Document:

exv4w4

Exhibit 4.4

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

E-Commerce China Co. Ltd.

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

June 27, 2006

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

E-Commerce China Co. Ltd.

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

     THIS SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT (the “Agreement”) is made as of June
27, 2006, by and among E-Commerce China Co. Ltd., an exempted company incorporated under the
Companies Law (2004 Revision) of the Cayman Islands (the “Company”), Beijing Kewen Shuye
Information Technology Co., Ltd., a wholly-owned foreign enterprise organized under the laws of the
People’s Republic of China (“Kewen”) the persons and entities listed on Schedule A hereof
(each a “Founder” and collectively, the “Founders”) and each other holder of Series A Preferred
Shares, Series B Preferred Shares and Series C Preferred Shares of the Company executing a copy of
this Agreement (individually, an “Investor” and collectively, the “Investors”). The Founders and
the Investors are sometimes collectively referred to as the “Shareholders.” Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Purchase Agreement (as defined
below).

RECITALS

     WHEREAS, the Company and certain of the Investors have entered into a Series C Preferred Share
Purchase Agreement, dated as of June 27, 2006, providing for the sale by the Company, and the
purchase by such Investors, of certain Series C Preferred Shares (the “Purchase Agreement”);

     WHEREAS, the Company and the Investors holding Series A Preferred Shares and Series B
Preferred Shares are party to that certain Amended and Restated Shareholders’ Agreement dated as of
February 25, 2004 (the “Prior Agreement”), which provides that such Prior Agreement may be amended,
and the observance of any provision thereof may be waived, with the written consent of the Company,
the holders of a majority of the shares held by the Investors (as defined therein) (on an
as-converted basis) but excluding any Investor that is a Founder, and the holders of a majority of
the shares held by the Founders (on an as-converted basis); and such persons desire to amend and
restate the Prior Agreement in its entirety with this Agreement; and

     WHEREAS, in connection with the closing of the Purchase Agreement, the Company and the
Shareholders desire to amend and restate the Prior Agreement and set forth the rights of the
Company, the Investors (as defined in the Prior Agreement) and the Founders with respect to the
election of the directors, registration, participation, first refusal, and co-sale and other
matters according to the terms of this Agreement.

     NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS:

     1. Certain Definitions. As used in this Agreement, the following terms have the following
respective meanings:

     1.1 “Adjusted Pro Rata Share” with respect to any Investor, means the ratio of: (a) the total
number of Common Shares, Convertible Securities and any securities currently

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

exercisable, exchangeable or otherwise convertible into Common Shares held by that Investor
(calculated on an as-converted basis) to (b) all such securities described in and calculated in
accordance with clause (a) of this definition held by all Investors; provided however, that any
Investor that is also a Founder shall not be deemed an Investor for purposes of this definition.

     1.2 “Affiliate” of any Person shall mean any Person that directly or indirectly, is in control
of, is controlled by, or is under common control with such Person. For purposes of this
definition, a Person shall be deemed to be “controlled by” another Person if the other possesses,
directly or indirectly, power either (i) to vote 50% or more of the securities having ordinary
voting power for the election of directors of such Person, or (ii) to direct or cause the direction
of the management and policies of such Person whether by contract or otherwise.

     1.3 “Agreement” has the meaning set forth in the preamble to this Agreement.

     1.4 “Blue Sky” means the statutes of any state regulating the sale of corporate securities
within that state in the United States of America.

     1.5 “Commission” means the United States Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

     1.6 “Common Shares” means the common shares, par value US $0.001 per share, of the Company.

     1.7 “Company” has the meaning set forth in the preamble to this Agreement.

     1.8 “Company Notice” has the meaning set forth in Section 5.2 of this Agreement.

     1.9 “Convertible Securities” means the Common Shares issued or issuable upon conversion of the
Preferred Shares, together with any securities issued or issuable, directly or indirectly, in
respect of such securities upon any bonus issues of shares, splits, subdivisions, share dividend,
recapitalization or the like.

     1.10 “Corporate Transaction” has the meaning set forth in Section 18 of this Agreement.

     1.11 “Co-Sale Pro Rata Share” with respect to any Investor, means the ratio of: (a) the total
number of Common Shares, Convertible Securities and any securities currently exercisable,
exchangeable or otherwise convertible into Common Shares held by that Investor (calculated on an as
converted basis) to (b) all such securities described in and calculated in accordance with clause
(a) of this definition held by all Investors and the Transferring Founder; provided however that
any Investor that is also a Founder shall not be deemed an Investor for the purposes of this
definition.

     1.12 “Co-Sale Right” has the meaning set forth in Section 5.3 of this Agreement.

     1.13 “Co-Sale Notice” has the meaning set forth in Section 5.3 of this Agreement.

     1.14 “Damages” has the meaning set forth in Section 14.1 of this Agreement.

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

     1.15 “DCM” means DCM IV, L.P. and its affiliates.

     1.16 “Drag-Along Holders” has the meaning set forth in Section 18 of this Agreement.

     1.17 “Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder, all as from time to time in
effect.

     1.18 “Exercisable Securities” means any securities convertible, exchangeable or otherwise
convertible into equity securities of the Company.

     1.19 “Form F-3” means such form under the Securities Act as in effect on the date hereof or
any successor registration form under the Securities Act subsequently adopted by the Commission
which permits inclusion or incorporation of substantial information by reference to other documents
filed by the Company with the Commission.

     1.20 “Fully-Participating Shareholder” has the meaning set forth in Section 4.2 of this
Agreement.

     1.21 “Fully-Purchasing Investor” has the meaning set forth in Section 5.2 of this Agreement.

     1.22 “Founder Designees” has the meaning set forth in Section 2.1 of this Agreement.

     1.23 “Founders” has the meaning set forth in the preamble of this Agreement.

     1.24 “Governmental or Regulatory Authority” means any court, tribunal, arbitrator, authority,
agency, commission, official or other instrumentality of the United States, any foreign country or
any domestic or foreign state, county, city or other political subdivision.

     1.25 “Holder” means any holder of outstanding Registrable Securities, but only if that holder
is one of the Shareholders or an assignee or transferee of the registration rights granted herein
as permitted by Section 17 of this Agreement.

     1.26 “IDG” means IDG Technology Venture Investment, Inc. and its affiliates.

     1.27 “Initiating Holders” means Shareholders who in the aggregate hold at least 30% of the
Investors Registrable Securities.

     1.28 “Issuance Notice” has the meaning set forth in Section 4.2 of this Agreement.

     1.29 “Investors Registrable Securities” means the Registrable Securities held by the
Investors.

     1.30 “Liquidation Event” has the meaning set forth in the Company’s Amended and Restated
Memorandum and Articles of Association (as such document may be amended or revised from time to
time).

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

     1.31 “Major Investor” has the meaning set forth in Section 16.1 of this Agreement.

     1.32 “Mutual Designee” has the meaning set forth in Section 2.1(a) of this Agreement.

     1.33 “New Securities” means any new shares of the Company, whether authorized or not, except:
(a) the Convertible Securities; (b) securities offered to the public pursuant to a Registration
Statement; (c) up to 3,958,663 Common Shares (as adjusted for share splits, dividends,
combinations, recapitalizations and the like) issued or issuable to the Company’s employees,
consultants, and advisors pursuant to the Option Plan or such other arrangement approved by the
Company’s Board of Directors, subject to increase upon approval of the Company’s Board of Directors
(in its sole discretion); (d) shares issued without additional payment by the recipient pursuant to
a bonus issue, split, subdivision, or similar transaction which does not affect the respective
equity percentage interest of the Shareholders; (e) issuances of the shares of the Company in
connection with a bona fide business acquisition whether by merger, consolidation, purchase of
assets or otherwise pursuant to agreements approved by the Board of Directors of the Company;
(f) issuances of shares of the Company pursuant to equipment leasing arrangements or debt financing
arrangements from a bank or similar institution, or pursuant to any real property leasing
arrangement, provided, in each case, that such arrangements are approved by the Board of Directors
of the Company; (g) issuances of shares of the Company to strategic partners, customers or
suppliers pursuant to agreements entered into by the Company primarily for non-equity financing
purposes and approved by the Board of Directors of the Company; (h) issuances of shares as
dividends or distributions with respect to the Preferred Shares; and (i) issuances of shares
exempted from this definition by the written consent of (a) the Shareholders holding a majority of
the Series A Preferred Shares and Series B Preferred Shares, voting together on an as-converted
basis, and (b) the Shareholders holding a majority of the Series C Preferred Shares.

     1.34 “Option Plan” means the Company’s Share Incentive Plan.

     1.35 “Participating Shareholder” has the meaning set forth in Section 4.2 of this Agreement.

     1.36 “Purchasing Investor” has the meaning set forth in Section 5.2 of this Agreement.

     1.37 “Person” means any individual, entity or group, including, without limitation, any
corporation, limited liability company, limited or general partnership, joint venture, association,
joint stock company, trust, unincorporated organization, or Governmental or Regulatory Authority.

     1.38 “PRC” means the People’s Republic of China, excluding the Special Administrative Regions
of Hong Kong, Macau and Taiwan.

     1.39 “Preferred Shares” means the Series A Preferred Shares, Series B Preferred Shares and
Series C Preferred Shares of the Company.

     1.40 “Prohibited Transfer” has the meaning set forth in Section 5.7 of this Agreement.

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

     1.41 “Pro Rata Share” with respect to any Shareholder, means the ratio of: (a) the total
number of Common Shares held by that Shareholder (including any Common Shares into which the
Convertible Securities or Exercisable Securities, if any, held by that Shareholder are convertible
or exercisable) to (b) the total number of Common Shares issued and outstanding (including any
Common Shares into which outstanding Convertible Securities or Exercisable Securities are
convertible or exercisable).

     1.42 “Purchase Agreement” has the meaning set forth in the recitals to this Agreement.

     1.43 “Qualified IPO” shall mean the initial underwritten public offering of the Common Shares
of the Company that is effected pursuant to a Registration Statement filed with, and declared
effective by, either the Commission under the Securities Act or another Governmental or Regulatory
Authority for a Registration in a jurisdiction other than the United States (other than either a
public offering limited solely to employees of the Company or an offering pursuant to Rule 145
under the Securities Act) covering the offers and sale of Common Shares of the Company for the
account of the Company resulting in aggregate gross proceeds to the Company of not less than
$30,000,000, or its equivalent in foreign currencies, if applicable, which values all outstanding
shares of the Company immediately following the first day on which Common Shares are publicly
traded (based on the per share price to the public included on the cover page to the prospectus (or
similar documents) related thereto) at not less than $250,000,000, or its equivalent in foreign
currencies, if applicable.

     1.44 “Register”, “Registered”, and “Registration” means a registration effected by preparing
and filing a registration statement in respect of the securities of the Company in compliance with
the Securities Act in the United States or by a comparable process pursuant to other application
laws or regulations in connection with a registration in a jurisdiction other than the United
States (a “Registration Statement”), and the declaration or ordering of the effectiveness of that
Registration Statement.

     1.45 “Registrable Securities” means any Common Shares not previously sold to the public and
(a) issued or issuable to the Shareholders upon conversion of any Preferred Shares, (b) held by any
Founder, (c) issued or issuable upon exercise of any options or warrants to purchase Common Shares
of the Company or (d) issued or issuable pursuant to a bonus issue, split, subdivision or similar
distribution.

     1.46 “Registration Expenses” means all expenses incurred by the Company in complying with
Sections 8, 9 and 10 of this Agreement, including, without limitation, all federal and state
Registration, qualification, and filing fees, printing expenses, fees and disbursements of counsel
for the Company, reasonable fees and disbursements of one special counsel for all Holders not to
exceed, with respect to Registrations pursuant to Sections 8.2 and 9 only, $20,000 (if different
from counsel to the Company), Blue Sky fees and expenses, and the expense of any special audits
incident to or required by any Registration.

     1.47 “Registration Statement” has the meaning set forth in Section 1.41 of this Agreement.

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

     1.48 “Remaining Preferred Holders” has the meaning set forth in Section 18 of this Agreement.

     1.49 “Right of First Refusal” has the meaning set forth in Section 5.1 of this Agreement.

     1.50 “Right of Second Refusal” has the meaning set forth in Section 5.2 of this Agreement.

     1.51 “Rule 144” has the meaning set forth in Section 11 of this Agreement.

     1.52 “Securities Act” means the United States Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as from time to time in effect.

     1.53 “Selling Expenses” means all underwriting, discounts, selling commissions and share
transfer taxes applicable to the sale of Registrable Securities pursuant to this Agreement.

     1.54 “Series A Designee” has the meaning set forth in Section 2.1(a) of this Agreement.

     1.55 “Series C Designee” has the meaning set forth in Section 2.1(a) of this Agreement.

     1.56 “Share Transfer Agreements” has the meaning set forth in Section 19 of this Agreement.

     1.57 “Shareholders” has the meaning set forth in the preamble to this Agreement.

     1.58 “Shares” has the meaning set forth in Section 5.1 of this Agreement.

     1.59 “Tiger” means Tiger Technology Private Investment Partners, L.P. and Tiger Technology II,
L.P. and their respective affiliates.

     1.60 “Transfer Notice” has the meaning set forth in Section 5.1 of this Agreement.

     1.61 “Transferring Founder” has the meaning set forth in Section 5.1 of this Agreement.

     1.62 “Underwriter’s Representative” has the meaning set forth in Section 8.3 of this
Agreement.

     1.63 “Walden” means Pacven Walden Ventures V, L.P. and its affiliates.

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

     2. Election of Directors.

     2.1 Voting.

          (a) Each of the Shareholders agrees that such Shareholder will vote, or cause to be voted, all
shares of the Company now or hereafter owned or held of record by such Shareholder or its
Affiliate, at each annual or special meeting of the shareholders of the Company at which directors
of the Company are to be elected, in favor of, or to take all actions by written resolution in lieu
of any such meeting as are necessary to cause the election or re-election as members of the Board
of Directors of the Company, and during such period, to continue in office, (i) for those directors
to be elected by the holders of Common Shares, two (2) persons designated by the Founders (the
“Founder Designees”), who shall initially be Peggy Yu Yu and Guoqing Li , (ii) for that director to
be elected by the holder of the Series A Preferred Shares one (1) person designated by the
Investors holding of a majority of the outstanding Series A Preferred Shares (the “Series A
Designee”), who shall initially be Junichi Goto, (iii) for that director to be elected by the
holders of Series C Preferred Shares (the “Series C Designee”), one (1) person designated by (A)
for so long as DCM holds at least 50% of the Series C Preferred Shares purchased by DCM under the
Purchase Agreement (or Common Shares issued upon conversion thereof), DCM and (B) thereafter, the
Investors holding a majority of the Series C Preferred Shares, who shall initially be Ruby Lu, and
(iv) one (1) independent person designated by the vote of a majority of the other members of the
Board (including the Founder Designees, the Series A Designee and the Series C Designee) (the
“Mutual Designee”), who shall initially be Feng Bo. Each Shareholder shall vote, or cause to be
voted, all shares of the Company now or hereafter owned or held of record by such Shareholder or
its Affiliate, in accordance with the foregoing, to elect as the Series A Designee, one (1) person
designated by the holders of a majority of the outstanding Series A Preferred Shares who is
acceptable to a majority of the other members of the Board (excluding the Series A Designee)..

          (b) Each of the Shareholders agrees that such Shareholder will vote, or cause to be voted, all
shares of the Company now or hereafter owned or held of record by such Shareholder or its
Affiliate, at each annual or special meeting of the shareholders of the Company at which the
Chairman or Alternate Chairman (each as defined in the Company’s Amended Articles of Association)
are to be elected, in favor of, or to take all actions by written consent in lieu of any such
meeting as are necessary to cause the election or re-election of persons so designated by the
Founder Designees.

          (c) Notwithstanding the foregoing, in the event that any Investor fails at any time to
beneficially own an aggregate of at least fifty percent of the Series A Preferred Shares (or Common
Shares if such Series A Preferred Shares have been converted) purchased by such Investor pursuant
to the Series A Preferred Shares Purchase Agreement dated as of February 28, 2000, the obligation
of other Shareholders under Section 2.1(a) of this Agreement to vote for a member of the Board of
Directors designated by such Investor shall terminate, but the obligations of such Investor
hereunder shall continue unless otherwise terminated.

          (d) The Shareholders and the Company shall take all such reasonable actions as may be
necessary or appropriate to cause the designees set forth in Sections 2.1(a) and 2.1(b) above to be
elected or re-elected as members of the Board of Directors and Chairman and

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Alternate Chairman, respectively and to otherwise effect the intent of the provisions of
Sections 2.1(a) and 2.1(b). Each Shareholder agrees that it will either attend such meeting or
execute a proxy for such meeting each time a vote is taken with respect to the matters set forth in
Sections 2.1(a) and 2.1(b).

