Exhibit
4.1
Approved
by Board of Directors on December 24, 2009
ORIGIN
AGRITECH LIMITED
2009
Performance Equity Plan
Section
1.
Purpose; Definitions.
1.1
Purpose
. The
purpose of the Origin Agritech Limited (“Company”) 2009 Performance Equity Plan
is to enable the Company to offer to its employees, officers, directors and
consultants, who are resident in China and elsewhere, 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 various 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.
1.2
Definitions
. For
purposes of the Plan, the following terms shall be defined as set forth
below:
(a) “Award
Agreement” means the agreement between the Company and the Holder, or such other
document as may be determined by the Committee, setting forth the terms and
conditions of an award under the Plan.
(b) “Board”
means the Board of Directors of the Company.
(c) “Cause”
means the termination of employment of a Holder by the Company for a reason
defined by the Committee as being for cause for purposes of this Plan.
Notwithstanding the forgoing, if a Holder is a party to a written agreement
embodying the material terms of his employment by the Company or a Subsidiary
and “cause” has been defined thereunder, the definition of “cause” contained in
such written agreement shall control. Otherwise, cause shall mean (i) an
unauthorized use or disclosure of the Company's or a Subsidiary’s confidential
information or trade secrets by a Holder, which use or disclosure causes
material harm to the Company or a Subsidiary, (ii) a material breach of any
agreement between the Company or a Subsidiary and the Holder that relates to or
was entered into in connection with the Holder’s employment by, or consultancy
with, the Company or a Subsidiary (“Employment/Consulting Agreement”), (iii) a
material failure to comply with the written policies or rules of the Company or
a Subsidiary, (iv) conviction of, or plea of "guilty" or "no contest" to, a
felony under the laws of the United States or any state thereof, (v) a continued
failure to perform assigned duties, consistent with any Employment/Consulting
Agreement, after receiving written notification of such failure from
the Board, (vi) repeated acts of insubordination, or (vii)
irresponsible, unauthorized acts or any willful misconduct, gross negligence or
willful failure to act which has, or can reasonably be expected to have, a
material adverse effect on the business, financial condition or performance,
reputation or prospects of the Company
(d) “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and any
successor thereto, and the regulations promulgated thereunder.
(e) “Committee”
means the Compensation Committee of the Board or any other 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
Shares” means the Common Shares of the Company, no par value per
share.
(g) “Company”
means Origin Agritech Limited, a corporation organized under the laws of the
British Virgin Islands.
(h) “Deferred
Stock” means Common Shares to be received under an award made pursuant to
Section 7, below, at the end of a specified deferral period.
(i) “Disability”
means physical or mental impairment as determined under procedures established
by the Committee for purposes of the Plan. Notwithstanding the
forgoing, if a Holder is a party to a written agreement embodying the material
terms of his employment by the Company or a Subsidiary and “disability” has been
defined thereunder, the definition of “disability” contained in such written
agreement shall control.
(j) “Effective
Date” means the date set forth in Section 11.1 below.
(k) “Employee”
means any person, including officers and directors, employed by the Company or
any Parent or Subsidiary of the Company. A person shall not cease to
be an Employee in the case of (i) any military, sick leave or other bona fide
leave of absence approved by the Company or (ii) transfers between locations of
the Company or between the Company, its Parent, any Subsidiary, or any
successor. For purposes of Incentive Stock Options, no such leave may
exceed ninety days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract. If the period of leave exceeds
ninety (90) days and reemployment upon expiration of such leave is not so
guaranteed, any Incentive Stock Option held by the Holder shall cease to be
treated as an Incentive Stock Option on the 180
th
day
following the first day of such leave and shall thereafter be treated for tax
purposes as a Nonqualified Stock Option. Neither service as a
director of the Company nor payment of a director’s fee by the Company shall be
sufficient to constitute “employment” by the Company.
