Document:

Exhibit 10.2

 

BONA
FILM GROUP LIMITED

 

2010 STOCK
INCENTIVE PLAN

 

WHEREAS,
Bona International Film Group Limited, a company incorporated under the laws of
the British Virgin Islands (“Bona BVI”) had adopted the Bona International Film
Group Limited 2010 Stock Incentive Plan (the “Original Plan”);

 

WHEREAS,
Bona BVI became a wholly-owned subsidiary of the Company (as such term
is defined herein) in connection a corporate reorganization constituting a
Corporate Transaction (as such term is defined herein) pursuant to the share
exchange agreement dated November 8, 2010 by and among the Company, Bona
BVI and the holders of the then outstanding issued share capital of Bona BVI;

 

WHEREAS,
the Company agrees to Assume (as such term is defined herein) the Awards (as
such term is defined herein) granted under the Original Plan;

 

WHEREAS,
the shareholders of the Company and its Board of Directors have approved this
2010 Stock Incentive Plan on the date hereof to amend and restate the Original
Plan;

 

NOW,
THEREFORE, this Plan is adopted as follows:

 

1.     Purposes of the Plan. 
The purposes of this Plan are to attract and retain the best available
personnel, to provide additional incentives to Employees, Directors and
Consultants and to promote the success of the Company’s business.

 

2.     Definitions.  The
following definitions shall apply as used herein and in the individual Award
Agreements except as defined otherwise in an individual Award Agreement.  In the event a term is separately defined in
an individual Award Agreement, such definition shall supersede the definition
contained in this Section 2.

 

(a)           “Administrator”
means the Board or any of the Committees appointed to administer the Plan.

 

(b)           “Affiliate”
and “Associate” shall have the respective meanings ascribed to such
terms in Rule 12b-2 promulgated under the Exchange Act.

 

(c)           “Applicable
Laws” means the legal requirements relating to the Plan and the Awards
under applicable provisions of federal
securities laws, state corporate and securities laws, the Code, the rules of
any applicable stock exchange or national market system, and the rules of
any jurisdiction applicable to Awards granted to residents therein.

 

(d)           “Assumed”
means that pursuant to a Corporate Transaction either (i) the Award is
expressly affirmed by the Company or (ii) the contractual obligations
represented by the Award are expressly assumed (and not simply by operation of
law) by the successor entity or its Parent in connection with the Corporate
Transaction with appropriate adjustments to the number and type of securities
of the successor entity or its Parent subject to the Award and the 

 

 

exercise
or purchase price thereof which at least preserves the compensation element of
the Award existing at the time of the Corporate Transaction as determined in
accordance with the instruments evidencing the agreement to assume the Award.

 

(e)           “Award”
means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Share,
Restricted Share Unit or other right or benefit under the Plan.

 

(f)            “Award
Agreement” means the written agreement evidencing the grant of an Award
executed by the Company and the Grantee, including any amendments thereto.

 

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

 

(h)           “Cause”
means, with respect to the termination by the Company or a Related Entity of
the Grantee’s Continuous Service, that such termination is for “Cause” as such
term is expressly defined in a then-effective written agreement between the
Grantee and the Company or such Related Entity, or in the absence of such
then-effective written agreement and definition, is based on, in the
determination of the Administrator, the Grantee’s:  (i) performance of any act or failure to
perform any act in bad faith and to the detriment of the Company or a Related
Entity; (ii) dishonesty, intentional misconduct or material breach of any
agreement with the Company or a Related Entity; or (iii) commission of a
crime involving dishonesty, breach of trust, or physical or emotional harm to
any person.

 

(i)            “Change
in Control”  means a change in ownership or
control of the Company after the Registration Date effected through the
following transactions: the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the Company or
by a Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) 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 pursuant to
a tender or exchange offer made directly to the Company’s shareholders which a
majority of the Directors who are not Affiliates or Associates of the offeror
do not recommend such shareholders accept.

 

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

 

(k)           “Committee”
means any committee composed of members of the Board appointed by the Board to
administer the Plan.

 

(l)            “Company”
means
Bona
Film Group Limited, a company incorporated
under the laws of the Cayman Islands or any successor corporation
that adopts the Plan in connection with a Corporate Transaction.

 

(m)          “Consultant”
means any person (other than an Employee or a Director, solely with respect to
rendering services in such person’s capacity as an Employee or Director) who is engaged by
the Company or any Related Entity to render consulting or advisory services to
the Company or such Related Entity.

 

 

(n)           “Continuous
Service” means that the provision of services to the Company or a Related
Entity in any capacity of Employee, Director or Consultant is not interrupted
or terminated.  In jurisdictions
requiring notice in advance of an effective termination as an Employee,
Director or Consultant, Continuous Service shall be deemed terminated upon the
actual cessation of providing services to the Company or a Related Entity
notwithstanding any required notice period that must be fulfilled before a
termination as an Employee, Director or Consultant can be effective under
Applicable Laws.  A Grantee’s Continuous
Service shall be deemed to have terminated either upon an actual termination of
Continuous Service or upon the entity for which the Grantee provides services ceasing
to be a Related Entity.  Continuous
Service shall not be considered interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any Related
Entity, or any successor, in any capacity of Employee, Director or Consultant,
or (iii) any change in status as long as the individual remains in the
service of the Company or a Related Entity in any capacity of Employee,
Director or Consultant (except as otherwise provided in the Award Agreement).  An approved leave of absence shall include
sick leave, military leave, or any other authorized personal leave.  For purposes of each Incentive Share Option
granted under the Plan, if such leave exceeds ninety (90) days, and
reemployment upon expiration of such leave is not guaranteed by statute or
contract, then the Incentive Share Option shall be treated as a Non-Qualified
Share Option on the day three (3) months and one (1) day following
the expiration of such ninety (90) day period.

 

(o)           “Corporate
Transaction” means any of the following transactions, provided, however,
that the Administrator shall determine under parts (iv) and (v) whether
multiple transactions are related, and its determination shall be final,
binding and conclusive:

 

(i)            a
merger or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the state
in which the Company is incorporated;

 

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

 

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

 

(iv)          any
reverse merger or series of related transactions culminating in a reverse
merger (including, but not limited to, a tender offer followed by a reverse
merger) in which the Company is the surviving entity but (A) the Ordinary
Shares outstanding immediately prior to such merger are converted or exchanged
by virtue of the merger into other property, whether in the form of securities,
cash or otherwise, or (B) in which securities possessing more than forty
percent (40%) 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 merger or the initial transaction
culminating in such merger, but excluding
any such transaction or series of related transactions that the Administrator
determines shall not be a Corporate Transaction; or

 

(v)           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 Administrator determines shall not be a Corporate Transaction.

 

(p)           “Director”
means a member of the Board or the board of directors of any Related Entity.

 

(q)           “Disability”
means as defined under the long-term disability policy of the Company or the
Related Entity to which the Grantee provides services regardless of whether the
Grantee is covered by such policy.  If
the Company or the Related Entity to which the Grantee provides service does
not have a long-term disability plan in place, “Disability” means that a
Grantee is unable to carry out the responsibilities and functions of the
position held by the Grantee by reason of any medically determinable physical
or mental impairment for a period of not less than ninety (90) consecutive
days.  A Grantee will not be considered
to have incurred a Disability unless he or she furnishes proof of such impairment
sufficient to satisfy the Administrator in its discretion.

 

(r)            “Dividend
Equivalent Right” means a right entitling the Grantee to compensation
measured by dividends paid with respect to Ordinary Shares.

 

(s)            “Drag-Along Event” means the
sale of all or substantially all of the equity or assets or undertaking of the
Company approved by
holders (i) holding a majority of each class of shares of the Company, voting separately or (ii) representing
two thirds of all shares on an as-if-converted
basis.