     2.2 Notice and Removal. The Founders, the holders of a majority of the Series A Preferred
Shares and (i) for such time that DCM holds at least 50% of the Series C Preferred Shares purchased
by DCM under the Purchase Agreement (or Common Shares issuable upon conversion thereof, DCM or (ii)
thereafter, the holders of a majority of the Series C Preferred Shares, shall each furnish notice
to each other Shareholder prior to any election of the Board of Directors (either in writing or
verbally at a shareholder meeting) of their respective director designees. In the absence of such
notice, the Directors then serving and previously designated shall be re-elected if still eligible
to serve as provided herein. No party hereto shall vote to remove any member of the Board of
Directors designated in accordance with the aforesaid procedure unless the party designating such
member so votes, and if the designating party so votes, then the non-designating parties shall
likewise so vote. If the party designating a member of the Board of Directors shall notify the
other Shareholders of its desire to remove any director of the Company previously designated by
such designating party and elected in accordance with Section 2.1, each Shareholder hereby agrees
promptly to vote all shares of the Company owned or held of record by it and to take all such other
reasonable actions as may be necessary or appropriate to effect such removal in accordance with
such request.

     2.3 Meetings. The Board of Directors shall hold no less than four meetings per year at the
principal place of business of the Company or at such other place as they may agree.

     2.4 Directors Indemnification. The Articles of Association and Memorandum of Association of
the Company shall at all times provide for the indemnification of the members of the Board of
Directors of the Company to the full extent provided by the law of the jurisdiction in which the
Company is organized.

     2.5 Related Party Transactions. The Board of Directors shall have the exclusive authority to
approve all transactions between the Company and any of its shareholders holding more than five
percent (5%) of the fully-diluted share capital of the Company, directors or officers (and any of
their respective Affiliates), including all agreements regarding cash or equity compensation of (i)
any of the Founders, officers or directors of the Company and (ii) any employee or consultant of
the Company earning more than $100,000 per year (excluding sales commissions).

     3. Observer Rights. The Company shall permit each of Tiger, IDG and Walden to designate one
representative to attend all meetings of the Company’s Board of Directors, in a non-voting observer
capacity, and, in this respect, the Company shall provide such representative with copies of all
notices, minutes, consents and other materials that the Company provides its directors; provided,
however, that each of Tiger, IDG and Walden shall require such representative to treat all
information obtained in such meetings of the Company’s Board of Directors as confidential; and
provided, further, that the representative may be excluded from access to any material or meeting
or portion thereof if the Board of Directors believes, in its sole discretion, that such exclusion
is reasonably necessary to preserve the attorney-client privilege,

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to protect confidential or proprietary information, to avoid any perceived conflict of
interest arising out of Tiger’s investments or relationships with other Persons, or for other
similar reasons.

     4. Right of Participation.

     4.1 Right of Participation With Respect to New Securities. The Company grants to each
Shareholder the right of participation to purchase its Pro Rata Share of any New Securities which
the Company may, from time to time, propose to sell and issue. The Shareholders may purchase New
Securities on the same terms and at the same price at which the Company proposes to sell the New
Securities.

     4.2 Notice. In the event the Company proposes to issue New Securities, it shall give each
Shareholder written notice (the “Issuance Notice”) of its intention, describing the type of New
Securities, the price, the terms upon which the Company proposes to issue the same, the number of
shares which each Shareholder is entitled to purchase pursuant to Section 4.1 of this Agreement,
and a statement that each Shareholder shall have 15 days to respond to the Issuance Notice. Each
Shareholder shall have 15 days from the date of receipt of the Issuance Notice to agree to purchase
its Pro Rata Share of the New Securities for the price and upon the terms specified in the Issuance
Notice by: (a) giving written notice to the Company and (b) forwarding payment for its Pro Rata
Share of New Securities to the Company if immediate payment is required by the terms of the
Issuance Notice. If the Shareholders have not elected within such 15-day period to purchase all of
the New Securities proposed to be issued, the Company shall provide each Shareholder electing to
purchase its entire Pro Rata Share of New Securities (each, a “Fully-Participating Shareholder”)
within five business days after such period ends with a schedule setting forth the following
information: (i) the amount of New Securities elected to be purchased, (ii) the purchasers thereof
(each a “Participating Shareholder”) and (iii) the specific amount of New Securities elected to be
purchased by each Participating Shareholder. Each Fully-Participating Shareholder shall thereafter
have an additional five (5) business day period to determine whether to purchase all or any portion
of such Fully-Participating Shareholder’s Pro Rata Share of such remaining New Securities for the
purchase price and upon the terms specified in the Issuance Notice by giving written notice to the
Company and stating therein the number of New Securities to be purchased.

     4.3 Sale of New Securities. In the event Shareholders fail to exercise this right of
participation within the periods specified in Section 4.2, the Company shall have 120 days
thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered
by the Issuance Notice shall be closed, if at all, within 60 days after the date of that agreement)
to sell the remaining unsubscribed portion of the New Securities at a price and upon the terms no
more favorable to the purchasers of the New Securities than those specified in the Issuance Notice.
In the event the Company has not sold the New Securities within this 120 day period (or sold and
issued New Securities in accordance with the foregoing within 60 days from the date of the
agreement), the Company shall not thereafter issue or sell any New Securities without first
offering the New Securities to the Shareholders in the manner provided above.

     4.4 Termination. The right of participation contained in this Section 4 shall terminate upon
the earliest to occur of (i) a Qualified IPO or (ii) the consummation of a Liquidation Event.

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     5. Right of First Refusal; Co-Sale Right.

     5.1 Company Right of First Refusal. Subject to Section 5.6 of this Agreement, if any Founder
proposes to sell, pledge, or otherwise transfer (a “Transferring Founder”) any Common Shares,
Preferred Shares, Convertible Securities or any other securities convertible, exchangeable or
otherwise convertible into equity securities of the Company now owned or subsequently acquired by
such Founder (the “Shares”) or any interest therein to any person or entity, including another
Shareholder, then the Company shall have a right of first refusal (the “Right of First Refusal”) to
purchase some or all of the Shares proposed to be sold. The Transferring Founder shall give a
written notice (the “Transfer Notice”) to the Company describing fully the proposed transfer,
including the number of shares proposed to be transferred, the proposed per share transfer price,
and the name and address of the proposed transferee. The Company shall then have the right to
purchase all or any portion of the Shares subject to the Transfer Notice at a price per share equal
to the proposed per share transfer price, by delivery of a notice of exercise of its Right of First
Refusal within 20 days after the date the Transfer Notice is delivered to the Company.

     5.2 Investor Right of Second Refusal. Subject to Section 5.6 of this Agreement, if the
Company fails to exercise in full its Right of First Refusal, then the Investors shall have a
secondary right of first refusal (the “Right of Second Refusal”) to purchase some or all of the
Shares proposed to be sold and not purchased by the Company; provided, however, that any Investor
that is also a Founder shall be deemed not to be an Investor for the purposes of this Section 5.
Prior to or immediately following the expiration of the 20-day period set forth in Section 5.1
above, the Company shall give a written notice (the “Company Notice”) to the Investors attaching
the Transfer Notice and setting forth the Shares with respect to which the Company has elected not
to exercise its Right of First Refusal. Each Investor shall then have the right to purchase its
Adjusted Pro Rata Share of the Shares subject to the Transfer Notice at a price per share equal to
the proposed per share transfer price, by delivery of a notice of exercise of its Right of Second
Refusal within 15 days after the date the Company Notice is delivered to the Investors. If the
Investors have not elected within such 15-day period to purchase all of the Shares subject to the
Right of Second Refusal, the Company shall provide each Investor electing to purchase its entire
Adjusted Pro Rata Share of such Shares (each a “Fully-Purchasing Investor”) within five (5)
business days after such period ends with a schedule setting forth the following information: (i)
the amount of Shares elected to be purchased, (ii) the purchasers thereof (each a “Purchasing
Investor”) and the specific amount of such Shares elected to be purchased by each Purchasing
Investor. Each Fully Purchasing Investor shall thereafter have an additional five (5) business day
period after receipt of such schedule to determine whether to purchase all or any portion of such
Fully-Purchasing Investor’s Adjusted Pro Rata Share of such remaining Shares for the purchase price
and upon the terms specified in the Company Notice by giving written notice to the Company and
stating therein the number of Shares to be purchased.

     To the extent the Company and/or the Investors exercise their Right of First Refusal and/or
Right of Second Refusal, respectively, in accordance with the terms and conditions set forth in
this Section 5, the number of Shares that the Transferring Founder may sell to the proposed
transferee in the transaction shall be correspondingly reduced.

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     5.3 Co-Sale Right.

          (a) If the Transferring Founder proposes to sell, pledge, or otherwise transfer Shares or any
interest therein to any person or entity, including another Shareholder, and the Company and the
Investors have not elected to exercise their Right of First Refusal and Right of Second Refusal
under Sections 5.1 and 5.2 in full, then the Company shall give written notice to each Investor
that did not exercise such Right of Second Refusal (the “Co-Sale Notice”) setting forth the number
of Shares as to which the Right of First Refusal and Right of Second Refusal have not been
exercised. Each such Investor shall have the right (the “Co-Sale Right”), exercisable upon written
notice to the Transferring Founder within 10 days after the date the Co- Sale Notice is delivered
to such Investor, to participate in the sale on the same terms and conditions as the Transferring
Founder with respect to up to its Co-Sale Pro Rata Share of the Shares covered by the Co-Sale
Notice; provided, however, that any Investor that is a Founder shall be deemed not to be an
Investor for purposes of this Section 5.

          Notice of exercise of a Co-Sale Right shall indicate the number of Shares an Investor wishes
to sell under its Co-Sale Right. Any Investor that did not exercise its Right of Second Refusal
may elect to sell all or some of the Shares then held by that Investor up to that Investor’s
Co-Sale Pro Rata Share. To the extent an Investor exercises its Co-Sale Right in accordance with
the terms and conditions set forth in this Section 5.3, the number of Shares that the Transferring
Founder may sell in the transaction shall be correspondingly reduced.

          (b) Delivery of Certificates. The Investors shall effect their participation in the sale by
promptly delivering to the Company for transfer to the prospective purchaser one or more
certificates, properly endorsed for transfer, which evidence the type and number of Shares which
such Investors elect to sell. Upon receipt thereof, the Company shall cause the Company’s Register
of Members to be updated to reflect the Shares to be so transferred and shall deliver to the
transferee a certificate evidencing such shares.

          (c) Sales Proceeds. The share certificate or certificates that the Investors deliver to the
Transferring Founder pursuant to Section 5.3(b) shall be transferred to the purchaser in
consummation of the sale of the Shares pursuant to the terms and conditions specified in the
Transfer Notice only after confirmation of receipt of the purchase price for all of the shares
subject to the Transfer Notice to which that Investor is entitled by reason of its participation in
the sale. To the extent that any prospective purchaser or purchasers prohibit assignment or
otherwise refuse to purchase shares or other securities from the Investors, the Transferring
Founder shall not sell to the prospective purchaser or purchasers any Shares unless and until,
simultaneously with the sale, the Transferring Founder purchases those shares or other securities
from the Investors.

     5.4 Sale by Transferring Founder. If the Company does not exercise its Right of First Refusal
in full and the Investors do not exercise their Right of Second Refusal or their Co-Sale Right in
full with respect to the sale of the Shares subject to the Transfer Notice and the Co-Sale Notice,
the Transferring Founder may, not later than 60 days following delivery to the Investors of the
Co-Sale Notice conclude a transfer of all of the Shares not subject to such exercise and covered by
the Transfer Notice on terms and conditions not more favorable to the transferee than those
described in the Transfer Notice. Any proposed transfer on terms and conditions more

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favorable to the transferee than those described in the Transfer Notice, as well as any
subsequent proposed transfer of any Shares by the Transferring Founder, shall again be subject to
the Right of First Refusal, Right of Second Refusal and Co-Sale Right and shall require compliance
by the Transferring Founder with the procedures described in this Section 5.

     5.5 No Adverse Effect. The Investors’ exercise or non-exercise of the Right of Second Refusal
or the Co-Sale Right shall not adversely affect their rights to participate in subsequent transfers
of Shares by the Transferring Founder subject to the provisions of this Section 5.

     5.6 Exempt Transfers. Notwithstanding the foregoing, the Right of First Refusal, Right of
Second Refusal and the Co-Sale Right shall not apply to: (a) any transfer of Shares to the spouse,
parent, children or sibling of the Transferring Founder, or to trusts for the benefit of such
persons or the Transferring Founder; (b) any transfer to another Founder or to an Affiliate of a
Founder (including, without limitation, any current or former shareholder, member or partner of a
Founder); (c) any sale to the public pursuant to an effective Registration Statement; (d) any bona
fide gift to any charitable organization as defined in Section 501(c)(3) of the Internal Revenue
Code (or similar foreign statute or regulation), (e) up to a cumulative aggregate over the term of
this Agreement of seven and one-half percent (7.5%) of the shares held by a Transferring Founder
after the sale of Common Shares contemplated by the Share Transfer Agreements, or (f) any transfer
of Common Shares pursuant to the Share Transfer Agreements (collectively, the “Exempt Transfers”);
provided, that, in any of the above cases: (x) the transferring party shall inform the Company of
the transfer prior to effecting it and be bound by lockup provisions substantially similar to those
set forth in Section 14.6 hereof; (y) in the case of a transfer described in clauses (a) and (b)
only, the transferee shall furnish the parties with a written agreement to be bound by and comply
with all provisions of this Section 5; and (z) in the case of a transfer described in clauses (a),
(b) and (e) only, the transfer of shares shall have been approved by the Board of Directors.
Subject to Section 17, the transferred shares shall remain “Shares”, and the transferee shall be
treated as a “Founder” for purposes of this Agreement.

     5.7 Prohibited Transfer. In the event the Transferring Founder transfers (or agrees to
transfer) any Shares in contravention of the Right of First Refusal, Right of Second Refusal or the
Co-Sale Right set forth in this Article 5 (a “Prohibited Transfer”), such transfer shall be null
and void and the Company shall not recognize such transfer and will not effect the transfer on the
Company’s share records.

     5.8 Share Status. Shares purchased by the Company pursuant to this Section 5 shall, on
acquisition by the Company, cease to form part of the issued share capital but shall remain part of
the Company’s authorized share capital available for reissue.

     6. Termination of Covenants. The covenants set forth in Sections 2, 3 and 5 of this Agreement
shall be terminated and be of no further force or effect upon the earliest to occur of (a) a
Qualified IPO or (b) the consummation of a Liquidation Event.

     7. Registration Rights. The registration rights and covenants of Holders set forth in
Sections 8 through 15 relate primarily to registration of securities in the United States. In the
event that the Company effects a Qualified IPO in a jurisdiction outside of the United States, the

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Shareholders agree for themselves and their transferees that the Company shall not be required
to register the Registrable Securities under the Securities Act or the Exchange Act, but may
provide instead (to the extent available) comparable Registration rights and covenants in the
jurisdiction in which it made its initial public offering.

     8. Demand Registration.

     8.1 Request for Registration on Form Other Than Form F-3. Subject to the terms of this
Agreement, in the event that the Company receives from the Initiating Holders at any time beginning
six months after the effective date of the Registration Statement pertaining to the Company’s
initial underwritten public offering of the Common Shares of the Company that is effected pursuant
to a Registration Statement filed with, and declared effective by, either the Commission under the
Securities Act or another Governmental or Regulatory Authority for a Registration in a jurisdiction
other than the United States (other than either a public offering limited solely to employees of
the Company or an offering pursuant to Rule 145 under the Securities Act or a similar provision in
a non-U.S. jurisdiction) covering the offer and sale of Common Shares of the Company for the
account of the Company, a written request that the Company effect any Registration with respect to
all or a part of the Registrable Securities on a form other than Form F-3 (or any successor form to
Form F-3, or any comparable form for a Registration in a jurisdiction other than the United States)
for an offering of at least 35% of the then outstanding Registrable Securities (or any lesser
percent if the reasonable anticipated offering price to the public, net of Selling Expenses, would
exceed $10,000,000), the Company shall (i) promptly give written notice of the proposed
Registration to all other Holders, and (ii) as soon as practicable, use its best efforts to effect
Registration of the Registrable Securities specified in the request, together with any Registrable
Securities of any Holder in that request as are specified in a written request given within 20 days
after written notice from the Company. The Company shall not be obligated to take any action to
effect any Registration pursuant to this Section 8.1 after the Company has effected two (2)
Registrations pursuant to this Section 8.1. The provisions of Section 8.4 shall be applicable to
the Registration initiated under this Section 8.1. The Company shall not be required to effect
more than one Registration pursuant to this Section 8.1 in any 12-month period. If the sale of all
of the securities to be included pursuant to a Registration Statement is not consummated for any
reason other than due to the action or inaction of the Initiating Holders, such Registration shall
not be deemed to constitute one of the registration rights granted pursuant to this Section 8.1.

