EX-10.1






Exhibit 10.1




COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD.




2009 SHARE INCENTIVE PLAN



ARTICLE 1



PURPOSE



          The purpose of the Country Style Cooking Restaurant Chain Co., Ltd. 2009 Share Incentive Plan
(the “Plan”) is to promote the success and enhance the value of Country Style Cooking
Restaurant Chain Co., Ltd., a company formed under the laws of the Cayman Islands (the
“Company”), by linking the personal interests of the Directors, Employees, and Consultants
to those of the Company’s shareholders and by providing such individuals with an incentive for
outstanding performance to generate superior returns to the Company’s shareholders. The Plan is
further intended to provide flexibility to the Company in its ability to motivate, attract, and
retain the services of Directors, Employees, and Consultants upon whose judgment, interest, and
special effort the successful conduct of the Company’s operation is largely dependent.




ARTICLE 2




DEFINITIONS AND CONSTRUCTION



          Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.





          2.1 “Applicable Laws” means the legal requirements relating to the Plan and the
Awards under applicable provisions of the corporate, securities, tax and other laws, rules,
regulations and government orders, and the rules of any applicable stock exchange or national
market system, of any jurisdiction applicable to Awards granted to residents therein.




          2.2 “Award” means an Option, Restricted Share or Restricted Share Unit award granted
to a Participant pursuant to the Plan.




          2.3 “Award Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award, including through electronic medium.




          2.4 “Board” means the Board of Directors of the Company.



 









 






          2.5 “Cause” shall mean (i) performing an act or failing to perform any act in bad
faith and to the detriment of the Company or any other Service Recipient; (ii) engaging in
dishonesty, intentional misconduct or material breach of any agreement with the Company or any
other Service Recipient; or (iii) commission of a felony or any other crime involving dishonesty,
breach of trust, or physical or emotional harm to any person.




          2.6 “Code” means the Internal Revenue Code of 1986 of the United States, as amended.




          2.7 “Committee” means a committee of the Board described in Article 10.




          2.8 “Consultant” means any consultant or adviser if: (a) the consultant or adviser
renders bona fide services to a Service Recipient; (b) the services rendered by the consultant or
adviser are not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for the Company’s
securities; and (c) the consultant or adviser is a natural person who has contracted directly
with the Service Recipient to render such services.




          2.9 “Corporate Transaction”, unless otherwise defined in an Award Agreement, means
any of the following transactions, provided, however, that the Committee shall determine under
(d) and (e) whether multiple transactions are related, and its determination shall be final,
binding and conclusive and, provided further, that the occurrence of a Trading Date shall not
constitute a Change in Control:



                    (a) an amalgamation, arrangement or consolidation or scheme of arrangement (i) in which the
Company is not the surviving entity, except for a transaction the principal purpose of which is to
change the jurisdiction in which the Company is incorporated or (ii) following which the holders of
the voting securities of the Company immediately prior to the transaction do not continue to hold
more than 50% of the combined voting power of the voting securities of the surviving entity
immediately following the transaction;



                    (b) the sale, transfer or other disposition of all or substantially all of the assets of the
Company;



                    (c) the complete liquidation or dissolution of the Company;



                    (d) any reverse takeover or series of related transactions culminating in a reverse takeover
(including, but not limited to, a tender offer followed by a reverse takeover) in which the Company
is the surviving entity but (A) the Company’s equity securities outstanding immediately prior to
such takeover are converted or exchanged by virtue of the takeover into other property, whether in
the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Company’s outstanding securities are
transferred to a person or persons different from those who held such securities immediately prior
to such takeover or the initial transaction culminating in such
takeover, but excluding any such transaction or series of related transactions that the
Committee determines shall not be a Corporate Transaction; or



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                    (e) acquisition in a single or series of related transactions by any person or related group
of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but
excluding any such transaction or series of related transactions that the Committee determines
shall not be a Corporate Transaction.




          2.10 “Date of Grant” means, with respect to an Award, the date that the Award is
granted and its exercise price is set (if applicable), consistent with Applicable Laws and
applicable financial accounting rules.




          2.11 “Director” means a member of the Board.




          2.12 “Disability”, unless otherwise defined in an Award Agreement, means that the
Participant qualifies to receive long-term disability payments under the Service Recipient’s
long-term disability insurance program, as it may be amended from time to time, to which the
Participant provides services regardless of whether the Participant is covered by such policy.
If the Service Recipient to which the Participant provides service does not have a long-term
disability plan in place, “Disability” means that a Participant is unable to carry out the
responsibilities and functions of the position held by the Participant by reason of any medically
determinable physical or mental impairment for a period of not less than ninety (90) consecutive
days. A Participant will not be considered to have incurred a Disability unless he or she
furnishes proof of such impairment sufficient to satisfy the Committee in its discretion.




          2.13 “Effective Date” shall have the meaning set forth in Section 11.1.




