Exhibit 4.2


 


 


 


KONGZHONG CORPORATION


2013 EQUITY INCENTIVE
PLAN


 


 


 


 


 




    	 



    	 



    

 


Table of Contents


 





 


 





  Article I GENERAL  




 


	1.1 Purpose	3
	1.2 Definitions of Certain Terms	3
	1.3 Administration	5
	1.4 Persons Eligible for Awards	5
	1.5 Types of Awards Under the Plan	6
	1.6 Shares Available for Awards	6
	 	 



 


  Article II AWARDS UNDER THE PLAN  




 


	2.1 Award Agreements	6
	2.2 No Rights as a Shareholder	7
	2.3 Grant of Share Options	7
	2.4 Exercise of Share Options	7
	2.5 Amendment, Cancellation and Termination of Share Options	8
	2.6 Termination of Employment	8
	2.7 Grant of Restricted Share Units	9
	 	 



 


  Article III MISCELLANEOUS  




 


	3.1 Amendment of the Plan; Modification of Awards	9
	3.2 Tax Withholding	10
	3.3 Restrictions	10
	3.4 Nonassignability	10
	3.5 Requirement of Notification Upon Disqualifying Disposition Under Section 421(b) of the Code	10
	3.6 Change in Control	11
	3.7 Sale of Subsidiary	12
	3.8 No Right to Employment or Award	12



 


 






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	3.9 Independent of Employment Contract	13
	3.10 Nature of Payments	13
	3.11 Non-Uniform Determinations	13
	3.12 Other Payments or Awards	13
	3.13 Section Headings	13
	3.14 Effective Date and Term of Plan	13
	3.15 Governing Law	13
	3.16 Severability; Entire Agreement	13
	3.17 No Third Party Beneficiaries	14
	3.18 Successors and Assigns	14
	3.19 Waiver of Claims	14
	 	 







 







  


 




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Article
I

GENERAL


 


1.1 Purpose


 


The purpose of the KongZhong Corporation
2013 Equity Incentive Plan (the “ Plan ”) is to provide an incentive for officers, other employees, prospective employees,
directors, consultants and advisors of KongZhong Corporation (the “ Company ”) and its Related Entities to acquire
a proprietary interest in the success of the Company, to enhance the long-term performance of the Company and to remain in the
service of the Company and its Related Entities.


 


1.2 Definitions
of Certain Terms


 


(a) “ Award ” means
an award under the Plan as described in Section 1.5 and Article II.


 


(b) “ Award Agreement  ”
means a written agreement entered into between the Company and a Grantee in connection with an Award.


 


(c) “ Board ” means
the Board of Directors of the Company.


 


(d) “ Business Combination 
” shall have the meaning set forth in Section 3.6(a).


 


(e) “ Cause  ” means
that a Grantee has, as determined by the Company in its sole discretion, (i) willfully failed to perform the duties appurtenant
to Grantee’s position, (ii) violated Company policies; (iii) violated any obligation of confidentiality, non-competition
or non- solicitation of employees, customers or suppliers owed to the Company; (iv) violated any terms of the Grantee’s employment
agreement(s); (v) engaged in any conduct that is detrimental to the Company; or (vi) been convicted of any felony crime.


 


(f) “ Change in Control  ”
shall have the meaning set forth in Section 3.6.


 


(g) “ Code  ” means
the Internal Revenue Code of 1986, as amended.


 


(h) “ Committee  ” means
the Compensation Committee of the Board and shall consist of not less than two directors; provided  , however  ,
that the Compensation Committee may from time to time delegate some or all of its functions under the Plan to a subcommittee or
to an executive officer of the Company. The term “Committee” as used herein and in any Award Agreement includes any
such subcommittee or executive officer, to the extent of the Compensation Committee’s delegation.


 


(i) “ Company Voting Securities
” shall have the meaning set forth in Section 3.6(a).


 


(j) “ Covered Person  ”
shall have the meaning set forth in Section 1.3(e).


 


(k) “ Disability  ”
means “permanent and total disability” as defined in Section 22(e)(3) of the Code or successor statute or provision.


 


(l) “ Eligible Persons  ”
shall have the meaning set forth in Section 1.4.


 


(m) “ Exchange Act  ”
means the Securities Exchange Act of 1934, as amended.


 


(n) The “ Fair Market Value 
” of a Share on any date shall be (i) the closing sale price of the Shares during normal trading hours on the securities
exchange or automated quotation system on which the Shares are principally traded for such date or the last preceding date on which
there was a sale of such Shares on such exchange, or (ii) if the Shares are then traded in an over-the-counter market, the average
of the closing bid and asked prices for the Shares during normal trading hours in such over-the-counter market for such date or
the last preceding date on which there was a sale of the Shares in such market, or (iii) if the Shares are not then listed on a
securities exchange or automated quotation system or traded in an over-the-counter market, such value as the Committee, in its
sole discretion, shall determine.