     8.2 Request for Registration on Form F-3. If the Initiating Holders request that the Company
file a Registration Statement on Form F-3 (or any successor form to Form F-3, or any comparable
form for a Registration in a jurisdiction other than the United States) for a public offering of
shares of Registrable Securities, the reasonably anticipated aggregate price to the public of
which, net of Selling Expenses, would not be less than US$1,000,000, and the Company is a
registrant entitled to use Form F-3 or comparable form to Register the Registrable Securities for
an offering, the Company shall use all reasonable efforts to cause those Registrable Securities to
be Registered for the offering on that form and to cause those Registrable Securities to be
qualified in jurisdictions as the Holder or Holders may reasonably request. The Company shall not
be required to effect more than two Registrations pursuant to this Section 8.2 in any twelve (12)
month period.

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     8.3 Underwriting in Demand Registration.

          (a) Notice of Underwriting. If the Initiating Holders intend to distribute the Registrable
Securities covered by their demand registration request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 8, and the Company
shall include that information in the written notice referred to in Section 8.1 or 8.2 of this
Agreement. The right of any Holder to Registration pursuant to this Section 8 shall be conditioned
upon that Holder’s agreement to participate in the underwriting and the inclusion of that Holder’s
Registrable Securities in the underwriting.

          (b) Inclusion of Other Holders in Demand Registration. If the Company, officers or directors
of the Company holding Common Shares other than Registrable Securities, or holders of securities
other than Registrable Securities, request inclusion in the Registration, the Initiating Holders,
to the extent they deem advisable and consistent with the goals of that Registration, may, in their
sole discretion, on behalf of all Holders, offer to any or all of the Company, those officers or
directors, and the holders of securities other than Registrable Securities that their securities be
included in the underwriting and may condition that offer on the acceptance by those persons of the
terms of this Section 8. If, however, the number of shares so included exceeds the number of
shares of Registrable Securities included by all Holders, the Registration shall be treated as
governed by Section 9 of this Agreement rather than this Section 8, and it shall not count as a
Registration for purposes of this Section 8.

          (c) Selection of Underwriter in Demand Registration. The Company shall (together with all
Holders proposing to distribute their securities through the underwriting) enter into an
underwriting agreement with the representative (“Underwriter’s Representative”) of the underwriter
or underwriters selected for the underwriting by the Holders of a majority of the Registrable
Securities being Registered by the Initiating Holders and agreed to by the Company.

          (d) Marketing Limitation in Demand Registration. In the event the Underwriter’s
Representative advises the Initiating Holders in writing that market factors (including, without
limitation, the aggregate number of Common Shares requested to be Registered, the general condition
of the market, and the status of the persons proposing to sell securities pursuant to the
Registration) require a limitation of the number of shares to be underwritten, then the Company
shall so advise all Holders of Registrable Securities which would otherwise be underwritten
thereto, and the number of shares to be included in the Registration shall be allocated among all
other Holders in proportion, as nearly as practicable, to the respective amounts of Registrable
Securities entitled to inclusion in that Registration held by those Holders at the time of filing
the Registration Statement. No Registrable Securities or other securities excluded from the
underwriting by reason of this Section 8.3(d) shall be included in that Registration Statement.

          (e) Right of Withdrawal in Demand Registration. If any Holder of Registrable Securities, or a
holder of other securities entitled (upon request) to be included in that Registration, disapproves
of the terms of the underwriting, that person may elect to withdraw therefrom by written notice to
the Company, the Underwriter’s Representative, and the Initiating Holders delivered at least three
days prior to the effective date of the Registration Statement. The securities so withdrawn shall
also be withdrawn from the Registration Statement. If

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

securities are so withdrawn from the Registration, and if the number of securities to be
included in such Registration was previously reduced as a result of marketing factors pursuant to
Section 8.3(d), then the Company shall offer to all Holders who, but for the limitation under
Section 8.3(d), have retained rights to include securities in the Registration the right to include
additional securities in the Registration in an aggregate amount equal to the number so withdrawn,
with such securities to be allocated among such Holders requesting additional inclusion in
proportion to the respective amounts of securities (including Registrable Securities) entitled to
inclusion in such Registration held by those holders at the time of filing of the Registration
Statement.

     8.4 Right of Deferral. Notwithstanding the foregoing, the Company shall not be obligated to
file a Registration Statement pursuant to this Section 8:

          (a) if the Company, within ten days of the receipt of the request of any Initiating Holder(s),
gives notice of its bona fide intention to effect the filing of a Registration Statement with the
Commission (or comparable regulatory agency for a Registration in a jurisdiction other than the
United States) within 60 days of receipt of that request (other than a registration of securities
in a Rule 145 transaction or an offering, solely to employees), provided that the Company is
actively employing in good faith all reasonable efforts to cause that Registration Statement to
become effective;

          (b) within six months immediately following the effective date of any Registration Statement
pertaining to the securities of the Company (other than a registration of securities in a Rule 145
transaction or with respect to an employee benefit plan) for which the Holders were entitled to the
Registration rights set forth in Section 8 or Section 9; or

          (c) if the Company furnishes to those Holders a certificate signed by the President or Chief
Executive Officer of the Company stating that in the good faith judgment of the Board of Directors
it would be materially detrimental to the Company or its shareholders for a Registration Statement
to be filed in the near future.

     In each of the above instances, the Company’s obligation to use its best efforts to file a
Registration Statement in response to the Holders’ request therefor shall be deferred for a period
not to exceed 120 days from the receipt of such request; provided that the Company shall not
exercise the right contained in this Section 8.4 more than once in any twelve month period and
provided further, that, in the case of a Company delay pursuant to clause (b) or (c) only, during
such 120-day period the Company shall not file a Registration Statement with respect to the public
offering of securities of the Company.

     8.5 Other Securities Laws in Demand Registration. In the event of any Registration pursuant
to this Section 8, the Company shall exercise its best efforts to Register and qualify the
securities covered by the Registration Statement under the securities laws of any other
jurisdictions as shall be reasonably appropriate for the distribution of the securities; provided,
however, that: (a) the Company shall not be required to do business or to file a general consent to
service of process in any such state or jurisdiction; and (b) notwithstanding anything in this
Agreement to the contrary, in the event any jurisdiction in which the securities shall be qualified
imposes a non-waivable requirement that expenses incurred in connection with the qualification

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

of the securities be borne by selling shareholders, the expenses shall be payable pro rata by
the selling shareholders.

     9. Piggyback Registration.

     9.1 Notice of Piggyback Registration and Inclusion of Registrable Securities. Subject to the
terms of this Agreement, if the Company decides to Register any of its Common Shares (either for
its own account or the account of a security holder or holders exercising their respective demand
registration rights) on a form that would be suitable for a Registration involving solely
Registrable Securities, the Company shall: (a) promptly give each Holder written notice thereof
(which shall include a list of the jurisdictions in which the Company intends to attempt to qualify
those securities under the applicable Blue Sky or other securities laws); and (b) include in that
Registration (and any related qualification under Blue Sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in a written request
delivered to the Company by any Holder within 20 days after delivery of the written notice from the
Company, subject to Section 9.2 hereof.

     9.2 Underwriting, in Piggyback Registration.

          (a) Notice of Underwriting in Piggyback Registration. If the Registration of which the
Company gives notice involves an underwriting, the Company shall so advise the Holders as a part of
the written notice given pursuant to Section 9.1. In this event, the right of any Holder to
Registration shall be conditioned upon the underwriting and the inclusion of that Holder’s
Registrable Securities in the underwriting, to the extent provided in this Section 9. All Holders
proposing to distribute their securities through the underwriting shall (together with the Company
and the other holders distributing their securities through the underwriting) enter into an
underwriting agreement with the Underwriter’s Representative for that offering. The Holders shall
have no right to participate in the selection of the underwriters for an offering pursuant to this
Section 9.

          (b) Marketing Limitation in Piggyback Registration. In the event the Underwriter’s
Representative advises the Holders seeking Registration of Registrable Securities pursuant to this
Section 9 in writing that market factors (including, without limitation, the aggregate number of
Common Shares requested to be Registered, the general condition of the market, and the status of
the persons proposing to sell securities pursuant to the Registration) require a limitation of the
number of shares to be underwritten, the Underwriter’s Representative (subject to the allocation
priority set forth in Section 9.2(c)) may:

               (i) in the case of the Company’s initial public offering, exclude some or all Registrable
Securities from the Registration and underwriting; and

               (ii) in the case of any Registered public offering subsequent to the Company’s initial public
offering, limit the number of shares of Registrable Securities to be included in the Registration
and underwriting so that the number of Registrable Securities so included is not less than 30% of
the securities included in the Registration.

          (c) Allocation of Shares in Piggyback Registration. No Registrable Securities shall be
excluded from any Registration unless all other shareholders’ shares (other than the

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

Company) are first entirely excluded from such Registration. In the event that the
Underwriter’s Representative limits the number of shares to be included in a Registration pursuant
to Section 9.2(b), the number of shares to be included in the Registration shall be allocated among
all Holders requesting and legally entitled to include securities in that Registration, in
proportion, as nearly as practicable, to the respective amounts of Registrable Securities which the
Holders would otherwise be entitled to include in the Registration. No Registrable Securities or
other securities excluded from the underwriting by reason of this Section 9.2(c) shall be included
in the Registration Statement.

          (d) Withdrawal in Piggyback Registration. If any Holder disapproves of the terms of any
underwriting, the Holder may elect to withdraw therefrom by written notice to the Company and the
Underwriter’s Representative delivered at least ten (10) days prior to the effective date of the
Registration Statement. Any Registrable Securities excluded or withdrawn from the underwriting
shall be withdrawn from the Registration.

     10. Expenses of Registration. All Registration Expenses incurred in connection with
Registrations pursuant to Sections 8.1, 8.2 and 9, shall be borne by the Company. All Registration
Expenses incurred in connection with any other Registration, qualification, or compliance, shall be
apportioned among the Holders and other holders, including the Company, of the securities so
Registered on the basis of the number of shares Registered.

     11. Termination of Registration Rights. The rights to cause the Company to Register
securities granted under this Agreement and to receive notices pursuant to Section 9 of this
Agreement, shall terminate on the earliest of: (a) the date that is five (5) years after the
Company’s Qualified IPO and (b) as to any Holder, such time as all Registrable Securities held by
such Holder can be sold in any three (3) month period without registration under Commission Rule
144 promulgated under the Securities Act (“Rule 144”).

     12. Registration Procedures and Obligations. Whenever required under this Agreement to effect
the Registration of any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:

          (a) Prepare and file with the Commission (or comparable regulatory agency for a Registration
in a jurisdiction other than the United States) a Registration Statement with respect to those
Registrable Securities and use its reasonable best efforts to cause that Registration Statement to
become effective, and, upon the request of the Holders of a majority of the Registrable Securities
Registered thereunder, keep the Registration Statement effective for up to 120 days;

          (b) Prepare and file with the Commission (or comparable regulatory agency for a Registration
in a jurisdiction other than the United States), amendments and supplements to that Registration
Statement and the prospectus used in connection with the Registration Statement as may be necessary
to comply with the provisions of the Securities Act (or other applicable law in a jurisdiction
other than the United States) with respect to the disposition of all securities covered by the
Registration Statement;

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

          (c) Furnish to the Holders the number of copies of a prospectus, including a preliminary
prospectus, required by the Securities Act (or other applicable law in a jurisdiction other than
the United States), and any other documents as they may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them that are contained in such Prospectus;

          (d) Use its reasonable best efforts to Register and qualify the securities covered by the
Registration Statement under such other securities or Blue Sky laws of any other jurisdictions as
shall be reasonably requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or file a general consent
to service of process in any such states or jurisdictions, and provided further that in the event
any jurisdiction in which the securities shall be qualified imposes a non-waivable requirement that
expenses incurred in connection with the qualification of the securities be borne by selling
shareholders, those expenses shall be payable pro rata by selling shareholders;

          (e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter of such
offering. Each Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement;

          (f) Notify each Holder of Registrable Securities covered by the Registration Statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in the Registration Statement,
as then in effect, includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing;

          (g) Provide a transfer agent and registrar for all Registrable Securities Registered pursuant
to the Registration Statement and a CUSIP number for all those Registrable Securities, in each case
not later than the effective date of the Registration;

          (h) Furnish, at the request of any Holder requesting Registration of Registrable Securities
pursuant to this Agreement, on the date such Registrable Securities are delivered to the
underwriter for sale in connection with a Registration pursuant to this Agreement, (i) an opinion,
dated the date of the sale, of the counsel representing the Company for the purposes of the
Registration, in form and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to a majority of the Holders requesting Registration,
and (ii) a letter dated the date of the sale, from the independent certified public accountants of
the Company, in form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering and reasonably satisfactory to a
majority of the Holders requesting Registration, addressed to the underwriters; and

          (i) Take all reasonable action necessary to list the Registrable Securities on the primary
exchange upon which the Company’s securities are then traded.

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

     13. Information Furnished by Holder. It shall be a condition precedent of the Company’s
obligations under this Agreement that each Holder of Registrable Securities included in any
Registration furnish to the Company information regarding the Holder, the Registrable Securities
held by such Holder, and the intended method of disposition of such securities by the Holder as the
Company may reasonably request.

     14. Indemnification.

     14.1 Company’s Indemnification of Holders. To the extent permitted by law, the Company shall
indemnify each Holder, each of its officers, directors, and constituent partners, legal counsel for
the Holders, and each person controlling that Holder, with respect to which Registration,
qualification, or compliance of Registrable Securities has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any underwriter against all
claims, losses, damages, liabilities, or actions in respect thereof to which they may become
subject (collectively, “Damages”) to the extent the Damages arise out of or are based upon any
untrue statement (or alleged untrue statement) of a material fact contained in any preliminary or
final prospectus or other document (including any Registration Statement) or amendment and
supplement thereto incident to any Registration, qualification, or compliance, or are based on any
omission (or alleged omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation or alleged violation by
the Company of any rule or regulation under the Securities Act, Exchange Act, applicable Blue Sky
laws, or other applicable laws in the jurisdiction other than the United States in which the
Registration occurred, applicable to the Company and relating to action or inaction required of the
Company in connection with such Registration, qualification, or compliance, and the Company shall
reimburse each Holder, each underwriter, and each person who controls any officers, directors,
Holder or underwriter, for any legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability, or action; provided, however,
that the indemnity contained in this Section 14.1 shall not apply to amounts paid in settlement of
any claims for Damages if settlement is effected without the consent of the Company (which consent
shall not unreasonably be withheld); and provided, further, that the Company will not be liable in
any case to the extent that any Damages arise out of or are based upon any untrue statement or
omission (or alleged untrue statement or omission) based upon written information furnished to the
Company by a Holder, underwriter, or controlling person and stated in writing to be for use in
connection with the offering of securities of the Company.

     14.2 Holder’s Indemnification of Company. To the extent permitted by law, each Holder shall,
if Registrable Securities held by that Holder are included in the securities as to which
Registration, qualification or, compliance is being effected pursuant to this Agreement, indemnify
the Company, each of its directors and officers, each legal counsel and independent accountant of
the Company, each underwriter, if any, of the Company’s securities covered by the Registration
Statement, each person who controls the Company or underwriter within the meaning of the Securities
Act, and each other Holder selling securities under the Registration, each of its officers,
directors, and constituent partners, and each person controlling the other Holder, against all
Damages which they may suffer that arise out of or based upon any untrue statement (or alleged
untrue statement) of a material fact contained in any Registration Statement, preliminary or final
prospectus, offering circular, or other document, or any omission

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

(or alleged omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the Holder of any rule
or regulation promulgated under the Securities Act, Exchange Act, applicable Blue Sky laws, or
other applicable laws in the jurisdiction other than the United States in which the Registration
occurred, applicable to the Holder and relating to action or inaction required of the Holder in
connection with such Registration, qualification, or compliance, and in each case to the extent and
only to the extent that such actions occur in reliance on and in conformity with written
information furnished by such Holder expressly for use in connection with such Registration, and
shall reimburse the Company, those Holders, each of its directors, officers, each person who
controls the Company within the meaning of the Securities Act, and each other Holder, each of its
officers, directors and constituent partners, and each person controlling the other Holders for any
legal and any other expenses reasonably incurred by such person in connection with investigating or
defending any claim, loss, damage, liability, or action, in each case to the extent, but only to
the extent, that the untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in that Registration Statement, prospectus, offering circular, or other document
in reliance upon and in conformity with written information furnished to the Company by that Holder
and stated in writing to be specifically for use in connection with the offering of securities of
the Company, provided, however, that the indemnity contained in this Section 14.2 shall not apply
to amounts paid in settlement of any Damages if settlement is effected without the consent of that
Holder (which consent shall not be unreasonably withheld) and provided that no such settlement
shall be effected without such Holder’s consent unless such settlement includes an unconditional
release of such Holder from all liability arising out of such litigation, investigation, proceeding
or claim and provided, further, that each Holder’s liability under this Section 14.2 shall not
exceed net proceeds (less underwriting discounts and selling commissions) received by such Holder
from the offering of securities made in connection with that Registration.

