Document:

exv4w50

EXHIBIT 4.50

CHINA UNICOM (HONG KONG) LIMITED

SPECIAL PURPOSE UNICOM SHARE OPTION SCHEME

(APPROVED BY AN ORDINARY RESOLUTION OF THE

COMPANY ON 16 SEPTEMBER 2008

AND EFFECTIVE FROM 15 OCTOBER 2008 AND

AMENDED BY ORDINARY RESOLUTION OF THE

COMPANY ON 26 MAY 2009)

 

 

Contents

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	1. Definitions

	 	 	1	 
	 
	 	 	 	 
	2. Eligibility of Participants

	 	 	4	 
	 
	 	 	 	 
	3. Number of Shares Subject to this Scheme

	 	 	4	 
	 
	 	 	 	 
	4. Grant of Options

	 	 	5	 
	 
	 	 	 	 
	5. Exercise of Options and Proceeds

	 	 	5	 
	 
	 	 	 	 
	6. Rights on Cessation of Employment

	 	 	8	 
	 
	 	 	 	 
	7. Rights on Death

	 	 	9	 
	 
	 	 	 	 
	8. Rights on Loss of Capacity

	 	 	9	 
	 
	 	 	 	 
	9. Change of Control

	 	 	9	 
	 
	 	 	 	 
	10. Amendments to and Termination of this Scheme

	 	 	10	 
	 
	 	 	 	 
	11. Cancellation of the Options

	 	 	10	 
	 
	 	 	 	 
	12. Ranking of Shares

	 	 	10	 
	 
	 	 	 	 
	13. Duration of this Scheme

	 	 	11	 
	 
	 	 	 	 
	14. General

	 	 	11	 

 

 

CHINA UNICOM (HONG KONG) LIMITED

SPECIAL PURPOSE UNICOM SHARE OPTION SCHEME

     The Special Purpose Unicom Share Option Scheme is adopted in connection with the merger of the
Company and Netcom by way of a scheme of arrangement of Netcom under Section 166 of the Companies
Ordinance and has been formulated to establish and refine an effective internal incentive and
disciplinary mechanism of the Company, to retain talented employees, and to encourage and promote
the participants to diligently achieve an enhancement in the value of the Company. This Scheme is
modelled on international practices, and has taken into consideration the specific circumstances in
the development of the enterprise as well as the Company’s remuneration and performance appraisal
systems.

1. Definitions

     In this Scheme, unless the context otherwise requires, the following terms shall have the
meanings set out below:

	 	 	 
	“2004 Netcom Options”

	 	means the Netcom Options granted by Netcom on 22
October 2004 pursuant to the Netcom Share Option
Scheme;
	 
	 	 
	“2005 Netcom Options”

	 	means the Netcom Options granted by Netcom on 6
December 2005 pursuant to the Netcom Share Option
Scheme;
	 
	 	 
	“Adjustable Options”

	 	has the meaning given to it in Clause 5(3);
	 
	 	 
	“Board”

	 	means the board of directors of the Company;
	 
	 	 
	“change of control”

	 	has the meaning given to it in Clause 9;
	 
	 	 
	“Companies Ordinance”

	 	means the Companies Ordinance (Chapter 32 of the
Laws of Hong Kong), as amended from time to time;
	 
	 	 
	“Company”

	 	means China Unicom (Hong Kong) Limited, a company
incorporated in Hong Kong whose Shares are listed
on the Hong Kong Stock Exchange and whose American
depositary shares are listed on the New York Stock
Exchange, Inc.;
	 
	 	 
	“County Branch
Companies”

	 	means the branch companies of the Provincial
Companies located in various counties;
	 
	 	 
	“Effective Options”

	 	means Options granted pursuant to this Scheme,
irrespective of whether such Options are
exercisable in accordance with the relevant Vesting
Schedule;
	 
	 	 
	“Eligible Participants”

	 	means the holders of Netcom Options outstanding as
at the Netcom Scheme Record Time, being directors,
chief executives or Middle-to-Senior Management or
Specialised Professionals of Netcom or its
Subsidiaries;

Page 1

 

	 	 	 
	“Exercise Date”

	 	means the calendar day on which Shares can be
subscribed for where the requirements under this
Scheme are satisfied. If Shares are not traded on
the Hong Kong Stock Exchange on a particular
Exercise Date, the Exercise Date shall be postponed
to the next calendar day on which Shares are traded
on the Hong Kong Stock Exchange;
	 
	 	 
	“Exercise Price”

	 	means the price per Share, determined in accordance
with Clause 4(3) of this Scheme, which is payable
by a grantee for the subscription of Shares as a
result of an exercise of Options in accordance with
this Scheme;
	 
	 	 
	“First Tier”

	 	has the meaning given to it in Clause 5(1)(a) or
Clause 5(2)(a) (as the case may be);
	 
	 	 
	“Fourth Tier”

	 	has the meaning given to it in Clause 5(1)(d) or
Clause 5(2)(d) (as the case may be);
	 
	 	 
	“HK$”

	 	means Hong Kong dollars, the lawful currency of
Hong Kong;
	 
	 	 
	“Hong Kong”

	 	means the Hong Kong Special Administrative Region
of the People’s Republic of China;
	 
	 	 
	“Hong Kong Stock
Exchange”

	 	means The Stock Exchange of Hong Kong Limited;
	 
	 	 
	“Listing Rules”

	 	means the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited;
	 
	 	 
	“Mandatory Moratorium”

	 	means any prohibition on the exercise of any Option
which would otherwise be exercisable, the
imposition of which is not made by nor within the
control of the Company. For the avoidance of doubt
and by way of illustration, this includes any
mandatory prohibition on the exercise of any Option
imposed by the central government of the People’s
Republic of China;
	 