          2.14 “Employee” means any person employed by the Company or any Parent or Subsidiary
of the Company.




          2.15 “Exchange Act” means the Securities Exchange Act of 1934 of the United States,
as amended.




          2.16 “Fair Market Value” means, as of any date, the value of Shares determined as
follows:



                    (a) If the Shares are listed on one or more established stock exchanges or national market
systems, including without limitation, The New York Stock Exchange and The Nasdaq Stock Market, the
Fair Market Value shall be the closing sales price for such shares (or the closing bid, if no sales
were reported) as quoted on the principal exchange or system on which the Shares are listed (as
determined by the Committee) on the date of determination (or, if no closing sales price or closing
bid was reported on that date, as applicable, on the last trading
date such closing sales price or closing bid was reported), as reported in The Wall Street
Journal or such other source as the Committee deems reliable;



                    (b) If the Shares are regularly quoted on an automated quotation system (including the OTC
Bulletin Board) or by a recognized securities dealer, the Fair Market Value



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shall be the closing
sales price for such shares as quoted on such system or by such securities dealer on the date of
determination, but if selling prices are not reported, the Fair Market Value of a Share shall be
the mean between the high bid and low asked prices for the Shares on the date of determination (or,
if no such prices were reported on that date, on the last date such prices were reported), as
reported in The Wall Street Journal or such other source as the Committee deems reliable; or



                    (c) In the absence of an established market for the Shares of the type described in (a) and
(b), above, the Fair Market Value thereof shall be determined by the Committee in good faith and in
its discretion by reference to (i) the placing price of the latest private placement of the Shares
and the development of the Company’s business operations and the general economic and market
conditions since such latest private placement, (ii) other third party transactions involving the
Shares and the development of the Company’s business operation and the general economic and market
conditions since such sale, (iii) an independent valuation of the Shares, or (iv) such other
methodologies or information as the Committee determines to be indicative of Fair Market Value and
relevant.




          2.17 “Fiscal Year” means a fiscal year of the Company.




          2.18 “Incentive Share Option” means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor provision thereto.




          2.19 “Independent Director” means (i) before the Shares or other securities
representing the Shares are listed on a stock exchange, a Director who is a Non-Employee
Director; and (ii) after the Shares or other securities representing the Shares are listed on a
stock exchange, a Director who meets the independence standards under the applicable corporate
governance rules of the stock exchange and any other Applicable Laws, including without
limitation, Section 162(m) of the Code, to the extent applicable.




          2.20 “Non-Employee Director” means a Director who qualifies as a “Non-Employee
Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted
by the Board.




          2.21 “Non-Qualified Share Option” means an Option that is not intended to be an
Incentive Share Option.




          2.22 “Option” means a right granted to a Participant pursuant to Article 5 of the
Plan to purchase a specified number of Shares at a specified price during specified time periods.
An Option may be either an Incentive Share Option or a Non-Qualified Share Option.




          2.23 “Participant” means a person who, as a Director, a Consultant or an Employee,
has been granted an Award pursuant to the Plan.




          2.24 “Parent” means a parent corporation under Section 424(e) of the Code.




          2.25 “Plan” means this Country Style Cooking Restaurant Chain Co., Ltd. 2009 Share
Incentive Plan, as it may be amended from time to time.



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          2.26 “Related Entity” means any business, corporation, partnership, limited
liability company or other entity in which the Company or a Parent or Subsidiary of the Company
holds a substantial ownership interest, directly or indirectly, but which is not a Subsidiary and
which the Board designates as a Related Entity for purposes of the Plan.




          2.27 “Restricted Share” means a Share awarded to a Participant pursuant to Article 6
that is subject to certain restrictions and may be subject to risk of forfeiture.




          2.28 “Restricted Share Unit” means the right granted to a Participant pursuant to
Article 7 to receive a Share at a future date.




          2.29 “Restriction Period” means the period during which the transfer of Restricted
Shares are subject to restrictions, which restrictions may be based on the passage of time, the
achievement of certain performance objectives, or the occurrence of other events as determined by
the Committee, in its discretion.




          2.30 “Securities Act” means the Securities Act of 1933 of the United States, as
amended.




          2.31 “Service Recipient” means the Company or any Parent or Subsidiary of the
Company and any Related Entity to which a Participant provides services as an Employee, a
Consultant or a Director.




          2.32 “Share” means an ordinary share of the Company, and such other securities of
the Company that may be substituted for Shares pursuant to Article 9.




          2.33 “Subsidiary” means any corporation or other entity of which a majority of the
outstanding voting shares or voting power is beneficially owned directly or indirectly by the
Company.




          2.34 “Trading Date” means the closing of the first sale to the general public of the
Shares pursuant to a registration statement filed with and declared effective by the U.S.
Securities and Exchange Commission under the Securities Act.