 






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(o) “ FICA  ” means
the Federal Insurance Contributions Act.


 


(p) “ Fully Vest  ”
shall have the meaning set forth in Section 3.6(d).


 


(q) “ Good Reason  ”
shall have the meaning set forth in Section 3.6(g).


 


(r) “ Grant Date  ”
means, with respect to any Award, the date of the Award Agreement entered into in by the Company and the Grantee in connection
with such Award.


 


(s) “ Grantee  ” means
a person who receives an Award.


 


(t) “ Incentive Share Option
” means a share option that is intended to qualify for special United States federal income tax treatment pursuant to Sections
421 and 422 of the Code (or successor provisions thereof) and which is so designated in the applicable Award Agreement. Under no
circumstances shall any share option that is not specifically designated as an Incentive Share Option be considered an Incentive
Share Option.


 


(u) “ Non-Qualified Option”
means a share option that does not qualify as an Incentive Share Option.


 


(v) “ Non-Qualifying Transaction
 ” shall have the meaning set forth in Section 3.6(a).


 


(w) “ Option Exercise Price 
” means the amount payable by a Grantee upon the exercise of a share option.


 


(x) “ Parent Corporation 
” shall have the meaning set forth in Section 3.6(a).


 


(y) “ Plan Action  ”
shall have the meaning set forth in Section 3.3(a).


 


(z) “ PRC  ” means the
People’s Republic of China.


 


(aa) “ Related Entity ”
means any present or future parent or subsidiary corporation of the Company, or any business, corporation, partnership, limited
liability company or other entity over which the Company or a parent or a subsidiary corporation exercises control, directly or
indirectly, through the ownership of voting shares, by contract or otherwise.


 


(bb) “ Restricted Share Unit 
” or “ RSU  ” means an unfunded and unsecured promise of the Company to pay the Grantee, on a specified
future vesting date, one Share for each Restricted Share Unit or, in the discretion of the Committee, a cash payment equal to the
Fair Market Value of such Share as of the relevant vesting date.


 


(cc) “ Shares  ” means
the ordinary shares of the Company.


 


(dd) “ Surviving Corporation 
” shall have the meaning set forth in Section 3.6(a).


 


(ee) Unless otherwise determined by the
Committee, a Grantee shall be deemed to have a “ Termination of Employment  ” upon ceasing employment with the
Company and all Related Entities (or, in the case of a Grantee who is not an employee, upon ceasing association with the Company
and all Related Entities as a director, consultant or advisor). The Committee in its sole discretion may determine (i) whether
any leave of absence constitutes a Termination of Employment for purposes of the Plan, (ii) the impact, if any, of any such leave
of absence on Awards previously made under the Plan, and (iii) when a change in a Grantee’s association with the Company
constitutes a Termination of Employment for purposes of the Plan. The Committee may also determine whether a Grantee’s Termination
of Employment is for Cause and the date of termination in such case.


 






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1.3 Administration


 


(a) The Plan shall be administered by the
Committee.


 


(b) The Committee shall have the authority
(i) to exercise all of the powers granted to it under the Plan, including but not limited to deciding to whom Awards may be granted
under the Plan, the time or times at which Awards may be granted and will vest, the kind of Award to be granted to each Grantee
and the Option Exercise Price of Incentive Share Options and Non-Qualified Options; (ii) to impose any terms and conditions with
respect to Awards not inconsistent with the terms of this Plan and any Award Agreements as it deems necessary and desirable; (iii)
to construe, interpret and implement the Plan and any Award Agreements, (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules governing its own operations, (v) to make all determinations necessary or advisable in administering
the Plan, (vi) to correct any defect, supply any omission and reconcile any inconsistency in the Plan, (vii) to amend the Plan
to reflect changes in applicable law, and (viii) to determine whether, to what extent and under what circumstances Awards may be
canceled, forfeited or suspended and the method or methods by which Awards may be settled, canceled, forfeited or suspended.


 


(c) Actions of the Committee shall be taken
by the vote of a majority of its members, acting at a meeting (whether held in person or by teleconference) or by a written instrument
signed by a majority of the Committee members. The Board shall designate one member of the Committee as its chairperson. In the
event of a tie vote on any issue, the chairperson’s vote shall decide the issue.


 


(d) The determination of the Committee
on all matters relating to the Plan or any Award Agreement shall be final, binding and conclusive unless otherwise determined by
the Board.