     14.3 Indemnification Procedure. Promptly after receipt by an indemnified party under this
Section 14 of notice of the commencement of any action, the indemnified party shall, if a claim is
to be made against an indemnifying party under this Section 14, notify the indemnifying party in
writing, of the commencement thereof and generally summarize the action. The indemnifying party
shall have the right to participate in and to assume the defense of that claim; provided, however,
that the indemnifying party shall be entitled to select counsel for the defense of the claim with
the approval of any parties entitled to indemnification, which approval shall not be unreasonably
withheld. The indemnified party shall have the right to participate at its own expense in the
defense of any such action provided further, however, that if either party reasonably determines
that there may be a conflict between the position of the Company and the Holders in conducting the
defense of the action, suit, or proceeding, then counsel for that party shall be entitled, at the
indemnifying party’s expense, to conduct the defense to the extent reasonably determined by counsel
to be necessary to protect the interests of that party. The failure to notify an indemnifying
party promptly of the commencement of any action, if prejudicial to the ability of the indemnifying
party to defend the action, shall relieve the indemnifying party, to the extent so prejudiced, of
any liability to the indemnified party under this Section 14, but the omission to notify the
indemnifying party shall not relieve the party of any liability that the party may have to any
indemnified party otherwise than under this Section 14.

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

     14.4 Indemnification Unavailable. If the indemnification provided for in this Section 14 is
held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in
lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability, claim, damage or expense in
such proportion as is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the statements or omissions
that resulted in such loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations; provided, however, that no contribution by any Holder, when combined with
any amounts paid by such Holder pursuant to Section 14.2, shall exceed the net proceeds from the
offering received by such Holder. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and the parties’
relative intent, knowledge, access to information, and opportunity to correct or prevent such
statement or omission.

     14.5 Conflicts. Notwithstanding the foregoing, to the extent that provisions on
indemnification and contribution contained in the underwriting agreement entered into in connection
with the underwritten public offering are in conflict with the foregoing provisions, the provisions
in the underwriting agreement shall control.

     14.6 Lock-up. Each Holder hereby agrees that such Holder shall not sell, pledge, hypothecate,
hedge, make any short sale of, loan, grant any option for the purchase of, or otherwise transfer or
dispose of any Registrable Securities or other securities of the Company without the prior written
consent of the Company and the Underwriter’s Representative for a period of time (not to exceed 180
days) following the effective date of a Registration Statement of the Company filed under the
Securities Act (or other applicable law in a jurisdiction other than the United States in which a
Registration occurred) in connection with the Company’s initial public offering. The obligations
of Holders under this Section 14.6 shall be conditioned upon similar agreements being in effect
with each officer, director, or holder of more than 3% of the fully-diluted share capital of the
Company. Each Holder hereby agrees to execute any lock-up agreement provided to it by the
Underwriter’s Representative containing substantially the terms of this Section 14.6.

     14.7 Survival of Obligations. The obligations of the Company and Holders under this
Section 14 shall survive the completion of any offering of Registrable Securities in a Registration
Statement under this Agreement or otherwise.

     15. Reports Under the Exchange Act. With a view to making available to Holders the benefits
of Rule 144 and any other rule or regulation of the Commission that may at any time permit a Holder
to sell securities of the Company to the public without Registration or pursuant to a Registration
on Form F-3, the Company agrees that, if the Company effects a Qualified IPO in the Untied States,
it shall:

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

          (a) use its reasonable best efforts to make and keep public information available, as those
terms are understood and defined in Rule 144, at all times after 90 days after the effective date
of the first Registration Statement filed by the Company for the offering of its securities to the
public;

          (b) take all reasonable action including the voluntary Registration of its Common Shares under
Section 12 of the Exchange Act, necessary to enable the Holders to utilize Form F-3 for the sale of
their Registrable Securities, such action to be taken as soon as practicable after the end of the
fiscal year in which the first Registration Statement filed by the Company for the offering of its
securities to the general public is declared effective;

          (c) use its reasonable best efforts to file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the Exchange Act;

          (d) use its reasonable best efforts to furnish to any Holder, so long as the Holder owns any
Registrable Securities, promptly upon request (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144 (at any time after 90 days after the effective
date of the first Registration Statement filed by the Company) or of the Securities Act and the
Exchange Act (at any time after it has become subject to those reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form F-3 (at any time after it
so qualifies); (ii) a copy of the most recent annual or quarterly report of the Company and any
other reports and documents filed by the Company; and (iii) any other information as may be
reasonably requested in availing any Holder of any rule or regulation of the Commission which
permits the selling of any securities without Registration or pursuant to that form; and

     15A. For a Registration in a jurisdiction other than the United States, the Company shall take
actions similar to those set forth in paragraphs (a), (b), (c) and (d) of Section 15 above if
needed to make available to Holders the benefits of the corresponding provision or provisions of
that jurisdiction’s securities laws.

     16. Covenants of the Company.

     16.1 Inspection. Each of the Company and Kewen shall permit each Investor who (a) together
with its affiliates purchases or has purchased Preferred Shares for a purchase price of at least US
$2,500,000 and (b) holds at least 50% of the Preferred Shares held or purchased by such Investor as
of the date hereof (each, a “Major Investor”) or any authorized representative thereof, to visit
and inspect the properties of the Company and Kewen, as the case may be, including its corporate
and financial records, and to discuss its business and finances with officers of the Company and
Kewen, as the case may be, during normal business hours following reasonable notice and as often as
may be reasonably requested; provided, however, that such Major Investor may be excluded from
access to any material, records or other information if the Board of Directors believes, in its
sole discretion, that such exclusion is reasonably necessary to preserve the attorney-client
privilege, to protect confidential or proprietary information, to avoid any perceived conflict of
interest arising out of such Investor’s investments or relationships with other Persons, or for
other similar reasons.

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

     16.2 Financial Statements and Other Information.

          (a) As long as any Preferred Shares are outstanding, the Company shall deliver to each Major
Investor:

               (i) within 120 days after the end of each fiscal year of the Company and Kewen, as the case
may be, an audited balance sheet of the Company and Kewen, as the case may be, as at the end of
such year and audited statements of income and of cash flows of the Company and Kewen, as the case
may be, for such year, certified by an accounting firm of international standing selected by the
Company, and prepared in accordance with IAS with respect to the Company and in accordance with the
applicable accounting rules in the PRC with respect to Kewen;

               (ii) within 30 days and 45 days, respectively, after the end of each month and fiscal quarter,
an unaudited balance sheet of Kewen as at the end of such month (or fiscal quarter) and unaudited
statements of income and of cash flows of Kewen for such month (or fiscal quarter);

               (iii) as soon as available, but in any event at least 30 days prior to commencement of each
fiscal year, a budget and business plan for such fiscal year; and

               (iv) with reasonable promptness, such other notices, information and data with respect to the
Company as the Company delivers to the holders of its Common Shares in their capacities as
shareholders.

          (b) The financial statements delivered pursuant to clause (ii) of paragraph (a) shall be
accompanied by a certificate of the Chief Financial Officer of the Company stating that such
statements have been prepared in accordance with the applicable accounting rules and fairly
present, in all material respects, the financial condition and results of operations of the Company
at the date thereof and for the periods covered thereby, except that the financial statements may
not contain footnotes and are subject to normal year-end audit adjustments.

     16.3 Insurance. Kewen shall maintain in effect, policies of workers’ compensation insurance
and of insurance with respect to its properties and business of the kinds and in the amounts not
less than is customarily obtained by corporations engaged in the same or similar business and
similarly situated in the PRC, including, without limitation, insurance against loss, damage, fire,
theft, public liability and other risks.

     16.4 Inventions and Proprietary Information Agreements. Unless otherwise determined by the
Company’s Board of Directors, the Company and Kewen shall require all employees and consultants now
or hereafter employed or retained by the Company or Kewen, as applicable, to enter into an
inventions and proprietary information agreement relating to the protection of the Company’s and
Kewen’s intellectual property and trade secrets and prohibiting such persons from competing with
the Company or Kewen during the term of their employment by the Company and/or Kewen.

     16.5 Incentive Shares Option Plan. Except as otherwise determined by the Board of Directors
in any particular instance, options or shares granted to employees of the Company shall

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

be subject to a four (4) year vesting schedule (25% after one year and monthly or longer
thereafter), pursuant to which the option shall be cancelled or the shares shall be subject to
repurchase by the Company at cost upon cessation of service. Unless otherwise approved by the
Board of Directors, such vesting shall not be subject to acceleration unless both (a) an event set
forth in Section 6(b) or (c) has occurred and (b) the surviving or acquiring entity in such
transaction does not assume the option or share. No unvested shares or options shall be
transferable by any employee of the Company, other than to family members of such employee (or
trusts for the benefit of the employee or such persons) unless otherwise approved by the Board of
Directors. The Company shall have a right of first refusal on all shares held by employees of the
Company prior to the Company’s initial public offering.

     16.6 Limitations on Subsequent Registration Rights. From and after the date of this
Agreement, the Company shall not, without the prior written consent of the holders of a majority of
the then outstanding shares of Investors’ Registrable Securities, enter into any agreement with any
holder or prospective holder of any securities of the Company that would allow such holder or
prospective holder (a) to include any of such securities in any registration filed under Section 8
or Section 9 hereof, unless under the terms of such agreement, such holder or prospective holder
may include such securities in any such registration only to the extent that the inclusion of such
securities will not reduce the amount of the Registrable Securities of the Holders that are
included therein or (b) to initiate a demand registration.

     16.7 Market Stand-Off. The Company shall cause all future officers, directors, and employees
of, and consultants to, the Company and its Subsidiaries who purchase, or receive options to
purchase, Company’s Common Shares to execute and deliver agreements in forms approved by the
Company’s Board of Directors providing for a right of repurchase in favor of the Company on
unvested shares, a prohibition on the transfer of unvested shares, a lockup or market standoff
commitment of up to 180 days, and a right of first refusal in favor of the Company on vested shares
terminating upon the Company’s Qualified IPO.

     17. Transfer of Rights. The rights under Sections 4, 5, 6, 8 and 9 of this Agreement may be
assigned by any Holder to a transferee or assignee of any Preferred Shares or Registrable
Securities acquiring at least 25% of the total shares of the Holder’s Registrable Securities,
provided that such assignee or transferee agrees in writing to be bound by this Agreement as if it
were a Shareholder and/or Holder for purposes of this Agreement. Notwithstanding the limitation
set forth in the foregoing sentence respecting the minimum number of shares which must be
transferred, any Holder which is a partnership may transfer that Holder’s Registration rights to
that Holder’s constituent partners without restriction as to the number or percentage of shares
acquired by any constituent partner.

          Any transfers or assignments of shares in the Company may be made by a written instrument
signed by the transferor or assignor and containing the name and address of the transferee or
assignee, but in the absence of such written instrument of transfer or assignment, the directors of
the Company may accept such evidence of a transfer or assignment of shares as they consider
appropriate. The Company shall, upon application of the transferor, assignor, transferee or
assignee of a registered share in the Company in accordance with the foregoing, enter in the share
register the name and address of the transferee or assignee of a share and, upon the entering of
such transferee’s or assignee’s name on the share register, the Company shall

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

treat any such transferee or assignee of any registered shares of the Company as a Member (as
defined in the Amended Articles of Association, as may be amended from time to time)

     18. Drag-Along Agreement.

          (a) In the event the Board of Directors, the holders of a majority of the outstanding Series C
Preferred Shares (voting as a separate class) and the holders of a majority of the outstanding
Series B Preferred Shares (voting as a separate class) (such holders of Series B Preferred Shares
and Series C Preferred Shares, the “Drag-Along Holders”) shall vote for, or otherwise consent to, a
consolidation or amalgamation of the Company, a sale of at least a majority of the outstanding
shares of the Company (including Common Shares and Preferred Shares) or the sale of all or
substantially all of the assets of the Company or an equity financing transaction of the Company (a
“Corporate Transaction”), then:

               (i) at every meeting of the shareholders of the Company called with respect to any of the
following, and at every adjournment or postponement thereof, and on every action or approval by
written consent of the shareholders of the Company with respect to any of the following, each other
holder of Series C Preferred Shares and each holder of Series A Preferred Shares and Series B
Preferred Shares (collectively, the “Remaining Preferred Holders”) shall vote all Preferred Shares
of the Company (or Common Shares issuable upon conversion of Preferred Shares) that such Remaining
Preferred Holder then holds in favor of approval of the Corporate Transaction and any matter that
could reasonably be expected to facilitate the Corporate Transaction, and against any proposal for
any recapitalization, amalgamation, sale of assets or other business combination (other than the
Corporate Transaction) between the Company and any person or entity other than the party or parties
to the Corporate Transaction or any other action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation or agreement of the Company under the
definitive agreement(s) related to the Corporate Transaction or which could result in any of the
conditions to the Company’s obligations under such agreement(s) not being fulfilled;

               (ii) if the Corporate Transaction is structured as (A) an amalgamation, consolidation or sale
of assets, each Remaining Preferred Holder shall waive any dissenters’ rights, appraisal rights,
right of judicial review, or similar rights in connection with such amalgamation, consolidation or
sale of assets, or (B) a sale of stock, each Remaining Preferred Holder shall agree to sell all of
the Shares and rights to acquire shares of capital stock of the Company held by such Remaining
Preferred Holder on the terms and conditions approved by the Drag-Along Holders; and

               (iii) each Remaining Preferred Holder shall take all necessary actions in connection with the
consummation of the Corporate Transaction as requested by the Company or the Drag-Along Holders and
shall, if requested by the Drag-Along Holders, execute and deliver any agreements prepared in
connection with such Corporate Transaction which agreements are executed by the Drag-Along Holders.

          (b) Each Remaining Preferred Holder hereby grants to any designee of the Board of Directors of
the Company an irrevocable proxy, coupled with an interest, to vote all of such Remaining Preferred
Holder’s Shares and to take such other actions to the extent necessary

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

to carry out the provisions of this Section 18 in the event of any breach or imminent breach
of this Section 18 by such Remaining Preferred Holder, or its affiliates, successors, custodians or
assigns. The Company and the Holders each agree and acknowledge that monetary damages would not
adequately compensate an injured party for the breach of this Section 18 by any party and this
Section 18 shall be specifically enforceable. Further, each party hereto waives any claim or
defense that there is an adequate remedy at law for such breach or threatened breach.

     19. Additional Covenants.

     19.1 Common Share Transfers. Following the Closing, it is anticipated that either the
Company, some or all of the Investors or other third parties may purchase from existing holders of
Common Shares, a number of Common Shares having a value equal to up to US $500,000. Any such
purchase by the Company or any Investor shall first be approved in writing by the Board of
Directors of the Company and DCM and shall be effected pursuant to a share transfer agreement in
form mutually acceptable to the Board of Directors of the Company and DCM (the “Share Transfer
Agreements”).

     19.2 Employment Agreements. Within sixty (60) days following the Closing, the Company shall
enter into employment agreements with the Founders on terms mutually acceptable to the Founders and
the Board of Directors, which employment agreements shall include mutually agreed upon cash
severance and equity acceleration provisions in the event of termination from employment without
“cause” (to be defined) or resignation from employment with “good reason” (to be defined).

     19.3 Director & Officer Liability Insurance. As soon as reasonably practicable following the
date of this Agreement, the Company shall obtain and continue in effect a directors’ and officers’
liability insurance policy on terms reasonably acceptable to the Board of Directors.

     19.4 Trademark. Kewen will use its commercially reasonable best efforts to enter into
trademark transfer agreements regarding “dangdang.com” (the “Trademark”) with Beijing Kewen
Cambridge Book Co. Ltd, Beijing Baichuan Shengye Advertising Co., Ltd. and Beijing Kewen Grand
Strategy Information Technology Co., Ltd. providing for the transfer of the Trademark to Kewen
within 60 days after the Closing. As soon as reasonably practicable thereafter, Kewen will apply to
relevant government bodies for official trademark registration, or approvals, if required.

     20. Legend; Stop Transfer Instructions.

     20.1 Legend. Each certificate evidencing shares now or hereafter owned by any Shareholder or
transferee shall be endorsed with the following legend:

“THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS
OF A CERTAIN SHAREHOLDERS AGREEMENT BY AND BETWEEN THE HOLDER
HEREOF, THE COMPANY AND CERTAIN OTHER SHARE HOLDERS OF THE COMPANY.

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY.”

Such legend shall be removed upon termination of this Agreement.

     20.2 Stop Transfer Instructions. The Shareholders agree that the Company may impose (or
instruct its agent to impose) transfer restrictions on the shares evidenced by certificates bearing
the legend referred to in Section 20.1 to enforce the provisions of this Agreement, and the Company
agrees promptly to do so. The legend shall be removed upon termination of the restrictions on
transfer in accordance with the terms of this Agreement.

     21. Miscellaneous.

     21.1 Governing Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware, without regard to conflicts of law principles. With respect to
the registration of any securities in the United States as contemplated in Sections 8, 9, 10, 11,
12 and 15, such matters shall be governed by, and construed in accordance with, relevant U.S.
federal law, as applicable.

     21.2 Counterparts and Facsimile Execution. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Any counterpart or other signature delivered by facsimile shall be
deemed for all purposes as being a good and valid execution and delivery of this Agreement by that
party.

     21.3 Headings. The headings of the Sections of this Agreement are for convenience and shall
not by themselves determine the interpretation of this Agreement.