ARTICLE 3




SHARES SUBJECT TO THE PLAN




          3.1 Number of Shares.




                    (a) Subject to the provisions of Article 9 and Section 3.1(b), the maximum aggregate number of
Shares which may be issued pursuant to all Awards (including Incentive Share Options) shall be
7,720,000.




                    (b) To the extent that an Award terminates, expires, or lapses for any reason, any Shares
subject to the Award shall again be available for the grant of an Award pursuant to the Plan. To
the extent permitted by Applicable Laws, Shares issued in assumption of, or in substitution for,
any outstanding awards of any entity acquired in any form or combination by the



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Company or any
Parent or Subsidiary of the Company shall not be counted against Shares available for grant
pursuant to the Plan. Shares delivered by the Participant or withheld by the Company upon the
exercise of any Award under the Plan, in payment of the exercise price thereof or tax withholding
thereon, may again be optioned, granted or awarded hereunder, subject to the limitations of Section
3.1(a). If any Restricted Shares are forfeited by the Participant or repurchased by the Company,
such Shares may again be optioned, granted or awarded hereunder, subject to the limitations of
Section 3.1(a). Notwithstanding the provisions of this Section 3.1(b), no Shares may again be
optioned, granted or awarded if such action would cause an Incentive Share Option to fail to
qualify under Section 422 of the Code.





                    3.2 Shares Distributed. Any Shares distributed pursuant to an Award may consist, in
whole or in part, of authorized and unissued Shares, treasury shares (subject to Applicable Laws)
or Shares purchased on the open market. Additionally, in the discretion of the Committee,
American Depository Shares in an amount equal to the number of Shares which otherwise would be
distributed pursuant to an Award may be distributed in lieu of Shares in settlement of any Award.
If the number of Shares represented by an American Depository Share is other than on a
one-to-one basis, the limitations of Section 3.1 shall be adjusted to reflect the distribution of
American Depository Shares in lieu of Shares.



ARTICLE 4




ELIGIBILITY AND PARTICIPATION




                    4.1 Eligibility. Persons eligible to participate in this Plan include Employees,
Consultants, and all Directors, as determined by the Committee.




                    4.2 Participation. Subject to the provisions of the Plan, the Committee may, from
time to time, select from among all eligible individuals, those to whom Awards shall be granted
and shall determine the nature and amount of each Award. No individual shall have any right to
be granted an Award pursuant to this Plan.




                    4.3 Jurisdictions. In order to assure the viability of Awards granted to
Participants employed in various jurisdictions, the Committee may provide for such special terms
as it may consider necessary or appropriate to accommodate differences in local law, tax policy,
or custom applicable in the jurisdiction in which the Participant resides or is employed.
Moreover, the Committee may approve such supplements to, or amendments, restatements, or
alternative versions of, the Plan as it may consider necessary or appropriate for such purposes
without thereby affecting the terms of the Plan as in effect for any other purpose; provided,
however, that no such supplements, amendments, restatements, or alternative versions shall
increase the share limitations contained in Section 3.1 of the Plan. Notwithstanding the
foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that
would violate any Applicable Laws.





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ARTICLE 5




OPTIONS




          5.1 General. The Committee is authorized to grant Options to Participants on the
following terms and conditions:



                    (a) Grant of Options. Subject to the terms and provisions of the Plan, Options may be
granted to Employees, Consultants or Directors at any time and from time to time as determined by
the Committee in its sole discretion. The Committee, in its sole discretion, shall determine the
number of Shares subject to each Option, provided that during any Fiscal Year, no Participant shall
be granted Options covering more than a total of 3,000,000 Shares. The Administrator may grant
Incentive Share Options, Non-Qualified Share Options, or a combination thereof.



                    (b) Exercise Price. The exercise price per Share subject to an Option shall be
determined by the Committee and set forth in the Award Agreement which may be a fixed or variable
price related to the Fair Market Value of the Shares, to the extent not prohibited by the
Applicable Laws. The exercise price per Share subject to an Option may be amended or adjusted in
the absolute discretion of the Committee, the determination of which shall be final, binding and
conclusive. For the avoidance of doubt, to the extent not prohibited by Applicable Laws or any
exchange rule, a downward adjustment of the exercise prices of Options mentioned in the preceding
sentence shall be effective without the approval of the Company’s shareholders or the approval of
the affected Participants.



                    (c) Time and Conditions of Exercise; Term. The Committee shall determine the time or
times at which an Option may be exercised in whole or in part. The Committee shall also determine
any conditions, including performance conditions, if any, that must be satisfied before all or part
of an Option may be exercised. The Committee shall determine the term of the Option, provided that
the term of any Option granted under the Plan shall not exceed ten years from the Date of Grant
and, provided further, that in the case of an Incentive Share Option granted to an Employee who,
immediately prior to the time the Incentive Share Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or
Subsidiary of the Company, the term of the Incentive Share Option shall be no longer than five (5)
years from the Date of Grant.