 

(t)            “Employee”
means any person, including an Officer or
Director, who is in the employ of the Company or any Related Entity, subject to
the control and direction of the Company or any Related Entity as to both the
work to be performed and the manner and method of performance.  The payment of a director’s fee by the
Company or a Related Entity shall not be sufficient to constitute “employment”
by the Company.

 

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

 

(v)           “Fair
Market Value” means, as of any date, the value of Ordinary Shares
determined as follows:

 

(i)            If the Ordinary Shares are traded
on a securities exchange, the value shall be deemed to be the average of the
security’s closing prices on such exchange over the thirty (30) day period
ending one (1) day prior to the distribution,  as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

 

(ii)           If the Ordinary Shares are traded over-the-counter, the value shall be deemed to be the average of the closing bid prices
over the thirty (30) day period ending three (3) days prior to the
distributionas reported in The Wall Street Journal or such other
source as the Administrator deems reliable; and

 

 

(iii)          In the absence of an established market for the Ordinary Shares of the type described in (i) and (ii), above, the Fair Market Value
thereof shall be determined by the Administrator in good faith.

 

The method of valuation of securities subject to
investment letter or other restrictions on free marketability shall be adjusted to make an appropriate
discount from the market value determined as above in sub-clauses (i), (ii) or
(iii) to reflect the fair market value thereof as determined in good faith
by the Administrator, or by a liquidator if one is appointed.

 

(w)          “Founders” means Messrs. Yu Dong and Yu Hai.

 

(x)           “Grantee”
means an Employee, Director or Consultant who receives an Award under the Plan.

 

(y)           “IPO”
shall mean the Company’s first firm commitment underwritten public offering of
any of its securities to the general public pursuant to (a) a registration
statement filed under the Securities Act of 1933, as amended, or (b) the
securities laws applicable to an offering of securities in another jurisdiction
pursuant to which such securities will be listed on an internationally-recognized
securities exchange.

 

(z)           “Incentive
Share Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code.

 

(aa)         “Non-Qualified
Share Option” means an Option not intended to qualify as an Incentive Share Option.

 

(bb)         “Officer”
means a person who is an officer of the Company or a Related Entity within the
meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

 

(cc)         “Option”
means an option to purchase Shares pursuant to an Award Agreement granted under
the Plan.

 

(dd)         “Ordinary
Share” means an ordinary share of US$0.0005 nominal or par value, of
the Company
having the rights and restrictions set out in the memorandum and
articles of association of the Company, as amended from time to time.

 

(ee)         “Parent”
means a “parent corporation”, whether now or hereafter existing, as defined in
Section 424(e) of the Code.

 

(ff)          “Plan”
means this 2010 Stock Incentive Plan.

 

(gg)         “Qualified
IPO” shall mean the closing of the Company’s first firm commitment, underwritten
public offering of Ordinary Shares or securities representing Ordinary Shares
in connection with which Ordinary Shares or such securities (or the shares of a
company of which the Company is a wholly owned subsidiary established for the
purpose of listing (the “Listco”))
is listed and becomes publicly traded on an internationally recognized
securities exchange (including the Stock Exchange of Hong Kong) or the NASDAQ
National Market or 

 

 

the
issue or transfer of shares in a company whose shares are listed on an
internationally recognized stock exchange (including the Stock Exchange of Hong
Kong) or on NASDAQ National Market for which shares approval for listing and
trading has been duly obtained and which shares are issued or transferred in
consideration of the acquisition of the Ordinary Shares of the Company or the
shares of the Listco, provided, however, that such transaction or listing shall
result in aggregate proceeds to the Company of at least US$60,000,000 (before
deduction for underwriters’ commissions and expenses), and that the market
capitalization of the Company or the Listco immediately after such transaction
or listing shall be at least US$300,000,000.

 

(hh)         “Registration
Date” means the first to occur of (i) the closing of the first sale to
the general public pursuant to a registration statement filed with and declared
effective by the U.S. Securities and Exchange Commission under the Securities
Act of 1933, as amended, of (A) the Ordinary Shares or (B) the same
class of securities of a successor corporation (or its Parent) issued pursuant
to a Corporate Transaction in exchange for or in substitution of the Ordinary
Shares; and (ii) in the event of a Corporate Transaction, the date of the
consummation of the Corporate Transaction if the same class of securities of
the successor corporation (or its Parent) issuable in such Corporate
Transaction shall have been sold to the general public pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Act of 1933, as amended, on or prior
to the date of consummation of such Corporate Transaction.

 

(ii)           “Related
Entity” means any Parent or Subsidiary of the Company and any business, corporation,
partnership, limited liability company or other entity in which the Company or
a Parent or a Subsidiary of the Company holds a substantial ownership interest,
directly or indirectly.

 

(jj)           “Replaced” means that pursuant to a Corporate
Transaction the Award is replaced with
a comparable share or stock award or a cash incentive program of the Company,
the successor entity (if applicable) or Parent of either of them which
preserves the compensation element of such Award existing at the time of the Corporate
Transaction and provides for subsequent payout in accordance with the same (or
a more favorable) vesting schedule applicable to such Award.  The determination of Award comparability
shall be made by the Administrator and its determination shall be final,
binding and conclusive.

 

(kk)         “Restricted
Share” means a Share issued under the Plan to the Grantee for such
consideration, if any, and subject to such restrictions on transfer, rights of
first refusal, repurchase provisions, forfeiture provisions, and other terms
and conditions as established by the Administrator.

 

(ll)           “Restricted
Share Units” means an Award which may be earned in whole or in part upon
the passage of time or the attainment of performance criteria established by
the Administrator and which may be settled for cash, Shares or other securities
or a combination of cash, Shares or other securities as established by the
Administrator.

 

(mm)      “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any successor
thereto.

 

 

(nn)         “SAR”
means a share appreciation right entitling the Grantee to Shares or cash
compensation, as established by the Administrator, measured by appreciation in
the value of Ordinary Shares.

 

(oo)         “Share”
means an Ordinary Share
of the Company.

 

(pp)         “Spin-off
Transaction” means a distribution by the Company to its shareholders of all
or any portion of the securities of any Subsidiary of the Company.

 

(qq)         “Subsidiary”
means a “subsidiary corporation”, whether now or hereafter existing, as defined
in Section 424(f) of the Code.

 

3.     Shares Subject to the Plan.

 

(a)           Subject
to the provisions of Section 10 below, the maximum aggregate number of
Shares which may be issued pursuant to all Awards (including Incentive Share
Options) is 5,410,650 Shares (proportionally adjusted to reflect any share
dividends, share splits, or similar transactions).

 

(b)           Any
Shares covered by an Award (or portion of an Award) which is forfeited,
canceled or expires (whether voluntarily or involuntarily) shall be deemed not
to have been issued for purposes of determining the maximum aggregate number of
Shares which may be issued under the Plan. 
Shares that actually have been issued under the Plan pursuant to an
Award shall not be returned to the Plan and shall not become available for future
issuance under the Plan, except that if unvested Shares are forfeited, or
repurchased by the Company at the lower of their original purchase price or
their Fair Market Value at the time of repurchase, such Shares shall become
available for future grant under the Plan.  To the extent not prohibited by
Section 422(b)(1) of the Code (and the corresponding regulations
thereunder), the listing requirements of The Nasdaq National Market (or other
established stock exchange or national market system on which the Ordinary
Shares are traded) and Applicable Law, any Shares covered by an Award which are
surrendered (i) in payment of the Award exercise or purchase price or
(ii) in satisfaction of tax withholding obligations incident to the
exercise of an Award shall be deemed not to have been issued for purposes of
determining the maximum number of Shares which may be issued pursuant to all
Awards under the Plan, unless otherwise determined by the Administrator.

 

4.     Administration of the Plan.

 

(a)           Plan
Administrator.