	 	 
	“Mandatory Moratorium
Period”

	 	means the period of time during which an Option is
subject to a Mandatory Moratorium;
	 
	 	 
	“Middle-to-Senior
Management”

	 	means general manager or management staff with
equivalent rank or above at various Provincial
Companies or County Branch Companies of Netcom;
	 
	 	 
	“Netcom”

	 	means China Netcom Group Corporation (Hong Kong)
Limited, a company incorporated in Hong Kong and a
wholly-owned subsidiary of the Company with effect
from the Netcom Scheme Effective Date;

Page 2

 

	 	 	 
	“Netcom Options”

	 	means the right to subscribe for shares in the
capital of Netcom in accordance with the Netcom
Share Option Scheme and comprise the 2004 Netcom
Options and the 2005 Netcom Options;
	 
	 	 
	“Netcom Scheme
Effective Date”

	 	means the date on which the Netcom Scheme of
Arrangement becomes effective in accordance with
its terms;
	 
	 	 
	“Netcom Scheme of
Arrangement”

	 	means the scheme of arrangement under Section 166
of the Companies Ordinance between Netcom and its
shareholders involving, among other things, the
cancellation of all the issued shares of Netcom;
	 
	 	 
	“Netcom Scheme Record
Time”

	 	means 5:00 p.m. (Hong Kong time) on 14 October 2008;
	 
	 	 
	“Netcom Share Option
Scheme”

	 	means the Share Option Scheme for Middle-to-Senior
Management of China Netcom Group Corporation (Hong
Kong) Limited adopted by Netcom on 30 September
2004, as amended from time to time;
	 
	 	 
	“Options”

	 	means the right to subscribe for Shares at the
Exercise Price in accordance with this Scheme,
granted pursuant to this Scheme;
	 
	 	 
	“Options Effective Term”

	 	means the period commencing from the Netcom Scheme
Effective Date to the date on which Options lapse
in accordance with the terms of this Scheme;
	 
	 	 
	“Provincial Companies”

	 	means the subsidiaries or branch companies of
Netcom located in various provinces, autonomous
regions and municipalities of the People’s Republic
of China;
	 
	 	 
	“Remuneration Committee”

	 	means the committee established by the Board, with
primary duties to formulate remuneration policies
and is responsible for dealing with all matters
relating to this Scheme as authorised by the Board;
its members are appointed by the Board with terms
of office determined by the Board and the Board has
the power to remove any member at any time;
	 
	 	 
	this “Scheme”

	 	means the Special Purpose Unicom Share Option
Scheme of China Unicom (Hong Kong) Limited;
	 
	 	 
	“Scheme Effective Term”

	 	means the period commencing on the Netcom Scheme
Effective Date and ending on 30 September 2014
(inclusive), being the date falling 10 years after
the date on which the Netcom Share Option Scheme
was adopted, unless the Board terminates this
Scheme in accordance with its power under the terms
of this Scheme;
	 
	 	 
	“Second Tier”

	 	has the meaning given to it in Clause 5(1)(b) or
Clause 5(2)(b) (as the case may be);

Page 3

 

	 	 	 
	“Share Exchange Ratio”

	 	means the exchange ratio of 1.508 Shares for each
share of Netcom under the Netcom Scheme of
Arrangement;
	 
	 	 
	“Shares”

	 	means ordinary shares of HK$0.10 each in the share
capital of the Company;
	 
	 	 
	“Special Purpose 2004
Unicom Options”

	 	has the meaning given to it in Clause 5(1);
	 
	 	 
	“Special Purpose 2005
Unicom Options”

	 	has the meaning given to it in Clause 5(2);
	 
	 	 
	“Specialised
Professionals”

	 	means professionals or management staff or
technical or marketing staff holding important
positions of Netcom or its Subsidiaries who are
important to the development of Netcom’s business;
	 
	 	 
	“Subsidiaries”

	 	means the branch companies or subsidiaries of
Netcom or joint venture companies with legal person
status in which Netcom has invested. The
definitions of subsidiaries in the Companies
Ordinance shall govern the relevant percentages of
shareholding or voting right control that Netcom
shall have in these companies;
	 
	 	 
	“Third Tier”

	 	has the meaning given to it in Clause 5(1)(c) or
Clause 5(2)(c) (as the case may be); and
	 
	 	 
	“Vesting Schedule”

	 	means the arrangement whereby Options granted at a
particular time can be exercised in one lot or in
batches in accordance with a pre-determined
timetable.

2. Eligibility of Participants

     The Eligible Participants of this Scheme are the holders of Netcom Options outstanding as at
the Netcom Scheme Record Time.

3. Number of Shares Subject to this Scheme

     (1) The total number of Options to be granted by the Company to all Eligible Participants
under this Scheme shall be equal to the product of (a) the Share Exchange Ratio and (b) the number
of Netcom Options outstanding as at the Netcom Scheme Record Time. The maximum number of Shares
which may be issued upon the exercise of all options to be granted under this Scheme and any other
share option schemes of the Company must not in aggregate exceed 10% of the issued share capital of
the Company as at the date of approval of this Scheme.

     (2) The number of Options which shall be granted to an Eligible Participant shall not exceed
such number of Options determined in accordance with the formula set out in Clause 4(3).

Page 4

 

4. Grant of Options

     (1) The Board shall grant Options to the Eligible Participants at the Exercise Price on the
terms and conditions set out in this Scheme.

     (2) The Options shall be granted by the Board no later than 10 days after the Netcom Scheme
Effective Date.