                    (d) Payment. The Committee shall determine the methods by which the exercise price of
an Option may be paid, the form of payment, including, without limitation (i) cash or check
denominated in U.S. Dollars, (ii) to the extent permissible under the Applicable Laws, cash or
check in Chinese Renminbi, (iii) cash or check denominated in any other local currency as approved
by the Committee, (iv) Shares held for such period of time as may be required by the Committee in
order to avoid adverse financial accounting consequences and having a Fair Market Value on the date
of delivery equal to the aggregate exercise price of the Option or exercised portion thereof, (v)
after the Trading Date the delivery of a notice that the Participant has placed a market sell order
with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker
has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; provided that payment of such proceeds is then made to
the Company upon settlement of such sale, (vi) other property acceptable to the Committee with a
Fair Market Value equal to the exercise price, or (vii) any combination of the foregoing.
Notwithstanding any other provision of the Plan to the



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contrary, no Participant who is a Director
or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act
shall be permitted to pay the exercise price of an Option in any method which would violate Section
13(k) of the Exchange Act.



                    (e) Evidence of Grant. All Options shall be evidenced by an Award Agreement between
the Company and the Participant. The Award Agreement shall include such additional provisions as
may be specified by the Committee.



                    (f) Expiration of Option. Except as otherwise provided in an Award Agreement or in
Section 5.2 of the Plan with respect to Incentive Share Options, Options may not be exercised to
any extent by anyone after the first to occur of the following events:



                         (i) Ten years from the Date of Grant, unless an earlier time is set in the Award Agreement;



                         (ii) Thirty (30) days after the Participant’s termination of employment and service for any
reason other than Cause, death or Disability;



                         (iii) Upon the Participant’s termination of employment for Cause; and



                         (iv) Six (6) months after the date of the Participant’s termination of employment and service
on account of Disability or death. Upon the Participant’s Disability or death, any Options
exercisable as of the Participant’s Disability or death may be exercised by the Participant’s legal
representative or representatives, by the person or persons entitled to do so pursuant to the
Participant’s last will and testament, or, if the Participant fails to make testamentary
disposition of such Option or dies intestate, by the person or persons entitled to receive the
Option pursuant to the applicable laws of descent and distribution.



                         Any Options not exercised within the period of time required pursuant to the earliest to occur
of the events described in (i) — (iv) above shall terminate and the Shares covered by such Option
shall revert to the Plan. In addition, except as otherwise provided in an
Award Agreement, if, on the date of termination, the Participant is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall be forfeited by the
Participant and shall immediately revert to the Plan.




          5.2 Incentive Share Options. Incentive Share Options may be granted to Employees of
the Company or a Parent or Subsidiary of the Company. Incentive Share Options may not be granted
to Employees of a Related Entity or to Independent Directors or Consultants.



                    (a) Individual Dollar Limitation. The aggregate Fair Market Value (determined as of
the time the Option is granted) of all Shares with respect to which Incentive Share Options are
first exercisable by a Participant in any calendar year may not exceed $100,000 or such other
limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent
that Incentive Share Options are first exercisable by a Participant in excess of such limitation,
the excess shall be considered Non-Qualified Share Options.



                    (b) Exercise Price. The exercise price of an Incentive Share Option shall be



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equal to
the Fair Market Value on the date of grant. However, the exercise price of any Incentive Share
Option granted to any individual who, at the date of grant, owns Shares possessing more than ten
percent of the total combined voting power of all classes of shares of the Company may not be less
than 110% of Fair Market Value on the date of grant and such Option may not be exercisable for more
than five years from the date of grant.



                    (c) Notice of Disposition. The Participant shall give the Company prompt notice of
any disposition of Shares acquired by exercise of an Incentive Share Option within (i) two years
from the date of grant of such Incentive Share Option or (ii) one year after the transfer of such
Shares to the Participant.



                    (d) Expiration of Incentive Share Options. No Award of an Incentive Share Option may
be made pursuant to this Plan after the tenth anniversary of the Effective Date.



                    (e) Right to Exercise. During a Participant’s lifetime, an Incentive Share Option may
be exercised only by the Participant.



ARTICLE 6




RESTRICTED SHARES




          6.1 Grant of Restricted Shares. The Committee, at any time and from time to time,
may grant Restricted Shares to Participants as the Committee, in its sole discretion, shall
determine. The Committee, in its sole discretion, shall determine the number of Restricted
Shares to be granted to each Participant.




          6.2 Restricted Shares Award Agreement. Each Award of Restricted Shares shall be
evidenced by an Award Agreement that shall specify the Restriction Period, the number of
Restricted Shares granted, and such other terms and conditions as the Committee, in its sole
discretion, shall determine. Unless the Committee determines otherwise, Restricted Shares
shall be held by the Company as escrow agent until the restrictions on such Restricted
Shares have lapsed.