 

(i)            Administration with Respect to Directors and Officers.  With respect to grants of Awards to Directors
or Employees who are also Officers or Directors of the Company, the Plan shall
be administered by (A) the Board or (B) a Committee designated by the
Board, which Committee shall be constituted in such a manner as to satisfy the
Applicable Laws and to permit such grants and related transactions under the
Plan to be exempt from Section 16(b) of the Exchange Act in
accordance with Rule 16b-3.  Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board.

 

 

(ii)           Administration With Respect to Consultants and Other
Employees.  With respect to grants of
Awards to Employees or Consultants who are neither Directors nor Officers of
the Company, the Plan shall be administered by (A) the Board or (B) a
Committee designated by the Board, which Committee shall be constituted in such
a manner as to satisfy the Applicable Laws. 
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. 
The Board may authorize one or more Officers to grant such Awards and
may limit such authority as the Board determines from time to time.

 

(iii)          Administration Errors.  In the event an Award is granted in a manner
inconsistent with the provisions of this subsection (a), such Award shall
be presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.

 

(b)           Powers
of the Administrator.  Subject to
Applicable Laws and the provisions of the Plan (including any other powers
given to the Administrator hereunder), and except as otherwise provided by the
Board, the Administrator shall have the authority, in its discretion:

 

(i)            to select the Employees, Directors and Consultants to
whom Awards may be granted from time to time hereunder;

 

(ii)           to determine whether and to what extent Awards are granted
hereunder;

 

(iii)          to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;

 

(iv)          to approve forms of Award Agreements for use under the
Plan;

 

(v)           to determine the terms and conditions of any Award granted
hereunder (including the vesting schedule set forth in the Notice of Stock
Option Award);

 

(vi)          to amend the terms of any outstanding Award granted under
the Plan, provided that any amendment that would adversely affect the
Grantee’s rights under an outstanding Award shall not be made without the
Grantee’s written consent;

 

(vii)         to construe and interpret the terms of the Plan and Awards,
including without limitation, any notice of award or Award Agreement, granted
pursuant to the  Plan;

 

(viii)        to grant Awards to Employees, Directors
and Consultants employed outside the United States on such terms and conditions
different from those specified in the Plan as may, in the judgment of the
Administrator, be necessary or desirable to further the purpose of the Plan; and

 

(ix)          to take such other action, not inconsistent with the terms
of the Plan, as the Administrator deems appropriate.

 

 

(c)           Indemnification.
In addition to such other rights of indemnification as they may have as members
of the Board or as Officers or Employees of the Company or a Related Entity,
members of the Board and any Officers or Employees of the Company or a Related
Entity to whom authority to act for the Board, the Administrator or the Company
is delegated shall be defended and indemnified by the Company to the extent
permitted by law on an after-tax basis against all reasonable expenses,
including attorneys’ fees, actually and necessarily incurred in connection with
the defense of any claim, investigation, action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan, or any Award granted hereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by the Company) or
paid by them in satisfaction of a judgment in any such claim, investigation,
action, suit or proceeding, except in relation to matters as to which it shall
be adjudged in such claim, investigation, action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct;
provided, however, that within thirty (30) days after the institution of such
claim, investigation, action, suit or proceeding, such person shall offer to
the Company, in writing, the opportunity at the Company’s expense to defend the
same.

 

5.     Eligibility.  Awards other than Incentive Share Options may
be granted to Employees, Directors and Consultants.  Incentive Share Options may be granted only
to Employees of the Company or a Parent or a Subsidiary of the Company.  An Employee, Director or Consultant who has
been granted an Award may, if otherwise eligible, be granted additional Awards.

 

6.     Terms and Conditions of Awards.

 

(a)           Types
of Awards. The Administrator is authorized under the Plan to award any type
of arrangement to an Employee, Director or Consultant that is not inconsistent
with the provisions of the Plan and that by its terms involves or might involve
the issuance of (i) Shares, (ii) cash or (iii) an Option, a SAR,
or similar right with a fixed or variable price related to the Fair Market
Value of the Shares and with an exercise or conversion privilege related to the
passage of time, the occurrence of one or more events, or the satisfaction of
performance criteria or other conditions. 
Such awards include, without limitation, Options, SARs, sales or bonuses
of Restricted Share, Restricted Share Units or Dividend Equivalent Rights, and
an Award may consist of one such security or benefit, or two (2) or more
of them in any combination or alternative.

 

(b)           Designation
of Award.  Each Award shall be
designated in the Award Agreement.  In
the case of an Option, the Option shall be designated as either an Incentive
Share Option or a Non-Qualified Share Option. 
However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as
Incentive Share Options which become exercisable for the first time by a
Grantee during any calendar year (under all plans of the Company or any Parent
or Subsidiary of the Company) exceeds $100,000, such excess Options, to the
extent of the Shares covered thereby in excess of the foregoing limitation,
shall be treated as Non-Qualified Share Options.  For this purpose, Incentive Share
Options shall be taken into account in the order in which they were granted,
and the Fair Market Value of the Shares shall be determined as of the grant
date of the relevant Option.

 

 

(c)           Conditions
of Award.  Subject to the terms of
the Plan, the Administrator shall determine the provisions, terms, and conditions
of each Award including, but not limited to, the Award vesting schedule,
repurchase provisions, rights of first refusal, forfeiture provisions, form of
payment (cash, Shares, or other consideration) upon settlement of the Award,
payment contingencies, and satisfaction of any performance criteria.  The performance criteria established by the
Administrator may be based on any one of, or combination of, the following: (i) increase
in share price, (ii) earnings per share, (iii) total shareholder
return, (iv) operating margin, (v) gross margin, (vi) return on
equity, (vii) return on assets, (viii) return on investment, (ix) operating
income, (x) net operating income, (xi) pre-tax profit, (xii) cash
flow, (xiii) revenue, (xiv) expenses, (xv) earnings before
interest, taxes and depreciation, (xvi) economic value added and (xvii) market
share.  The performance criteria may be
applicable to the Company, Related Entities and/or any individual business
units of the Company or any Related Entity. 
Partial achievement of the specified criteria may result in a payment or
vesting corresponding to the degree of achievement as specified in the Award
Agreement.

 

(d)           Acquisitions
and Other Transactions.  The
Administrator may issue Awards under the Plan in settlement, assumption or
substitution for, outstanding awards or obligations to grant future awards in
connection with the Company or a Related Entity acquiring another entity, an
interest in another entity or an additional interest in a Related Entity
whether by merger, share purchase, asset purchase or other form of transaction.

 

(e)           Deferral
of Award Payment.  The Administrator
may establish one or more programs under the Plan to permit selected Grantees
the opportunity to elect to defer receipt of consideration upon exercise of an
Award, satisfaction of performance criteria, or other event that absent the
election would entitle the Grantee to payment or receipt of Shares or other
consideration under an Award.  The
Administrator may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, Shares or other consideration so deferred, and
such other terms, conditions, rules and procedures that the Administrator
deems advisable for the administration of any such deferral program.

 

(f)            Separate
Programs.  The Administrator may
establish one or more separate programs under the Plan for the purpose of
issuing particular forms of Awards to one or more classes of Grantees on such
terms and conditions as determined by the Administrator from time to time.

 

(g)           Early
Exercise.  The Award Agreement may,
but need not, include a provision whereby the Grantee may elect at any time
while an Employee, Director or Consultant to exercise any part or all of the
Award prior to full vesting of the Award. 
Any unvested Shares received pursuant to such exercise may be subject to
a repurchase right in favor of the Company or a Related Entity or to any other
restriction the Administrator determines to be appropriate.