(l)
“Fair Market Value”, unless otherwise required by any applicable provision of
the Code or any regulations issued thereunder, means, as of any given date: (i)
if the Common Shares are listed on a national securities exchange or regularly
quoted on the Nasdaq Stock Market LLC (“Nasdaq”) or the OTC Bulletin Board (“OTC
BB”), the last sale price of a Common Share in the principal trading market for
the Common Shares on such date, as reported by the exchange, Nasdaq or the OTC
BB, as the case may be, or if no sale was reported on that date, then on the
last preceding date on which such sale took place; (ii) if the Common Shares are
not listed on a national securities exchange or regularly quoted on the Nasdaq
or the OTC BB, but is regularly traded in the residual over-the-counter market,
the last sale price of a Common Share on such date, as reported by Pink OTC
Markets Inc. or similar publisher of such information, or if no sale was
reported on that date, then on the last preceding date on which such sale took
place; and (iii) if the fair market value of a Common Share cannot be determined
pursuant to clause (i) or (ii) above, such price as the Committee shall
determine, in good faith. Notwithstanding the foregoing, the Committee may use
any other definition of Fair Market Value consistent with applicable tax,
accounting and other rules.
(m) “Holder”
means a person who has received an award under the Plan.
(n) “Incentive
Stock Option” means any Stock Option intended to be and designated as an
“incentive stock option” within the meaning of Section 422 of the
Code.
(o) “Nonqualified
Stock Option” means any Stock Option that is not an Incentive Stock
Option.
(p) “Other
Stock-Based Award” means an award under Section 8, below, that is valued in
whole or in part by reference to, or is otherwise based upon, the Common
Shares.
(q) “Parent”
means any present or future “parent corporation” of the Company, as such term is
defined in Section 424(e) of the Code.
(r) “Plan”
means this Origin Agritech Limited 2009 Performance Equity Plan, as hereinafter
amended from time to time
(s) “Plan
Stock” means the Common Shares subject to an award under this Plan.
(t) “Repurchase
Value” shall mean the Fair Market Value in the event the award to be settled
under Section 2.2(h) or repurchased under Section 9.2 is comprised of Common
Shares 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; in each
case, multiplied by the number of shares subject to the award.
(u) “Restricted
Stock” means the Common Shares received under an award made pursuant to Section
6, below, that is subject to restrictions under said Section 6.
(v) “Stock
Option” or “Option” means any option to purchase Common Shares which is granted
pursuant to the Plan.
(w) “Subsidiary”
means any present or future “subsidiary corporation” of the Company, as such
term is defined in Section 424(f) of the Code and any present or future
“controlled entity” of the Company, as such term may be determined by United
States generally accepted accounting principals.
(x) “Vest”
means to become exercisable or to otherwise obtain ownership rights in an
award.
Section
2.
Administration.
2.1
Committee
Membership
. The Plan shall be administered by the Board or a
Committee. 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. If the Common Shares are registered under Section 12 of the
Exchange Act or the Company is a United States domestic reporting company (i.e.
not a foreign private issuer) under the Exchange Act, then the Committee, to the
extent possible and deemed to be appropriate by the Board, shall consist solely
of two or more “non-employee directors” as defined in Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and
“outside directors” within the meaning of Section 162(m) of the
Code.
2.2
Powers of
Committee
. The Committee shall have full authority to award,
pursuant to the terms of the Plan: (i) Stock Options, (ii) Restricted
Stock, (iii) Deferred 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, Restricted Stock, Deferred Stock and/or Other
Stock-Based Awards may from time to time be awarded hereunder.
(b) to
determine the terms and conditions, not inconsistent with the terms of the Plan,
of any award granted hereunder (including, but not limited to, number of shares,
share exercise price or types of consideration paid upon exercise of such
options, 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 Fair Market Value;
(e) to
determine the terms and conditions under which awards granted hereunder are to
operate in conjunction with or apart from other equity awarded under this Plan
and cash and non-cash awards made by the Company or any Subsidiary outside of
this Plan
(f) to
permit a Holder to satisfy withholding tax obligations by electing to have the
Company withhold from the Common Shares to be issued upon exercise or vesting of
the award that number of shares having a Fair Market Value equal to the amount
required to be withheld. The Fair Market Value of the shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by Holders to have shares withheld
for this purpose shall be made in such form and under such conditions as the
Committee may deem necessary or advisable;
(g) to
substitute (i) new Stock Options for previously granted Stock Options, which
previously granted Stock Options have higher option exercise prices and/or
contain other less favorable terms, and (ii) new awards of any other type for
previously granted awards of the same type, which previously granted awards are
upon less favorable terms; and
(h) to
make payments and distributions with respect to awards (i.e., to “settle”
awards) through cash payments in an amount equal to the Repurchase
Value.
