Document:

Exhibit
      10.9 

    INTERMETRO
      COMMUNICATIONS, INC.

    FORM
      OF INDEMNIFICATION AGREEMENT

    This
      Indemnification Agreement
      (“Agreement”) is made as of April     , 2006 by and
      between InterMetro Communications, Inc., a Delaware corporation (the “Company”),
      and
                    
      (“Indemnitee”). 

    RECITALS

    A.
      The Company and Indemnitee
      recognize the significant cost of directors’ and officers’ liability insurance
      and the general reductions in the coverage of such insurance. 

    B.
      The Company and Indemnitee
      further recognize the substantial increase in corporate litigation in general,
      subjecting officers and directors to expensive litigation risks at the same
      time
      as the coverage of liability insurance has been severely limited. 

    C.
      The Company desires to attract
      and retain the services of highly qualified individuals, such as Indemnitee,
      to
      serve as officers and directors of the Company and to indemnify its officers
      and
      directors so as to provide them with the maximum protection permitted by law.
      

    NOW,
      THEREFORE, in consideration for Indemnitee’s services as an officer
      or director of the Company, the Company and Indemnitee hereby agree as follows:
      

    1.
      Indemnification. 

    (a)
Third
      Party Proceedings.
      The Company shall indemnify Indemnitee if Indemnitee is or was a party or is
      threatened to be made a party to any threatened, pending or completed action,
      suit, proceeding or any alternative dispute resolution mechanism, whether civil,
      criminal, administrative or investigative (other than an action by or in the
      right of the Company) by reason of the fact that Indemnitee is or was a
      director, officer, employee or agent of the Company, or any subsidiary of the
      Company, or by reason of the fact that Indemnitee 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, against
      expenses (including attorneys’ fees), judgments, fines and amounts paid in
      settlement (if such settlement is approved in advance by the Company, which
      approval shall not be unreasonably withheld) actually and reasonably incurred
      by
      Indemnitee in connection with such action, suit or proceeding if Indemnitee
      acted in good faith and in a manner Indemnitee reasonably believed to be in
      or
      not opposed to the best interests of the Company, and, with respect to any
      criminal action or proceeding, had no reasonable cause to believe Indemnitee’s
      conduct was unlawful. The termination of any action, suit or proceeding by
      judgment, order, settlement, conviction, or upon a plea of nolo contendere
      or
      its equivalent, shall not, of itself, create a presumption that Indemnitee
      did
      not act in good faith and in a manner which Indemnitee reasonably believed
      to be
in or not opposed
      to
      the best interests of the Company, and, with respect to any criminal action
      or
      proceeding, had reasonable cause to believe that Indemnitee’s conduct was
      unlawful.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)
Proceedings
      By or in the
      Right of the Company. The Company shall indemnify Indemnitee if Indemnitee
      was or is a party or is threatened to be made a party to any threatened, pending
      or completed action or suit by or in the right of the Company or any subsidiary
      of the Company to procure a judgment in its favor by reason of the fact that
      Indemnitee is or was a director, officer, employee or agent of the Company,
      or
      any subsidiary of the Company, or by reason of the fact that Indemnitee 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, against expenses (including attorneys’ fees) and, to the fullest
      extent permitted by law, amounts paid in settlement actually and reasonably
      incurred by Indemnitee in connection with the defense or settlement of such
      action or suit if Indemnitee acted in good faith and in a manner Indemnitee
      reasonably believed to be in or not opposed to the best interests of the
      Company, except that no indemnification shall be made in respect of any claim,
      issue or matter as to which Indemnitee shall have been adjudged to be liable
      to
      the Company unless and only to the extent that the Court of Chancery of the
      State of Delaware or the court in which such action or suit was brought shall
      determine upon application that, despite the adjudication of liability but
      in
      view of all the circumstances of the case, Indemnitee is fairly and reasonably
      entitled to indemnity for such expenses which the Court of Chancery of the
      State
      of Delaware or such other court shall deem proper. 

    (c)
Mandatory
      Payment of
      Expenses. To the extent that Indemnitee has been successful on the merits or
      otherwise in defense of any action, suit or proceeding referred to in
      Subsections (a) and (b) of this Section 1, or in defense of any
      claim, issue or matter therein, Indemnitee shall be indemnified against expenses
      (including attorneys’ fees) actually and reasonably incurred by Indemnitee in
      connection therewith. 