 

(h)           Term
of Award.  The term of each Award
shall be the term stated in the Award Agreement, provided, however, that the
term of an Incentive Share Option shall be no more than ten (10) years
from the date of grant thereof.  However,
in the case of an Incentive Share Option granted to a Grantee who, at the time
the Option is granted, owns shares representing more than ten percent
(10%) of the voting power of all classes of shares of the

 

 

 

 

 

 

Company
or any Parent or Subsidiary of the Company, the term of the Incentive Share Option shall be five (5) years
from the date of grant thereof or such shorter term as may be provided in the
Award Agreement.  Notwithstanding the
foregoing, the specified term of any Award shall not include any period for
which the Grantee has elected to defer the receipt of the Shares or cash
issuable pursuant to the Award.

 

(i)            Transferability
of Awards.  Incentive
Share Options may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Grantee, only by
the Grantee.  Non-Qualified
Stock Options and other Awards shall be transferable (i) by will
and by the laws of descent and distribution and (ii) during the lifetime
of the Grantee, to the extent and in the manner authorized by the Administrator, to certain persons or entities
related to the participant, including but not limited to members of the Grantee’s immediate family, trusts
or other entities controlled by or whose beneficiaries or beneficial owners are
the Grantee and/or members
of the Grantee’s immediate
family, provided
that the transfer and exercise of the Awards shall comply with applicable laws
and provided further that the Administrator has received evidence satisfactory to it
that the transfer (i) is being made for essentially donative, estate and/or tax
planning purposes on a gratuitous or donative basis and without consideration
(other than nominal consideration or in exchange for an interest in a qualified
transferee), and (ii) will not compromise the Company’s ability to rely on Rule 701,
or register Shares issuable under this Plan on Form S-8, under the
Securities Act of 1933, as amended. 
Notwithstanding the foregoing, the transfer and exercise restrictions in this Section 6(i) shall
not apply to: (i) transfer to the Company; (ii) designation  of one or more beneficiaries of
the Grantee’s Award in the event of the Grantee’s death on a beneficiary
designation form provided by the Administrator; (iii) subject to any applicable
limitations on Incentive Share Options, transfers to a family member (or former
family member) pursuant to a domestic relations order if approved or ratified
by the Administrator; (iv) if the Grantee has suffered a disability,
permitted transfers or exercises on behalf of the participant by his or her
legal representative; (v) the authorization by the Administrator of “cashless
exercise” procedures with third parties who provide financing for the purpose
of (or who otherwise facilitate) the exercise of awards consistent with
applicable laws and the express authorization of the Administrator.

 

(j)            Time of
Granting Awards.  The date of
grant of an Award shall for all purposes be the date on which the Administrator
makes the determination to grant such Award, or such other date as is
determined by the Administrator.

 

7.     Award Exercise
or Purchase Price, Consideration and Taxes.

 

(a)           Exercise or
Purchase Price.  The
exercise or purchase price, if any, for an Award shall be as follows:

 

(i)            In the case of
an Incentive Share Option:

 

(A)          granted to an
Employee who, at the time of the grant of such Incentive Share Option owns
shares representing more than ten percent (10%) of the voting power of all
classes of shares of the Company or any Parent or Subsidiary of the Company,
the 

 

 

per
Share exercise price shall be not less than one hundred ten percent (110%)  of the Fair Market Value per
Share on the date of grant; or

 

(B)          granted to any
Employee other than an Employee described in the preceding paragraph, the per
Share exercise price shall be not less than one hundred percent (100%) of the
Fair Market Value per Share on the date of grant.

 

(ii)           In the case of
a Non-Qualified Share Option, the per Share exercise price shall be not less
than fifteen percent (15%) of the Fair Market Value
per Share on the date of grant unless otherwise determined by the
Administrator.

 

(iii)          In the case of
other Awards, such price as is determined by the Administrator.

 

(iv)          Notwithstanding
the foregoing provisions of this Section 7(a), in the case of an Award
issued pursuant to Section 6(d), above, the exercise or purchase price for
the Award shall be determined in accordance with the provisions of the relevant
instrument evidencing the agreement to issue such Award.

 

(b)           Consideration.  Subject to Applicable Laws, the consideration
to be paid for the Shares to be issued upon exercise or purchase of an Award
including the method of payment, shall be determined by the Administrator (and,
in the case of an Incentive Share Option, shall be determined at the time of
grant).  In addition to any other types
of consideration the Administrator may determine, the Administrator is
authorized to accept as consideration for Shares issued under the Plan the
following:

 

(i)            cash;

 

(ii)           check;

 

(iii)          if the exercise
or purchase occurs on or after the Registration Date, surrender of Shares or
delivery of a properly executed form of attestation of ownership of Shares as
the Administrator may require which have a Fair Market Value on the date of
surrender or attestation equal to the aggregate exercise price of the Shares as
to which said Award shall be exercised, provided, however, that Shares acquired
under the Plan or any other equity compensation plan or agreement of the
Company must have been held by the Grantee for a period of more than six (6) months
(and not  used for
another Award exercise by attestation during such period);

 

(iv)          with respect to
Options, if the exercise occurs on or after the Registration Date, payment
through a broker-dealer sale and remittance procedure pursuant to which the
Grantee (A) shall provide written instructions to a Company designated
brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company sufficient funds to cover the aggregate
exercise price payable for the purchased Shares and (B) shall provide
written directives to the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale
transaction; or

 

(v)           any combination
of the foregoing methods of payment.

 

 

The
Administrator may at any time or from time to time, by adoption of or by
amendment to the standard forms of Award Agreement described in
Section 4(b)(iv), or by other means, grant Awards which do not permit all
of the foregoing forms of consideration to be used in payment for the Shares or
which otherwise restrict one or more forms of consideration.

 

(c)           Taxes.  No Shares shall be delivered under the Plan
to any Grantee or other person until such Grantee or other person has made
arrangements acceptable to the Administrator for the satisfaction of any
non-U.S., federal, state, or local income and employment tax withholding
obligations, including, without limitation, obligations incident to the receipt
of Shares or the disqualifying disposition of Shares received on exercise of an
Incentive Share Option.  Upon exercise of
an Award the Company shall withhold or collect from Grantee an amount
sufficient to satisfy such tax obligations.

 

8.     Exercise of
Award.

 

(a)           Procedure for
Exercise; Rights as a Shareholder.

 

(i)            Any Award
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator under the terms of the Plan and specified in
the Award Agreement.

 

(ii)           An Award shall
be deemed to be exercised when written notice of such exercise has been given
to the Company in accordance with the terms of the Award by the person entitled
to exercise the Award and full payment for the Shares with respect to which the
Award is exercised, including, to the extent selected, use of the broker-dealer
sale and remittance procedure to pay the purchase price as provided in Section 7(b)(iv).

 

(b)           Exercise of
Award Following Termination of Continuous Service.

 

(i)            An Award may
not be exercised after the termination date of such Award set forth in the
Award Agreement and may be exercised following the termination of a Grantee’s Continuous
Service only to the extent provided in the Award Agreement.

 

Where the Award Agreement permits a Grantee to
exercise an Award following the termination of the Grantee’s Continuous Service
for a specified period, the Award shall terminate to the extent not exercised
on the last day of the specified period or the last day of the original term of
the Award, whichever occurs first.

 

(ii)           Any Award
designated as an Incentive Share Option to the extent not exercised within the
time permitted by law for the exercise of Incentive Share Options following the
termination of a Grantee’s Continuous Service shall convert automatically to a
Non-Qualified Share Option and thereafter shall be exercisable as such to the
extent exercisable by its terms for the period specified in the Award
Agreement.

 

9.     Conditions Upon
Issuance of Shares.

 

(a)           Shares shall
not be issued pursuant to the exercise of an Award unless the exercise of such
Award and the issuance and delivery of such Shares pursuant thereto shall 

 

 

comply
with all Applicable Laws, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

 

(b)           As a condition
to the exercise of an Award, the Company may require the person exercising such
Award to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any Applicable Laws.