     21.4 Notices. Any notice required or permitted pursuant to this Agreement shall be given in
writing and shall be deemed given upon personal delivery or delivery by courier, or on the first
business day after transmission if sent by confirmed facsimile transmission, or five (5) days after
deposit with an overnight or expedited courier, postage prepaid, addressed: (a) if to the Company,
to the address set forth below the Company’s name on the signature page of this Agreement; (b) if
to an Shareholder, to the Shareholder’s address (and any additional addresses) as set forth below
the signature of such Shareholder to this Agreement; or (c) at such other address as the Company or
that Shareholder may designate by 15 days’ advance written notice to the other parties to this
Agreement given in accordance with this Section 20.4.

     21.5 Amendment of Agreement. Any provision of this Agreement may be amended only by a written
instrument signed by (a) the Company and (b) the holders of a majority of the shares held by the
Investors (on an as-converted basis) but excluding any Investor that is also a Founder; provided,
however, that any amendment that adversely affects the rights of the Founders (which shall be
deemed to include, without limitation, any amendment effecting a change in the size of the Board of
Directors and any amendment to Section 2.1(b) or Section 19 of this Agreement) shall also require
the written consent of the holders of a majority of the shares held by the Founders (on an
as-converted basis).

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

     21.6 Severability. In case any provision of this Agreement shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

     21.7 Entire Agreement; Successors and Assigns. This Agreement (together with the Company’s
Amended and Restated Memorandum and Articles of Association and the Purchase Agreement) constitutes
the entire contract among the Company and the Shareholders relative to the subject matter of this
Agreement. The Prior Agreement is hereby amended and restated in its entirety. Subject to the
exceptions specifically set forth in this Agreement, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective executors, administrators, heirs,
successor, and assigns of the parties. No party may assign its rights and obligations hereunder
except according to the terms of the Purchase Agreement.

     21.8 Further Assurance. Each Shareholder agrees to vote shares in the Company registered in
its name from time to time to procure so far as possible compliance with the provisions of this
Agreement.

[Remainder of page intentionally left blank]

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SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

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

	 	 	 	 	 
	 	

E-Commerce China Co. Ltd.

 	 
	 	by:	/s/ Peggy Yu Yu
 	 
	 	Name:  	Peggy Yu Yu      	 
	 	Title:  	Chairman 	 

			
	Address:	 	4/F Sanli Mansion

208 Andingmenwai Street

Beijing 100011

PEOPLE’S REPUBLIC OF CHINA

Telephone: 86 10 6420 8961

Facsimile: 86 10 6421 8783

E-mail: yuyu@dangdang.com

With a copy to:

			
	O’Melveny & Myers LLP

2765 Sand Hill Road

Menlo Park, California 94025

U.S.A.

Attention: Howard H. Chao, Esq.

Telephone: (650) 473-2600

Facsimile: (650) 473-2601

E-mail: hchao@omm.com

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	DCM IV, L.P.

DCM AFFILIATES FUND IV, L.P.

 	 
	 	By:  	DCM Investment Management IV, L.P.
 	 
	 	 	its General Partner 	 
	 	 	 	 
	 	By:  	DCM International IV, Ltd.
 	 
	 	 	its General Partner 	 
	 	 	 	 
	 	By:  	/s/ Katsujin David Chao
 	 
	 	 	Katsujin David Chao, Director 	 

			
	Address:	 	2420 Sand Hill Road, Suite 200

Menlo Park, CA 94025

U.S.A.

Tel: (650) 233-1400

Fax: (650) 854-9159

With a copy to:

			
	 	 	Gunderson Dettmer Stough Villeneuve

Franklin & Hachigian, LLP

155 Constitution Drive

Menlo Park, California 94025

U.S.A.

Attention: Andy Toebben, Esq.

Telephone: (650) 321-2400

Facsimile: (650) 321-2800

E-mail: atoebben@gunder.com

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	Pacven Walden Ventures V, L.P.

Pacven Walden Ventures V Associates Fund, L.P.

Pacven Walden Ventures V-QP Associates Fund, L.P.

WIIG-Nikko IT LLC

 	 
	 	By:  	/s/ S.C. Mak
 	 
	 	Name:  	S.C. Mak 	 

			
	Address:	 	c/o Walden International Hong Kong Limited

2806A Central Plaza, 18 Harbour Road,

Hong Kong

Tel: 852-2523 0615

Fax: 852-2521 5778

E-mail: scmak@waldenintl.com

	 	 	 	 	 
	 	Pacven Walden Ventures Parallel V-A C.V.

Pacven Walden Ventures Parallel V-B C.V.

 	 
	 	By:  	/s/ S.C. Mak
 	 
	 	Name:  	S.C. Mak 	 

			
	Address:	 	c/o Walden International Hong Kong Limited

2806A Central Plaza, 18 Harbour Road,

Hong Kong

Tel: 852-2523 0615

Fax: 852-2521 5778

E-mail: scmak@waldenintl.com

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	

AGI-GTA-No. 1 Investment Partnership

(a Japanese partnership)

 	 
	 	By:  	/s/ Shogo Kamei
 	 
	 	Name:  	Shogo Kamei 	 
	 	Title:  	General Partner 	 

			
	Address:	 	c/o Alto Global Investment Inc.

13-12 Rokubancho

Chiyoda-ku, Tokyo 102-0085 Japan

TEL: 813-5771-8585

FAX: 813-5771-8586

Email: akamel@alto-global.com

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	

CRIMSON GROUP, INC.

 	 
	 	By:  	/s/ Hiroshi Mikitani
 	 
	 	Name:  	Hiroshi Mikitani 	 
	 	Title:  	President 	 

			
	Address:	 	N211 Ark Hills Executive Tower

1-14-5 Akasaka

Minato-ku, Tokyo 107-0052

JAPAN

Tel: 813-3568-1681

Fax: 813-3568-1683

E-mail: mouri@crimson.co.jp

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	Hiroshi Mikitani. 

 	 
	 	By:  	/s/ Hiroshi Mikitani
 	 
	 	 	Hiroshi Mikitani, an individual      	 

			
	Address:	 	N211 Ark Hills Executive Tower

1-14-5 Akasaka

Minato-ku, Tokyo 107-0052

JAPAN

Tel: 813-3568-1681

Fax: 813-3568-1683

E-mail: hiroshi.mori@mail.rakuten.co.jp

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	

Beijing Kewen Shuye Information

Technology Co., Ltd.

 	 
	 	By:  	/s/ Guoqing Li
 	 
	 	Name:  	Li Guoqing      	 
	 	Title:  	Chairman of the Board 	 

			
	Address:	 	4/F Sanli Mansion

208 Andingmenwai Street

Beijing 100011

PEOPLE’S REPUBLIC OF CHINA

Telephone: 86 10 5123 6088

Facsimile: 86 10 6421 8789

E-mail: lgq@dangdang.com

With a copy to:

			
	 	 	O’Melveny & Myers LLP

2765 Sand Hill Road

Menlo Park, California 94025

U.S.A.

Attention: Howard H. Chao, Esq.

Telephone: (650) 473-2600

Facsimile: (650) 473-2601

E-mail: hchao@omm.com

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	Tiger Technology Private Investment Partners, L.P.

 	 
	 	By:  	/s/ Charles P. Coleman III
 	 
	 	Name:  	Charles P. Coleman III 	 
	 	Title:  	Managing Partner 	 

			
	Address:	 	101 Park Avenue, 48th Floor

New York, New York 10178

U.S.A.

With a copy to:

Gunderson Dettmer Stough Villeneuve

Franklin & Hachigian, LLP

220 West 42nd Street, 20th Floor

New York, New York 10036

Attention:       Kenneth McVay

Telephone:    (212) 730-8133

Facsimile:      (877) 881-3007

	 	 	 	 	 
	 	

Tiger Technology II, L.P.

 	 
	 	By:  	/s/ Charles P. Coleman III
 	 
	 	Name:  	Charles P. Coleman III 	 
	 	Title:  	Managing Partner 	 
	 

			
	Address:	 	101 Park Avenue, 48th Floor

New York, New York 10178

U.S.A.

With a copy to:

Gunderson Dettmer Stough Villeneuve Franklin &

Hachigian, LLP

220 West 42nd Street, 20th Floor

New York, New York 10036

Attention: Kenneth McVay

Telephone: (212) 730-8133

Facsimile: (877) 881-3007

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	LCHG (Asia) S.A

 	 
	 	By:  	/s/ James D. Jameson
 	 
	 	Name:  	Mr. James D.  Jameson 	 
	 	Title:  	Chairman of the Board
 	 
	 	 	 	 	 
	 	Address:  	 	 	 

c/o Mr. James D. Jameson

P.O. Box 2028

Del Mar, California 92014

U.S.A.

Telephone:    (858) 259 1952

Facsimile:      (858) 259 0143

E-mail:           jdjrk@adnc.com

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	LCHG (Asia) Partners, LLC

(a Florida partnership)

 	 
	 	By:  	/s/ James D. Jameson
 	 
	 	Name:  	Mr. James D. Jameson 	 
	 	Title:  	Manager 	 

			
	Address:	 	P.O. Box 2028

Del Mar, California 92014

U.S.A.

Telephone: (858) 259 1952

Facsimile: (858) 259 0143

E-mail: jdjrk@adnc.com

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	IDG Technology Venture Investment, Inc. 

 	 
	 	By:  	/s/ Quan Zhou
 	 
	 	Name: 	 	Quan, Zhou      	 
	 	Title: 	 	President 	 

			
	Address:	 	IDG Technology Venture Investment

Suite 616, Tower A, COFCO Plaza,

8 Jianguomennei Avenue

Beijing 100005

PEOPLE’S REPUBLIC OF CHINA

Telephone:    86 10 6526 2400

Facsimile:      86 10 6526 0700

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	China Enterprise Investments No. 4 Limited 

 	 
	 	By:  	/s/ Junichi Goto
 	 
	 	Name:  	 	Junichi Goto      	 
	 	Title:  	 	Director 	 

			
	Address:	 	Unit 3613, The Center

99 Queen’s Road

CENTRAL HONG KONG

			
	Telephone:	 	852 2866 1060

852 2866 1282
	Facsimile:	 	
 852 2851 1589

	E-mail:	 	 jgoto@go-to-asia.com.hk

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	Science & Culture International Ltd. (BVI) 

 	 
	 	By:  	/s/ Naiyue Yu
 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 

			
	Address:	 	c/o Beijing Kewen Shuye

      Information Technology Co. Ltd.

4/F Sanli Mansion

208 Andingmenwai Street,

Beijing 100011

PEOPLE’S REPUBLIC OF CHINA

			
	Telephone:	 	86 10 6420 8961

86 10 6424 8899 ext. 6889
	Facsimile:	 	86 10 6421 8783

	 	 	 	 	 
	 	By:  	                      /s/ Naiyue Yu
 	 
	 	Name:  	 	Naiyue Yu 	 
	 	 	 	 

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

	 	 	 	 	 
	 	Peggy Yu Yu

 	 
	 	By:  	/s/ Peggy Yu Yu
 	 
	 	 	Peggy Yu Yu, an individual      	 

			
	Address:	 	4/F Sanli Mansion

208 Andingmenwai Street,

Beijing 100011

PEOPLE’S REPUBLIC OF CHINA

Telephone    86 10 6420 8961

Facsimile:     86 10 6421 8783

	 	 	 	 	 
	 	Guoqing Li

 	 
	 	By:  	/s/ Guoqing Li
 	 
	 	 	Guoqing Li, an individual      	 

			
	Address:	 	4/F Sanli Mansion

208 Andingmenwai Street,

Beijing 100011

PEOPLE’S REPUBLIC OF CHINA

Telephone    86 10 6421 8789

Facsimile:     86 10 6421 8783

Signature Page to

Second Amended and Restated Shareholders Agreement

 

 

SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

Schedule A

FOUNDERS

Peggy Yu Yu

Guoqing Li

Science & Culture International Ltd. (BVI)

A-1

 

Schedule B

SCHEDULE OF INVESTORS

DCM IV, L.P.

DCM Affiliates Fund IV, L.P.

AGI-GTA-No. 1 Investment Partnership

Pacven Walden Ventures V, L.P.

Pacven Walden Ventures Parallel V-A C.V.

Pacven Walden Ventures Parallel V-B C.V.

Pacven Walden Ventures V Associates Fund, L.P.

Pacven Walden Ventures V-QP Associates Fund, L.P.

WIIG-Nikko IT LLC

Crimson Group, Inc.

Hiroshi Mikitani

Tiger Technology Private Investment Partners, L.P.

Tiger Technology II, L.P.

IDG Technology Venture Investment, Inc.

China Enterprise Investments No. 4 Limited

Science & Culture International Ltd. (BVI)

LCHG (Asia) Partners, LLC (a Florida partnership)

B-1exv10w1

Exhibit 10.1

E-COMMERCE CHINA CO. LTD.

SHARE INCENTIVE PLAN

PREFACE

     This Plan is divided into two separate equity programs: (1) the option grant program set forth
in Section 5 under which Eligible Persons (as defined in Section 3) may, at the discretion of the
Administrator, be granted Options, and (2) the share award program set forth in Section 6 under
which Eligible Persons may, at the discretion of the Administrator, be awarded restricted or
unrestricted Common Shares. Section 2 of this Plan contains the general rules regarding the
administration of this Plan. Section 3 sets forth the requirements for eligibility to receive an
Award grant under this Plan. Section 4 describes the authorized shares of the Company that may be
subject to Awards granted under this Plan. Section 7 contains other provisions applicable to all
Awards granted under this Plan. Section 8 provides definitions for certain capitalized terms used
in this Plan and not otherwise defined herein.

	1.	 	PURPOSE OF THE PLAN.
	 
	 	 	The purpose of this Plan is to promote the success of the Company and the interests of its
shareholders by providing a means through which the Company may grant equity-based
incentives to attract, motivate, retain and reward certain officers, employees, directors
and other eligible persons and to further link the interests of Award recipients with those
of the Company’s shareholders generally.
	 
	2.	 	ADMINISTRATION.

	 	2.1	 	Administrator. This Plan shall be administered by and all Awards under this
Plan shall be authorized by the Administrator. The “Administrator” means the Board or
one or more committees appointed by the Board or another committee (within its
delegated authority) to administer all or certain aspects of this Plan. Any such
committee shall be comprised solely of one or more directors or such number of
directors as may be required under applicable law. A committee may delegate some or
all of its authority to another committee so constituted. The Board or a committee
comprised solely of directors may also delegate, to the extent permitted by the
Companies Law (2004 Revision) of the Cayman Islands and any other applicable law, to
one or more officers of the Company, its powers under this Plan (a) to designate the
officers and employees of the Company and its Affiliates who will receive grants of
Awards under this Plan, and (b) to determine the number of shares subject to, and the
other terms and conditions of, such Awards. The Board may delegate different levels of
authority to different committees with administrative and grant authority under this
Plan. Unless otherwise provided in the Memorandum and Articles of Association of the
Company or the applicable charter of any Administrator: (a) a majority of the members
of the acting Administrator shall constitute a quorum, and (b) the vote of a majority
of the members present assuming the presence of a quorum or the

1

 

	 	 	 	unanimous written consent of the members of the Administrator shall constitute
action by the acting Administrator.

	 	2.2	 	Plan Awards; Interpretation; Powers of Administrator. Subject to the express
provisions of this Plan, the Administrator is authorized and empowered to do all things
necessary or desirable in connection with the authorization of Awards and the
administration of this Plan (in the case of a committee or delegation to one or more
officers, within the authority delegated to that committee or person(s)), including,
without limitation, the authority to:

	 	(a)	 	determine eligibility and, from among those persons determined
to be eligible, the particular Eligible Persons who will receive Awards;
	 
	 	(b)	 	grant Awards to Eligible Persons, determine the price and
number of securities to be offered or awarded to any of such persons, determine
the other specific terms and conditions of Awards consistent with the express
limits of this Plan, establish the installments (if any) in which such Awards
will become exercisable or will vest (which may include, without limitation,
performance and/or time-based schedules) or determine that no delayed
exercisability or vesting is required, establish any applicable performance
targets, and establish the events of termination or reversion of such Awards;
	 
	 	(c)	 	approve the forms of Award Agreements, which need not be
identical either as to type of Award or among Participants;
	 
	 	(d)	 	construe and interpret this Plan and any Award Agreement or
other agreements defining the rights and obligations of the Company, its
Affiliates, and Participants under this Plan, make factual determinations with
respect to the administration of this Plan, further define the terms used in
this Plan, and prescribe, amend and rescind rules and regulations relating to
the administration of this Plan or the Awards;
	 
	 	(e)	 	cancel, modify, or waive the Company’s rights with respect to,
or modify, discontinue, suspend, or terminate any or all outstanding Awards,
subject to any required consent under Section 7.7.4;
	 
	 	(f)	 	accelerate or extend the vesting or exercisability or extend
the term of any or all outstanding Awards (within the maximum ten-year term of
Awards under Sections 5.4.2 and 6.5) in such circumstances as the Administrator
may deem appropriate (including, without limitation, in connection with a
termination of employment or services or other events of a personal nature);
	 
	 	(g)	 	determine Fair Market Value for purposes of this Plan and
Awards;

2

 

	 	(h)	 	determine the duration and purposes of leaves of absence that
may be granted to Participants without constituting a termination of their
employment for purposes of this Plan; and
	 
	 	(i)	 	determine whether, and the extent to which, adjustments are
required pursuant to Section 7.3 hereof and authorize the termination,
conversion, substitution or succession of awards upon the occurrence of an
event of the type described in Section 7.3.