    2.
Advancement
      of
      Expenses. All reasonable Expenses incurred by or on behalf of
      Indemnitee (including costs of enforcement of this Agreement) shall be advanced
      from time to time by the Company to Indemnitee within thirty (30) days
      after the receipt by the Company of a written request for an advance of
      Expenses, whether prior to or after final disposition of a Proceeding (except
      to
      the extent that there has been a final adverse determination that Indemnitee
      is
      not entitled to be indemnified for such Expenses), including without limitation
      any Proceeding brought by or in the right of the Company. The written request
      for an advancement of any and all Expenses under this paragraph shall contain
      reasonable detail of the Expenses incurred by Indemnitee. By execution of this
      Agreement, Indemnitee shall be deemed to have made whatever undertaking as
      may
      be required by law at the time of any advancement of Expenses with respect
      to
      repayment to the Company of such Expenses. In the event that the Company shall
      breach its obligation to advance Expenses under this Section 2, the parties
      hereto agree that Indemnitee’s remedies available at law would not be adequate
      and that Indemnitee would be entitled to specific performance. 

    3.
Presumptions
      and
      Effect of Certain Proceedings. Upon making a request for
      indemnification, Indemnitee shall be presumed to be entitled to indemnification
      under this Agreement and the Company shall have the burden of proof to overcome
      that presumption in reaching any contrary
      determination. The termination of any Proceeding by
      judgment, order, settlement, arbitration award or conviction, or upon a plea
      of
      nolo contendere or its equivalent shall not affect this presumption or, except
      as determined by a judgment or other final adjudication adverse to Indemnitee,
      establish a presumption with regard to any factual matter relevant to
      determining Indemnitee’s rights to indemnification hereunder. If the person or
      persons so empowered to make a determination pursuant to Section 4 hereof
      shall have failed to make the requested determination within sixty
      (60) days after any judgment, order, settlement, dismissal, arbitration
      award, conviction, acceptance of a plea of nolo contendere or its equivalent,
      or
      other disposition or partial disposition of any Proceeding or any other event
      that could enable the Company to determine Indemnitee’s entitlement to
      indemnification, the requisite determination that Indemnitee is entitled to
      indemnification shall be deemed to have been made.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.
Procedure
      for
      Determination of Entitlement to Indemnification. 

    (a)
Notice/Cooperation
      by
      Indemnitee. Indemnitee shall, as a condition precedent to his right to be
      indemnified under this Agreement, 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 directed
      to the President of the Company at the address shown on the signature page
      of
      this Agreement (or such other address as the Company shall designate in writing
      to Indemnitee). Notice shall be deemed received three business days after the
      date postmarked if sent by domestic certified or registered mail, properly
      addressed, five business days if sent by airmail to a country outside of North
      America; otherwise notice shall be deemed received when such notice shall
      actually be received by the Company. In addition, Indemnitee shall give the
      Company such information, documentation and cooperation as it may reasonably
      require and as shall be within Indemnitee’s power. 

    (b)
Procedure.
      Any
      indemnification and advances provided for in Section 1 and Section 2
      shall be made no later than thirty (30) days after receipt of the written
      request of Indemnitee; provided, in the case of any request for indemnification,
      the Company has determined that Indemnitee is entitled to indemnification
      hereunder. If a claim under this Agreement, under any statute, or under any
      provision of the Company’s Certificate of Incorporation or Bylaws providing for
      indemnification, is not paid in full by the Company within thirty (30) days
      after a written request for payment thereof has first been received by the
      Company, Indemnitee may, but need not, at any time thereafter bring an action
      against the Company to recover the unpaid amount of the claim and, subject
      to
      Section 14 of this Agreement, Indemnitee shall also be entitled to be paid
      for the expenses (including attorneys’ fees) of bringing such action. It shall
      be a defense to any such action (other than an action brought to enforce a
      claim
      for expenses incurred in connection with any action, suit or proceeding in
      advance of its final disposition) that Indemnitee has not met the standards
      of
      conduct which make it permissible under applicable law for the Company to
      indemnify Indemnitee for the amount claimed. However, Indemnitee shall be
      entitled to receive interim payments of expenses pursuant to Section 2
      unless and until such defense may be finally adjudicated by court order or
      judgment from which no further right of appeal exists. It is the parties’
intention that if the Company contests Indemnitee’s right to indemnification,
      the question of
      Indemnitee’s right to indemnification shall be for the court to decide, and
      neither the failure of the Company (including its Board of Directors, any
      committee or subgroup of the Board of Directors, independent legal counsel,
      or
      its stockholders) to have made a determination that indemnification of
      Indemnitee is proper in the circumstances because Indemnitee has met the
      applicable standard of conduct required by applicable law, nor an actual
      determination by the Company (including it Board of Directors, any committee
      or
      subgroup of the Board of Directors, independent legal counsel, or its
      stockholders) that Indemnitee has not met such applicable standard of conduct,
      shall create a presumption that Indemnitee has or has not met the applicable
      standard of conduct.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)
Change
      in Control. The
      Company agrees that if there is a Change in Control of the Company then with
      respect to all matters thereafter arising concerning the rights of Indemnitee
      to
      indemnity payments and Expense advances under this Agreement or any other
      agreement, the Bylaws or Certificate of Incorporation now or hereafter in
      effect, the Company shall seek legal advice only from special independent
      counsel selected by the Company and approved by Indemnitee (which approval
      shall
      not be unreasonably withheld or delayed) and who has not otherwise performed
      services for the Company within the last five years (other than in connection
      with such matters) or for Indemnitee. In the event that Indemnitee and the
      Company are unable to agree on the selection of the special independent counsel,
      such special independent counsel shall be selected by lot from among at least
      five law firms with offices in the State of California having more than fifty
      attorneys, having a rating of “av” or better in the then current Martindale
      Hubbell Law Directory and having attorneys who specialize in corporate law.
      Such
      selection shall be made in the presence of Indemnitee (and his legal counsel
      or
      either of them, as Indemnitee may elect). Such special independent counsel,
      among other things, shall, within 90 days of its retention, 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. The
      Company agrees to pay the reasonable fees of the special independent counsel
      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. 