 

(c)           As a condition
to the exercise of an Award, the Grantee shall grant a power of attorney to the
Board or any person designated by the Board to exercise the voting rights with
respect to the Shares and the Company may require the person exercising such
Award to acknowledge and agree to be bound by the provisions of the Members  Agreement, the Right of First Refusal and
Co-Sale Agreement and the Voting Agreement entered into among the
shareholders of the Company from time to time, as if the Grantee is an Ordinary Shareholder thereunder.

 

10.  Adjustments
Upon Changes in Capitalization.  Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding
Award, and the number of Shares which have been authorized for issuance under
the Plan but as to which no Awards have yet been granted or which have been
returned to the Plan, the exercise or purchase price of each such outstanding
Award, the maximum number of Shares with respect to which Awards may be granted
to any Grantee in any fiscal year of the Company, as well as any other terms
that the Administrator determines require adjustment shall be proportionately
adjusted for (i) any increase or decrease in the number of issued Shares
resulting from a share split, reverse share split, share dividend, combination
or reclassification of the Shares, or similar transaction affecting the Shares,
(ii) any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company, or (iii) as the
Administrator may determine in its discretion, any other transaction with
respect to Ordinary Shares including a corporate merger, consolidation,
acquisition of property or equity, separation (including a spin-off or other
distribution of shares or property), reorganization, liquidation (whether
partial or complete) or any similar transaction; provided, however that
conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration.”  Such adjustment shall be made by the
Administrator and its determination shall be final, binding and
conclusive.  Except as the Administrator
determines, 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
hereof shall be made with respect to, the number or price of Shares subject to
an Award.  In the event of a Spin-off
Transaction, the Administrator may in its discretion make such adjustments and
take such other action as it deems appropriate with respect to outstanding
Awards under the Plan, including but not limited to: (i) adjustments to
the number and kind of Shares, the
exercise or purchase price per Share and the
vesting periods of outstanding Awards, (ii) prohibit the exercise of
Awards during certain periods of time prior to the consummation of the Spin-off
Transaction, or (iii) the substitution, exchange or grant of Awards to
purchase securities of the Subsidiary; provided that the Administrator shall
not be obligated to make any such adjustments or take any such action
hereunder.

 

 

11.  Corporate
Transactions and Changes in Control.

 

(a)           Termination of
Award to the Extent Not Assumed in Corporate Transaction.  Effective upon the consummation of a
Corporate Transaction, all outstanding Awards under the Plan shall
terminate.  However, all such Awards
shall not terminate to the extent they are Assumed in connection with the
Corporate Transaction.

 

(b)           Acceleration of
Award Upon Corporate Transaction or Change in Control.

 

(i)            Corporate
Transaction.  Except as
provided otherwise in an individual Award Agreement, in the event of a
Corporate Transaction, for the portion of each Award that is neither Assumed
nor Replaced, such portion of the Award shall automatically become fully vested
and exercisable and be released from any repurchase or forfeiture rights (other
than repurchase rights exercisable at Fair Market Value) for all of the Shares
at the time represented by such portion of the Award, immediately prior to the
specified effective date of such Corporate Transaction, provided that the
Grantee’s Continuous Service has not terminated prior to such date.  The portion
of the Award that is not Assumed shall terminate under subsection (a) of
this Section 11 to the extent not exercised prior to the consummation of
such Corporate Transaction.

 

(ii)           Change in
Control.  Except as provided otherwise
in an individual Award Agreement, in the event of a Change in Control (other
than a Change in Control which also is a Corporate Transaction), each Award
which is at the time outstanding under the Plan automatically shall become
fully vested and exercisable and be released from any repurchase or forfeiture
rights (other than repurchase rights exercisable at Fair Market Value),
immediately prior to the specified effective date of such Change in Control,
for all of the Shares at the time represented by such Award, provided that the
Grantee’s Continuous Service has not terminated prior to such date.

 

(c)           Effect of
Acceleration on Incentive Share Options.  Any Incentive Share Option accelerated under
this Section 11 in connection with a Corporate Transaction or Change in
Control shall remain exercisable as an Incentive Share Option under the Code
only to the extent the $100,000 dollar limitation of Section 422(d) of
the Code is not exceeded.  To the extent such dollar limitation is
exceeded, the excess Options shall be treated as Non-Qualified Share
Options.

 

12.  Effective Date and Term of
Plan.  The Plan shall become
effective upon the later to occur of its adoption by the Board or its
approval by the shareholders of the Company. 
It shall continue in effect for a term of ten (10) years unless
sooner terminated.  Subject to
Section 17, below, and Applicable Laws, Awards may be granted under the
Plan upon its becoming effective.

 

13.  Amendment,
Suspension or Termination of the Plan.

 

(a)           The Board may
at any time amend, suspend or terminate the Plan; provided, however, that no such amendment shall be made without the
approval of the Company’s shareholders to the extent such approval is required
by Applicable Laws, or if such amendment would change any of the provisions of
Section 4(b)(vi) or this Section 13(a).

 

 

(b)           No Award may be
granted during any suspension of the Plan or after termination of the Plan.

 

(c)           No suspension
or termination of the Plan (including termination of the Plan under
Section 12, above) shall adversely affect any rights under Awards already
granted to a Grantee.

 

14.  Reservation of
Shares.

 

(a)           The Company,
during the term of the Plan, will at all times reserve and keep available such
number of Shares as shall be sufficient to satisfy the requirements of the
Plan.

 

(b)           The inability
of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

 

15.  No Effect on Terms of
Employment/Consulting Relationship.  The Plan shall not confer upon any Grantee
any right with respect to the Grantee’s Continuous Service, nor shall it
interfere in any way with his or her right or the right of the Company or any
Related Entity to terminate the Grantee’s Continuous Service at any time, with
or without Cause, and with or without notice. 
The ability of the Company or any Related Entity to terminate the
employment of a Grantee who is employed at will is in no way affected by its
determination that the Grantee’s Continuous Service has been terminated for
Cause for the purposes of this Plan.

 

16.  No Effect on Retirement and
Other Benefit Plans.  Except as
specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a Related Entity, and shall not affect any benefits under any other benefit
plan of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation.  The Plan is not a “Retirement Plan” or “Welfare
Plan” under the Employee Retirement Income Security Act of 1974, as amended.

 

17.  Shareholder Approval.  The grant of Incentive Share Options under
the Plan shall be subject to approval by the shareholders of the Company within
two (2) months after the date
the Plan is adopted excluding Incentive Share Options issued in substitution
for outstanding Incentive Share Options pursuant to Section 424(a) of
the Code.  Such shareholder approval
shall be obtained in the degree and manner required under Applicable Laws.  The Administrator may grant Incentive Share
Options under the Plan prior to approval by the shareholders, but until such
approval is obtained, no such Incentive Share Option shall be exercisable.  In the event that shareholder approval is not
obtained within the two (2) month
period provided above, all Incentive Share Options previously granted under the
Plan shall be exercisable as Non-Qualified Share Options.

 

18.  Vesting Schedule.  Except as
unanimously approved by the Board, Options to be issued to the Grantees other than Founders under the Plan
shall be subject to a minimum four (4) 

 

 

year vesting schedule calling for vesting no
faster than the following, counting from the
applicable vesting commencement date with respect to the total issued Options: the Shares subject to the Options shall vest in
48 substantially equal monthly installments, with the first installment vesting
on the vesting commencement date, and an additional installment vesting on the first day
of each of the next 47 months thereafter; Options to be issued to each Founder under
the Plan shall be subject to a vesting schedule as unanimously approved by the
Board.