     (3) The number of Options to be granted by the Board to an Eligible Participant and the
Exercise Price of such Options shall be determined in accordance with the following formula:

Number of Options = A x B

Exercise Price = C / A

where:

A is the Share Exchange Ratio;

B is the number of outstanding 2004 Netcom Options or 2005 Netcom Options (as the case may be) held
by an Eligible Participant at the Netcom Scheme Record Time; and

C is the exercise price of an outstanding 2004 Netcom Option or an outstanding 2005 Netcom Option
(as the case may be) held by an Eligible Participant at the Netcom Scheme Record Time, being
HK$8.40 for a 2004 Netcom Option and HK$12.45 for a 2005 Netcom Option,

provided that fractions of Options will not be granted to any Eligible Participant.

Based on the formula set out above, the Exercise Price of a Special Purpose 2004 Unicom Option is
HK$5.57 and the Exercise Price of a Special Purpose 2005 Unicom Option is HK$8.26.

5. Exercise of Options and Proceeds

     (1) Options granted to Eligible Participants in respect of the 2004 Netcom Options held by
them as at the Netcom Scheme Record Time (the Special Purpose 2004 Unicom Options) shall be
effective from the Netcom Scheme Effective Date until 16 November 2010. Any Special Purpose 2004
Unicom Option not exercised by 16 November 2010 shall lapse automatically. The Special Purpose
2004 Unicom Options shall only be exercised in batches in accordance with the Vesting Schedule
below. The maximum number of Special Purpose 2004 Unicom Options that can be exercised at each
tier shall not exceed the limits set out below:

	 	(a)	 	100% of the Special Purpose 2004 Unicom Options granted in
respect of the outstanding 2004 Netcom Options held by the Eligible
Participants at the Netcom Scheme Record Time which are exercisable from 17 May
2006 to 16 November 2010 may be exercised at any time from the Netcom Scheme
Effective Date to 16 November 2010 (the First Tier);

Page 5

 

	 	(b)	 	100% of the Special Purpose 2004 Unicom Options granted in
respect of the outstanding 2004 Netcom Options held by the Eligible
Participants at the Netcom Scheme Record Time which are exercisable from 17 May
2007 to 16 November 2010 may be exercised at any time from the Netcom Scheme
Effective Date to 16 November 2010 (the Second Tier);
	 
	 	(c)	 	100% of the Special Purpose 2004 Unicom Options granted in
respect of the outstanding 2004 Netcom Options held by the Eligible
Participants at the Netcom Scheme Record Time which are exercisable from 17 May
2008 to 16 November 2010 may be exercised at any time from the Netcom Scheme
Effective Date to 16 November 2010 (the Third Tier); and
	 
	 	(d)	 	100% of the Special Purpose 2004 Unicom Options granted in
respect of the outstanding 2004 Netcom Options held by the Eligible
Participants at the Netcom Scheme Record Time which are exercisable from 17 May
2009 to 16 November 2010 may be exercised at any time from 17 May 2009 to 16
November 2010 (the Fourth Tier).

     (2) Options granted to Eligible Participants in respect of the 2005 Netcom Options held by
them as at the Netcom Scheme Record Time (the Special Purpose 2005 Unicom Options) shall be
effective from the Netcom Scheme Effective Date until 5 December 2011. Any Special Purpose 2005
Unicom Option not exercised by 5 December 2011 shall lapse automatically. The Special Purpose 2005
Unicom Options shall only be exercised in batches in accordance with the Vesting Schedule below.
The maximum number of Special Purpose 2005 Unicom Options that can be exercised at each tier shall
not exceed the limits set out below:

	 	(a)	 	100% of the Special Purpose 2005 Unicom Options granted in
respect of the outstanding 2005 Netcom Options held by the Eligible
Participants at the Netcom Scheme Record Time which are exercisable from 6
December 2007 to 5 December 2011 may be exercised at any time from the Netcom
Scheme Effective Date to 5 December 2011 (the First Tier);
	 
	 	(b)	 	100% of the Special Purpose 2005 Unicom Options granted in
respect of the outstanding 2005 Netcom Options held by the Eligible
Participants at the Netcom Scheme Record Time which are exercisable from 6
December 2008 to 5 December 2011 may be exercised at any time from 6 December
2008 to 5 December 2011 (the Second Tier);
	 
	 	(c)	 	100% of the Special Purpose 2005 Unicom Options granted in
respect of the outstanding 2005 Netcom Options held by the Eligible
Participants at the Netcom Scheme Record Time which are exercisable from 6
December 2009 to 5 December 2011 may be exercised at any time from 6 December
2009 to 5 December 2011 (the Third Tier); and

Page 6

 

	 	(d)	 	100% of the Special Purpose 2005 Unicom Options granted in
respect of the outstanding 2005 Netcom Options held by the Eligible
Participants at the Netcom Scheme Record Time which are exercisable from 6
December 2010 to 5 December 2011 may be exercised at any time from 6 December
2010 to 5 December 2011 (the Fourth Tier).

     (3) The exercise of a portion of the Options of the Eligible Participants (excluding Eligible
Participants who were senior management and directors of Netcom prior to the Netcom Scheme
Effective Date) exercisable at each tier pursuant to the above Vesting Schedule (the Adjustable
Options) shall be subject to the results of the performance review of the grantee in respect of the
year immediately preceding the commencement of the relevant tier as measured against the Company’s
performance review plan. Part or all of the Adjustable Options shall be subject to cancellation
depending upon the results of the performance review. The Adjustable Options shall be determined by
the Company with reference to the number of Options exercisable at each tier, the expected yield of
each Option and the difference between the average price of the Shares in the year immediately
preceding the commencement of the relevant tier and the Exercise Price of the Options.

     (4) Except for the transmission of the Options on the death of a grantee of Options to his
personal representatives or authorised persons, neither the Options nor any relevant rights may be
transferred, assigned or otherwise disposed of by any grantee to any other person. If a grantee
transfers, assigns or disposes of such Options or rights, the Company will be entitled to cancel
the Options granted to the grantee.