    (d)
Notice
      to Insurers. If,
      at the time of the receipt of a notice of a claim pursuant to Section 4(a)
      hereof, the Company has director and officer liability insurance in effect,
      the
      Company shall give prompt notice of the commencement of such proceeding to
      the
      insurers in accordance with the procedures set forth in the respective policies.
      The Company shall thereafter take all necessary or desirable action to cause
      such insurers to pay, on behalf of the Indemnitee, all amounts payable as a
      result of such proceeding in accordance with the terms of such policies.

    (e)
Selection
      of Counsel. In
      the event the Company shall be obligated under Section 2 hereof to pay the
      expenses of any proceeding against Indemnitee, the Company, if appropriate,
      shall be entitled to assume the defense of such proceeding, with counsel
      approved by Indemnitee, which approval shall not be unreasonably withheld,
      upon
      the delivery to Indemnitee of written notice of its election to do so. After
      delivery of such notice, approval of such counsel by Indemnitee 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 same proceeding, provided that
      (i) Indemnitee shall have the right
      to employ his counsel in any such proceeding at
      Indemnitee’s expense; and (ii) if (A) the employment of counsel by
      Indemnitee has been previously authorized by the Company, (B) Indemnitee
      shall have reasonably concluded that there may be a conflict of interest between
      the Company and Indemnitee in the conduct of any such defense, or (C) the
      Company shall not, in fact, have employed counsel to assume the defense of
      such
      proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the
      expense of the Company

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.
Additional
      Indemnification Rights; Nonexclusivity. 

    (a)
Scope.
Notwithstanding
      any other provision of this Agreement, the Company hereby agrees to indemnify
      the Indemnitee to the fullest extent permitted by law, notwithstanding that
      such
      indemnification is not specifically authorized by the other provisions of this
      Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or
      by statute. In the event of any change, after the date of this Agreement, in
      any
      applicable law, statute, or rule which expands the right of a Delaware
      corporation to indemnify a member of its board of directors or an officer,
      such
      changes shall be, ipso facto, within the purview of Indemnitee’s rights and
      Company’s obligations, under this Agreement. In the event of any change in any
      applicable law, statute or rule which narrows the right of a Delaware
      corporation to indemnify a member of its board of directors or an officer,
      such
      changes, to the extent not otherwise required by such law, statute or rule
      to be
      applied to this Agreement shall have no effect on this Agreement or the parties’
rights and obligations hereunder. 

    (b)
Nonexclusivity.
      The
      indemnification provided by this Agreement shall not be deemed exclusive of
      any
      rights to which Indemnitee may be entitled under the Company’s Certificate of
      Incorporation, its Bylaws, any agreement, any vote of stockholders or
      disinterested Directors, the General Corporation Law of the State of Delaware,
      or otherwise, both as to action in Indemnitee’s official capacity and as to
      action in another capacity while holding such office. The indemnification
      provided under this Agreement shall continue as to Indemnitee for any action
      taken or not taken while serving in an indemnified capacity even though he
      may
      have ceased to serve in such capacity at the time of any action, suit or other
      covered proceeding (the “Indemnification Period”). To the extent that during the
      Indemnification Period the rights of the then existing directors and officers
      are more favorable to such directors or officers than the rights currently
      provided to Indemnitee thereunder or under this Agreement, Indemnitee shall
      be
      entitled to the full benefits of such more favorable rights. 