 

19.  Drag-Along Events.  The Award Agreement shall include a provision whereby in the event of a
Drag-Along Event, the Grantees who hold any Shares upon exercise of the Award
shall sell, transfer, convey or assign all of their Shares pursuant to, and so
as to give effect to, the Drag-Along Event, and each of such Grantees shall
grant to the then current chief executive officer of the Company or an
authorized officer, a power of attorney to transfer his/her Shares and to do
and carry out all other acts and to sign all other documents that are necessary
or advisable to complete the Drag-Along Event.

 

20.  Qualified IPO.   The Award Agreement shall include a provision
whereby in the case of a Qualified IPO, the Grantees shall enter into any
agreements with any underwriter, coordinator, bankers or sponsor elected by the
Company for the purpose of the Qualified IPO, and each of such Grantees shall
grants to the then current chief executive officer or other authorized officer
of the Company a power of attorney to enter into any agreements with any
underwriter, coordinator, bankers or sponsor elected by the Company and to do
and carry out all the acts and to sign all the documents that are necessary or
advisable to complete the Qualified IPO.

 

21.  Unfunded
Obligation.  Any amounts
payable to Grantees pursuant to the Plan shall be unfunded and unsecured
obligations for all purposes, including, without limitation, Title I of
the Employee Retirement Income Security Act of 1974, as amended.  Neither the Company nor any Related Entity
shall be required to segregate any monies from its general funds, or to create
any trusts, or establish any special accounts with respect to such
obligations.  The Company shall retain at
all times beneficial ownership of any investments, including trust investments,
which the Company may make to fulfill its payment obligations hereunder.  Any investments or the creation or maintenance
of any trust or any Grantee account shall not create or constitute a trust or
fiduciary relationship between the Administrator, the Company or any Related
Entity and a Grantee, or otherwise create any vested or beneficial interest in
any Grantee or the Grantee’s creditors in any assets of the Company or a
Related Entity. The Grantees shall have no claim against the Company or any
Related Entity for any changes in the value of any assets that may be invested
or reinvested by the Company with respect to the Plan.

 

22.          Construction.  Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan.  Except when
otherwise indicated by the context, the singular shall include the plural and
the plural shall include the singular. 
Use of the term “or” is not intended to be exclusive, unless the context
clearly requires otherwise.Exhibit 10.3

 

INDEMNIFICATION AGREEMENT

 

This
Indemnification Agreement (the “Agreement”) is entered into as of
            by and
between Bona Film Group Limited, a Cayman Islands company (the “Company”) and
the undersigned, a [director or officer] of the Company (“Indemnitee”).

 

RECITALS

 

1.             The Company
recognizes that highly competent persons are becoming more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against risks
of claims and actions against them arising out of their services to the
corporation.

 

2.             The Board of
Directors of the Company (the “Board”) has determined that the inability to
attract and retain highly competent persons to serve the Company is detrimental
to the best interests of the Company and its shareholders and that it is
reasonable and necessary for the Company to provide adequate protection to such
persons against risks of claims and actions against them arising out of their
services to the corporation.

 

3.             The Company and
Indemnitee do not regard the indemnities available under the Company’s current
memorandum and articles of association (the “Articles of Association”) as
adequate to protect Indemnitee against the risks associated with his service to
the Company.

 

4.             The Company is
willing to indemnify Indemnitee to the fullest extent permitted by applicable
law, and Indemnitee is willing to serve and continue to serve the Company on
the condition that he be so indemnified.

 

AGREEMENT

 

In
consideration of the premises and the covenants contained herein, the Company
and Indemnitee do hereby covenant and agree as follows:

 

I.              Definitions

 

The
following terms shall have the meanings defined below:

 

Disinterested Director means a director of the
Company who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.

 

Change in Control shall be deemed to have occurred if, on or
after the date of this Agreement, (i) any “person” (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)), other than (a) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company
acting in such capacity; (b) a corporation owned directly or indirectly by
the shareholders of the Company in substantially the same proportions as their
ownership of ordinary shares of the Company; or (c) any current beneficial
shareholder or group, as defined by Rule 13d-5 of the Exchange Act,
including the heirs, assigns and successors thereof, of beneficial ownership,
within the meaning of Rule 13d-3 of the Exchange Act, of securities
possessing more than 50% of the total combined 

 

 

voting
power of the Company’s outstanding securities; hereafter becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing more than 20% of the
total combined voting power represented by the Company’s then outstanding
ordinary shares, (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board and any
new director whose election by the Board or nomination for election by the
Company’s shareholders was approved by a vote of at least two thirds (2/3) of
the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (iii) the
shareholders of the Company approve a merger or consolidation of the Company
with any other corporation other than a merger or consolidation which would
result in the ordinary shares of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into ordinary shares of the surviving entity) at least 80% of the total voting
power represented by the ordinary shares of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one
transaction or a series of related transactions) all or substantially all of
the Company’s assets.

 

Expenses shall include damages,
judgments, fines, penalties, settlements and costs, attorneys’ fees and
disbursements and costs of attachment or similar bond, investigations,
liabilities, losses, taxes, any expenses paid or incurred in connection with
investigating, defending, being a witness in, participating in (including on
appeal), or preparing for any of the foregoing in, any Proceeding, and any
taxes, interests, assessments or other charges imposed as a result of the
actual or deemed receipt of any payments under this Agreement.

 

Indemnifiable Event means any event or
occurrence that takes place either before or after the execution of this
Agreement, related to the fact that Indemnitee is or was a director or an
officer of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other entity, including services with respect to employee
benefit plans, or was a director or officer of an entity that was a predecessor
of the Company or another entity at the request of such predecessor entity, or
related to anything done or not done by Indemnitee in any such capacity.

 

Independent Counsel means a law firm, or a
member of a law firm, that is experienced in matters of corporation law and
neither presently is, nor in the past five (5) years has been, retained to
represent (i) the Company or Indemnitee in any matter material to either
such party (other than with respect to matters concerning the Indemnitee under
this Agreement, or of other indemnitees under similar indemnification
agreements), or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. 
Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.

 

Participant means a person who is a
party to, or witness or participant (including on appeal) in, a Proceeding.

 

Proceeding means any threatened,
pending, or completed action, suit or proceeding, or any inquiry, hearing or
investigation, whether civil, criminal, administrative, investigative or other,
including any appeal thereof, in which Indemnitee may be or may have been
involved as a party or otherwise by reason of an Indemnifiable Event,
including, without 

 

2

 

limitation,
any threatened, pending, or completed action, suit or proceeding by or in the
right of the Company. 

 

Reviewing Party means (A) the Board by a majority vote
of a quorum consisting of Disinterested Directors, or (B) if a quorum of
the Board consisting of Disinterested Directors is not obtainable or, even if
obtainable, said Disinterested Directors so direct, Independent Counsel in
a written opinion to the Board, a copy of which shall be delivered to
Indemnitee.

 

II.            Agreement
To Indemnify

 

1.             General
Agreement.  In the
event Indemnitee was, is, or becomes a Participant in, or is threatened to be
made a Participant in, a Proceeding, the Company shall indemnify the Indemnitee
from and against any and all Expenses which Indemnitee incurs or becomes
obligated to incur in connection with such Proceeding, to the fullest extent
permitted by applicable law.

 

2.             Partial
Indemnification.  If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for a portion of Expenses, but not for the total amount of
Expenses, the Company shall indemnify the Indemnitee for the portion of such
Expenses to which Indemnitee is entitled.