          6.3 Issuance and Restrictions. Restricted Shares shall be subject to such
restrictions on transferability and other restrictions as the Committee may impose (including,
without limitation, limitations on the right to vote Restricted Shares or the right to receive
dividends on the Restricted Share). These restrictions may lapse separately or in combination at
such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter.




          6.4 Forfeiture/Repurchase. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment or service during
the applicable Restriction Period, Restricted Shares that are at that time subject to
restrictions shall be forfeited or repurchased in accordance with the Award Agreement; provided,
however, the Committee may (a) provide in any Restricted Share Award Agreement that restrictions
or forfeiture and repurchase conditions relating to Restricted Shares will be waived in whole or
in part in the event of terminations resulting from specified causes, and (b)



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in other cases
waive in whole or in part restrictions or forfeiture and repurchase conditions relating to
Restricted Shares.




          6.5 Certificates for Restricted Shares. Restricted Shares granted pursuant to the
Plan may be evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Shares are registered in the name of the Participant, certificates must
bear an appropriate legend referring to the terms, conditions, and restrictions applicable to
such Restricted Shares, and the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.




          6.6 Removal of Restrictions. Except as otherwise provided in this Article 6,
Restricted Shares granted under the Plan shall be released from escrow as soon as practicable
after the last day of the Restriction Period. The Committee, in its discretion, may accelerate
the time at which any restrictions shall lapse or be removed. After the restrictions have
lapsed, the Participant shall be entitled to have any legend or legends under Section 6.5 removed
from his or her Share certificate, and the Shares shall be freely transferable by the
Participant, subject to applicable legal restrictions. The Committee (in its discretion) may
establish procedures regarding the release of Shares from escrow and the removal of legends, as
necessary or appropriate to minimize administrative burdens on the Company.



ARTICLE 7




RESTRICTED SHARE UNITS




          7.1 Grant of Restricted Share Units. The Committee, at any time and from time to
time, may grant Restricted Share Units to Participants as the Committee, in its sole discretion,
shall determine. The Committee, in its sole discretion, shall determine the number of Restricted
Share Units to be granted to each Participant.




          7.2 Restricted Share Units Award Agreement. Each Award of Restricted Share Units
shall be evidenced by an Award Agreement that shall specify any vesting conditions, the number of
Restricted Share Units granted, and such other terms and conditions as the Committee, in its sole
discretion, shall determine.




          7.3 Performance Objectives and Other Terms. The Committee, in its discretion, may
set performance objectives or other vesting criteria which, depending on the extent to which they
are met, will determine the number or value of Restricted Share Units that will be paid out to
the Participants.




          7.4 Form and Timing of Payment of Restricted Share Units. At the time of grant, the
Committee shall specify the date or dates and/or event or events upon which the Restricted Share
Units shall become fully vested and nonforfeitable. Upon vesting, the Committee, in its sole
discretion, may pay Restricted Share Units in the form of cash, in Shares or in a combination
thereof.




          7.5 Forfeiture/Repurchase. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment and service



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during
the applicable restriction period, Restricted Share Units that are at that time unvested shall be
forfeited or repurchased in accordance with the Award Agreement; provided, however, the Committee
may (a) provide in any Restricted Share Unit Award Agreement that restrictions or forfeiture and
repurchase conditions relating to Restricted Share Units will be waived in whole or in part in
the event of terminations resulting from specified causes, and (b) in other cases waive in whole
or in part restrictions or forfeiture and repurchase conditions relating to Restricted Share
Units.



ARTICLE 8




PROVISIONS APPLICABLE TO AWARDS




          8.1 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements
that set forth the terms, conditions and limitations for each Award, which may include the term
of an Award, the provisions applicable in the event the Participant’s employment or service
terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend,
cancel or rescind an Award.




          8.2 Limits on Transfer. No right or interest of a Participant in any Award may be
pledged, encumbered, or hypothecated to or in favor of any party other than the Company or a
Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any
other party other than the Company or a Subsidiary. Except as otherwise provided by the
Committee, no Award shall be assigned, transferred, or otherwise disposed of by a Participant
other than by will or the laws of descent and distribution. The Committee by express provision
in the Award or an amendment thereto may permit an Award (other than an Incentive Share Option)
to be transferred to, exercised by and paid to certain persons or entities related to the
Participant, including but not limited to members of the Participant’s
family, charitable institutions, or trusts or other entities whose beneficiaries or
beneficial owners are members of the Participant’s family and/or charitable institutions, or to
such other persons or entities as may be expressly approved by the Committee, pursuant to such
conditions and procedures as the Committee may establish. Any permitted transfer shall be
subject to the condition that the Committee receive evidence satisfactory to it that the transfer
is being made for estate and/or tax planning purposes (or to a “blind trust” in connection with
the Participant’s termination of employment or service with the Company or a Subsidiary to assume
a position with a governmental, charitable, educational or similar non-profit institution) and on
a basis consistent with the Company’s lawful issue of securities.