	 	2.3	 	Binding Determinations. Any action taken by, or inaction of, the Company, any
Affiliate, the Board or the Administrator relating or pursuant to this Plan and within
its authority hereunder or under applicable law shall be within the absolute discretion
of that entity or body and shall be conclusive and binding upon all persons. Neither
the Board nor the Administrator, nor any member thereof or person acting at the
direction thereof, shall be liable for any act, omission, interpretation, construction
or determination made in good faith in connection with this Plan (or any Award), and
all such persons shall be entitled to indemnification and reimbursement by the Company
in respect of any claim, loss, damage or expense (including, without limitation,
attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law
and/or under any directors and officers liability insurance coverage that may be in
effect from time to time.
	 
	 	2.4	 	Reliance on Experts. In making any determination or in taking or not taking
any action under this Plan, the Administrator or the Board, as the case may be, may
obtain and may rely upon the advice of experts, including employees of and professional
advisors to the Company. No director, officer or agent of the Company or any of its
Affiliates shall be liable for any such action or determination taken or made or
omitted in good faith.
	 
	 	2.5	 	Delegation. The Administrator may delegate ministerial, non-discretionary
functions to individuals who are officers or employees of the Company or any of its
Affiliates or to third parties.

	3.	 	ELIGIBILITY.
	 
	 	 	Awards may be granted under this Plan only to those persons that the Administrator
determines to be Eligible Persons. An “Eligible Person” means any person who qualifies as
one of the following at the time of grant of the respective Award:

	 	(a)	 	an officer (whether or not a director) or employee of the Company or any of its
Affiliates;
	 
	 	(b)	 	any member of the Board; or
	 
	 	(c)	 	any director of one of the Company’s Affiliates, or any individual consultant
or advisor who renders or has rendered bona fide services (other than services in
connection with the offering or sale of securities of the Company or one of its

3

 

	 	 	 	Affiliates, as applicable, in a capital raising transaction or as a market maker or
promoter of that entity’s securities) to the Company or one of its Affiliates.

	 	 	An advisor or consultant may be selected as an Eligible Person pursuant to clause (c) above
only if such person’s participation in this Plan would not adversely affect (1) the
Company’s eligibility to rely on the Rule 701 exemption from registration under the
Securities Act for the offering of shares issuable under this Plan by the Company, or (2)
the Company’s compliance with any other applicable laws.
	 
	 	 	An Eligible Person may, but need not, be granted one or more Awards pursuant Section 5
and/or one or more Awards pursuant to Section 6. An Eligible Person who has been granted an
Award under this Plan may, if otherwise eligible, be granted additional Awards under this
Plan if the Administrator so determines. However, a person’s status as an Eligible Person
is not a commitment that any Award will be granted to that person under this Plan.
Furthermore, an Eligible Person who has been granted an Award under Section 5 is not
necessarily entitled to an Award under Section 6, or vice versa, unless otherwise expressly
determined by the Administrator.
	 
	 	 	Each Award granted under this Plan must be approved by the Administrator at or prior to the
grant of the Award.
	 
	4.	 	SHARES SUBJECT TO THE PLAN.

	 	4.1	 	Shares Available. Subject to the provisions of Section 7.3.1, the shares that
may be delivered under this Plan will be the Company’s authorized but unissued Common
Shares. The Common Shares issued and delivered may be issued and delivered for any
lawful consideration.
	 
	 	4.2	 	Share Limits. Subject to the provisions of Section 7.3.1 and further subject
to the share counting rules of Section 4.3, the maximum aggregate number of Common
Shares that may be delivered pursuant to Awards granted under this Plan will not exceed
5,328,654 shares (the “Share Limit”) in the aggregate. As required under U.S. Treasury
Regulation Section 1.422-2(b)(3)(i), in no event will the number of Common Shares that
may be delivered pursuant to Incentive Stock Options granted under this Plan exceed the
Share Limit.
	 
	 	4.3	 	Replenishment and Reissue of Unvested Awards. To the extent that an Award is
settled in cash or a form other than Common Shares, the shares that would have been
delivered had there been no such cash or other settlement shall not be counted against
the shares available for issuance under this Plan. No Award may be granted under this
Plan unless, on the date of grant, the sum of (a) the maximum number of Common Shares
issuable at any time pursuant to such Award, plus (b) the number of Common Shares that
have previously been issued pursuant to Awards granted under this Plan, plus (c) the
maximum number of Common Shares that may be issued at any time after such date of grant
pursuant to Awards that are outstanding on such date, does not exceed the Share Limit.
Notwithstanding the foregoing, Common Shares that are subject to or underlie

4

 

	 	 	 	Options granted under this Plan that expire or for any reason are canceled or
terminated without having been exercised (or Common Shares subject to or underlying
the unexercised portion of such Options in the case of Options that were partially
exercised), as well as Common Shares that are subject to Share Awards made under
this Plan that are forfeited to the Company or otherwise repurchased by the Company
prior to the vesting of such shares for a price not greater than the original
purchase or issue price of such shares (as adjusted pursuant to Section 7.3.1) will
again, except to the extent prohibited by law or applicable listing or regulatory
requirements (and subject to any applicable limitations of the Code in the case of
Awards intended to be Incentive Stock Options), be available for subsequent Award
grants under this Plan. Shares that are exchanged by a Participant or withheld by
the Company as full or partial payment in connection with any Award under this Plan,
as well as any shares exchanged by a Participant or withheld by the Company or one
of its Affiliates to satisfy the tax withholding obligations related to any Award,
shall be available for subsequent awards under this Plan.

	 	4.4	 	Reservation of Shares. The Company shall at all times reserve a number of
Common Shares sufficient to cover the Company’s obligations and contingent obligations
to deliver shares with respect to Awards then outstanding under this Plan.

	5.	 	OPTION GRANT PROGRAM.

	 	5.1	 	Option Grants in General. Each Option shall be evidenced by an Award Agreement
in the form approved by the Administrator. The Award Agreement evidencing an Option
shall contain the terms established by the Administrator for that Option, as well as
any other terms, provisions, or restrictions that the Administrator may impose on the
Option or any Common Shares subject to the Option; in each case subject to the
applicable provisions and limitations of this Section 5 and the other applicable
provisions and limitations of this Plan. The Administrator may require that the
recipient of an Option promptly execute and return to the Company his or her Award
Agreement evidencing the Option. In addition, the Administrator may require that the
spouse of any married recipient of an Option also promptly execute and return to the
Company the Award Agreement evidencing the Option granted to the recipient or such
other spousal consent form that the Administrator may require in connection with the
grant of the Option.
	 
	 	5.2	 	Types of Options. The Administrator will designate each Option granted under
this Plan to a U.S. resident as either an Incentive Stock Option or a Nonqualified
Option, and such designation shall be set forth in the applicable Award Agreement. Any
Option granted under this Plan to a U.S. resident that is not expressly designated in
the applicable Award Agreement as an Incentive Stock Option will be deemed to be
designated a Nonqualified Option under this Plan and not an “incentive stock option”
within the meaning of Section 422 of the Code. Incentive Stock Options shall be
subject to the provisions of Section 5.5 in

5

 

	 	 	 	addition to the provisions of this Plan applicable to Options generally. The
Administrator may designate any Option granted under this Plan to a non-U.S.
resident in accordance with the rules and regulations applicable to options in the
jurisdiction in which such person is a resident. The Administrator may, in its
discretion, designate any Option as an Early Exercise Option pursuant to Section
5.9.

	 	5.3	 	Option Price.

	 	5.3.1	 	Pricing Limits. Subject to the following provisions
of this Section 5.3.1, the Administrator will determine the purchase price per
share of the Common Shares covered by each Option (the “exercise price” of the
Option) at the time of the grant of the Option, which exercise price will be
set forth in the applicable Award Agreement. In no case will the exercise
price of an Option be less than the greater of:

	 	(a)	 	the nominal value of the Common Shares;
	 
	 	(b)	 	in the case of an Incentive Stock Option and
subject to clause (c) below, 100% of the Fair Market Value of the
Common Shares on the date of grant; or
	 
	 	(c)	 	in the case of an Incentive Stock Option
granted to a Participant described in Section 5.6, 110% of the Fair
Market Value of the Common Shares on the date of grant.

	 	5.3.2	 	Payment Provisions. The Company will not be obligated
to deliver certificates for the Common Shares to be purchased on exercise of an
Option unless and until it receives full payment of the exercise price
therefor, all related withholding obligations under Section 7.6 have been
satisfied, and all other conditions to the exercise of the Option set forth
herein or in the Award Agreement have been satisfied. The purchase price of
any Common Shares purchased on exercise of an Option must be paid in full at
the time of each purchase in such lawful consideration as may be permitted or
required by the Administrator, which may include, without limitation, one or a
combination of the following methods:

	 	(a)	 	cash, check payable to the order of the
Company, or electronic funds transfer;
	 
	 	(b)	 	notice and third party payment in such manner
as may be authorized by the Administrator;
	 
	 	(c)	 	the delivery of previously owned Common Shares;
	 
	 	(d)	 	by a reduction in the number of Common Shares
otherwise deliverable pursuant to the Award;

6

 

	 	(e)	 	subject to such procedures as the Administrator
may adopt, pursuant to a “cashless exercise”; or
	 
	 	(f)	 	if authorized by the Administrator or specified
in the applicable Award Agreement, by a promissory note of the
Participant consistent with the requirements of Section 5.3.3.

	 	 	 	In no event shall any shares newly-issued by the Company be issued for less
than the minimum lawful consideration for such shares or for consideration
other than consideration permitted by applicable law. In the event that the
Administrator allows a Participant to exercise an Award by delivering Common
Shares previously owned by such Participant and unless otherwise expressly
provided by the Administrator, any shares delivered which were initially
acquired by the Participant from the Company (upon exercise of an option or
otherwise) must have been owned by the Participant at least six months as of
the date of delivery. Common Shares used to satisfy the exercise price of
an Option (whether previously-owned shares or shares otherwise deliverable
pursuant to the terms of the Option) shall be valued at their Fair Market
Value on the date of exercise. Unless otherwise expressly provided in the
applicable Award Agreement, the Administrator may eliminate or limit a
Participant’s ability to pay the purchase or exercise price of any Award by
any method other than cash payment to the Company. The Administrator may
take all actions necessary to alter the method of Option exercise and the
exchange and transmittal of proceeds with respect to Participants resident
in the People’s Republic of China (“PRC”) not having permanent residence in
a country other than the PRC in order to comply with applicable PRC foreign
exchange and tax regulations.

	 	5.3.3	 	Acceptance of Notes to Finance Exercise. The Company
may, with the Administrator’s approval in each specific case, accept one or
more promissory notes from any Eligible Person in connection with the exercise
of any Option; provided that any such note shall be subject to the following
terms and conditions:

	 	(a)	 	The principal of the note shall not exceed the
amount required to be paid to the Company upon the exercise, purchase
or acquisition of one or more Awards under this Plan and the note shall
be delivered directly to the Company in consideration of such exercise,
purchase or acquisition.
	 
	 	(b)	 	The initial term of the note shall be
determined by the Administrator; provided that the term of the note,
including extensions, shall not exceed a period of five years.
	 
	 	(c)	 	The note shall provide for full recourse to the
Participant and shall bear interest at a rate determined by the
Administrator, but not less

7

 

	 	 	 	than the interest rate necessary to avoid the imputation of interest
under the Code and to avoid any adverse accounting consequences in
connection with the exercise, purchase or acquisition.

	 	(d)	 	If the employment or services of the
Participant by or to the Company and its Affiliates terminates, the
unpaid principal balance of the note shall become due and payable on
the 30th business day after such termination; provided, however, that
if a sale of the shares acquired on exercise of the Option would cause
such Participant to incur liability under Section 16(b) of the Exchange
Act, the unpaid balance shall become due and payable on the 10th
business day after the first day on which a sale of such shares could
have been made without incurring such liability assuming for these
purposes that there are no other transactions (or deemed transactions)
in securities of the Company by the Participant subsequent to such
termination.
	 
	 	(e)	 	If required by the Administrator or by
applicable law, the note shall be secured by a pledge of any shares or
rights financed thereby or other collateral, in compliance with
applicable law.

	 	 	 	The terms, repayment provisions, and collateral release provisions of the
note and the pledge securing the note shall conform with all applicable
rules and regulations, including those of the Federal Reserve Board of the
United States and any applicable law, as then in effect.

	 	5.4	 	Vesting; Term; Exercise Procedure.

	 	5.4.1	 	Vesting. Except as provided in Section 5.9, an Option
may be exercised only to the extent that it is vested and exercisable. The
Administrator will determine the vesting and/or exercisability provisions of
each Option (which may be based on performance criteria, passage of time or
other factors or any combination thereof), which provisions will be set forth
in the applicable Award Agreement. Unless the Administrator otherwise
expressly provides, once exercisable an Option will remain exercisable until
the expiration or earlier termination of the Option. To the extent required to
satisfy applicable securities laws and subject to Section 5.7, no Option
(except an Option granted to an officer, director, or consultant of the Company
or any of its Affiliates) shall vest and become exercisable at a rate of less
than 20% per year over five years after the date the Option is granted.
	 
	 	5.4.2	 	Term. Each Option shall expire not more than 10 years
after its date of grant. Each Option will be subject to earlier termination as
provided in or pursuant to Sections 5.7 and 7.3. Any payment of cash or
delivery of shares in payment of or pursuant to an Option may be delayed until
a

8

 

	 	 	 	future date if specifically authorized by the Administrator in writing and
by the Participant.

	 	5.4.3	 	Exercise Procedure. Any exercisable Option will be
deemed to be exercised when the Company receives written notice of such
exercise from the Participant (on a form and in such manner as may be required
by the Administrator), together with any required payment made in accordance
with Section 5.3 and Section 7.6 and any written statement required pursuant to
Section 7.5.1.
	 
	 	5.4.4	 	Fractional Shares/Minimum Issue. Fractional share
interests will be disregarded, but may be accumulated. The Administrator,
however, may determine that cash, other securities, or other property will be
paid or transferred in lieu of any fractional share interests. No fewer than
100 shares (subject to adjustment pursuant to Section 7.3.1) may be purchased
on exercise of any Option at one time unless the number purchased is the total
number at the time available for purchase under the Option.

	 	5.5	 	Limitations on Grant and Terms of Incentive Stock Options.

	 	5.5.1	 	$100,000 Limit. To the extent that the aggregate Fair
Market Value of shares with respect to which incentive stock options first
become exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Common Shares subject to Incentive Stock Options under
this Plan and shares subject to incentive stock options under all other plans
of the Company or any of its Affiliates, such options will be treated as
nonqualified options. For this purpose, the Fair Market Value of the shares
subject to options will be determined as of the date the options were awarded.
In reducing the number of options treated as incentive stock options to meet
the $100,000 limit, the most recently granted options will be reduced
(recharacterized as nonqualified options) first. To the extent a reduction of
simultaneously granted options is necessary to meet the $100,000 limit, the
Administrator may, in the manner and to the extent permitted by law, designate
which Common Shares are to be treated as shares acquired pursuant to the
exercise of an incentive stock option.
	 
	 	5.5.2	 	Other Code Limits. Incentive Stock Options may only
be granted to individuals that are employees of the Company or one of its
Affiliates and satisfy the other eligibility requirements of the Code. Any
Award Agreement relating to Incentive Stock Options will contain or shall be
deemed to contain such other terms and conditions as from time to time are
required in order that the Option be an “incentive stock option” as that term
is defined in Section 422 of the Code.
	 
	 	5.5.3	 	ISO Notice of Sale Requirement. Any Participant who
exercises an Incentive Stock Option shall give prompt written notice to the
Company of any sale or other transfer of the Common Shares acquired on such

9

 

	 	 	 	exercise if the sale or other transfer occurs within (a) one year after the
exercise date of the Option, or (b) two years after the grant date of the
Option.

	 	5.6	 	Limits on 10% Holders. No Incentive Stock Option may be granted to any person
who, at the time the Incentive Stock Option is granted, owns (or is deemed to own under
Section 424(d) of the Code) outstanding shares of the Company (or any of its
Affiliates) possessing more than 10% of the total combined voting power of all classes
of shares of the Company (or any of its Affiliates), unless the exercise price of such
Incentive Stock Option is at least 110% of the Fair Market Value of the shares subject
to the Incentive Stock Option and such Incentive Stock Option by its terms is not
exercisable after the expiration of five years from the date such Incentive Stock
Option is granted.
	 