2.3
Interpretation of Plan;
Liability
.
(a)
Committee
Authority
. Subject to Section 10, 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 Award Agreements
relating thereto), and to otherwise supervise the administration of the
Plan. Subject to Section 10, below, all decisions made by the
Committee pursuant to the provisions of the Plan shall be made in the
Committee’s sole discretion and shall be final and binding upon all persons,
including the Company, its Subsidiaries and Holders.
(b)
Incentive Stock
Options
. Anything in the Plan to the contrary notwithstanding,
no term or provision of the Plan relating to Incentive Stock Options or any
Award Agreement providing for Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Holder(s) affected, to disqualify any Incentive Stock
Option under such Section 422.
(c)
Compliance with Code Section
409A.
To the extent United States federal tax regulation applies to the
Company, it is the intent of the Company that the plan qualifies under Code
Section 409A and all Awards granted to all Participants shall be made in
accordance with Code Section 409A (including the Treasury Regulations
promulgated thereunder and any future interpretation or guidance published by
the Internal Revenue Service). In such event, it is the further intent of the
Company that the Plan meets, is operated and maintained in accordance with the
requirements of Code Section 409A and that no participant should be subject to
any additional tax or interest as a result of Code Section 409A.
Notwithstanding anything to the contrary in the Plan, the Company reserves the
right unilaterally to amend or modify the Plan or any Award Agreement as it
deems necessary or advisable, in its sole discretion, to avoid the imposition of
any additional tax, interest or penalty under Code Section 409A on any
Holder.
(d)
Limitation of Liability
.
The Committee and each member thereof, and any person acting pursuant to
authority delegated by the Committee, shall be entitled, in good faith, to rely
or act upon any report or other information furnished by any executive officer,
other officer or employee of the Company or a subsidiary or affiliate, the
Company’s independent auditors, consultants or any other agents assisting in the
administration of the Plan. Members of the Committee, any person acting pursuant
to authority delegated by the Committee, and any officer or employee of the
Company or a subsidiary or affiliate acting at the direction or on behalf of the
Committee or a delegee shall not be personally liable for any action or
determination taken or made in good faith with respect to the Plan, and shall,
to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action or determination.
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Section
3.
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Stock Subject to Plan.
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3.1
Number of
Shares
. Subject to Section 3.2, below, the total number of
Common Shares reserved and available for issuance under the Plan shall be
1,500,000 shares. The Common Shares under the Plan (“Shares”) may
consist, in whole or in part, of authorized and unissued shares or treasury
shares. If Common Shares that are subject to an outstanding Stock
Option cease to be subject to such Stock Option, or if any Common Shares that
are subject to any Restricted Stock award, 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
Shares, such shares shall again be available for distribution in connection with
future grants and awards under the Plan. If a Holder pays the
exercise price of a Stock Option by surrendering any previously owned shares
and/or arranges to have the appropriate number of shares otherwise issuable upon
exercise withheld to cover the withholding tax liability associated with the
Stock Option exercise, then the number of shares available under the Plan shall
be increased by the lesser of (i) the number of such surrendered shares and
shares used to pay taxes; and (ii) the number of shares purchased under such
Stock Option. Notwithstanding anything contained herein to the
contrary, but subject to Section 3.2, below, the Committee shall not grant to
any one Holder in any one calendar year awards for more than 250,000 shares in
the aggregate.
3.2
Adjustment Upon Changes in
Capitalization, Etc
. In the event of any merger,
reorganization, consolidation, common share dividend payable on Common Shares,
Common Share split or reverse split, combination or exchange of Common Shares,
or other extraordinary or unusual event which results in a change in the shares
of Common Shares of the Company as a whole, the Committee shall determine, in
its sole discretion, whether such change equitably requires an adjustment in the
terms of any award (including number of shares subject to the award and the
exercise price) or the aggregate number of shares reserved for issuance under
the Plan. Any such adjustments will be made by the Committee, whose
determination will be final, binding and conclusive.