    6.
Partial
      Indemnification. If Indemnitee is entitled under any provision of
      this Agreement to indemnification by the Company for some or a portion of the
      expenses, judgments, fines or penalties actually and reasonably incurred by
      him
      in the investigation, defense, appeal or settlement of any civil or criminal
      action, suit or proceeding, but not, however, for the total amount thereof,
      the
      Company shall nevertheless indemnify Indemnitee for the portion of such
      expenses, judgments, fines or penalties to which Indemnitee is entitled.

    7.
Mutual
      Acknowledgement. Both the Company and Indemnitee acknowledge that
      in certain instances, Federal law or applicable public policy may prohibit
      the
      Company from indemnifying its directors and officers under this Agreement or
      otherwise. Indemnitee understands and acknowledges that the Company has
      undertaken or may be required in the future to undertake with the Securities
      and
      Exchange Commission 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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8.
Officer
      and Director
      Liability Insurance. The Company shall, from time to time, make the
      good faith determination whether or not it is practicable for the Company to
      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 from wrongful acts, or to ensure the Company’s performance of its
      indemnification obligations under this Agreement. Among other considerations,
      the Company will weigh the costs of obtaining such insurance coverage against
      the protection afforded by such coverage. In all policies of director and
      officer liability insurance, Indemnitee shall be named as an insured in such
      a
      manner as to provide Indemnitee the same rights and benefits as are accorded
      to
      the most favorably insured of the Company’s directors, if Indemnitee is a
      director; or of the Company’s officers, if Indemnitee is not a director of the
      Company but is an officer. Notwithstanding the foregoing, the Company shall
      have
      no obligation to obtain or maintain such insurance if the Company determines
      in
      good faith that such insurance is not reasonably available, if the premium
      costs
      for such insurance are disproportionate to the amount of coverage provided,
      if
      the coverage provided by such insurance is limited by exclusions so as to
      provide an insufficient benefit, or if Indemnitee is covered by similar
      insurance maintained by a subsidiary or parent of the Company. 

    9.
      Severability. 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 court
      order, to perform its obligations under this Agreement shall not constitute
      a
      breach of this Agreement. The provisions of this Agreement shall be severable
      as
      provided in this Section 9. If this Agreement or any portion hereof shall
      be invalidated on any ground by any court of competent jurisdiction, then the
      Company shall nevertheless indemnify Indemnitee to the full extent permitted
      by
      any applicable portion of this Agreement that shall not have been invalidated,
      and the balance of this Agreement not so invalidated shall be enforceable in
      accordance with its terms. 

    10.
      Exceptions. Any other provision herein to the contrary
      notwithstanding, the Company shall not be obligated pursuant to the terms of
      this Agreement: 

    (a)
Claims
      Initiated by
      Indemnitee. To indemnify or advance expenses to Indemnitee with respect to
      proceedings or claims initiated or brought voluntarily by Indemnitee and not
      by
      way of defense, except with respect to proceedings brought to establish or
      enforce a right to indemnification under this Agreement or any other statute
      or
      law or otherwise as required under Section 145 of the Delaware General
      Corporation Law, but such indemnification or advancement of expenses may be
      provided by the Company in specific cases if the Board of Directors has approved
      the initiation or bringing of such suit; or 

    (b)
Lack
      of Good Faith. To
      indemnify Indemnitee for any expenses incurred by the Indemnitee with respect
      to
      any proceeding instituted by Indemnitee to enforce or interpret this Agreement,
      if a court of competent jurisdiction determines that each of the material
      assertions made by the Indemnitee in such proceeding was not made in good faith
      or was frivolous; or 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)
Insured
      Claims. To
      indemnify Indemnitee for expenses or liabilities of any type whatsoever
      (including, but not limited to, judgments, fines, ERISA excise taxes or
      penalties, and amounts paid in settlement) which have been paid directly to
      or
      on behalf of Indemnitee by an insurance carrier under a policy of officers’ and
      directors’ liability insurance maintained by the Company; or 

    (d)
Claims
      Under
      Section 16(b). To indemnify Indemnitee for expenses and the payment of
      profits arising from the purchase and sale by Indemnitee of securities in
      violation of Section 16(b) of the Securities Exchange Act of 1934, as
      amended, or any similar successor statute. 

    11.
Construction
      of
      Certain Phrases. 

    (a)
      For purposes of this Agreement,
      references to the “Company” shall include, in addition to the resulting
      corporation, any constituent corporation (including any constituent of a
      constituent) absorbed in a consolidation or merger which, if its separate
      existence had continued, would have had power and authority to indemnify its
      directors, officers, and employees or agents, so that if Indemnitee is or was
      a
      director, officer, employee or agent of such constituent corporation, or is
      or
      was serving at the request of such constituent corporation as a director,
      officer, employee or agent of another corporation, partnership, joint venture,
      trust or other enterprise, Indemnitee shall stand in the same position under
      the
      provisions of this Agreement with respect to the resulting or surviving
      corporation as Indemnitee would have with respect to such constituent
      corporation if its separate existence had continued. 