 

3.             Exclusions.  Notwithstanding anything in this Agreement to
the contrary, Indemnitee shall not be entitled to indemnification under
this Agreement:

 

(a)           to the extent
that payment is actually made to Indemnitee under a valid, enforceable and
collectible insurance policy;

 

(b)           to the extent
that Indemnitee is indemnified and actually paid other than pursuant to this
Agreement;

 

(c)           in connection
with any Proceeding initiated by Indemnitee against the Company, any director
or officer of the Company or any other party, and not by way of defense, unless
(i) the Company has joined in or the Reviewing Party (as hereinafter
defined) has consented to the initiation of such Proceeding; or (ii) the
Proceeding is one to enforce indemnification rights under this Agreement or any
applicable law;

 

(d)           for a disgorgement
of profits made from the purchase and sale by the Indemnitee of securities
pursuant to Section 16(b) of the Exchange Act or similar provisions
of any applicable U.S. state statutory law or common law;

 

(e)           for Expenses
that have been finally judicially determined to have resulted from fraud, gross
negligence or willful misconduct of the Indemnitee;

 

(f)            for any
judgment, fine or penalty which the Company is prohibited by applicable law
from paying as indemnity;

 

(g)           arising out of
Indemnitee’s personal tax matter; or

 

(h)           arising out of
Indemnitee’s breach of an employment agreement with the Company (if any) or any
other agreement with the Company or any of its subsidiaries.

 

3

 

4.             No Employment
Rights.  Nothing in this Agreement is
intended to create in Indemnitee any right to continued employment with the
Company.

 

5.             Contribution.  If the
indemnification provided in this Agreement is unavailable and may not be paid
to Indemnitee for any reason other than those set forth in Section II. 3,
then the Company shall contribute to the amount of Expenses paid in settlement
actually and reasonably incurred and paid or payable by Indemnitee in such
proportion as is appropriate to reflect (i) the relative benefits received
by the Company on the one hand and by the Indemnitee on the other hand from the
transaction from which such Proceeding arose, and (ii) the relative fault
of the Company on the one hand and of the Indemnitee on the other hand in
connection with the events which resulted in such Expenses, as well as any
other relevant equitable considerations. 
The relative fault of the Company on the one hand and of the Indemnitee
on the other hand shall be determined by reference to, among other things, the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent the circumstances resulting in such Expenses, judgments,
fines or settlement amounts.  The Company
agrees that it would not be just and equitable if contribution pursuant to this
Section II. 5 were determined by pro rata allocation or any other method
of allocation which does not take account of the foregoing equitable
considerations.

 

III.           Indemnification
Process

 

1.             Notice and
Cooperation By Indemnitee. 
Indemnitee shall give the Company notice in writing as soon as
practicable of any claim made against Indemnitee for which indemnification will
or could be sought under this Agreement. 
Notice to the Company shall be given in accordance with Section VI.7
below.  In addition, Indemnitee
shall give the Company such information and cooperation as the Company may
reasonably request.

 

2.             Indemnification
Payment.

 

(a)           Advancement
of Expenses.  Indemnitee
may submit a written request with reasonable particulars to the Company
requesting that the Company advance to Indemnitee all Expenses that may be
reasonably incurred in advance by Indemnitee in connection with a
Proceeding.  The Company shall, within
ten (10) business days of receiving such a written request by Indemnitee,
advance all requested Expenses to Indemnitee. 
Any excess of the advanced Expenses over the actual Expenses will be
repaid to the Company.

 

(b)           Reimbursement
of Expenses.  To the
extent Indemnitee has not requested any advanced payment of Expenses from the
Company, Indemnitee shall be entitled to receive reimbursement for the
Expenses incurred in connection with a Proceeding from the Company as soon as
practicable after Indemnitee makes a written request to the Company for
reimbursement.

 

(c)           Determination
by the Reviewing Party. 
Notwithstanding the foregoing, (i) the obligations of the Company
under Section II.1 shall be subject to the condition that the Reviewing
Party shall not have determined (in a written opinion, in any case in which the
Independent Counsel referred to in Section III.2(e) hereof is
involved) that Indemnitee would not be permitted to be indemnified under
applicable law or the Company’s Articles of Association, and (ii) the
obligation of the Company to make an advance payment of Expenses to Indemnitee
pursuant to Section III. 2(a) shall be subject to the condition that,
if, when and to the extent that the Reviewing Party determines that Indemnitee
would not be 

 

4

 

permitted
to be so indemnified under applicable law or the Company’s Articles of
Association, the Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore paid;
provided, however, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, any
determination made by the Reviewing Party that Indemnitee would not be permitted
to be indemnified under applicable law shall not be binding and Indemnitee
shall not be required to reimburse the Company for any advanced Expenses until
a final judicial determination is made with respect thereto (as to which all
rights of appeal therefrom have been exhausted or lapsed). The Indemnitee’s
obligation to reimburse the Company for any advanced Expenses shall be
unsecured and no interest shall be charged thereon. If there has not been a
Change in Control, the Reviewing Party shall be selected by the Board, and if
there has been such a Change in Control (other than a Change in Control which
has been approved by a majority of the Company’s Board who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the Independent
Counsel referred to in Section III.2(e) hereof.

 

(d)           Enforcement
of Indemnification Rights.  If
there has been no determination by the Reviewing Party or if the Reviewing
Party determines that Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, or if Indemnitee has not
otherwise been paid in full within 30 days after a written demand has been
received by the Company, Indemnitee shall have the right to commence
litigation in any court having subject matter jurisdiction thereof and in which
venue is proper to recover the unpaid amount of the demand (an “Enforcement
Proceeding”) and, if successful in whole or in part, Indemnitee shall be
entitled to be paid any and all Expenses in connection with such Enforcement
Proceeding.  The Company hereby consents
to service of process and to appear in any such proceeding.

 

(e)           Change
in Control.  The Company
agrees that if there is a Change in Control of the Company (other than a Change
in Control which has been approved by a majority of the Company’s Board who
were directors immediately prior to such Change in Control) then, with respect
to all matters thereafter arising concerning the rights of Indemnitees to
payments of Expenses under this Agreement or any other agreement or under the
Company’s Articles of Association as now or hereafter in effect, Independent
Counsel shall be selected by the Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld). 
Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent Indemnitee would be
permitted to be indemnified under applicable law, and the Company agrees to
abide by such opinion. The Company agrees to pay the reasonable fees of the
Independent Counsel referred to above and to fully indemnify such counsel
against any and all expenses (including attorneys’ fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement pursuant
hereto.

 

3.             Assumption of
Defense.  In the event the Company is
obligated under this Agreement to advance or bear any Expenses for any
Proceeding against Indemnitee, the Company shall be entitled to assume the
defense of such Proceeding, with counsel approved by Indemnitee, upon delivery
to Indemnitee of written notice of its election to do so.  After delivery of such notice, approval of
such counsel by Indemnitee in writing and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with respect to the 

 

5

 

same
Proceeding, unless (i) the employment of counsel by Indemnitee has been
previously authorized by the Company, (ii) Indemnitee shall have
reasonably concluded that, based on written advice of counsel, there may be a
conflict of interest of such counsel retained by the Company between the
Company and Indemnitee in the conduct of any such defense, or that counsel
selected by the Company may not be adequately representing Indemnitee, or  (iii) the Company ceases or terminates
the employment of such counsel with respect to the defense of such Proceeding,
in any of which events the fees and expenses of Indemnitee’s counsel shall be
at the expense of the Company.  At all
times, Indemnitee shall have the right to employ counsel in any Proceeding
at Indemnitee’s expense.

 

4.             Defense to
Indemnification, Burden of Proof and Presumptions.  It shall be a defense to any action brought
by Indemnitee against the Company to enforce this Agreement that it is not
permissible under this Agreement or applicable law for the Company to indemnify
the Indemnitee for the amount claimed. 
In connection with any such action or any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified under
this Agreement, the burden of proving such a defense or determination shall be
on the Company.  Neither the failure of
the Reviewing Party or the Company to have made a determination prior to the
commencement of such action by Indemnitee that indemnification is proper under
the circumstances because Indemnitee has met the standard of conduct set forth
in applicable law, nor an actual determination by the Reviewing Party or the
Company that Indemnitee had not met such applicable standard of conduct shall
be a defense to the action or create a presumption that Indemnitee has not met
the applicable standard of conduct.