     (5) The increase in the number of Options exercisable by a grantee as a result of another tier
of the Vesting Schedule applying (for example, (i) when the First Tier applies, the Options
exercisable at the First Tier shall be deemed as the increase in the number of Options exercisable
by the grantee and (ii) when the Second Tier applies, the Options exercisable at the Second Tier
shall be the increase in the number of Options exercisable by the grantee) shall be subject to
cancellation upon the happening of any of the following events:

	 	(a)	 	the annual performance review of the Company for the year
preceding the commencement of the relevant tier shows that the Company is
unable to meet the performance review targets;
	 
	 	(b)	 	the issuance of a negative opinion by the Company’s accountants
or the Company’s accountants being unable to issue an opinion on the financial
reports in respect of the year preceding the commencement of the relevant tier;
or
	 
	 	(c)	 	where the Supervisory Panel or the audit authorities for
State-owned enterprises of the State Council have raised material objections to
the results or the annual report of the Company in respect of the year
preceding the commencement of the relevant tier.

     (6) In the event that the grantee is to be demoted, his unvested Options pursuant to the
Vesting Schedule will be reduced to reflect his new position and the reduced Options will
automatically lapse.

Page 7

 

     (7) In the event of a capitalisation issue, rights issue, sub-division or consolidation of
Shares or reduction of capital, the Board has the right to make corresponding alterations to the
number of Shares involved in the Options granted under this Scheme and the Exercise Price, provided
that the proportion of the total number of Shares involved in this Scheme to the total number of
issued Shares shall remain unchanged. Such adjustments shall give participants to this Scheme the
same proportion of the issued share capital to which they would have been entitled prior to such
alteration, and no adjustment shall be made the effect of which would be to enable Shares to be
issued at less than its nominal value.

     (8) In the event that a Mandatory Moratorium is imposed in respect of any Option during a time
when it would otherwise be exercisable, the Board shall have the power to extend the period during
which that Option may be exercisable by such period (which shall not exceed the aggregate Mandatory
Moratorium Period to which the relevant Option is at that time known to the Board to have been
and/or will be subject) as the Board shall in its absolute discretion determine, by giving notice
thereof to the relevant Grantee.

     (9) The proceeds from the exercise of Options shall be the multiple of the number of Options
being exercised and the difference between the market price of the Shares upon the exercise of the
Options by the grantee and the Exercise Price, less the relevant tax expenses. After exercising the
Options, the proceeds shall belong to the person who exercised the Options. If the grantee does not
exercise the Options within the period during which he is entitled to exercise the Options, the
Options shall lapse and the proceeds shall be zero.

     (10) Prior to exercising part or all of his Options, the grantee shall inform the Company in
writing of his intention to exercise the Options together with the number of Shares, the Exercise
Price etc.

     (11) The grantee is required to exercise his Options through the intermediaries selected by
the Company.

6. Rights on Cessation of Employment

     (1) If the grantee of an Option ceases to be an employee because of misconduct or criminal
conviction, all the Effective Options of such employee which have not yet been exercised shall
lapse on the date of cessation of his employment and such Options shall in no circumstances be
exercisable.

     (2) If the grantee of an Option is transferred internally to China United Telecommunications
Corporation and its controlled entities, China Network Communications Group Corporation and its
controlled entities, or the Company and its subsidiaries, the grantee shall be entitled to exercise
the Options in accordance with the Vesting Schedule and this Scheme.

     (3) If the grantee of an Option is transferred out of the Company with the Company’s consent
(for any reason other than Clause 6(2)), the grantee may, at any time within 90 days of the date of
the cessation of his employment, exercise the Options of such grantee which are exercisable as at
the date of the cessation of his employment as well as the Options which are exercisable at the
tier immediately following the tier that applies to the grantee at the date of cessation of his
employment. Any such Options which

Page 8

 

are not exercised within the 90-day period shall lapse automatically. All the Options
exercisable at later tiers shall lapse automatically.

     (4) If the grantee of an Option retires, the grantee may, at any time within 90 days of the
date of his retirement, exercise the Effective Options of such grantee which have not yet been
exercised. Any such Options which are not exercised within the 90-day period shall lapse
automatically.

     (5) If the grantee of an Option ceases to be an employee for any reason other than death, loss
of capacity or any of the reasons as referred to under Clauses 6(1), 6(2), 6(3) or 6(4) and for
reason of his resignation, all of his Effective Options not yet exercised shall lapse on the date
of cessation of his employment.

7. Rights on Death

     If the grantee of an Option dies and none of the grounds for cessation of employment as
referred to in Clause 6(1) has occurred, Effective Options granted (but not yet exercised) shall be
vested in the grantee’s estate and the grantee’s personal representatives or authorised persons
shall be entitled to exercise such Effective Options within 90 days of the date of the grantee’s
death. Any such Options which are not exercised within the 90-day period shall lapse automatically.

8. Rights on Loss of Capacity

     The guardian of the grantee of an Option or authorised persons may, at any time during the
period within 90 days of the date of the loss of capacity of such grantee, exercise the Effective
Options granted to such grantee but not yet exercised as at the date of the loss of capacity of
such grantee. Any such Options which are not exercised within the 90-day period shall lapse
automatically.

9. Change of Control

     For the purpose of this Scheme, change of control means the occurrence of any of the following
events following the Netcom Scheme Effective Date and the issue of Shares pursuant to the Netcom
Scheme of Arrangement:

     (1) any person, entity or organisation having acquired or become the holder of 30% or more of
the Shares in issue or the voting rights attached to the Company’s issued securities (or such
percentage of voting rights as prescribed under the Hong Kong Code on Takeovers and Mergers
triggering a mandatory offer obligation).