 


(e) No member of the Board or the Committee
or any employee of the Company or any of its Related Entities (each such person a “ Covered Person  ”) shall
have any liability to any person (including, without limitation, any Grantee) for any action taken or omitted to be taken or any
determination made in good faith with respect to the Plan or any Award. Each Covered Person shall be indemnified and held harmless
by the Company against and from any loss, cost, liability or expense (including attorneys’ fees) that may be imposed upon
or incurred by such Covered Person in connection with or resulting from any action, suit or proceeding to which such Covered Person
may be a party or in which such Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan
and against and from any and all amounts paid by such Covered Person, with the Company’s approval, in settlement thereof,
or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered Person,
provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and,
once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel
of the Company’s choice. The foregoing right of indemnification shall not be available to a Covered Person to the extent
that a court of competent jurisdiction in a final judgment or other final adjudication, in either case, not subject to further
appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such
Covered Person’s bad faith, fraud or willful criminal act or omission. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which Covered Persons may be entitled under the Company’s Memorandum
and Articles of Association, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such persons
or hold them harmless.


 


(f) Notwithstanding anything to the contrary
contained herein, the Board may, in its sole discretion, at any time and from time to time, grant Awards or resolve to administer
the Plan. In such event, the Board shall have all of the authority and responsibility granted to the Committee herein. From time
to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without
cause) and appoint new members in substitution therefor, fill vacancies however caused, or remove all members of the Committee
and thereafter directly administer the Plan, in each case subject to compliance with all applicable securities laws and the rules
of any securities exchange or automated quotation system on which the Shares are traded.


 


1.4 Persons
Eligible for Awards


 


Awards under the Plan may be made to such
officers, other employees, prospective employees, directors, consultants and advisors of the Company and its Related Entities (“
Eligible Persons  ”) as the Committee shall select in its sole discretion, provided  , however,  that
Incentive Stock Options may be granted only to officers and other employees of the Company and its Related Entities and may not
be granted to prospective employees, outside directors, consultants and advisors of the Company and its Related Entities.


 






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1.5 Types
of Awards Under the Plan


 


Awards may be made under the Plan in the
form of Incentive Stock Options, Non-Qualified Options and Restricted Share Units.


 


1.6 Shares
Available for Awards


 


(a) Total shares available  . The
total number of Shares that may be transferred pursuant to Awards granted under the Plan shall not exceed 80,000,000 Shares. Such
Shares may be authorized but unissued Shares or authorized and issued Shares held in the Company’s treasury or acquired by
the Company for the purposes of the Plan. The Committee may direct that any share certificate evidencing Shares issued pursuant
to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such Shares pursuant to the
Plan. If any Award is forfeited or otherwise terminates or is canceled without the delivery of Shares, Shares are surrendered or
withheld from any Award to satisfy a Grantee’s income tax withholding obligations, or Shares owned by a Grantee are tendered
to pay the exercise price of options granted under the Plan, then the Shares covered by such forfeited, terminated or canceled
Award or which are equal to the number of Shares surrendered, withheld or tendered shall again become available for transfer pursuant
to Awards granted or to be granted under this Plan. Any Shares delivered by the Company, any Shares with respect to which Awards
are made by the Company and any Shares with respect to which the Company becomes obligated to make Awards, through the assumption
of, or in substitution for, outstanding awards previously granted by an acquired entity, shall not be counted against the shares
available for Awards under this Plan.


 


(b) Adjustments  . The Committee
shall make appropriate adjustments in the number of Shares covered by each outstanding Award and the number of Shares available
for Awards as it deems equitable, in its sole discretion, in the event of an increase or decrease in the number of issued Shares
resulting from a Share split, combination of Shares, issuance of Shares as a dividend on its outstanding Shares, recapitalization,
combination or reclassification of Shares, or any other increase or decrease in the number of issued Shares effected without receipt
of consideration by the Company; provided  , however  , that conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of consideration”. Except as expressly provided herein,
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 or price of Shares subject to an Award. After any adjustment made pursuant
to this paragraph, the number of Shares subject to each outstanding Award shall be rounded to the nearest whole number.


 


 


 


Article
II

AWARDS UNDER THE PLAN


 


2.1 Award
Agreements


 


Each Award granted under the Plan shall
be evidenced by an Award Agreement that shall contain such provisions as the Committee in its sole discretion deems necessary or
desirable. Payments or transfers to be made by the Company upon the grant, exercise or payment of an Award may be made in such
form as the Committee shall determine, including cash, Shares, other securities, other Awards or other property and may be made
in a single payment or transfer, in installments or on a deferred basis. A Grantee shall have no rights with respect to an Award
unless such Grantee accepts the Award within such period as the Committee shall specify by executing an Award Agreement in such
form as the Committee shall determine.


 






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2.2 No
Rights as a Shareholder


 


No Grantee of an Award (or other person
having rights pursuant to such Award) shall have any of the rights of a shareholder of the Company with respect to Shares subject
to such Award until such person’s name is entered in the share register of the Company as owner of such Shares. Except as
otherwise provided in Section 1.6(b), no adjustment shall be made for dividends, distributions or other rights (whether ordinary
or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such entry
is made in the share register of the Company.