          8.3 Beneficiaries. Notwithstanding Section 8.2, a Participant may, in the manner
determined by the Committee, designate a beneficiary to exercise the rights of the Participant
and to receive any distribution with respect to any Award upon the Participant’s death. A
beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant
to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable
to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to
any additional restrictions deemed necessary or appropriate by the Committee. If the Participant
is married and resides in a community property state, a designation of a person other than the
Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s
interest in the Award shall not be effective without the prior written



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consent of the
Participant’s spouse. If no beneficiary has been designated or survives the Participant, payment
shall be made to the person entitled thereto pursuant to the Participant’s will or the laws of
descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or
revoked by a Participant at any time provided the change or revocation is filed with the
Committee.




          8.4 Share Certificates. Notwithstanding anything herein to the contrary, the
Company shall not be required to issue or deliver any certificates evidencing the Shares pursuant
to the exercise of any Award, unless and until the Committee has determined, with advice of
counsel, that the issuance and delivery of such certificates is in compliance with all Applicable
Laws, regulations of governmental authorities and, if applicable, the requirements of any
exchange on which the Shares are listed or traded. All Share certificates delivered pursuant to
the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems
necessary or advisable to comply all Applicable Laws, and the rules of any national securities
exchange or automated quotation system on which the Shares are listed, quoted, or traded. The
Committee may place legends on any Share certificate to reference restrictions applicable to the
Shares. In addition to the terms and conditions provided herein, the Committee may require that
a Participant make such reasonable covenants, agreements, and representations as the Committee,
in its discretion, deems advisable in order to comply with any such laws, regulations, or
requirements. The Committee shall have the right to require any Participant to comply with any
timing or other restrictions with respect to the settlement or exercise of any Award, including a
window-period limitation, as may be imposed in the discretion of the Committee.




          8.5 Paperless Administration. Subject to Applicable Laws, the Committee may make
Awards, provide applicable disclosure and procedures for exercise of Awards by an internet
website or interactive voice response system for the paperless administration of Awards.




          8.6 Foreign Currency. A Participant may be required to provide evidence that any
currency used to pay the exercise price of any Award were acquired and taken out of the
jurisdiction in which the Participant resides in accordance with Applicable Laws, including
foreign exchange control laws and regulations. In the event the exercise price for an Award is
paid in Chinese Renminbi or other foreign currency, as permitted by the Committee, the amount
payable will be determined by conversion from U.S. dollars at the official rate promulgated by
the People’s Bank of China for Chinese Renminbi, or for jurisdictions other than the Peoples
Republic of China, the exchange rate as selected by the Committee on the date of exercise.



ARTICLE 9




CHANGES IN CAPITAL STRUCTURE




          9.1 Adjustments. In the event of any dividend, share split, combination or exchange
of Shares, amalgamation, arrangement or consolidation, spin-off, recapitalization or other
distribution (other than normal cash dividends) of Company assets to its shareholders, or any
other change affecting the shares of Shares or the share price of a Share, the Committee shall



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make such proportionate adjustments, if any, as the Committee in its discretion may deem
appropriate to reflect such change with respect to (a) the aggregate number and type of shares
that may be issued under the Plan (including, but not limited to, adjustments of the limitations
in Section 3.1); (b) the terms and conditions of any outstanding Awards (including, without
limitation, any applicable performance targets or criteria with respect thereto); and (c) the
grant or exercise price per share for any outstanding Awards under the Plan.




          9.2 Corporate Transactions. Except as may otherwise be provided in any Award
Agreement or any other written agreement entered into by and between the Company and a
Participant, if the Committee anticipates the occurrence, or upon the occurrence, of a Corporate
Transaction, the Committee may, in its sole discretion, provide for one or more of the following:
(i) any and all Awards outstanding hereunder to terminate at a specific time in the future and
shall give each Participant the right to exercise the vested portion of such Awards during a
period of time as the Committee shall determine, or (ii) the termination of any Award in exchange
for an amount of cash equal to the amount that could have been attained upon the exercise of such
Award (and, for the avoidance of doubt, if as of such date the Committee determines in good faith
that no amount would have been attained upon the exercise of such Award, then such Award may be
terminated by the Company without payment), or (iii) the replacement of such Award with other
rights or property selected by the Committee in its sole discretion or the assumption of or
substitution of such Award by the successor or surviving corporation, or a Parent or Subsidiary
thereof, with appropriate adjustments as to the number and kind of Shares and prices, or (iv)
payment of Award in cash
based on the value of Shares on the date of the Corporate Transaction plus reasonable
interest on the Award through the date when such Award would otherwise be vested or have been
paid in accordance with its original terms, if necessary to comply with Section 409A of the Code.




          9.3 Outstanding Awards — Other Changes. In the event of any other change in the
capitalization of the Company or corporate change other than those specifically referred to in
this Article 9, subject to Applicable Laws and the terms of the Plan, the Committee may, in its
absolute discretion, make such adjustments in the number and class of shares subject to Awards
outstanding on the date on which such change occurs and in the per share grant or exercise price
of each Award as the Committee may consider appropriate to prevent dilution or enlargement of
rights.