For the purpose of this Clause 9(1), the following circumstances shall not be regarded as a
change of control:

	 	•	 	the acquiring person(s), entity(ies) or organisation(s) is/are connected with the
Company within the definition of the Companies Ordinance;
	 
	 	•	 	the Shares or the voting rights, as the case may be, are acquired by the Company;
	 
	 	•	 	the Shares or the voting rights, as the case may be, are acquired by the employee
share option scheme established or supervised by the Company (or by the related trust
funds);

Page 9

 

     (2) the Company being a party to any material reorganisation, merger or acquisition which has
been unanimously approved by the shareholders of the Company;

     (3) the Company being liquidated or reorganised.

     In the event of change of control, the Effective Options which are held by the grantee but
outstanding shall become immediately exercisable. The exercise period shall be 12 months from the
date on which the change of control occurs.

10. Amendments to and Termination of this Scheme

     (1) The Board may amend any of the provisions of this Scheme and the terms of the Options
(including amendments in order to comply with changes in legal or regulatory requirements) at any
time.

     (2) Any alterations to the matters set out in the Listing Rules which are to the advantage of
grantees of Options shall only be made with the approval of the shareholders of the Company in
general meeting.

     (3) Any alterations to the terms and conditions of this Scheme which are of a material nature
shall be approved by the shareholders of the Company in general meeting, except where the
alterations take effect automatically under the existing terms of this Scheme.

     Any change to the authority of the Board in relation to alteration of the terms of this Scheme
shall be approved by shareholders of the Company in general meeting.

     The amended Scheme and the terms thereof shall comply with the relevant requirements of the
Listing Rules.

     (4) For the avoidance of doubt, all Options granted after the Netcom Scheme Effective Date
shall be bound by the rules of the Scheme as amended from time to time.

     (5) During the Scheme Effective Term, the Board may at any time terminate this Scheme, and in
such event the Options granted under this Scheme (to the extent not already exercised) may still be
exercised pursuant to the rules of this Scheme or may be cancelled by the Board pursuant to Clause
11.

11. Cancellation of the Options

     The Board may resolve to cancel any Options granted but not yet exercised.

     Lapsed Options shall be deemed to be automatically cancelled on the date of lapse.

12. Ranking of Shares

     (1) Subject to the granting of listing by the Hong Kong Stock Exchange, the Shares to be
allotted and issued upon the exercise of an Option will be Shares tradable in the stock market. The
Company will have authorised the allotment and issue of such Shares. Such Shares may be allotted
but unissued Shares, reserved Shares or Shares repurchased upon approval of the Board, provided
that there will not be any contravention of applicable laws, regulations and the rules of the
relevant stock exchange.

Page 10

 

     (2) Options which are outstanding shall not be entitled to any dividend and voting rights. The
Shares allotted and issued upon the exercise of an Option will rank pari passu in all respects with
the issued Shares, other than the rights and benefits attached to the Shares prior to the Exercise
Date.

13. Duration of this Scheme

     Unless the Board terminates this Scheme in accordance with its power under the terms of this
Scheme, this Scheme will remain in effect during the Scheme Effective Term and will automatically
terminate upon the expiration of the Scheme Effective Term.

14. General

     (1) Unless otherwise provided, the decision of the Board regarding the Options shall be final
and binding on all parties.

     (2) This Scheme shall be administered and interpreted by the Remuneration Committee subject to
the Listing Rules. The Human Resources Department of the Company shall be responsible for the
implementation of this Scheme, and the formulation of the implementation rules of each grant which
shall be put forward to the Board for approval.

     (3) This Scheme shall become effective on the Netcom Scheme Effective Date.

     (4) This Scheme and all Special Unicom Options granted hereunder shall be governed by, and
construed in accordance with, Hong Kong law.

Page 11exv10w1

Exhibit 10.1

SUBSCRIPTION AGREEMENT

Fuel Systems Solutions, Inc.

3030 South Susan Street

Santa Ana, California 92704

Gentlemen:

     The undersigned (the “Investor”) hereby confirms its agreement with Fuel Systems Solutions,
Inc., a Delaware corporation (the “Company”), as follows:

     1. This Subscription Agreement, including the Terms and Conditions for Purchase of Shares
attached hereto as Annex I (collectively, this “Agreement”) is made as of the date set
forth below between the Company and the Investor.

     2. The Company has authorized the sale and issuance to certain investors of up to an aggregate
of 1,500,000 shares (the “Shares”) of its Common Stock, par value $0.001 per share (the “Common
Stock”), subject to adjustment by the Company’s Board of Directors or a committee thereof, for a
purchase price of $20.00 per share (the “Purchase Price”).

     3. The offering and sale of the Shares (the “Offering”) are being made pursuant to (a) an
effective Registration Statement on Form S-3, No. 333-159624 (the “Registration Statement”) filed
by the Company with the Securities and Exchange Commission (the “Commission”), including the
Prospectus contained therein (the “Base Prospectus”), (b) if applicable, certain “free writing
prospectuses” (as that term is defined in Rule 405 under the Securities Act of 1933, as amended
(the “Act”)), that have been or will be filed with the Commission and delivered to the Investor on
or prior to the date hereof (the “Issuer Free Writing Prospectus”), containing certain
supplemental information regarding the Shares, the terms of the Offering and the Company and (c) a
Prospectus Supplement (the “Prospectus Supplement” and, together with the Base Prospectus, the
“Prospectus”) containing certain supplemental information regarding the Shares and terms of the
Offering that has been or will be filed with the Commission and delivered to the Investor (or made
available to the Investor by the filing by the Company of an electronic version thereof with the
Commission).

     4. The Company and the Investor agree that the Investor will purchase from the Company and the
Company will issue and sell to the Investor the Shares of Common Stock set forth below for the
aggregate purchase price set forth below. The Shares shall be purchased pursuant to the Terms and
Conditions for Purchase of Shares attached hereto as Annex I and incorporated herein by
this reference as if fully set forth herein. The Investor acknowledges that the Offering is not
being underwritten by the placement agent (the “Placement Agent”) named in the Prospectus
Supplement and that there is no minimum offering amount.