 


2.3 Grant
of Share Options


 


(a) The Committee may grant share options,
including Incentive Share Options and Non-Qualified Options, to purchase Shares from the Company, to such persons, in such amounts
and subject to such terms and conditions, as the Committee shall determine in its discretion.


 


(b) Each Award Agreement with respect to
a share option shall set forth the Option Exercise Price, which shall be at least 100% of the Fair Market Value of a Share on the
applicable Grant Date.


 


(c) Each Award Agreement with respect to
a share option shall set forth the periods during which the Award evidenced thereby shall be exercisable, whether in whole or in
part. Such periods shall be determined by the Committee in its discretion; provided  , however  , that no Incentive
Share Option shall be exercisable more than ten (10) years after the Grant Date.


 


(d) To the extent that the aggregate Fair
Market Value (determined as of the Grant Date of the option) of the Shares with respect to which Incentive Share Options granted
under this Plan and all other plans of the Company are first exercisable by any Grantee during any calendar year shall exceed the
maximum limit (currently, U.S. $100,000), if any, imposed from time to time under Section 422 (or its successor provisions) of
the Code, such options shall be treated as Non-Qualified Options.


 


(e) Notwithstanding any other provisions
of this Plan, to the extent required under Section 422 (or its successor provisions) of the Code, an Incentive Share Option may
not be granted under the Plan to an individual who, at the time the option is granted, owns Shares possessing more than 10% of
the total combined voting power of all classes of shares of the Company or any Related Entities (as such ownership may be determined
for purposes of Section 422(b)(6) of the Code) unless (i) the Option Exercise Price is at least 110% of the Fair Market Value of
the Shares subject thereto on the Grant Date and (ii) the Incentive Share Option by its terms is not exercisable after the expiration
of five (5) years from the Grant Date.


 


2.4 Exercise
of Share Options


 


Each share option granted under the Plan
shall be exercisable as follows:


 


(a) Unless otherwise specified by the Committee
and subject to Section 2.6, share options shall become exercisable on a schedule at least as rapid as the following: (i) 25% of
any share option shall be exercisable on the one-year anniversary of the Grant Date, and (ii) 6.25% of any share option shall become
exercisable at the end of each subsequent three-month period, such that 100% of the share option granted in any Award shall have
vested as of the fourth-year anniversary of the Grant Date of such Award. The Committee may also specify such other conditions
precedent as it deems appropriate to the exercise of an option. The Committee shall have the right to accelerate the date of exercise
of any installment of any option. Once an option becomes exercisable, it shall remain exercisable until expiration or termination
of the option, unless otherwise specified by the Committee.


 


(b) Unless the applicable Award Agreement
otherwise provides, a share option may be exercised from time to time (but no more than once in any fiscal year quarter) as to
all or part of the Shares as to which such Award is then exercisable (but, in any event, only for whole Shares); provided 
, however  , that the Committee may specify a minimum number or percentage of the Shares issuable upon exercise of any option
that must be purchased in a single exercise. A share option shall be exercised by written notice to the Company, on such form and
in such manner as the Committee shall prescribe.


 






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(c) Any written notice of exercise of a
share option shall be accompanied by payment of the Option Exercise Price for the Shares being purchased. Such payment shall be
made (i) in cash or as otherwise permitted by the Committee, or (ii) to the extent specified in the Award Agreement (A) by delivery
of Shares (which, if acquired pursuant to the exercise of a share option or under an Award made under this Plan or any other compensatory
plan of the Company, were acquired at least six (6) months prior to the option exercise date) having a Fair Market Value (determined
as of the exercise date) equal to all or part of the Option Exercise Price and cash for any remaining portion of the Option Exercise
Price, or (B) to the extent permitted by law, by such other method as the Committee may from time to time prescribe, including
a cashless exercise procedure through a broker-dealer.


 


(d) Promptly after receiving payment of
the full Option Exercise Price, the Company shall, subject to the provisions of Section 3.3 (relating to certain restrictions),
enter, or cause to be entered, the name of the Grantee (or such other person as may then have the right to exercise the Award)
in the share register of the Company as owner of such Shares.


 


 


2.5 Amendment,
Cancellation and Termination of Share Options


 


The Committee may amend, modify or terminate
any outstanding and not yet exercisable share options, including, but not limited to, substituting therefor another share option
of the same or a different type, changing the date of exercise, and converting an Incentive Share Option to a Non-Qualified Option;
provided however  , that except as provided in Section 2.6 and Section 3.1, the Grantee’s consent shall be required
if the Committee determines that such amendment would materially and adversely affect the Grantee’s rights and obligations.
The Committee may, at any time and in its sole discretion, determine that any outstanding share options granted under the Plan,
whether or not exercisable, shall be canceled and terminated and that in connection with such cancellation and termination the
holder of such share options may receive for each Share subject to such options a cash payment (or the delivery of other securities
or a combination of cash, Shares and other securities equivalent to such cash payment) equal to the difference, if any, between
the amount determined by the Committee to be the Fair Market Value of the Shares and the Option Exercise Price per share multiplied
by the number of Shares subject to such Award; provided that if such product is zero or less or to the extent that the options
are not then exercisable, the options will be canceled and terminated without payment therefor.


