* Grapple Check is now = BAB + # of unarmed feats you have
( you may substitute Athletics or Acrobatics for BAB at a -4 penalty )
I agree with Deral. If your goal is to make main combatant style characters better at grappling, I think something like "make a Athletics check or Unarmed attack check opposed by the target's Athletics or Unarmed attack check" would be less disruptive.
* Grabbed condition = The character is engaged in a grapple. The characters first half action of every round while grabbed must be a grappling check. Their second half action may be used as normal for an attack or intiative action. The character looses Dex bonus to deffence, all dodge bonuses, and may not take movement actions ( unless a benefit of grapple ) even the 5' step. All characters suffer a -3 penalty with all Attacks, Saves, Skill Checks, or any other action besides the grappling check. DR from Armor is halved ( round up ). Basically flat footed with so extras.
This is awkward to me. I think what I would suggest instead is to alter the Grapple action to be a Full round action that also allows the character to take a certain type of half action at the same time. Similar to how Total Defense is a full action that allows you to take a standard move, Grapple would be a full round action that allows you to make a standard attack. Functionally, they're pretty much the same, but the 2nd way is a smaller modification to the rules, and I think it feels more like a bonus (you get to take an extra attack action) rather than a restriction (you can only use this half action to attack).
Also, what Initiative action do you envision being used here? The standard list is Aim, Anticipate, Delay, Distract, Ready, and Refresh. None of those seem like something you could do while holding someone in a kung fu joint lock (please forgive my lack of martial arts knowledge, you know what I mean), much less being held in one yourself.
* If the character wins a grapple check on another characters initiative count they may chose one of the benefits :
+ Break Free = if grabbed , if held become grabbed , if pinned become held
+ Move = move the grapple 5' in any direction
+ Injure = do half damage from a unarmed attack ( no tricks )
+ Disarm= disarm ( this check is a separate check with the penalty for being grabbed )
I don't feel good about letting characters take most of these actions when it's not their turn. It creates the very strange situation where the best tactic for an expert grappler is to goad someone into grabbing him, so that he can win the grapple on his turn to take a grapple benefit, and then win again on his opponent's turn to take a second grapple benefit. It also perpetuates the strange situation (there's a number of threads around here regarding this) that the best option for a poor grappler is to do nothing on their turn, rather than try to resist the grapple (by a certain common interpretation of the RAW, which was not the intent. Again, see the other threads, mostly in the FC section of the forums).
It seems to me that your broader goal is to make grappling less isolated from the rest of combat, so that the participants in a grapple don't just drop out of a fight that's happening around them, and sort of make things into a Jackie Chan or Jet Li movie. If so, and if you're looking for more grapple benefits for the winner when it's not their turn, maybe you should think more defensively. There is at least one trick somewhere (a feat maybe?) that lets you redirect a missed attack to another target instead. So you could do something similar. Instead of a Screaming Club, you have a Screaming Shield. Your opponent takes -4 defense for a round, and any attack against you that misses can hit them instead.
Otherwise though, I think this looks good. I like that it makes Grapples more involved with the rest of a combat, and less just two dudes rolling around on the ground, UFC style.