     5. The manner of settlement of the Shares purchased by the Investor shall be determined by
such Investor as follows:

 

 

Delivery by crediting the account of the Investor’s prime broker (as specified by such
Investor on Exhibit A annexed hereto) with the Depository Trust Company (“DTC”)
through its Deposit/Withdrawal At Custodian (“DWAC”) system, whereby Investor’s prime
broker shall initiate a DWAC transaction on the Closing Date using its DTC participant
identification number, and released by Mellon Bank, the Company’s transfer agent (the
“Transfer Agent”), at the Company’s direction. NO LATER THAN ONE (1) BUSINESS DAY AFTER
THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:

	 	(I)	 	DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED
WITH THE SHARES ARE MAINTAINED TO SET UP A DWAC INSTRUCTING THE TRANSFER AGENT TO
CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES, AND
	 
	 	(II)	 	REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE
PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING
ACCOUNT:

JPMorgan Chase Bank, N.A.

ABA # 021000021

Account Name: Fuel Systems Solutions, Inc.

Account Number: 806022232

Attention: Audrey Cohen

Tel: (212) 623-5078

IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER IN A TIMELY MANNER
AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DWAC IN A TIMELY MANNER. IF THE INVESTOR DOES NOT DELIVER
THE AGGREGATE PURCHASE PRICE FOR THE SHARES OR DOES NOT MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN
A TIMELY MANNER, THE SHARES MAY NOT BE DELIVERED AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE
EXCLUDED FROM THE CLOSING ALTOGETHER.

6. The Investor represents that, except as set forth below, (a) it has had no position, office or
other material relationship within the past three years with the Company or persons known to it to
be affiliates of the Company, (b) it is not a member of the Financial Industry Regulatory
Authority, Inc. or an Associated Person (as such term is defined under the NASD Membership and
Registration Rules Section 1011) as of the Closing, and (c) neither the Investor nor any group of
Investors (as identified in a public filing made with the Commission) of which the Investor is a
part in connection with the Offering of the Shares, acquired, or obtained the right to acquire, 20%
or more of the Common Stock (or securities convertible into or exercisable for Common Stock) or the
voting power of the Company on a post-transaction basis. Exceptions:

(If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)

- 2 -

 

7. The Investor represents that it has received (or otherwise had made available to it by the
filing by the Company of an electronic version thereof with the Commission) the Base Prospectus
which is a part of the Company’s Registration Statement, the documents incorporated by reference
therein and any free writing prospectus (collectively, the “Disclosure Package”), prior to or in
connection with the receipt of this Agreement. The Investor acknowledges that, prior to the
delivery of this Agreement to the Company, the Investor will receive certain additional information
regarding the Offering, including pricing information (the “Offering Information”). Such
information may be provided to the Investor by any means permitted under the Act, including the
Prospectus Supplement, a free writing prospectus and oral communications.

8. No offer by the Investor to buy Shares will be accepted and no part of the Purchase Price will
be delivered to the Company until the Investor has received the Offering Information and the
Company has accepted such offer by countersigning a copy of this Agreement, and any such offer may
be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the
Company (or Placement Agent on behalf of the Company) sending (orally, in writing or by electronic
mail) notice of its acceptance of such offer. An indication of interest will involve no obligation
or commitment of any kind until the Investor has been delivered the Offering Information and this
Agreement is accepted and countersigned by or on behalf of the Company.

9. The Company acknowledges that the only material, non-public information relating to the Company
or its subsidiaries that the Company, its employees or agents has provided to the Investor in
connection with the Offering prior to the date hereof is the existence of the Offering, and the
Investor has agreed to maintain the confidentiality of this information until such information has
been publicly disclosed as provided in Section 13 of the Terms and Conditions set forth on
Annex I hereof.

- 3 -

 

	 	 	 
	Number of Shares:

	 	 
	 

	 	 
	Purchase Price Per Share: $

	 	 
	 

	 	 
	Aggregate Purchase Price: $

	 	 
	 

	 	 

     Please confirm that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.

	 	 	 	 	 	 	 
	 	 	Dated as of: June __, 2009	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	INVESTOR	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Print Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 

Agreed and Accepted

this ___ day of June, 2009:

	 	 	 	 	 
	FUEL SYSTEMS SOLUTIONS, INC.	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 

- 4 -

 

ANNEX I

TERMS AND CONDITIONS FOR PURCHASE OF SHARES

     1. Authorization and Sale of the Shares. Subject to the terms and conditions of this
Agreement, the Company has authorized the sale of the Shares.

     2. Agreement to Sell and Purchase the Shares; Placement Agent.

          2.1 At the Closing (as defined in Section 3.1), the Company will sell to the Investor,
and the Investor will purchase from the Company, upon the terms and conditions set forth herein,
the number of Shares set forth on the last page of the Agreement to which these Terms and
Conditions for Purchase of Shares are attached as Annex I (the “Signature Page”) for the
aggregate purchase price therefor set forth on the Signature Page.

          2.2 The Company will enter into an identical form of Subscription Agreement (other than with
respect to each investor’s subscription information) with certain other investors (the “Other
Investors”) and expects to complete sales of Shares to them. The Investor and the Other Investors
are hereinafter sometimes collectively referred to as the “Investors,” and this Agreement and the
Subscription Agreements executed by the Other Investors are hereinafter sometimes collectively
referred to as the “Agreements.”

          2.3 Investor acknowledges that the Company has agreed to pay Needham & Company, LLC (the
“Placement Agent”) a fee (the “Placement Fee”) in respect of the sale of Shares to the Investor.