	 	5.7	 	Effects of Termination of Employment on Options.

	 	5.7.1	 	Dismissal for Cause. Unless otherwise provided in the
Award Agreement and subject to earlier termination pursuant to or as
contemplated by Section 5.4.2 or 7.3, if a Participant’s employment by or
service to the Company or any of its Affiliates is terminated by such entity
for Cause, the Participant’s Option will terminate on the Participant’s
Severance Date, whether or not the Option is then vested and/or exercisable.
	 
	 	5.7.2	 	Death or Disability. Unless otherwise provided in the
Award Agreement (consistent with applicable securities laws) and subject to
earlier termination pursuant to or as contemplated by Section 5.4.2 or 7.3, if
a Participant’s employment by or service to the Company or any of its
Affiliates terminates as a result of the Participant’s death or Total
Disability:

	 	(a)	 	the Participant (or his or her Personal
Representative or Beneficiary, in the case of the Participant’s Total
Disability or death, respectively), will have until the date that is 12
months after the Participant’s Severance Date to exercise the
Participant’s Option (or portion thereof) to the extent that it was
vested and exercisable on the Severance Date;
	 
	 	(b)	 	the Option, to the extent not vested and
exercisable on the Participant’s Severance Date, shall terminate on the
Severance Date; and
	 
	 	(c)	 	the Option, to the extent exercisable for the
12-month period following the Participant’s Severance Date and not
exercised during such period, shall terminate at the close of business
on the last day of the 12-month period.

	 	5.7.3	 	Other Terminations of Employment. Unless otherwise
provided in the Award Agreement (consistent with applicable securities laws)
and subject

10

 

	 	 	 	to earlier termination pursuant to or as contemplated by Section 5.4.2 or
7.3, if a Participant’s employment by or service to the Company or any of
its Affiliates terminates for any reason other than a termination by such
entity for Cause or because of the Participant’s death or Total Disability:

	 	(a)	 	the Participant will have until the date that
is 90 days after the Participant’s Severance Date to exercise his or
her Option (or portion thereof) to the extent that it was vested and
exercisable on the Severance Date;
	 
	 	(b)	 	the Option, to the extent not vested and
exercisable on the Participant’s Severance Date, shall terminate on the
Severance Date; and
	 
	 	(c)	 	the Option, to the extent exercisable for the
90-day period following the Participant’s Severance Date and not
exercised during such period, shall terminate at the close of business
on the last day of the 90-day period.

	 	5.8	 	Option Repricing/Cancellation and Regrant/Waiver of Restrictions. Subject to
Section 4 and Section 7.7 and the specific limitations on Options contained in this
Plan, the Administrator from time to time may authorize, generally or in specific cases
only, for the benefit of any Eligible Person, any adjustment in the exercise price, the
vesting schedule, the number of shares subject to, or the term of, an Option granted
under this Plan by cancellation of an outstanding Option and a subsequent regranting of
the Option, by amendment, by substitution of an outstanding Option, by waiver or by
other legally valid means. Such amendment or other action may result in, among other
changes, an exercise price that is higher or lower than the exercise price of the
original or prior Option, provide for a greater or lesser number of Common Shares
subject to the Option, or provide for a longer or shorter vesting or exercise period.
	 
	 	5.9	 	Early Exercise Options. The Administrator may, in its discretion, designate
any Option as an Early Exercise Option which, by express provision in the applicable
Award Agreement, may be exercised prior to the date such Option has vested. If the
Participant elects to exercise all or a portion of an Early Exercise Option before it
is vested, the Common Shares acquired under the Option which are attributable to the
unvested portion of the Option shall be Restricted Shares. The applicable Award
Agreement will specify the extent (if any) to which and the time (if ever) at which the
Participant will be entitled to dividends, voting and other rights in respect of such
Restricted Shares prior to vesting, and the restrictions imposed on such shares and the
conditions of release or lapse of such restrictions. Unless otherwise expressly
provided in the applicable Award Agreement, such Restricted Shares shall be subject to
the provisions of Sections 6.6 through 6.9, below.

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	6.	 	SHARE AWARD PROGRAM.

	 	6.1	 	Share Awards in General. Each Share Award shall be evidenced by an Award
Agreement in the form approved by the Administrator. The Award Agreement evidencing a
Share Award shall contain the terms established by the Administrator for that Share
Award, as well as any other terms, provisions, or restrictions that the Administrator
may impose on the Share Award; in each case subject to the applicable provisions and
limitations of this Section 6 and the other applicable provisions and limitations of
this Plan. The Administrator may require that the recipient of a Share Award promptly
execute and return to the Company his or her Award Agreement evidencing the Share
Award. In addition, the Administrator may require that the spouse of any married
recipient of a Share Award also promptly execute and return to the Company the Award
Agreement evidencing the Share Award granted to the recipient or such other spousal
consent form that the Administrator may require in connection with the grant of the
Share Award.
	 
	 	6.2	 	Types of Share Awards. The Administrator shall designate whether a Share Award
shall be a Restricted Share Award, and such designation shall be set forth in the
applicable Award Agreement.
	 
	 	6.3	 	Purchase Price.

	 	6.3.1	 	Pricing Limits. Subject to the following provisions
of this Section 6.3, the Administrator will determine the purchase price per
share of the Common Shares covered by each Share Award at the time of grant of
the Award. In no case will such purchase price be less than the
greater of:

	 	(a)	 	the nominal value of the Common Shares;
	 
	 	(b)	 	85% of the Fair Market Value of the Common
Shares on the date of grant, or at the time the purchase is
consummated; or
	 
	 	(c)	 	100% of the Fair Market Value of the Common
Shares on the date of grant, or at the time the purchase is
consummated, in the case of any person who owns shares possessing more
than 10% of the total combined voting power of all classes of shares of
the Company or one of its Affiliates.

	 	6.3.2	 	Payment Provisions. The Company will not be obligated
to record in the Company’s register of members, or issue certificates
evidencing, Common Shares awarded under this Section 6 unless and until it
receives full payment of the purchase price therefor and all other conditions
to the purchase, as determined by the Administrator, have been satisfied, at
which point the relevant shares shall be issued and noted in the Company’s
register of members. The purchase price of any shares subject to a Share Award
must be paid in full at the time of the purchase in such lawful consideration
as may be permitted or required by the

12

 

	 	 	 	Administrator, which may include, without limitation, one or a combination
of the methods set forth in clauses (a) through (f) in Section 5.3.2 and/or
past services rendered to the Company or any of its Affiliates.

	 	6.4	 	Vesting. The restrictions imposed on the Common Shares subject to a Restricted
Share Award (which may be based on performance criteria, passage of time or other
factors or any combination thereof) will be set forth in the applicable Award
Agreement. To the extent required to satisfy applicable securities laws, the
restrictions imposed on the Common Shares subject to a Restricted Share Award (other
than an Award granted to an officer, director, or consultant of the Company or any of
its Affiliates, which may include more restrictive provisions) shall lapse as to such
            shares, subject to Section 6.8, at a rate of at least 20% of the shares subject to the
Award per year over the five years after the date the Award is granted.
	 
	 	6.5	 	Term. A Share Award shall either vest or be repurchased by the Company not
more than 10 years after the date of grant. Each Share Award will be subject to
earlier repurchase as provided in or pursuant to Sections 6.8 and 7.3. Any payment of
cash or delivery of shares in payment for a Share Award may be delayed until a future
date if specifically authorized by the Administrator in writing and by the Participant.
	 
	 	6.6	 	Share Certificates; Fractional Shares. Share certificates evidencing
Restricted Shares will bear a legend making appropriate reference to the restrictions
imposed hereunder and will be held by the Company or by a third party designated by the
Administrator until the restrictions on such shares have lapsed, the shares have vested
in accordance with the provisions of the Award Agreement and Section 6.4, and any
related loan has been repaid. Fractional share interests will be disregarded, but may
be accumulated. The Administrator, however, may determine that cash, other securities,
or other property will be paid or transferred in lieu of any fractional share
interests.
	 
	 	6.7	 	Dividend and Voting Rights. Unless otherwise provided in the applicable Award
Agreement, a Participant holding Restricted Shares will be entitled to cash dividend
and voting rights for all Restricted Shares issued even though they are not vested, but
such rights will terminate immediately as to any Restricted Shares which are
repurchased by the Company.
	 
	 	6.8	 	Termination of Employment; Return to the Company. Unless the Administrator
otherwise expressly provides, Restricted Shares subject to an Award that remain subject
to vesting conditions that have not been satisfied by the time specified in the
applicable Award Agreement (which may include, without limitation, the Participant’s
Severance Date), will not vest and will be reacquired by the Company in such manner and
on such terms as the Administrator provides, which terms shall include return or
repayment of the lower of (a) the Fair Market Value of the Restricted Shares at
the time of the termination, or (b) the original purchase price of the Restricted
Shares, without interest, to the Participant to the extent not

13

 

	 	 	 	prohibited by law. The Award Agreement shall specify any other terms or conditions
of the repurchase if the Award fails to vest.

	 	6.9	 	Waiver of Restrictions. Subject to Sections 4 and 7.7 and the specific
limitations on Share Awards contained in this Plan, the Administrator from time to time
may authorize, generally or in specific cases only, for the benefit of any Eligible
Person, any adjustment in the vesting schedule, or the restrictions upon or the term
of, a Share Award granted under this Plan by amendment, by substitution of an
outstanding Share Award, by waiver or by other legally valid means.

	7.	 	PROVISIONS APPLICABLE TO ALL AWARDS.

	 	7.1	 	Rights of Eligible Persons, Participants and Beneficiaries.

	 	7.1.1	 	Employment Status. No person shall have any claim or
rights to be granted an Award (or additional Awards, as the case may be) under
this Plan, subject to any express contractual rights (set forth in a document
other than this Plan) to the contrary.
	 
	 	7.1.2	 	No Employment/Service Contract. Nothing contained in
this Plan (or in any other documents under this Plan or related to any Award)
shall confer upon any Eligible Person or Participant any right to continue in
the employ or other service of the Company or any of its Affiliates, constitute
any contract or agreement of employment or other service or affect an
employee’s status as an employee at will, nor shall interfere in any way with
the right of the Company or any Affiliate to change such person’s compensation
or other benefits, or to terminate his or her employment or other service, with
or without cause at any time. Nothing in this Section 7.1.2, or in Section 7.3
or 7.15, however, is intended to adversely affect any express independent right
of such person under a separate employment or service contract. An Award
Agreement shall not constitute a contract of employment or service.
	 
	 	7.1.3	 	Plan Not Funded. Awards payable under this Plan will
be payable in Common Shares or from the general assets of the Company, and
(except as to the share reservation provided in Section 4.4) no special or
separate reserve, fund or deposit will be made to assure payment of such
Awards. No Participant, Beneficiary or other person will have any right, title
or interest in any fund or in any specific asset (including Common Shares,
except as expressly provided) of the Company or any of its Affiliates by reason
of any Award hereunder. Neither the provisions of this Plan (or of any related
documents), nor the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan will create, or be construed to create,
a trust of any kind or a fiduciary relationship between the Company or any of
its Affiliates and any Participant, Beneficiary or other person. To the extent
that a Participant, Beneficiary or other person acquires a right to receive
payment pursuant to any Award hereunder, such

14

 

	 	 	 	right will be no greater than the right of any unsecured general creditor of
the Company.

	 	7.1.4	 	Charter Documents. The Memorandum and Articles of
Association of the Company, as may lawfully be amended from time to time, may
provide for additional restrictions and limitations with respect to the Common
Shares (including additional restrictions and limitations on the voting or
transfer of Common Shares) or priorities, rights and preferences as to
securities and interests prior in rights to the Common Shares. To the extent
that these restrictions and limitations are greater than those set forth in
this Plan or any Award Agreement, such restrictions and limitations shall apply
to any Common Shares acquired pursuant to the exercise of Awards and are
incorporated herein by this reference.

	 	7.2	 	No Transferability; Limited Exception to Transfer Restrictions.

	 	7.2.1	 	Limit On Exercise and Transfer. Unless otherwise
expressly provided in (or pursuant to) this Section 7.2, by applicable law and
by the Award Agreement, as the same may be amended:

	 	(a)	 	all Awards are non-transferable and will not be
subject in any manner to sale, transfer, anticipation, alienation,
assignment, pledge, encumbrance or charge;
	 
	 	(b)	 	Awards will be exercised only by the
Participant; and
	 
	 	(c)	 	amounts payable or shares issuable pursuant to
an Award will be delivered only to (or for the account of), and, in the
case of Common Shares, registered in the name of, the Participant.

	 	 	 	In addition, the shares shall be subject to the restrictions set forth in
the applicable Award Agreement.
	 
	 	7.2.2	 	Further Exceptions to Limits On Transfer. The exercise
and transfer restrictions in Section 7.2.1 will not apply to:

	 	(a)	 	transfers to the Company;
	 
	 	(b)	 	transfers by gift to “immediate family” as that
term is defined in SEC Rule 16a-1(e) promulgated under the Exchange
Act;
	 
	 	(c)	 	the designation of a Beneficiary to receive
benefits if the Participant dies or, if the Participant has died,
transfers to or exercises by the Participant’s Beneficiary, or, in the
absence of a validly designated Beneficiary, transfers by will or the
laws of descent and distribution; or

15

 

	 	(d)	 	if the Participant has suffered a disability,
permitted transfers or exercises on behalf of the Participant by the
Participant’s duly authorized legal representative.

	 	 	 	Notwithstanding anything else in this Section 7.2.2 to the contrary, but
subject to compliance with all applicable laws, Incentive Stock Options and
Restricted Share Awards will be subject to any and all transfer restrictions
under the Code applicable to such awards or necessary to maintain the
intended tax consequences of such Awards. Notwithstanding clause (b) above
but subject to compliance with all applicable laws, any contemplated
transfer by gift to “immediate family” as referenced in clause (b) above is
subject to the condition precedent that the transfer be approved by the
Administrator in order for it to be effective.

	 	7.3	 	Adjustments; Changes in Control.

	 	7.3.1	 	Adjustments. Upon or in contemplation of any
reclassification, recapitalization, share split (including a share split in the
form of a share dividend) or reverse share split (“share split”); any merger,
amalgamation, combination, consolidation or other reorganization; any split-up,
spin-off, or similar extraordinary dividend distribution in respect of the
Common Shares (whether in the form of securities or property); any exchange of
Common Shares or other securities of the Company, or any similar, unusual or
extraordinary corporate transaction in respect of the Common Shares; or a sale
of substantially all the assets of the Company as an entirety; then the
Administrator shall, in such manner, to such extent (if any) and at such time
as it deems appropriate and equitable in the circumstances:

	 	(a)	 	proportionately adjust any or all of (1) the
number of Common Shares or the number and type of other securities that
thereafter may be made the subject of Awards (including the specific
share limits, maxima and numbers of shares set forth elsewhere in this
Plan), (2) the number, amount and type of Common Shares (or other
securities or property) subject to any or all outstanding Awards, (3)
the grant, purchase, or exercise price of any or all outstanding
Awards, or (4) the securities, cash or other property deliverable upon
exercise or vesting of any outstanding Awards, or
	 
	 	(b)	 	make provision for a settlement by a cash
payment or for the assumption, substitution or exchange of any or all
outstanding Awards (or the cash, securities or other property
deliverable to the holder(s) of any or all outstanding Awards) based
upon the distribution or consideration payable to holders of the Common
Shares upon or in respect of such event.

16

 

	 	 	 	The Administrator may adopt such valuation methodologies for outstanding
Awards as it deems reasonable in the event of a cash, securities or other
property settlement. In the case of Options, but without limitation on
other methodologies, the Administrator may base such settlement solely upon
the excess (if any) of the amount payable upon or in respect of such event
over the exercise price of the Option to the extent of the then vested and
exercisable shares subject to the Option.
	 
	 	 	 	The Administrator may make adjustments to and/or accelerate the
exercisability of Options in a manner that disqualifies the Options as
Incentive Stock Options without the written consent of the Option holders
affected thereby.
	 
	 	 	 	In any of such events, the Administrator may take such action prior to such
event to the extent that the Administrator deems the action necessary to
permit the Participant to realize the benefits intended to be conveyed with
respect to the underlying shares in the same manner as is or will be
available to shareholders generally.
	 
	 	 	 	Any adjustment by the Administrator pursuant to this Section 7.3.1 shall be
final, binding, and conclusive. Unless otherwise expressly provided by the
Administrator, in no event shall a conversion of one or more outstanding
            shares of the Company’s preferred shares (if any) or any new issuance of
securities by the Company for consideration be deemed, in and of itself, to
require an adjustment pursuant to this Section 7.3.1.
	 
	 	 	 	In the case of any event described in the first paragraph of this Section
7.3.1, if no action is formally taken by the Administrator in the
circumstances with respect to then-outstanding Awards, the proportionate
adjustments contemplated by clause (a) above shall nevertheless be deemed to
have been made with respect to the Awards outstanding at the time of such
event in order to preserve the intended level of incentives.