 


2.6 Termination
of Employment


 


(a) Except to the extent otherwise provided
in paragraphs (b) and (c) below or in the applicable Award Agreement, all share options not theretofore exercised shall terminate
upon the Grantee’s Termination of Employment for any reason.


 


(b) If a Grantee’s Termination of
Employment is for any reason other than death or dismissal for Cause, the Grantee may exercise any outstanding share option on
the following terms and conditions: (i) exercise may be made only to the extent that the Grantee was entitled to exercise the Award
on the date of the Termination of Employment; and (ii) exercise must occur within ninety (90) days after the Termination of Employment,
except that this ninety (90) day period shall be increased to one (1) year if the Termination of Employment is by reason of Disability,
but in no event after the expiration date of the Award as set forth in the Award Agreement.


 


(c) If a Grantee dies while employed by
the Company or a Related Entity, or after a Termination of Employment but during the period in which the Grantee’s share
options are exercisable pursuant to paragraph (b) above, any outstanding share option shall be exercisable on the following terms
and conditions: (i) exercise may be made only to the extent that the Grantee was entitled to exercise the Award on the date of
death and (ii) exercise must occur by the earlier of one hundred eighty (180) days after the Grantee’s death or the expiration
date of the Award. Any such exercise of an Award following a Grantee’s death shall be made only by the Grantee’s executor
or administrator, unless the Grantee’s will specifically disposes of such Award, in which case such exercise shall be made
only by the recipient of such specific disposition. If a Grantee’s personal representative or the recipient of a specific
disposition under the Grantee’s will shall be entitled to exercise any Award pursuant to the preceding sentence, such representative
or recipient shall be bound by all the terms and conditions of the Plan and the applicable Award Agreement that would have applied
to the Grantee.


 






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2.7 Grant
of Restricted Share Units


 


(a) The Committee may grant Awards of RSUs
to such persons, in such amounts, and subject to such terms and conditions as the Committee shall determine in its discretion,
subject to the provisions of the Plan. RSUs may be awarded independently of or in connection with any other Award under the Plan.


 


(b) Vesting of RSUs  . Each Award
Agreement shall specify the date or dates on which the RSUs shall become vested, and may specify such conditions to vesting as
the Committee deems appropriate. Unless otherwise specified by the Committee and subject to Section 2.7(d), RSUs shall vest on
a schedule at least as rapid as the following: as to any Award, (i) 25% of the RSUs shall vest on the one-year anniversary of the
Grant Date, and (ii) 6.25% of the RSUs shall vest at the end of each subsequent three-month period, such that 100% of the RSUs
contained in any Award shall have vested as of the fourth-year anniversary of the Grant Date of such Award. The Committee may also
specify such other conditions precedent as it deems appropriate to the vesting of RSUs. The Committee shall have the right to accelerate
vesting dates and otherwise waive or amend any conditions of an Award of RSUs.


 


(c) Payment of RSUs  . As soon as
is reasonably practicable after the vesting date, the Company shall transfer to the Grantee one unrestricted, fully transferable
Share (or, in the discretion of the Committee, a cash payment therefor) for each vested RSU scheduled to be paid out on such date
and as to which all other conditions to the transfer have been fully satisfied. The Company shall effect such transfer by entering,
or causing to be entered, the name of the Grantee (or such other person as may then have the right to receive payment of the Award)
in the share register of the Company as owner of the Shares underlying the vested RSUs.


 


(d) Termination of Employment. Death
 . Except to the extent otherwise provided in the applicable Award Agreement, upon a Grantee’s Termination of Employment
for any reason, including death, such Grantee shall forfeit all rights in respect of RSUs that have not yet Fully Vested. However,
if a Grantee’s Termination of Employment occurs prior to the payment of Shares underlying RSUs but subsequent to the applicable
RSU vesting date, the Company shall pay, or cause to be paid, to such Grantee the number of Shares underlying such Grantee’s
Fully Vested RSUs. If a Grantee dies while employed by the Company or Related Entity prior to the payment of Shares underlying
RSUs but subsequent to the applicable RSU vesting date, the Company shall pay, or cause to be paid, to such Grantee’s estate
the number of Shares underlying such Grantee’s Fully Vested RSUs.