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. No
Incentive Stock Option shall be granted to any person who is not an Employee at
the time of grant. Notwithstanding the foregoing, an award may be
made or granted to a person in connection with his hiring or retention, or at
any time on or after the date he reaches an agreement (oral or written) with the
Company with respect to such hiring or retention, even though it may be prior to
the date the person first performs services for the Company or its Subsidiaries;
provided, however, that no portion of any such award shall vest prior to the
date the person first performs such services.
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Section
5.
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Stock Options.
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5.1
Grant and
Exercise
. Stock Options granted under the Plan may be of two
types: (i) Incentive Stock Options and (ii) Nonqualified Stock
Options. Any Stock Option granted under the Plan shall contain such
terms, not inconsistent with this Plan, or with respect to Incentive Stock
Options, not inconsistent with the Plan and the Code, as the Committee may from
time to time approve. Subject to Section 3.2, below, the maximum
number of Shares that may be issuable upon the exercise of Incentive Stock
Options awarded under the Plan shall be 250,000. The Committee shall
have the authority to grant Incentive Stock Options or Non-Qualified Stock
Options, or both types of Stock Options which may be granted alone or in
addition to other awards granted under the Plan. To the extent that
any Stock Option intended to qualify as an Incentive Stock Option does not so
qualify, it shall constitute a separate Nonqualified Stock Option.
5.2
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; provided, however,
that (i) an Incentive Stock Option may be granted only within the ten-year
period commencing from the Effective Date and (ii) in no event shall the term of
any Stock Option exceed a period of ten years from the date of grant (or five
years in the case of an Incentive Stock Option granted to an Employee who, at
the time of grant, owns Common Shares possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary (“10% Stockholder”)).
(b)
Exercise
Price
. The exercise price per Common Share purchasable under a
Stock Option shall be determined by the Committee at the time of grant and may
not be less than 100% of the Fair Market Value on the date of grant (or, if
greater, the par value of a Common Share); provided, however, that the exercise
price of an Incentive Stock Option granted to a 10% Stockholder shall not be
less than 110% of the Fair Market Value on the date of grant.
(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
9, 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. The vesting provisions of individual Stock
Options may vary.
(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 Option by
giving written notice of exercise to the Company specifying the number of Common
Shares 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
Award Agreement, either in Common Shares (including Restricted Stock and other
contingent awards under this Plan) or partly in cash and partly in such Common
Shares, or such other means which the Committee determines are consistent with
the Plan’s purpose and applicable law, including, but not limited to, permitting
payment by surrender of a portion of the Stock Option that has a “value” equal
to the difference between the purchase price of the Common Shares issuable upon
exercise of the Option and the Fair Market Value on the date prior to exercise,
multiplied by the number of Shares underlying the portion of the Stock Option
being surrendered, all as may be set forth in the Award Agreement representing
such Stock Option. 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 Common Shares 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 (except that, in the case of an
exercise arrangement approved by the Committee and described in the last
sentence of this paragraph, payment may be made as soon as practicable after the
exercise). Payments in the form of Common Shares 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
Stockholder with respect to the shares subject to the Option until such shares
shall be transferred to the Holder upon the exercise of the
Option. The Committee may permit a Holder to elect to pay the
Exercise Price upon the exercise of a Stock Option by irrevocably authorizing a
third party to sell Common Shares (or a sufficient portion of the shares)
acquired upon exercise of the Stock Option and remit to the Company a sufficient
portion of the sale proceeds to pay the entire Exercise Price and any tax
withholding resulting from such exercise.
(e)
Transferability
. Except
as may be set forth in the next sentence of this Section or in the Award
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). Notwithstanding the foregoing, a Holder, with the
approval of the Committee, may transfer a Stock Option (i) (A) by gift, for no
consideration, or (B) pursuant to a domestic relations order, in either case, to
or for the benefit of the Holder’s “Immediate Family” (as defined below), or
(ii) to an entity in which the Holder and/or members of Holder’s Immediate
Family own more than fifty percent of the voting interest, in exchange for an
interest in that entity, subject to such limits as the Committee may establish
and the execution of such documents as the Committee may require. In
such event, the transferee shall remain subject to all the terms and conditions
applicable to the Stock Option prior to such transfer. The term
“Immediate Family” shall mean any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships, any person sharing the Holder’s
household (other than a tenant or employee), a trust in which these persons have
more than fifty percent beneficial interest, and a foundation in which these
persons (or the Holder) control the management of the assets.