          9.4 No Other Rights. Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of Shares of any class, the payment
of any dividend, any increase or decrease in the number of shares of any class or any
dissolution, liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan,
no issuance by the Company of shares of any class, or securities convertible into shares of any
class, shall affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares subject to an Award or the grant or exercise price of any Award.




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ARTICLE 10




ADMINISTRATION




          10.1 Committee. The Plan shall be administered by a committee of one or more
Directors (the “Committee”) to whom the Board shall delegate the authority to grant or amend
Awards to Participants other than any of the Committee members. Any grant or amendment of Awards
to any Committee member shall then require an affirmative vote of a majority of the Directors who
are not on the Committee.




          10.2 Section 162(m). To the extent Section 162(m) of the Code is applicable to the
Company and the Committee determines it to be desirable to qualify Awards granted hereunder as
“performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan shall
be administered by a Committee of two or more “outside directors” within the meaning of Section
162(m) of the Code.




          10.3 Action by the Committee. A majority of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting at which a quorum is
present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall
be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith,
rely or act upon any report or other information furnished to that member by any officer or other
employee of the Company or any Subsidiary or Parent of the Company, the Company’s independent
certified public accountants, or any executive compensation
consultant or other professional retained by the Company to assist in the administration of
the Plan.




          10.4 Authority of the Committee. Subject to any specific designation in the Plan,
the Committee has the exclusive power, authority and discretion to:



                    (a) Designate Participants to receive Awards;



                    (b) Determine the type or types of Awards to be granted to each Participant;



                    (c) Determine the number of Awards to be granted and the number of Shares to which an Award
will relate;



                    (d) Determine the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any restrictions or
limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the
exercisability of an Award, and accelerations or waivers thereof, any provisions related to
non-competition and recapture of gain on an Award, based in each case on such considerations as the
Committee in its sole discretion determines;



                    (e) Determine whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Shares, other Awards, or other
property, or an Award may be canceled, forfeited, or surrendered;



                    (f) Prescribe the form of each Award Agreement, which need not be identical for each
Participant;



                    (g) Decide all other matters that must be determined in connection with an Award;




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                    (h) Determine the Fair Market Value, consistent with the terms of the Plan;



                    (i) Establish, adopt, or revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;



                    (j) Interpret the terms of, and any matter arising pursuant to, the Plan, any Award Agreement
and any Award granted thereunder; and



                    (k) Make all other decisions and determinations that may be required pursuant to the Plan or
as the Committee deems necessary or advisable to administer the Plan.




          10.5 Decisions Binding. The Committee’s interpretation of the Plan, any Awards
granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the
Committee with respect to the Plan are final, binding, and conclusive on all parties.



ARTICLE 11




EFFECTIVE AND EXPIRATION DATE




          11.1 Effective Date. The Plan is effective as of the date the Plan is adopted and
approved by the Board (the “Effective Date”).




          11.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant
to the Plan after, the tenth anniversary of the Effective Date. Any Awards that are outstanding
on the tenth anniversary of the Effective Date shall remain in force according to the terms of
the Plan and the applicable Award Agreement.



ARTICLE 12




AMENDMENT, MODIFICATION, AND TERMINATION




          12.1 Amendment, Modification, And Termination. With the approval of the Board, at
any time and from time to time, the Committee may terminate, amend or modify the Plan; provided,
however, that (a) to the extent necessary and desirable to comply with Applicable Laws, the
Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required[, unless the Company decides to follow home country practice, and (b) unless
the Company decides to follow home country practice, shareholder approval is required for any
amendment to the Plan that (i) increases the number of Shares available under the Plan (other
than any adjustment as provided by Article 9), (ii) permits the Committee to extend the term of
the Plan or the exercise period for an Option beyond ten years from the date of grant, or (iii)
results in a material increase in benefits or a change in eligibility requirements.




          12.2 Awards Previously Granted. Except with respect to amendments made pursuant to
Section 12.1, no termination, amendment, or modification of the Plan shall adversely affect



15









 







in any material way any Award previously granted pursuant to the Plan without the prior written
consent of the Participant. ‘



ARTICLE 13




GENERAL PROVISIONS




          13.1 No Rights to Awards. No Participant, employee, or other person shall have any
claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is
obligated to treat Participants, employees, and other persons uniformly.




          13.2 No Shareholders Rights. Except as otherwise determined by the Committee at the
time of the grant of an Award or thereafter, no Award gives the Participant any of the rights of
a Shareholder of the Company unless and until Shares are in fact issued to such person in
connection with such Award.