 


Article
III

MISCELLANEOUS


 


3.1 Amendment
of the Plan; Modification of Awards


 


(a) The Board may from time to time suspend,
discontinue, revise or amend the Plan in any respect whatsoever, except that (i) the termination date of the Plan may not be extended,
and (ii) if the Board determines that an amendment would materially impair any rights or materially increase any obligations of
the Grantee under any Award already made under the Plan, the consent of the Grantee (or, after the Grantee’s death, the person
having the right to exercise or receive payment of the Award) shall be required. For purposes of the Plan, any action of the Board
or the Committee that alters or affects the tax treatment of any Award under the applicable law of any jurisdiction shall not be
considered to materially impair any rights of any Grantee.


 


(b) Shareholder approval of any amendment
shall be obtained to the extent necessary to comply with Section 422 of the Code (relating to Incentive Stock Options) or any other
applicable law, regulation or the listing requirements of any securities exchange or automated quotation system on which the Shares
are listed.


 


(c) The Committee may amend any outstanding
Award Agreement, including, without limitation, by amendment that would accelerate the time or times at which the Award becomes
may be exercised or becomes vested, or waive or amend any goals, restrictions or conditions set forth in the Award Agreement. However,
any such amendment (other than an amendment pursuant to paragraphs (a) or (d) of this Section or an amendment to effect an assumption
or other action consistent with Section 3.6(b) regarding Change of Control) that the Committee determines would materially impair
the rights or materially increase the obligations of a Grantee under an outstanding Award shall be made only with the consent of
the Grantee (or, upon the Grantee’s death, the person having the right to exercise or receive payment of the Award).


 






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(d) Notwithstanding anything to the contrary
in this Section, the Board or the Committee shall have full discretion to amend the Plan to the extent necessary to preserve fixed
accounting treatment with respect to any Award and any outstanding Award Agreement shall be deemed to be so amended to the same
extent, without obtaining the consent of any Grantee (or, after the Grantee’s death, the person having the right to exercise
or receive payment of the affected Award), without regard to whether such amendment adversely affects a Grantee’s rights
under the Plan or such Award Agreement.


 


3.2 Tax
Withholding


 


(a) As a condition to the receipt of any
Shares pursuant to any Award or the lifting of restrictions on any Award, or in connection
with any other event that gives rise to any applicable governmental tax withholding obligation on the part of the Company relating
to an Award (including, without limitation, PRC individual income tax and U.S. FICA and individual income tax), the Company
shall be entitled (i) to require that the Grantee remit to the Company an amount sufficient in the opinion of the Company to satisfy
such withholding obligation, and (ii) to the extent permitted by applicable law, to withhold Shares having a Fair Market Value
equal to the amount of tax to be withheld or deduct from any payment of any kind otherwise due to the Grantee the amount of tax
to be withheld. For this purpose, Fair Market Value shall be determined as of the date on which the amount of tax to be withheld
is determined (and any fractional share amount shall be settled in cash).


 


3.3 Restrictions


 


(a) If the Committee shall at any time
determine that any consent (as hereinafter defined) is necessary or desirable as a condition of, or in connection with, the granting
of any Award, the issuance or purchase of Shares or other rights thereunder, or the taking of any other action thereunder (a “
Plan Action ”), then no such Plan Action shall be taken, in whole or in part, unless and until such consent shall have been
effected or obtained to the full satisfaction of the Committee.


 


(b) The term “ consent ” as
used herein with respect to any action referred to in paragraph (a) means (i) any and all listings, registrations or qualifications
in respect thereof upon any securities exchange or under any applicable law, rule or regulation of any relevant jurisdiction, (ii)
any and all written agreements and representations by the Grantee with respect to the disposition of Shares, or with respect to
any other matter, which the Committee shall deem necessary or desirable to comply with the terms of any such listing, registration
or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made, (iii)
any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies, and
(iv) any and all consents or authorizations required to comply with, or required to be obtained under, applicable local law or
otherwise required by the Committee. Nothing herein shall require the Company to list, register or qualify the Shares on any securities
exchange.


 


3.4 Nonassignability


 


Except to the extent otherwise provided
in the applicable Award Agreement, no Award or right granted to any person under the Plan shall be assignable or transferable other
than by will or by the laws of descent and distribution, and all such Awards and rights shall be exercisable during the life of
the Grantee only by the Grantee or the Grantee’s legal representative. The terms of the Plan and any applicable Award Agreement
shall be binding upon the executors, administrators, heirs, successors or assigns of the Grantee.


 


3.5 Requirement
of Notification Upon Disqualifying Disposition Under Section 421(b) of the Code


 


If any Grantee shall make any disposition
of Shares issued pursuant to the exercise of an Incentive Stock Option under the circumstances described in Section 421(b) of the
Code (relating to certain disqualifying dispositions), such Grantee shall notify the Company of such disposition within ten (10)
days thereof.