          2.4 The Company has entered into a Placement Agent Agreement, dated June [22], 2009 (the
“Placement Agreement”), with the Placement Agent that contains certain representations and
warranties of the Company contained in Section 2 of the Placement Agreement and the Company’s
lock-up agreement contained in Section 4(k) of the Placement Agreement that may be relied upon by
the Investor, which shall be a third party beneficiary thereof.

     3. Closings and Delivery of the Shares and Funds.

          3.1 Closing. The completion of the purchase and sale of the Shares (the “Closing”)
shall occur at a place and time (the “Closing Date”) to be specified by the Company and the
Placement Agent, and of which the Investors will be notified in advance by the Placement Agent, in
accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). At the Closing, (a) the Company shall cause the Transfer Agent to deliver to the
Investor the number of Shares set forth on the Signature Page registered in the name of the
Investor or, if so indicated on the Investor Questionnaire attached hereto as Exhibit A, in
the name of a nominee designated by the Investor and (b) the aggregate purchase price for the
Shares being purchased by the Investor will be delivered by or on behalf of the Investor to the
Company.

          3.2 Conditions to the Obligations of the Parties.

               (a) Conditions to the Company’s Obligations. The Company’s obligation to issue and
sell the Shares to the Investor shall be subject to: (i) the receipt by the Company of the

- 5 -

 

purchase price for the Shares being purchased hereunder as set forth on the Signature Page and
(ii) the accuracy of the representations and warranties made by the Investor and the fulfillment of
those undertakings of the Investor to be fulfilled prior to the Closing Date.

               (b) Conditions to the Investor’s Obligations. The Investor’s obligation to purchase
the Shares will be subject to the accuracy of the representations and warranties made by the
Company and the fulfillment of those undertakings of the Company to be fulfilled prior to the
Closing Date, including without limitation, those contained in the Placement Agreement, and to the
condition that the Placement Agent shall not have: (i) terminated the Placement Agreement pursuant
to the terms thereof or (ii) determined that the conditions to the closing in the Placement
Agreement have not been satisfied. The Investor’s obligations are expressly not conditioned on the
purchase by any or all of the Other Investors of the Shares that they have agreed to purchase from
the Company. The Investor understands and agrees that, in the event that the Placement Agent in
its sole discretion determines that the conditions to closing in the Placement Agreement have not
been satisfied or if the Placement Agent Agreement may be terminated for any other reason permitted
by such Agreement, then the Placement Agent may, but shall not be obligated to, terminate such
Agreement, which shall have the effect of terminating this Subscription Agreement pursuant to
Section 14 below.

          3.3 Delivery of Funds.

               No later than one (1) business day after the execution of this Agreement by the Investor
and the Company, the Investor shall remit by wire transfer the amount of funds equal to the
aggregate purchase price for the Shares being purchased by the Investor to the following account
designated by the Company and the Placement Agent pursuant to the terms of that certain Escrow
Agreement (the “Escrow Agreement”) dated as of the date hereof, by and among the Company, the
Placement Agent and JPMorgan Chase Bank, N.A. (the “Escrow Agent”):

JPMorgan Chase Bank, N.A.

ABA # 021000021

Account Name: Fuel Systems Solutions, Inc.

Account Number: 806022232

Attention: Audrey Cohen

Tel: (212) 623-5078

               Such funds shall be held in escrow until the Closing and delivered by the Escrow Agent on
behalf of the Investors to the Company upon the satisfaction, in the sole judgment of the Placement
Agent, of the conditions set forth in Section 3.2(b) hereof. The Placement Agent shall
have no rights in or to any of the escrowed funds, unless the Placement Agent and the Escrow Agent
are notified in writing by the Company in connection with the Closing that a portion of the
escrowed funds shall be applied to the Placement Fee. The Company agrees to indemnify and hold the
Escrow Agent harmless from and against any and all losses, costs, damages, expenses and claims
(including, without limitation, court costs and reasonable attorneys fees) (“Losses”) arising under
this Section 3.3 or otherwise with respect to the funds held in escrow pursuant hereto or
arising under the Escrow Agreement, unless it is finally, judicially determined that such Losses
resulted directly from the willful misconduct or gross negligence of the Escrow Agent. Anything in
this Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for
any special, indirect or consequential

- 6 -

 

loss or damage of any kind whatsoever (including but not limited to lost profits), even if the
Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form
of action.

          3.4 Delivery of Shares.

               No later than one (1) business day after the execution of this Agreement by the Investor
and the Company, the Investor shall direct the broker-dealer at which the account or accounts
to be credited with the Shares being purchased by such Investor are maintained, which broker/dealer
shall be a DTC participant, to set up a DWAC instructing Mellon Bank, the Company’s Transfer Agent,
to credit such account or accounts with the Shares. Such DWAC instruction shall indicate the
settlement date for the deposit of the Shares, which date shall be provided to the Investor by the
Placement Agent. Simultaneously with the delivery to the Company by the Escrow Agent of the funds
held in escrow pursuant to Section 3.3 above, the Company shall direct the Transfer Agent
to credit the Investor’s account or accounts with the Shares pursuant to the information contained
in the DWAC.

     4. Representations, Warranties and Covenants of the Investor.

     The Investor acknowledges, represents and warrants to, and agrees with, the Company and the
Placement Agent that:

          4.1 The Investor (a) is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in shares presenting an investment
decision like that involved in the purchase of the Shares, including investments in securities
issued by the Company and investments in comparable companies, (b) has answered all questions on
the Signature Page and the Investor Questionnaire and the answers thereto are true and correct as
of the date hereof and will be true and correct as of the Closing Date and (c) in connection with
its decision to purchase the number of Shares set forth on the Signature Page, has received and is
relying only upon the Disclosure Package and the documents incorporated by reference therein and
the Offering Information..