    (b)
      For purposes of this Agreement,
      the term “Expenses” shall include all reasonable attorneys’ fees, retainers,
      court costs, transcript costs, fees of experts, witness fees, travel expenses,
      duplicating costs, printing and binding costs, telephone charges, postage,
      delivery service fees and all other disbursements or expenses of the types
      customarily incurred in connection with prosecuting, defending, preparing to
      prosecute or defend, investigating, participating, or being or preparing to
      be a
      witness in a Proceeding. Expenses also shall include Expenses incurred in
      connection with any appeal resulting from any Proceeding, including without
      limitation the premium, security for, and other costs relating to any cost
      bond,
      supersede as bond, or other appeal bond or its equivalent. Expenses, however,
      shall not include amounts paid in settlement by Indemnitee or the amount of
      judgments or fines against Indemnitee. 

    (c)
      For purposes of this Agreement,
      the term “Proceeding” shall include any threatened, pending or completed action,
      suit, arbitration, alternate dispute resolution mechanism, investigation,
      inquiry, administrative hearing or any other actual, threatened or completed
      proceeding, whether brought by or in the right of the Company or otherwise
      and
      whether civil, criminal, administrative or investigative, in which Indemnitee
      was, is or will be involved as a party or otherwise, by reason of the fact
      that
      Indemnitee is or was an officer or director of the Company, by reason of any
      action taken by him or of any inaction on his part while acting as an officer
      or
      director of the Company, or by reason of the fact that he is or was serving
      at
      the request of the Company as a director, officer, employee, agent or fiduciary
      of another corporation, partnership, joint venture, trust or other enterprise;
      in each case whether or not he is acting
      or serving in any such capacity at the time any
      liability or expense is incurred for which indemnification can be provided
      under
      this Agreement, including one pending on or before the date of this Agreement,
      but excluding one initiated by Indemnitee to enforce his rights under this
      Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)
      For purposes of this Agreement,
      a “Change in Control” shall be deemed to occur upon the earliest to occur after
      the date of this Agreement of any of the following events: 

    (i)
      Acquisition of Stock by Third
      Party. Any Person (as defined below) is or becomes the Beneficial Owner (as
      defined below), directly or indirectly, of securities of the Company
      representing fifteen percent (15%) or more of the combined voting power of
      the Company’s then outstanding securities; 

    (ii)
      Change in Board of Directors.
      During any period of two (2) consecutive years (not including any period
      prior to the execution of this Agreement), 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 stockholders was approved by a
      vote of at least two-thirds 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
      least a majority of the members of the Board; 

    (iii)
      Corporate Transactions. The
      effective date of a merger or consolidation of the Company with any other
      entity, other than a merger or consolidation which would result in the voting
      securities of the Company outstanding immediately prior to such merger or
      consolidation continuing to represent (either by remaining outstanding or by
      being converted into voting securities of the surviving entity) more than 51%
      of
      the combined voting power of the voting securities of the surviving entity
      outstanding immediately after such merger or consolidation and with the power
      to
      elect at least a majority of the board of directors or other governing body
      of
      such surviving entity; 

    (iv)
      Liquidation. The approval by
      the stockholders of the Company of a complete liquidation of the Company or
      an
      agreement for the sale or disposition by the Company of all or substantially
      all
      of the Company’s assets; and 

    (v)
      Other Events. There occurs any
      other event of a nature that would be required to be reported in response to
      Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar
      item on any similar schedule or form) promulgated under the Exchange Act (as
      defined below), whether or not the Company is then subject to such reporting
      requirement. 

    For
      purposes of this
      Section 11(d), the following terms shall have the following meanings:

    (A)
“Exchange
      Act” shall mean the
      Securities Exchange Act of 1934, as amended. 

    (B)
“Person”
shall
      have the meaning
      as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however,
      that Person shall exclude (i) the Company, (ii) any trustee
or other fiduciary
      holding securities under an employee benefit plan of the Company, and
      (iii) any corporation owned, directly or indirectly, by the stockholders of
      the Company in substantially the same proportions as their ownership of stock
      of
      the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (C)
“Beneficial
      Owner” shall have
      the meaning given to such term in Rule 13d-3 under the Exchange Act; provided,
      however, that Beneficial Owner shall exclude any Person otherwise becoming
      a
      Beneficial Owner by reason of the stockholders of the Company approving a merger
      of the Company with another entity. 