(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 and set forth in the Award Agreement,
shall thereupon automatically terminate, except that the portion of such Stock
Option that is vested as of 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 lesser period as the
Committee may specify in the Award Agreement) from the date of such death, but
in no event later than the expiration of the stated term of such Stock
Option.
(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 and set forth in the Award
Agreement, shall thereupon automatically terminate, except that the portion of
such Stock Option that is vested as of the date of termination may thereafter be
exercised by the Holder for a period of one year (or such lesser period as the
Committee may specify in the Award Agreement) from the date of such termination
of employment, but in no event later than the expiration of the stated term of
such Stock Option.
(h)
Other
Termination
. Unless otherwise determined by the Committee and
set forth in the Award Agreement, if such Holder’s employment or retention by,
or association with, 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 the vested portion of the Stock Option as of the
date of termination may be exercised for the lesser of 90 days after termination
of employment or the balance of such Stock Option’s term.
(i)
Buyout and Settlement
Provisions
. The Committee may at any time, in its sole
discretion, 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.
5.3
Additional Incentive Stock
Option Provisions
.
(a) Each Option
shall be designated in the Award Agreement as either an Incentive Stock Option
or a Nonqualified Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the Common
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Holder during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonqualified Stock Options. For purposes of this Section
5.3(a), Incentive Stock Options shall be taken into account in the order in
which they were granted. The Fair Market Value of the shares shall be
determined as of the time the Option with respect to such shares is
granted
(b) Each
Employee who receives an Incentive Stock Option must agree to notify the Company
in writing immediately after the Employee makes a Disqualifying Disposition of
any Common Shares acquired pursuant to the exercise of an Incentive Stock
Option. A “Disqualifying Disposition” is any disposition (including
any sale) of such Common Shares before the later of (a) two years after the date
the Employee was granted the Incentive Stock Option, or (b) one year after the
date the Employee acquired Common Shares by exercising the Incentive Stock
Option. If the Employee has died before such stock is sold, these
holding period requirements do not apply and no Disqualifying Disposition can
occur thereafter.
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Section
6.
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Restricted Stock.
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6.1
Grant
. Shares
of Restricted Stock may be awarded either alone or in addition to other awards
granted under the Plan. The Committee 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.
6.2
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 Award 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
Award Agreement.
(b)
Rights of
Holder
. Restricted Stock shall constitute issued and
outstanding Common Shares 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 Shares
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 Award 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 Award Agreement,
subject to Section 9, 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 9, 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.
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Section
7.
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Deferred Stock.
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7.1
Grant
. Shares
of Deferred Stock may be awarded either alone or in addition to other awards
granted under the Plan. The Committee shall determine the eligible persons to
whom and the time or times at which grants of Deferred Stock will be awarded,
the number of shares of Deferred Stock to be awarded to any person, the duration
of the period (“Deferral Period”) during which, and the conditions under which,
receipt of the shares will be deferred, and all the other terms and conditions
of the awards.
7.2
Terms and
Conditions
. Each Deferred Stock award shall be subject to the
following terms and conditions:
(a)
Certificates
. At
the expiration of the Deferral Period, share certificates shall be issued and
delivered to the Holder, or his legal representative, representing the number
equal to the shares covered by the Deferred Stock award.
(b)
Rights of
Holder
. A person entitled to receive Deferred Stock shall not
have any rights of a Stockholder by virtue of such award until the expiration of
the applicable Deferral Period and the issuance and delivery of the certificates
representing such Common Shares. The Common Shares issuable upon
expiration of the Deferral Period shall not be deemed outstanding by the Company
until the expiration of such Deferral Period and the issuance and delivery of
such Common Shares to the Holder.
