applicable Withholding Taxes, (xii) conditions relating to the length of time before disposition of Company Stock received
in connection with an Award is permitted, (xiii) notice provisions relating to the sale of Company Stock acquired under the
Plan, and (xiv) any additional requirements relating to Awards that the Committee deems appropriate. Notwithstanding the foregoing,
no “tandem stock options” (where two stock options are issued together and the exercise of one option affects the right
to exercise the other option) may be issued in connection with Incentive Stock Options.
(c) The Committee shall have
the power to amend the terms of previously granted Awards so long as the terms as amended are consistent with the terms of the
Plan and, where applicable, consistent with the qualification of an option as an Incentive Stock Option. The consent of the Participant
must be obtained with respect to any amendment that would adversely affect the Participant’s rights under the Award, except
that such consent shall not be required if such amendment is for the purpose of complying with Rule 16b-3 or any requirement of
the Code applicable to the Award.
(d) The Committee may adopt
rules and regulations for carrying out the Plan. The Committee shall have the express discretionary authority to construe and interpret
the Plan and the Award agreements, to resolve any ambiguities, to define any terms, and to make any other determinations required
by the Plan or an Award agreement. The interpretation and construction of any provisions of the Plan or an Award agreement by the
Committee shall be final and conclusive. The Committee may consult with counsel, who may be counsel to the Company, and shall not
incur any liability for any action taken in good faith in reliance upon the advice of counsel.
(e) A majority of the members
of the Committee shall constitute a quorum, and all actions of the Committee shall be taken by a majority of the members present.
Any action may be taken by a written instrument signed by all of the members, and any action so taken shall be fully effective
as if it had been taken at a meeting.
15. Issuance of Company Stock.
The Company shall not be required to issue or deliver any certificate for shares of Company Stock before (i) the admission
of such shares to listing on any stock exchange on which Company Stock may then be listed, (ii) receipt of any required registration
or other qualification of such shares under any state or federal securities law or regulation that the Company’s counsel
shall determine is necessary or advisable, and (iii) the Company shall have been advised by counsel that all applicable legal
requirements have been complied with. The Company may place on a certificate representing Company Stock any legend required to
reflect restrictions pursuant to the Plan, and any legend deemed necessary by the Company’s counsel to comply with federal
or state securities laws. The Company may require a customary written indication of a Participant’s investment intent. Until
a Participant has been issued a certificate for the shares of Company Stock acquired, the Participant shall possess no shareholder
rights with respect to the shares.
16. Rights Under the Plan.
Title to and beneficial ownership of all benefits described in the Plan shall at all times remain with the Company. Participation
in the Plan and the right to receive payments under the Plan shall not give a Participant any proprietary interest in the Company
or any Affiliate or any of their assets. No trust fund shall be created in connection with the Plan, and there shall be no required
funding of amounts that may become payable under the Plan. A Participant shall, for all purposes, be a general creditor of the
Company. The interest of a Participant in the Plan cannot be assigned, anticipated, sold, encumbered or pledged and shall not be
subject to the claims of his creditors.
17. Beneficiary. A Participant
may designate, on a form provided by the Committee, one or more beneficiaries to receive any payments under Awards of Restricted
Stock or Incentive Stock after the Participant’s death. If a Participant makes no valid designation, or if the designated
beneficiary fails to survive the Participant or otherwise fails to receive the benefits, the Participant’s beneficiary shall
be the first of the following persons who survives the Participant: (a) the Participant’s surviving spouse, (b) the
Participant’s surviving descendants, per stirpes, or (c) the personal representative of the Participant’s
estate.
18. Notice. All notices and
other communications required or permitted to be given under this Plan shall be in writing and shall be deemed to have been duly
given if delivered personally or mailed first class, postage prepaid, as follows: (a) if to the Company—at its principal
business address to the attention of the Secretary; (b) if to any Participant—at the last address of the Participant
known to the sender at the time the notice or other communication is sent.
19. Interpretation. The terms
of this Plan and Awards granted pursuant to the Plan are subject to all present and future regulations and rulings of the Secretary
of the Treasury relating to the qualification of Incentive Stock Options under the Code or compliance with Code section 162(m),
to the extent applicable, and they are subject to all present and future rulings of the Securities and Exchange Commission with
respect to Rule 16b-3. If any provision of the Plan or an Award conflicts with any such regulation or ruling, to the extent applicable,
the Committee shall cause the Plan to be amended, and shall modify the Award, so as to comply, or if for any reason amendments
cannot be made, that provision of the Plan and/or the Award shall be void and of no effect.
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