    (e)
      For purposes of this Agreement,
      references to “other enterprise” shall include employee benefit plans;
      references to “fines” shall include any excise taxes assessed on Indemnitee with
      respect to an employee benefit plan; and references to “serving at the request
      of the Company” shall include any service as a director, officer, employee or
      agent of the Company which imposes duties on, or involves services by, such
      director, officer, employee or agent with respect to an employee benefit plan,
      its participants, or beneficiaries; and if Indemnitee acted in good faith and
      in
      a manner Indemnitee reasonably believed to be in the interest of the
      participants and beneficiaries of an employee benefit plan, Indemnitee shall
      be
      deemed to have acted in a manner “not opposed to the best interests of the
      Company” as referred to in this Agreement. 

    12.
      Counterparts. This Agreement may be executed in one or
      more counterparts, each of which shall constitute an original. 

    13.
Successors
      and
      Assigns. This Agreement shall be binding upon the Company and its
      successors and assigns, and shall inure to the benefit of Indemnitee and
      Indemnitee’s estate, heirs, legal representatives and permitted assigns.

    14.
Attorneys’
      Fees. In the event that any action is instituted by Indemnitee
      under this Agreement to enforce or interpret any of the terms hereof, Indemnitee
      shall be entitled to be paid all court costs and expenses, including reasonable
      attorneys’ fees, incurred by Indemnitee with respect to such action, unless as a
      part of such action, the court of competent jurisdiction determines that each
      of
      the material assertions made by Indemnitee as a basis for such action were
      not
      made in good faith or were frivolous. In the event of an action instituted
      by or
      in the name of the Company under this Agreement or to enforce or interpret
      any
      of the terms of this Agreement, Indemnitee shall be entitled to be paid all
      court costs and expenses, including attorneys’ fees, incurred by Indemnitee in
      defense of such action (including with respect to Indemnitee’s counterclaims and
      cross-claims made in such action), unless as a part of such action the court
      determines that each of Indemnitee’s material defenses to such action were made
      in bad faith or were frivolous. 

    15.
Notice.
      All notices, requests, demands and other communications under this Agreement
      shall be in writing and shall be deemed duly given (i) if delivered by hand
      and receipted for by the party addressee, on the date of such receipt, or
      (ii) if mailed by domestic certified or registered mail with postage
      prepaid, on the third business day after the date postmarked. Addresses for
      notice to either party are as shown on the signature page of this Agreement,
      or
      as subsequently modified by written notice.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    16.
Consent
      to
      Jurisdiction. The Company and Indemnitee each hereby irrevocably
      consent to the jurisdiction of the courts of the State of Delaware for all
      purposes in connection with any action or proceeding which arises out of or
      relates to this Agreement and agree that any action instituted under this
      Agreement shall be brought only in the state courts of the State of Delaware.
      

    17.
Choice
      of
      Law. This Agreement shall be governed by and its provisions
      construed in accordance with the laws of the State of Delaware, without regard
      to the conflict of law principles thereof. 

    18.
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,
      Indemnitee’s estate, spouse, heirs, executors or personal or legal
      representatives after the expiration of one year 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 one-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. 

    19.
      Subrogation. In the event of payment under this
      Agreement, the Company shall be subrogated to the extent of such payment to
      all
      of the rights of recovery of Indemnitee, who shall execute all documents
      required and shall do all acts that may be necessary to secure such rights
      and
      to enable the Company effectively to bring suit to enforce such rights.

    20.
Amendment
      and
      Termination. No amendment, modification, termination or
      cancellation of this Agreement shall be effective unless it is in writing signed
      by both the parties hereto. No waiver of any of the provisions of this Agreement
      shall be deemed or shall constitute a waiver of any other provisions hereof
      (whether or not similar) nor shall such waiver constitute a continuing waiver.
      

    21.
Integration
      and
      Entire Agreement. This Agreement sets forth the entire
      understanding between the parties hereto and supersedes and merges all previous
      written and oral negotiations, commitments, understandings and agreements
      relating to the subject matter hereof between the parties hereto. 