(c)
Vesting;
Forfeiture
. Upon the expiration of the Deferral Period with
respect to each award of Deferred Stock and the satisfaction of any other
applicable restrictions, terms and conditions all or part of such Deferred Stock
shall become vested in accordance with the terms of the Award Agreement, subject
to Section 9, below. Any such Deferred Stock that does not vest shall
be forfeited to the Company and the Holder shall not thereafter have any rights
with respect to such Deferred Stock.
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Section
8.
|
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, Common Shares, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, purchase rights, Common
Shares awarded which are not subject to any restrictions or conditions,
convertible or exchangeable debentures, or other rights convertible into Common
Shares 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.
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Section
9.
|
Accelerated Vesting and
Exercisability
.
|
9.1
Non-Approved
Transactions
. If any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act of 1934, as amended (“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 35% 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 Shares 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.
9.2
Approved
Transactions
. The Committee may, in the event of an
acquisition of substantially all of the Company’s assets or at least 65% 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.
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Section
10.
|
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
Award Agreement theretofore entered into hereunder, without the Holder’s
consent, except as set forth in this Plan.
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Section
11.
|
Term of Plan.
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11.1
Effective
Date
. The Plan shall be effective as of December 24, 2009
(“Effective Date”), provided, however, that if the Plan is not approved by the
Company’s stockholders within one year after the Effective Date, any Incentive
Stock Options awarded under the Plan prior to the one year anniversary shall no
longer be deemed Incentive Stock Options, but shall otherwise remain in full
force and effect.
11.2
Termination
Date
. Unless terminated by the Board, this Plan shall continue
to remain effective until such time as no further awards may be granted and all
awards granted under the Plan are no longer
outstanding. Notwithstanding the foregoing, grants of Incentive Stock
Options may be made only during the ten year period following the Effective
Date.
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Section
12.
|
General Provisions.
|
12.1
Written Award
Agreements
. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of, the Award Agreement executed
by the Company and the Holder, or such other document as may be determined by
the Committee. The Committee may terminate any award made under the
Plan if the Award Agreement relating thereto is not executed and returned to the
Company within 10 days after the Award Agreement has been delivered to the
Holder for his or her execution.
12.2
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.
12.3
Employees
.
(a)
Termination for Cause
. The
Committee may, if a Holder’s employment with the Company or a Subsidiary is
terminated for Cause, annul any award granted under this Plan to such employee
and, in such event, the Committee, in its sole discretion, may require such
Holder to return to the Company the economic value of any Common
Shares that was realized or obtained by such Holder at any time
during the period beginning on the date that is six months prior to the date
such Holder’s employment with the Company is terminated. In such
event, Holder agrees to remit to the Company, in cash, an amount equal to the
difference between the Fair Market Value of the Shares on the date of
termination (or the sales price of such Common Shares if the Common Shares were
sold during such six month period) and the price the Holder paid the Company for
such Common Shares.
(b)
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.
12.4
Investment Representations;
Company Policy
. The Committee may require each person
acquiring Common Shares 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 Common Shares 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.
12.5
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 Shares and cash otherwise than under the Plan; and such
arrangements may be either generally applicable or applicable only in specific
cases.
12.6
Withholding
Taxes
. Not later than the date as of which an amount must
first be included in the gross income of the Holder for any applicable income
tax purposes with respect to any Stock 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 applicable national or 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 Shares, including Common Shares
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.
12.7
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 British
Virgin Islands.
12.8
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).
12.9
Non-Transferability
. Except
as otherwise expressly provided in the Plan or the Award Agreement, no right or
benefit under the Plan may be alienated, sold, assigned, hypothecated, pledged,
exchanged, transferred, encumbranced or charged, and any attempt to alienate,
sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the
same shall be void.
12.10
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 (the
“Securities Act”), as amended, and (ii) the rules and regulations of any
securities exchange on which the Common Shares may be listed.
12.11
Conflicts
. If
any of the terms or provisions of any Award Agreement conflict 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 Award 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.
12.12
Non-Registered
Stock
. The Common Shares 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 Shares or to
assist the Holder in obtaining an exemption from the various registration
requirements, or to list the Common Shares on a national securities exchange or
any other trading or quotation system, including the Nasdaq.