 

5.             No Settlement
Without Consent.  Neither
party to this Agreement shall settle any Proceeding in any manner that would
impose any damage, loss, penalty or limitation on Indemnitee without the other
party’s written consent.  Neither the
Company nor Indemnitee shall unreasonably withhold its consent to any proposed
settlement.

 

6.             Company
Participation.  Subject to Section II.5,
the Company shall not be liable to indemnify the Indemnitee under this
Agreement with regard to any judicial action if the Company was not given a
reasonable and timely opportunity, at its expense, to participate in the
defense, conduct and/or settlement of such action.

 

IV.           Director
and Officer Liability Insurance

 

1.             Liability
Insurance.  The Company
shall obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the officers and directors of the Company with
coverage for losses incurred in connection with their services to the Company
or to ensure the Company’s performance of its indemnification obligations under
this Agreement.  To the extent the
Company determines that it is no longer practicable for the Company to maintain
such insurances, it shall notify promptly its directors and officers before it
terminates such insurances and such termination must be approved by the
majority of the Company’s directors.

 

2.             Coverage of
Indemnitee.  To the
extent the Company maintains an insurance policy or policies providing
directors’ and officers’ liability insurance, Indemnitee shall be covered
by such policy or policies, in accordance with its or their terms, to the
maximum extent of the coverage available for any of the Company’s directors or
officers.

 

6

 

3.             No Obligation.  Notwithstanding the foregoing, the Company
shall have no obligation to obtain or maintain any director and officer
insurance policy if a majority of the Company’s directors determines in good
faith that such insurance is not reasonably available in the case that (i) premium
costs for such insurance are disproportionate to the amount of coverage
provided, (ii) the coverage provided by such insurance is limited by
exclusions so as to provide an insufficient benefit, or (iii) Indemnitee
is covered by similar insurance maintained by a parent or subsidiary of the
Company.

 

V.            Non-Exclusivity;
Federal Preemption; Term

 

1.             Non-Exclusivity.  The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may
be entitled under the Articles of Association, any vote of shareholders or
directors, applicable law or any written agreement between Indemnitee and the
Company (including its subsidiaries and affiliates).  The indemnification provided under this
Agreement shall continue to be available to Indemnitee for any action taken or
not taken while serving in an indemnified capacity even though he may have
ceased to serve in any such capacity at the time of any Proceeding.

 

2.             Federal
Preemption. 
Notwithstanding the foregoing, both the Company and Indemnitee acknowledge
that in certain instances, U.S. federal law or public policy may override
applicable law and prohibit the Company from indemnifying its directors and
officers under this Agreement or otherwise. 
Such instances include, but are not limited to, the U.S. Securities and
Exchange Commission’s prohibition on indemnification for liabilities arising
under certain U.S. federal securities laws. 
Indemnitee understands and acknowledges that the Company has undertaken
or may be required in the future to undertake with the SEC to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company’s right under public policy to indemnify
Indemnitee.

 

3.             Duration of Agreement.  All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is an officer
and/or a director of the Company (or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as Indemnitee shall be subject to any Proceeding by reason
of his former or current capacity at the Company or any other enterprise,
including service with respect to employee benefit plans) at the Company’s
request, whether or not he is acting or serving in any such capacity at the
time any Expense is incurred for which indemnification can be provided under
this Agreement.  This Agreement shall
continue in effect regardless of whether Indemnitee continues to serve as an
officer and/or a director of the Company or any other enterprise at the Company’s
request.

 

VI.           Miscellaneous

 

1.             Amendment of
this Agreement.  No
supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by the parties hereto.  No waiver of any of the provisions of this
Agreement shall operate as a waiver of any other provisions (whether or not
similar), nor shall such waiver constitute a continuing waiver.  Except as specifically provided in this
Agreement, no failure to exercise or any delay in exercising any right or
remedy shall constitute a waiver.

 

2.             Subrogation.  In the event of payment to Indemnitee by the
Company under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the 

 

7

 

rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company to bring suit to enforce such
rights.

 

3.             Assignment;
Binding Effect.  Neither
this Agreement nor any of the rights or obligations hereunder may be assigned
by either party hereto without the prior written consent of the other party;
except that the Company may, without such consent, assign all such rights and
obligations to a successor in interest to the Company which assumes all
obligations of the Company under this Agreement in a written agreement in form
and substance satisfactory to Indemnitee. 
Notwithstanding the foregoing, this Agreement shall be binding upon and
inure to the benefit of and be enforceable by and against the parties hereto
and the Company’s successors (including any direct or indirect successor by
purchase, merger, consolidation, or otherwise to all or substantially all of
the business and/or assets of the Company) and assigns, as well as Indemnitee’s
spouses, heirs, and personal and legal representatives.

 

4.             Severability
and Construction.  Nothing in
this Agreement is intended to require or shall be construed as requiring the
Company to do or fail to do any act in violation of applicable law.  The Company’s inability, pursuant to a court
order, to perform its obligations under this Agreement shall not constitute a
breach of this Agreement.  In addition,
if any portion of this Agreement shall be held by a court of competent
jurisdiction to be invalid, void, or otherwise unenforceable, the remaining
provisions shall remain enforceable to the fullest extent permitted by
applicable law.  The parties hereto
acknowledge that they each have opportunities to have their respective counsels
review this Agreement.  Accordingly, this
Agreement shall be deemed to be the product of both of the parties hereto, and
no ambiguity shall be construed in favor of or against either of the parties
hereto.

 

5.             Counterparts.  This Agreement may be executed in two
counterparts, both of which taken together shall constitute one instrument.

 

6.             Governing Law.  This agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
New York, U.S.A., without giving effect to conflicts of law provisions thereof.

 

7.             Notices.  All notices, demands, and other
communications required or permitted under this Agreement shall be made in
writing and shall be deemed to have been duly given if delivered by hand,
against receipt, on the date of delivery, or mailed, on the third business day
after mailing, postage prepaid, certified or registered mail, return receipt
requested, and addressed to the Company at:

 

Bona Film Group Limited

11/F, Guan Hu Garden 3

105 Yao Jia Yuan Road, Chaoyang District

Beijing 100025

People’s Republic of China

Attention:  Mr. Liang Xu

 

8

 

and
to Indemnitee at:

 

[Name]

[Address]

[Address]

[Address]

 

Notice
of change of address shall be effective only when done in accordance with this
Section.

 

8.             Certain
Relationships.  The
obligations and rights created under this Agreement shall not be affected by
any amendment to the Company’s Articles of Association or any other agreement
or instrument to which Indemnitee is not a party, and shall not diminish any
other rights which Indemnitee now or in the future has against the Company or
any other person or entity.

 

9.             Acknowledgment.  The Company expressly acknowledges that it
has entered into this Agreement and assumed the obligations imposed on the Company
under this Agreement in order to induce Indemnitee to serve or to continue to
serve as a director or officer and acknowledges that Indemnitee is relying on
this Agreement in serving or continuing to serve in such capacity.  The Company further agrees to stipulate in
any court proceeding that the Company is bound by all of the provisions of this
Agreement.

 

10.           Period of
Limitations.  No legal
action shall be brought and no cause of action shall be asserted by or in the
right of the Company against Indemnitee, or Indemnitee’s estate, heirs,
executors, administrators or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of action, and
any claim or cause of action of the Company shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such
two-year period; provided, however, that if any shorter period of limitations
is otherwise applicable to any such cause of action, such shorter period shall
govern.

 

11.           Entire
Agreement.  This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof.

 

(Signature page follows)

 

9

 

IN
WITNESS WHEREOF, the parties hereto execute this Agreement as of the date first
written above.

 

 

	
  COMPANY

  	
   

  
	
   

  	
   

  
	
  BONA
  FILM GROUP LIMITED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  INDEMNITEE

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

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