    [SIGNATURES
      ON NEXT
      PAGE]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    
      	
            	
            	
            	
            	
            	
            	
            
	COMPANY:	 	
            	 	INDEMNITEE:
	
            	
            	
            
	InterMetro
              Communications, Inc.,	 	
            	 	  
	
              a Delaware corporation

            	 	
            	 	[Printed]
	
            	
            	
            	
            
	By:	 	  	 	
            	 	  
	Name: 	 	  	 	
            	 	[Signed]
	Its:Ex-4.4 Equity Incentive Plan

 

EXHIBIT 4.4

KONGZHONG CORPORATION

2006 EQUITY INCENTIVE PLAN

 

 

Table of Contents

	 	 	 	 	 
	 
	 	ARTICLE I	 	 
	 
	 	GENERAL	 	 
	 
	 	 	 	 
	1.1
	 	Purpose	 	1
	1.2
	 	Definitions of Certain Terms	 	1
	1.3
	 	Administration	 	3
	1.4
	 	Persons Eligible for Awards	 	4
	1.5
	 	Types of Awards Under the Plan	 	5
	1.6
	 	Shares Available for Awards	 	5
	 
	 	 	 	 
	 
	 	ARTICLE II	 	 
	 
	 	AWARDS UNDER THE PLAN	 	 
	 
	 	 	 	 
	2.1
	 	Award Agreements	 	6
	2.2
	 	No Rights as a Shareholder	 	6
	2.3
	 	Grant of Share Options	 	6
	2.4
	 	Exercise of Share Options	 	7
	2.5
	 	Amendment, Cancellation and Termination of Share Options	 	8
	2.6
	 	Termination of Employment	 	8
	2.7
	 	Grant of Restricted Share Units	 	9
	 
	 	 	 	 
	 
	 	ARTICLE III	 	 
	 
	 	MISCELLANEOUS	 	 
	 
	 	 	 	 
	3.1
	 	Amendment of the Plan; Modification of Awards	 	10
	3.2
	 	Tax Withholding	 	10
	3.3
	 	Restrictions	 	11
	3.4
	 	Nonassignability	 	11
	3.5
	 	Requirement of Notification Upon
Disqualifying Disposition Under Section 421(b) of the Code	 	11
	3.6
	 	Change in Control	 	12
	3.7
	 	Sale of Subsidiary	 	14
	3.8
	 	No Right to Employment or Award	 	14
	3.9
	 	Independent of Employment Contract	 	15
	3.10
	 	Nature of Payments	 	15
	3.11
	 	Non-Uniform Determinations	 	15
	3.12
	 	Other Payments or Awards	 	15
	3.13
	 	Section Headings	 	15
	3.14
	 	Effective Date and Term of Plan	 	15
	3.15
	 	Governing Law	 	16
	3.16
	 	Severability; Entire Agreement	 	16
	3.17
	 	No Third Party Beneficiaries	 	16

  -i-

 

 

	 	 	 	 	 
	3.18
	 	Successors and Assigns	 	16
	3.19
	 	Waiver of Claims	 	16

  -ii-

 

 

ARTICLE I

GENERAL

     1.1 Purpose

          The purpose of the KongZhong Corporation 2006 Equity Incentive Plan (the “Plan”) is to
provide an incentive for officers, other employees, prospective employees, directors, consultants
and advisors of KongZhong Corporation (the “Company”) and its Related Entities to acquire a
proprietary interest in the success of the Company, to enhance the long-term performance of the
Company and to remain in the service of the Company and its Related Entities.

     1.2 Definitions of Certain Terms

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

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

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

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

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

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

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

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

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

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

1

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2

 

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

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

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

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

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

     1.3 Administration

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

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

          (c) Actions of the Committee shall be taken by the vote of a majority of its members, acting
at a meeting (whether held in person or by teleconference) or by a written instrument signed by a
majority of the Committee members. The Board shall designate one

3

 

member of the Committee as its chairperson. In the event of a tie vote on any issue, the
chairperson’s vote shall decide the issue.

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

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

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

     1.4 Persons Eligible for Awards

          Awards under the Plan may be made to such officers, other employees, prospective employees,
directors, consultants and advisors of the Company and its Related Entities (“Eligible
Persons”) as the Committee shall select in its sole discretion, provided,
however, that Incentive Stock Options may be granted only to officers and other employees
of the Company and its

4

 

Related Entities and may not be granted to prospective employees, outside directors,
consultants and advisors of the Company and its Related Entities.

     1.5 Types of Awards Under the Plan

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

     1.6 Shares Available for Awards

          (a) Total shares available. The total number of Shares that may be transferred
pursuant to Awards granted under the Plan shall not exceed 40,000,000 Shares. Such Shares may be
authorized but unissued Shares or authorized and issued Shares held in the Company’s treasury or
acquired by the Company for the purposes of the Plan. The Committee may direct that any share
certificate evidencing Shares issued pursuant to the Plan shall bear a legend setting forth such
restrictions on transferability as may apply to such Shares pursuant to the Plan. If any Award is
forfeited or otherwise terminates or is canceled without the delivery of Shares, Shares are
surrendered or withheld from any Award to satisfy a Grantee’s income tax withholding obligations,
or Shares owned by a Grantee are tendered to pay the exercise price of options granted under the
Plan, then the Shares covered by such forfeited, terminated or canceled Award or which are equal to
the number of Shares surrendered, withheld or tendered shall again become available for transfer
pursuant to Awards granted or to be granted under this Plan. Any Shares delivered by the Company,
any Shares with respect to which Awards are made by the Company and any Shares with respect to
which the Company becomes obligated to make Awards, through the assumption of, or in substitution
for, outstanding awards previously granted by an acquired entity, shall not be counted against the
shares available for Awards under this Plan.