          4.2 (a) No action has been or will be taken in any jurisdiction outside the United States by
the Company or the Placement Agent that would permit an offering of the Shares, or possession or
distribution of offering materials in connection with the issue of the Shares in any jurisdiction
outside the United States where action for that purpose is required, (b) if the Investor is outside
the United States, it will comply with all applicable laws and regulations in each foreign
jurisdiction in which it purchases, offers, sells or delivers Shares or has in its possession or
distributes any offering material, in all cases at its own expense and (c) the Placement Agent is
not authorized to make and has not made any representation, disclosure or use of any information in
connection with the issue, placement, purchase and sale of the Shares, except as set forth or
incorporated by reference in the Base Prospectus or the Prospectus Supplement.

          4.3 (a) The Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and (b) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally

- 7 -

 

and except as enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law) and except as to the
enforceability of any rights to indemnification or contribution that may be violative of the public
policy underlying any law, rule or regulation (including any federal or state securities law, rule
or regulation).

          4.4 The Investor understands that nothing in this Agreement, the Prospectus, the General
disclosure Package, the Offering Information or any other materials presented to the Investor in
connection with the purchase and sale of the Shares constitutes legal, tax or investment advice.
The Investor has consulted such legal, tax and investment advisors and made such investigation as
it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of
Shares.

          4.5 Since the date on which the Placement Agent first contacted the Investor about the
Offering, it has not disclosed any information regarding the Offering to any third parties (other
than its legal, accounting and other advisors) and has not engaged in any purchases or sales of the
securities of the Company (including, without limitation, any Short Sales involving the Company’s
securities). The Investor covenants that it will not engage in any purchases or sales of the
securities of the Company (including Short Sales) prior to the time that the transactions
contemplated by this Agreement are publicly disclosed. The Investor agrees that it will not use
any of the Shares acquired pursuant to this Agreement to cover any short position in the Common
Stock if doing so would be in violation of applicable securities laws. For purposes hereof, “Short
Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all types of direct and
indirect stock pledges, forward sales contracts, options, puts, calls, short sales, swaps, “put
equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements
(including on a total return basis), and sales and other transactions through non-US broker dealers
or foreign regulated brokers.

     5. Survival of Representations, Warranties and Agreements; Third Party Beneficiary.
Notwithstanding any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company and the Investor
herein will survive the execution of this Agreement, the delivery to the Investor of the Shares
being purchased and the payment therefor. The Placement Agent shall be a third party beneficiary
with respect to the representations, warranties and agreements of the Investor in Section 4
hereof.

     6. Notices. All notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International Federal Express or
facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed and (iv) if delivered by facsimile, upon electric
confirmation of receipt and will be delivered and addressed as follows:

- 8 -

 

	 	     (a)	 	if to the Company, to:
	 
	 	 	 	Fuel Systems Solutions, Inc.

3030 South Susan Street

Santa Ana, California 92704

Attention: Matthew Beale, President and CFO

Facsimile: 714-656-1401
	 
	 	 	 	with copies to:
	 
	 	 	 	Day Pitney LLP

7 Times Square

New York, NY 10036

Attention: Ron Janis, Esq.

Facsimile: 212-966-1015

     (b) if to the Investor, at its address on the Signature Page hereto, or at such
other address or addresses as may have been furnished to the Company in writing.

7. Changes. This Agreement may not be modified or amended except pursuant to an instrument
in writing signed by the Company and the Investor.

8. Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this Agreement.

9. Severability. In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein will not in any way be affected or impaired thereby.

10. Governing Law. This Agreement will be governed by, and construed in accordance with,
the internal laws of the State of New York, without giving effect to the principles of
conflicts of law that would require the application of the laws of any other jurisdiction.

11. Counterparts. This Agreement may be executed in two or more counterparts, each of which
will constitute an original, but all of which, when taken together, will constitute but one
instrument, and will become effective when one or more counterparts have been signed by each
party hereto and delivered to the other parties. The Company and the Investor acknowledge
and agree that the Company shall deliver its counterpart to the Investor along with the
Prospectus Supplement (or the filing by the Company of an electronic version thereof with
the Commission).

12. Confirmation of Sale. The Investor acknowledges and agrees that such Investor’s receipt
of the Company’s signed counterpart to this Agreement, together with the Prospectus
Supplement (or the filing by the Company of an electronic version thereof with the
Commission), shall constitute written confirmation of the Company’s sale of Shares to such
Investor.

13. Press Release. The Company and the Investor agree that the Company shall, prior to the
opening of the financial markets in New York City on the business day immediately after

- 9 -

 

the date hereof (a) issue a press release announcing the Offering and disclosing all
material information regarding the Offering and (b) file a current report on Form 8-K with
the Securities and Exchange Commission including, but not limited to, a form of this
Agreement as an exhibit thereto.

14. Termination. In the event that the Placement Agreement is terminated by the Placement
Agent pursuant to the terms thereof, this Agreement shall terminate without any further
action on the part of the parties hereto.

- 10 -

 

Exhibit A

FUEL SYSTEMS SOLUTIONS, INC.

INVESTOR QUESTIONNAIRE

     Pursuant to Section 3 of Annex I to the Agreement, please provide us with the
following information:

	 	 	 	 	 
	1.

	 	The exact name that your Shares are to be registered in. You may
use a nominee name if appropriate:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	2.

	 	The relationship between the Investor and the registered holder
listed in response to item 1 above:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	3.

	 	The mailing address of the registered holder listed in response to
item 1 above:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	4.

	 	The Social Security Number or Tax Identification Number of the
registered holder listed in the response to item 1 above:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	5.

	 	Name of DTC Participant (broker-dealer at which the account or
accounts to be credited with the Shares are maintained):	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	6.

	 	DTC Participant Number:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	7.

	 	Name of Account at DTC Participant being credited with the Shares:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	8.

	 	Account Number at DTC Participant being credited with the Shares:

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