          13.3 Taxes. No Shares shall be delivered under the Plan to any Participant until
such Participant has made arrangements acceptable to the Committee for the satisfaction of any
income and employment tax withholding obligations under Applicable Laws. The Company or any
Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant
to remit to the Company, an amount sufficient to satisfy all applicable taxes (including the
Participant’s payroll tax obligations) required or permitted by Applicable Laws to be withheld
with respect to any taxable event concerning a Participant arising as a result of this Plan. The
Committee may in its discretion and in satisfaction of the foregoing requirement allow a
Participant to elect to have the Company withhold Shares otherwise issuable under an Award (or
allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld.
Notwithstanding any other provision of the Plan, the number of Shares which may be withheld with
respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased
from the Participant of such Award after such Shares were acquired by the Participant from the
Company) in order to satisfy any income and payroll tax liabilities applicable to the Participant
with respect to the issuance, vesting, exercise or payment of the Award shall, unless
specifically approved by the Committee, be limited to the number of Shares which have a Fair
Market Value on the date of withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for the applicable income and
payroll tax purposes that are applicable to such supplemental taxable income.




          13.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Service Recipient to terminate any
Participant’s employment or services at any time, nor confer upon any Participant any right to
continue in the employment or services of any Service Recipient.




          13.5 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a Participant pursuant to
an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any
rights that are greater than those of a general creditor of the Company or any Subsidiary.



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          13.6 Indemnification. To the extent allowable pursuant to Applicable Laws, each
member of the Committee or of the Board shall be indemnified and held harmless by the Company
from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by
such member in connection with or resulting from any claim, action, suit, or proceeding to which
he or she may be a party or in which he or she may be involved by reason of any action or failure
to act pursuant to the Plan and against and from any and all amounts paid by him or her in
satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or
she gives the Company an opportunity, at its own expense, to handle and defend the same before he
or she undertakes to handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to which such
persons may be entitled pursuant to the Company’s Memorandum of Association and Articles of
Association, as a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.




          13.7 Relationship to other Benefits. No payment pursuant to the Plan shall be taken
into account in determining any benefits pursuant to any pension, retirement, savings, profit
sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary or
Parent of the Company except to the extent otherwise expressly provided in writing in such other
plan or an agreement thereunder.




          13.8 Expenses. The expenses of administering the Plan shall be borne by the Company
and its Subsidiaries.




          13.9 Titles and Headings. The titles and headings of the Sections in the Plan are
for convenience of reference only and, in the event of any conflict, the text of the Plan, rather
than such titles or headings, shall control.




          13.10 Fractional Shares. No fractional Shares shall be issued and the Committee
shall determine, in its discretion, whether cash shall be given in lieu of fractional Shares or
whether such fractional Shares shall be eliminated by rounding up or down as appropriate.




          13.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any Participant who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set
forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such
exemptive rule. To the extent permitted by the Applicable Laws, the Plan and Awards granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable
exemptive rule.




          13.12 Government and Other Regulations. The obligation of the Company to make
payment of awards in Shares or otherwise shall be subject to all Applicable Laws, and to such
approvals by government agencies as may be required. The Company shall be under no obligation to
register any of the Shares paid pursuant to the Plan under the Securities Act or any other
similar law in any applicable jurisdiction. If the Shares paid pursuant to the Plan may in
certain circumstances be exempt from registration pursuant to the Securities Act or other
Applicable Laws, the Company may restrict the transfer of such Shares in such



17









 







manner as it deems
advisable to ensure the availability of any such exemption.




          13.13 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the Cayman Islands.




          13.14 Section 409A. It is the intent of the Company that payments and benefits
under the Plan comply with Section 409A of the Code to the extent subject thereto, and,
accordingly, to the maximum extent permitted, the Plan shall be interpreted and be administered
to be in compliance therewith. To the extent that the Committee determines that any Award
granted under the Plan is or may become subject to Section 409A of the Code, the Award Agreement
evidencing such Award shall incorporate the terms and conditions required by Section 409A of the
Code. To the extent applicable, the Plan and the Award Agreements shall be interpreted in accordance with Section 409A of the Code and the U.S.
Department of Treasury regulations and other interpretative guidance issued thereunder, including
without limitation any such regulation or other guidance that may be issued after the Effective
Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the
Effective Date the Committee determines that any Award may be subject to Section 409A of the Code
and related Department of Treasury guidance (including such Department of Treasury guidance as
may be issued after the Effective Date), the Committee may adopt such amendments to the Plan and
the applicable Award Agreement or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions, that the Committee
determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code
and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or
(b) comply with the requirements of Section 409A of the Code and related U.S. Department of
Treasury guidance.




          13.15 Appendices. The Committee may approve such supplements, amendments or
appendices to the Plan as it may consider necessary or appropriate for purposes of compliance
with Applicable Laws or otherwise and such supplements, amendments or appendices shall be
considered a part of the Plan; provided, however, that no such supplements shall increase the
share limitation contained in Section 3.1 of the Plan without the approval of the Board and
shareholder approval to the extent required by Applicable Laws.





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