 






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3.6 Change
in Control


 


(a) A “ Change in Control 
” means the occurrence of any one of the following events:


 


(i) any person is or becomes
a “ beneficial owner  ” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing more than 30% of the total voting power of the Company’s then outstanding securities generally
eligible to vote for the election of directors (the “ Company Voting Securities  ”); provided  , however
 , that any of the following acquisitions shall not be deemed to be a Change in Control: (1) by the Company or any subsidiary
or affiliate, (2) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary or affiliate,
(3) by any underwriter temporarily holding securities pursuant to an offering of such securities, or (4) pursuant to a Non-Qualifying
Transaction (as defined in paragraph (ii));


 


(ii) the consummation of a merger,
consolidation, statutory share exchange or similar form of corporate transaction involving the Company or any of its subsidiaries
or affiliates that requires the approval of the Company’s stockholders whether for such transaction or the issuance of securities
in the transaction (a “ Business Combination ”), unless immediately following such Business Combination:


 


(A) more than 49% of the total
voting power of (x) the corporation resulting from such Business Combination (the “ Surviving Corporation  ”),
or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 95% of the voting
securities eligible to elect directors of the Surviving Corporation (the “ Parent Corporation  ”), is represented
by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented
by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Business Combination, and


 


(B) no person (other than any
employee benefit plan (or any related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation), is
or becomes the beneficial owner, directly or indirectly, of securities of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation) representing 30% of the total voting power of the securities then outstanding generally eligible to
vote for the election of directors of the Parent Corporation (or the Surviving Corporation); (any Business Combination which satisfies
all of the criteria specified in (A) and (B) above shall be deemed to be a “ Non-Qualifying Transaction ”);


 


(iii) the shareholders of the
Company approve a plan of complete liquidation or dissolution of the Company; or


 


(iv) the consummation of a sale
of all or substantially all of the Company’s assets to an entity that is not an affiliate of the Company (other than pursuant
to a Non-Qualifying Transaction).


 


Notwithstanding the foregoing, a Change in
Control of the Company shall not be deemed to occur solely because any person acquires beneficial ownership of more than 30% of
Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the number of
Company Voting Securities outstanding; provided  , that if after such acquisition by the Company such person becomes the
beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities
beneficially owned by such person, a Change in Control of the Company shall then occur.


 


(b) Upon the occurrence of a Change in
Control specified in paragraph (a)(iii) above, all outstanding Awards will terminate upon consummation of the liquidation or dissolution
of the Company. The Committee may, in the exercise of its sole discretion in such instances, (i) provide that Awards shall Fully
Vest as of any specified date prior to such liquidation or dissolution and/or (ii) declare that any Award shall terminate as of
any specified date.


 


(c) The following shall occur if Awards
“ Fully Vest  ”: (i) any share options granted under the Plan shall become fully vested and immediately exercisable,
(ii) any RSUs and other share-based Awards granted under the Plan will become fully vested, any restrictions applicable to such
Awards shall lapse and such Awards denominated in Shares will be immediately paid out, and (iii) any performance goals applicable
to Awards will be deemed to be fully satisfied.


 






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(d) Upon the occurrence of any Change in
Control or upon the occurrence of a Non-Qualifying Transaction where Awards are not assumed (or substituted) by the Surviving Corporation
or Parent Corporation, the Committee may, in its sole discretion, (i) Fully Vest Awards; (ii) determine that any or all outstanding
Awards granted under the Plan, whether or not exercisable, will be canceled and terminated and that in connection with such cancellation
and termination the holder of such Award may receive for each Share subject to such Awards a cash payment (or the delivery of shares
of stock, other securities or a combination of cash, stock and securities equivalent to such cash payment) equal to the difference,
if any, between the consideration received by shareholders of the Company in respect of a Share in connection with such transaction
and the purchase price per Share, if any, under the Award multiplied by the number of Shares subject to such Award; provided
that if such product is zero or less or to the extent that the Award is not then exercisable, the Awards will be canceled and terminated
without payment therefor; or (iii) provide that the period to exercise share options granted under the Plan shall be extended (but
not beyond the expiration of such option).


 


(e) The Committee shall determine in its
sole discretion whether an Award shall be considered “assumed” or “substituted”. Without limiting the foregoing,
for the purposes of Section 3.6, a share option shall be considered “assumed” or “substituted” if in the
reasonable determination of the Committee (i) the aggregate intrinsic value (the difference between the then Fair Market Value
as reasonably determined by the Committee and the exercise price per Share multiplied by the number of Shares subject to such Award)
of the assumed (or substituted) Award immediately after the Change in Control is substantially the same as the aggregate intrinsic
value of such Award immediately before such transaction, (ii) the ratio of the exercise price per assumed (or substituted) Award
to the Fair Market Value per share of successor corporation stock immediately after the Change in Control is substantially the
same as such ratio for such Award immediately before such transaction and (iii) the Award is exercisable for the consideration
approved by the Committee (including Shares, other securities or other property or a combination of cash, Shares, other securities
and other property).