          (b) Adjustments. The Committee shall make appropriate adjustments in the number of
Shares covered by each outstanding Award and the number of Shares available for Awards as it deems
equitable, in its sole discretion, in the event of an increase or decrease in the number of issued
Shares resulting from a Share split, combination of Shares, issuance of Shares as a dividend on its
outstanding Shares, recapitalization, combination or reclassification of Shares, or any other
increase or decrease in the number of issued Shares effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been “effected without receipt of consideration”. Except
as expressly provided herein, no issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of Shares subject to an Award. After any adjustment made
pursuant to this paragraph, the number of Shares subject to each outstanding Award shall be rounded
to the nearest whole number.

5

 

ARTICLE II

AWARDS UNDER THE PLAN

     2.1 Award Agreements

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

     2.2 No Rights as a Shareholder

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

     2.3 Grant of Share Options

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

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

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

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

6

 

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

     2.4 Exercise of Share Options

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

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

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

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

          (d) Promptly after receiving payment of the full Option Exercise Price, the Company shall,
subject to the provisions of Section 3.3 (relating to certain restrictions), enter, or

7

 

cause to be entered, the name of the Grantee (or such other person as may then have the right
to exercise the Award) in the share register of the Company as owner of such Shares.

     2.5 Amendment, Cancellation and Termination of Share Options

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

     2.6 Termination of Employment

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

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

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

8

 

entitled to exercise any Award pursuant to the preceding sentence, such representative or
recipient shall be bound by all the terms and conditions of the Plan and the applicable Award
Agreement that would have applied to the Grantee.

     2.7 Grant of Restricted Share Units

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

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

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

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

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ARTICLE III

MISCELLANEOUS

     3.1 Amendment of the Plan; Modification of Awards

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

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

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

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

     3.2 Tax Withholding

          (a) As a condition to the receipt of any Shares pursuant to any Award or the lifting of
restrictions on any Award, or in connection with any other event that gives rise to any applicable
governmental tax withholding obligation on the part of the Company relating to an Award (including,
without limitation, PRC individual income tax and U.S. FICA and individual income tax), the Company
shall be entitled (i) to require that the Grantee remit to the Company an

10

 

amount sufficient in the opinion of the Company to satisfy such withholding obligation, and
(ii) to the extent permitted by applicable law, to withhold Shares having a Fair Market Value equal
to the amount of tax to be withheld or deduct from any payment of any kind otherwise due to the
Grantee the amount of tax to be withheld. For this purpose, Fair Market Value shall be determined
as of the date on which the amount of tax to be withheld is determined (and any fractional share
amount shall be settled in cash).

     3.3 Restrictions

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

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

     3.4 Nonassignability

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

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

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

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     3.6 Change in Control

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

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

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

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

                    (B) no person (other than any employee benefit plan (or any
related trust) sponsored or maintained by the Surviving Corporation
or the Parent Corporation), is or becomes the beneficial owner,
directly or indirectly, of securities of the Parent Corporation (or,
if there is no Parent Corporation, the Surviving Corporation)
representing 30% of the total voting power of the securities then

12

 

outstanding generally eligible to vote for the election of
directors of the Parent Corporation (or the Surviving Corporation);

(any Business Combination which satisfies all of the criteria specified in
(A) and (B) above shall be deemed to be a “Non-Qualifying
Transaction”);

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

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

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

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

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

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

13

 

payment therefor; or (iii) provide that the period to exercise share options granted under the
Plan shall be extended (but not beyond the expiration of such option).

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

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

     3.7 Sale of Subsidiary

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

     3.8 No Right to Employment or Award

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

14

 

     3.9 Independent of Employment Contract

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

     3.10 Nature of Payments

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

     3.11 Non-Uniform Determinations

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

     3.12 Other Payments or Awards

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

     3.13 Section Headings

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

     3.14 Effective Date and Term of Plan

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

15

 

     3.15 Governing Law

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

     3.16 Severability; Entire Agreement

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

     3.17 No Third Party Beneficiaries

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

     3.18 Successors and Assigns

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

     3.19 Waiver of Claims

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

16

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