 


(f) Where the successor corporation assumes
(or substitutes for) any outstanding Awards, if within eighteen (18) months of the consummation of such Change in Control, Grantee’s
employment with the successor corporation is terminated by the successor corporation other than for Cause or the Grantee terminates
employment with the successor corporation for Good Reason, then all outstanding Awards owned by such Participant shall Fully Vest.
For purposes hereof, the term “ Good Reason  ” shall have the meaning specified in the Grantee’s Award
agreement or as otherwise determined by the Committee in its discretion.


 


3.7 Sale
of Subsidiary


 


Unless the Committee determines at any time
in its sole discretion that this Section 3.7 shall not apply, in the event the Company sells or spins off a portion of its assets
or one of its Related Entities and a Grantee is determined to have experienced a Termination of Employment as a result of such
sale or spin-off, then the Grantee shall be permitted to exercise Grantee’s outstanding and Fully Vested share options until
the earlier of one (1) year after such Termination of Employment or the expiration of the Award.


 


3.8 No
Right to Employment or Award


 


Nothing in the Plan or in any Award Agreement
shall confer upon any Grantee the right to continue in the employ of or association with the Company or Related Entity, or affect
any right which the Company or Related Entity may have to terminate such employment or association at any time (with or without
Cause), or confer any additional rights to compensation, damages or otherwise in consequence of or upon the termination of such
employment or association. Nothing in the Plan shall be construed as a commitment to make an Award under the Plan to any or every
Eligible Person.


 






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3.9 Independent
of Employment Contract


 


The Plan shall not form part of any contract
of employment or association between the Company or its Related Entities and Eligible Persons. The rights and obligations of an
Eligible Person under the terms of his office or employment shall not be affected by his participation or non-participation in
the Plan or by any right which he may have in relation to any Award (or any matter relating thereto).


 


3.10 Nature
of Payments


 


Any
and all grants of Awards and issuances of Shares under the Plan shall constitute a special incentive payment to the Grantee and
shall not be taken into account in computing the amount of salary or compensation of the Grantee for the purpose of determining
any benefits under any pension, retirement, profit-sharing, bonus, life insurance or other benefit plan of the Company or under
any agreement with the Grantee, unless such plan or agreement specifically provides otherwise.


 


3.11 Non-Uniform
Determinations


 


The Committee’s determinations under
the Plan need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards (whether
or not such persons are similarly situated). Without limiting the generality of the foregoing, the Committee shall be entitled,
among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Award Agreements,
as to the persons to receive Awards under the Plan, and the terms and provisions of Awards under the Plan.


 


3.12 Other
Payments or Awards


 


Nothing
contained in the Plan shall be deemed in any way to limit or restrict the Company from making any Award or payment to any
person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.


 


3.13 
Section Headings


 


The section headings contained herein are
for the purpose of convenience only and are not intended to define or limit the contents of the sections.


 


3.14 Effective
Date and Term of Plan


 


Unless sooner terminated by the Board,
the Plan, including the provisions respecting the grant of Incentive Stock Options, shall terminate the day before the tenth anniversary
of the adoption of the Plan by the shareholders. All Awards made under the Plan prior to its termination shall remain in effect
until such Awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable
Award Agreements.


 


3.15 Governing
Law


 


All rights and obligations under the Plan
shall be construed and interpreted in accordance with the laws of the State of New York.


 


3.16 Severability;
Entire Agreement


 


If any of the provisions of this Plan or
any Award Agreement is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such provision shall
be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining
provisions shall not be affected thereby; provided  , that  if any of such provisions is finally held to be invalid,
illegal, or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable,
such provision shall be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision
enforceable hereunder. The Plan and any Award Agreements contain the entire agreement of the parties with respect to the subject
matter thereof and supersede all prior agreements, promises, covenants, arrangements, communications, representations and warranties
between them, whether written or oral with respect to the subject matter thereof.


 






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3.17 No
Third Party Beneficiaries


 


Except as expressly provided therein, neither
the Plan nor any Award Agreement shall confer on any person other than the Company and the grantee of any Award any rights or remedies
thereunder.


 


3.18 Successors
and Assigns


 


The terms of this Plan shall be binding
upon and inure to the benefit of the Company and its successors and assigns.


 


3.19 Waiver
of Claims


 


Each grantee of an Award recognizes and
agrees that prior to being selected by the Committee to receive an Award he or she has no right to any benefits hereunder. Accordingly,
in consideration of the grantee’s receipt of any Award hereunder, he or she expressly waives any right to contest the amount
of any Award, the terms of any Award Agreement, any determination, action or omission hereunder or under any Award Agreement by
the Committee, the Board or the Company, or any amendment to the Plan or any Award Agreement (other than an amendment to this Plan
or an Award Agreement to which his or her consent is expressly required by the express terms of the Plan or an Award Agreement).


 




 






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