	 	7.3.2	 	Consequences of a Change in Control Event. Subject to
Sections 7.3.4 through 7.3.6, upon (or, as may be necessary to effectuate the
purposes of this acceleration, immediately prior to) the occurrence of a Change
in Control Event:

	 	(a)	 	each Option will become immediately vested and
exercisable, and
	 
	 	(b)	 	Restricted Shares will immediately vest free of
forfeiture restrictions and/or restrictions giving the Company the
right to repurchase the shares at their original purchase price;

	 	 	 	provided, however, that such acceleration provision shall
not apply, unless otherwise expressly provided by the Administrator, with
respect to any Award to the extent that the Administrator has made a
provision for the substitution, assumption, exchange or other continuation
or settlement of

17

 

	 	 	 	the Award, or the Award would otherwise continue in accordance with its
terms, in the circumstances.

	 	 	 	The foregoing Change in Control Event provisions shall not in any way limit
the authority of the Administrator to accelerate the vesting of one or more
Awards in such circumstances (including, but not limited to, a Change in
Control Event) as the Administrator may determine to be appropriate,
regardless of whether accelerated vesting of all or a portion of the
Award(s) is otherwise required or contemplated by the foregoing in the
circumstances.
	 
	 	7.3.3	 	Early Termination of Awards. Any Award, the vesting
of which has been accelerated to the extent required in the circumstances as
contemplated by Section 7.3.2 (or would have been so accelerated but for
Section 7.3.4 or 7.3.6), shall terminate upon the related Change in Control
Event, subject to any provision that has been expressly made by the
Administrator, through a plan of reorganization or otherwise, for the survival,
substitution, assumption, exchange or other continuation or settlement of such
Award and provided that, in the case of Options that will not survive or be
substituted for, assumed, exchanged, or otherwise continued or settled in the
Change in Control Event, the holder of such Award shall be given reasonable
advance notice of the impending termination and a reasonable opportunity to
exercise his or her outstanding Options in accordance with their terms before
the termination of such Awards (except that in no case shall more than ten
days’ notice of accelerated vesting and the impending termination be required
and any acceleration may be made contingent upon the actual occurrence of the
event). For purposes of this Section 7.3, an Award shall be deemed to have
been “assumed” if (without limiting other circumstances in which an Award is
assumed) the Award continues after the Change in Control Event, and/or is
assumed and continued by a Parent (as such term is defined in the definition of
Change in Control Event) following a Change in Control Event, and confers the
right to purchase or receive, as applicable and subject to vesting and the
other terms and conditions of the Award, for each Common Share subject to the
Award immediately prior to the Change in Control Event, the consideration
(whether cash, shares, or other securities or property) received in the Change
in Control Event by the shareholders of Company for each Common Share sold or
exchanged in such transaction (or the consideration received by a majority of
the shareholders participating in such transaction if the shareholders were
offered a choice of consideration); provided, however, that if the
consideration offered for a Common Share in the transaction is not solely the
ordinary or common shares of a successor Company or a Parent, the Board may
provide for the consideration to be received upon exercise or payment of the
Award, for each share subject to the Award, to be solely ordinary or common
shares (as applicable) of the successor Company or a Parent equal in Fair
Market

18

 

	 	 	 	Value to the per share consideration received by the shareholders
participating in the Change in Control Event.

	 	7.3.4	 	Other Acceleration Rules. Any acceleration of Awards
pursuant to this Section 7.3 shall comply with applicable legal requirements
and, if necessary to accomplish the purposes of the acceleration or if the
circumstances require, may be deemed by the Administrator to occur a limited
period of time not greater than 30 days before the event that triggered such
acceleration. Without limiting the generality of the foregoing, the
Administrator may deem an acceleration to occur immediately prior to the
applicable event and/or reinstate the original terms of an Award if an event
giving rise to an acceleration does not occur. The Administrator may override
the provisions of this Section 7.3 as to any Award by express provision in the
applicable Award Agreement and may accord any Participant a right to refuse any
acceleration, whether pursuant to the Award Agreement or otherwise, in such
circumstances as the Administrator may approve. The portion of any Incentive
Stock Option accelerated in connection with a Change in Control Event or any
other action permitted hereunder shall remain exercisable as an Incentive Stock
Option only to the extent the applicable $100,000 limitation on Incentive Stock
Options is not exceeded. To the extent exceeded, the accelerated portion of
the Option shall be exercisable as a Nonqualified Option.
	 
	 	7.3.5	 	Possible Rescission of Acceleration. If the vesting
of an Award has been accelerated expressly in anticipation of an event or upon
shareholder approval of an event and the Administrator later determines that
the event will not occur, the Administrator may rescind the effect of the
acceleration as to any then outstanding and unexercised or otherwise unvested
Awards.
	 
	 	7.3.6	 	Golden Parachute Limitation. Notwithstanding anything
else contained in this Section 7.3 to the contrary, in no event shall an Award
be accelerated under this Section 7.3 to an extent or in a manner which would
not be fully deductible by the Company or one of its Affiliates for federal
income tax purposes because of Section 280G of the Code, nor shall any payment
hereunder be accelerated to the extent any portion of such accelerated payment
would not be deductible by the Company or one of its Affiliates because of
Section 280G of the Code. If a holder of an Award would be entitled to
benefits or payments hereunder and under any other plan or program that would
constitute “parachute payments” as defined in Section 280G of the Code, then
the holder may by written notice to the Company designate the order in which
such parachute payments will be reduced or modified so that the Company or one
of its Affiliates is not denied federal income tax deductions for any
“parachute payments” because of Section 280G of the Code. Notwithstanding the
foregoing, if a Participant is a party to an employment or other agreement with
the Company or one of its Affiliates, or is a participant in a severance
program sponsored by the

19

 

	 	 	 	Company or one of its Affiliates that contains express provisions regarding
Section 280G and/or Section 4999 of the Code (or any similar successor
provision), the Section 280G and/or Section 4999 provisions of such
employment or other agreement or plan, as applicable, shall control as to
any Awards held by that Participant (for example, and without limitation, a
Participant may be a party to an employment agreement with the Company or
one of its Affiliates that provides for a “gross-up” as opposed to a
“cut-back” in the event that the Section 280G thresholds are reached or
exceeded in connection with a change in control and, in such event, the
Section 280G and/or Section 4999 provisions of such employment agreement
shall control as to any Awards held by that Participant).

	 	7.4	 	Termination of Employment or Services.

	 	7.4.1	 	Events Not Deemed a Termination of Employment. Unless
the Administrator otherwise expressly provides with respect to a particular
Award, if a Participant’s employment by or service to the Company or an
Affiliate terminates but immediately thereafter the Participant continues in
the employ of or service to another Affiliate or the Company, as applicable,
the Participant shall be deemed to have not had a termination of employment or
service for purposes of this Plan and the Participant’s Awards. Unless the
express policy of the Company or the Administrator otherwise provides, a
Participant’s employment relationship with the Company or any of its Affiliates
shall not be considered terminated solely due to any sick leave, military
leave, or any other leave of absence authorized by the Company or any Affiliate
or the Administrator; provided that, unless reemployment upon
the expiration of such leave is guaranteed by contract or law, such leave is
for a period of not more than 90 days. In the case of any Participant on an
approved leave of absence, continued vesting of the Award while on leave from
the employ of or service with the Company or any of its Affiliates will be
suspended until the Participant returns to service, unless the Administrator
otherwise provides or applicable law otherwise requires. In no event shall an
Award be exercised after the expiration of the term of the Award set forth in
the Award Agreement.
	 
	 	7.4.2	 	Effect of Change of Affiliate Status. For purposes of
this Plan and any Award, if an entity ceases to be an Affiliate, a termination
of employment or service will be deemed to have occurred with respect to each
Eligible Person in respect of such Affiliate who does not continue as an
Eligible Person in respect of another Affiliate that continues as such after
giving effect to the transaction or other event giving rise to the change in
status.
	 
	 	7.4.3	 	Administrator Discretion. Notwithstanding the
provisions of Section 5.7 or 6.8, in the event of, or in anticipation of, a
termination of employment or service with the Company or any of its Affiliates
for any reason, the

20

 

	 	 	 	Administrator may accelerate the vesting and exercisability of all or a
portion of the Participant’s Award, and/or, subject to the provisions of
Sections 5.4.2 and 7.3, extend the exercisability period of the
Participant’s Option upon such terms as the Administrator determines and
expressly sets forth in or by amendment to the Award Agreement.

	 	7.4.4	 	Termination of Consulting or Affiliate Services. If
the Participant is an Eligible Person solely by reason of clause (c) of Section
3, the Administrator shall be the sole judge of whether the Participant
continues to render services to the Company or any of its Affiliates, unless a
written contract or the Award Agreement otherwise provides. If, in these
circumstances, the Company or any Affiliate notifies the Participant in writing
that a termination of the Participant’s services to the Company or any
Affiliate has occurred for purposes of this Plan, then (unless the contract or
the Award Agreement otherwise expressly provides), the Participant’s
termination of services with the Company or Affiliate for purposes of this Plan
shall be the date which is 10 days after the mailing of the notice by the
Company or Affiliate or, in the case of a termination for Cause, the date of
the mailing of the notice.

	 	7.5	 	Compliance with Laws.

	 	7.5.1	 	General. This Plan, the granting and vesting of
Awards under this Plan, and the offer, issuance and delivery of Common Shares,
the acceptance of promissory notes and/or the payment of money under this Plan
or under Awards are subject to compliance with all applicable federal and state
laws, applicable foreign laws, rules and regulations (including but not
limited to state and federal securities laws, and federal margin requirements)
and to such approvals by any listing, regulatory or governmental authority as
may, in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. The person acquiring any securities under this Plan
will, if requested by the Company, provide such assurances and representations
to the Company as the Administrator may deem necessary or desirable to assure
compliance with all applicable legal and accounting requirements.
	 
	 	7.5.2	 	Compliance with Securities Laws. No Participant shall
sell, pledge or otherwise transfer Common Shares acquired pursuant to an Award
or any interest in such shares except in accordance with the express terms of
this Plan and the applicable Award Agreement. Any attempted transfer in
violation of this Section 7.5 shall be void and of no effect. Without in any
way limiting the provisions set forth above, no Participant shall make any
disposition of all or any portion of Common Shares acquired or to be acquired
pursuant to an Award, except in compliance with all applicable federal and
state securities laws and unless and until:

21

 

	 	(a)	 	there is then in effect a registration
statement under the Securities Act covering such proposed disposition
and such disposition is made in accordance with such registration
statement;
	 
	 	(b)	 	such disposition is made in accordance with
Rule 144 under the Securities Act; or
	 
	 	(c)	 	such Participant notifies the Company of the
proposed disposition and furnishes the Company with a statement of the
circumstances surrounding the proposed disposition, and, if requested
by the Company, furnishes to the Company an opinion of counsel
acceptable to the Company’s counsel, that such disposition will not
require registration under the Securities Act and will be in compliance
with all applicable state securities laws.

	 	 	 	Notwithstanding anything else herein to the contrary, neither the Company or
any Affiliate has any obligation to register the Common Shares or file any
registration statement under either federal or state securities laws, nor
does the Company or any Affiliate make any representation concerning the
likelihood of a public offering of the Common Shares or any other securities
of the Company or any Affiliate.
	 
	 	7.5.3	 	Share Legends. All certificates evidencing Common
Shares issued or delivered under this Plan shall bear the following legends
and/or any other appropriate or required legends under applicable laws:
	 
	 	 	 	“OWNERSHIP OF THIS CERTIFICATE, THE SHARES EVIDENCED BY THIS CERTIFICATE AND
ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER
UNDER APPLICABLE LAW AND UNDER AGREEMENTS WITH THE COMPANY, INCLUDING
RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION.”
	 
	 	 	 	“THE SHARES ARE SUBJECT TO THE COMPANY’S RIGHT OF FIRST REFUSAL AND CALL
RIGHTS TO REPURCHASE THE SHARES UNDER THE COMPANY’S SHARE INCENTIVE PLAN AND
AGREEMENTS WITH THE COMPANY THEREUNDER, COPIES OF WHICH ARE AVAILABLE FOR
REVIEW AT THE OFFICE OF THE SECRETARY OF THE COMPANY.”
	 
	 	 	 	“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“ACT”), NOR HAVE THEY BEEN
REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. NO TRANSFER
OF SUCH SECURITIES WILL BE PERMITTED UNLESS A REGISTRATION STATEMENT UNDER
THE ACT IS IN EFFECT AS TO SUCH TRANSFER, THE TRANSFER

22

 

	 	 	 	IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR IN THE OPINION OF
COUNSEL TO THE COMPANY, REGISTRATION UNDER THE ACT IS UNNECESSARY IN ORDER
FOR SUCH TRANSFER TO COMPLY WITH THE ACT AND WITH APPLICABLE STATE
SECURITIES LAWS.”

	 	7.5.4	 	Delivery of Financial Statements. The Company shall
deliver annually to Participants such financial statements of the Company as
are required to satisfy applicable securities laws.
	 
	 	7.5.5	 	Confidential Information. Any financial or other
information relating to the Company obtained by Participants in connection with
or as a result of this Plan or their Awards shall be treated as confidential.

	 	7.6	 	Tax Withholding.

	 	7.6.1	 	Tax Withholding. Upon any exercise, vesting, or
payment of any Award or upon the disposition of Common Shares acquired pursuant
to the exercise of an Incentive Stock Option prior to satisfaction of the
holding period requirements of Section 422 of the Code, the Company or any of
its Affiliates shall have the right at its option to:

	 	(a)	 	require the Participant (or the Participant’s
Personal Representative or Beneficiary, as the case may be) to pay or
provide for payment of at least the minimum amount of any taxes which
the Company or Affiliate may be required to withhold with respect to
such Award event or payment;
	 
	 	(b)	 	deduct from any amount otherwise payable (in
respect of an Award or otherwise) in cash to the Participant (or the
Participant’s Personal Representative or Beneficiary, as the case may
be) the minimum amount of any taxes which the Company or Affiliate may
be required to withhold with respect to such Award event or payment; or
	 
	 	(c)	 	reduce the number of Common Shares to be
delivered by (or otherwise reacquire shares held by the Participant at
least 6 months) the appropriate number of Common Shares, valued at
their then Fair Market Value, to satisfy the minimum withholding
obligation.

	 	 	 	In any case where a tax is required to be withheld (including taxes in the
PRC where applicable) in connection with the delivery of Common Shares under
this Plan (including the sale of Common Shares as may be required to comply
with foreign exchange rules in the PRC for Participants resident in the
PRC), the Administrator may in its sole discretion (subject to Section 7.5)
grant (either at the time of the Award or thereafter) to the Participant the
right to elect, pursuant to such rules and subject to such

23

 

	 	 	 	conditions as the Administrator may establish, to have the Company reduce
the number of shares to be delivered by (or otherwise reacquire) the
appropriate number of shares, valued in a consistent manner at their Fair
Market Value or at the sales price in accordance with authorized procedures
for cashless exercises, necessary to satisfy the minimum applicable
withholding obligation on exercise, vesting or payment. In no event shall
the shares withheld exceed the minimum whole number of shares required for
tax withholding under applicable law. The Company may, with the
Administrator’s approval, accept one or more promissory notes from any
Eligible Person in connection with taxes required to be withheld upon the
exercise, vesting or payment of any award under this Plan; provided that any
such note shall be subject to terms and conditions established by the
Administrator and the requirements of applicable law.

	 	7.6.2	 	Tax Loans. If so provided in the Award Agreement or
otherwise authorized by the Administrator, the Company may, to the extent
permitted by law, authorize a loan to an Eligible Person in the amount of any
taxes that the Company or any of its Affiliates may be required to withhold
with respect to Common Shares received (or disposed of, as the case may be)
pursuant to a transaction described in Section 7.6.1. Such a loan will be for
a term and at a rate of interest and pursuant to such other terms and
conditions as the Company may establish, subject to compliance with applicable
law. Such a loan need not otherwise comply with the provisions of Section
5.3.3.

	 	7.7	 	Plan and Award Amendments, Termination and Suspension.

	 	7.7.1	 	Board Authorization. The Board may, at any time,
terminate or, from time to time, amend, modify or suspend this Plan, in whole
or in part. No Awards may be granted during any period that the Board suspends
this Plan.
	 
	 	7.7.2	 	Shareholder Approval. To the extent then required by
applicable law or any applicable listing agency or required under Sections 162,
422 or 424 of the Code to preserve the intended tax consequences of this Plan,
or deemed necessary or advisable by the Board, any amendment to this Plan shall
be subject to shareholder approval.
	 
	 	7.7.3	 	Amendments to Awards. Without limiting any other
express authority of the Administrator under (but subject to) the express
limits of this Plan, the Administrator by agreement or resolution may waive
conditions of or limitations on Awards to Participants that the Administrator
in the prior exercise of its discretion has imposed, without the consent of a
Participant, and (subject to the requirements of Sections 2.2 and 7.7.4) may
make other changes to the terms and conditions of Awards.

24

 

	 	7.7.4	 	Limitations on Amendments to Plan and Awards. No
amendment, suspension or termination of this Plan or change of or affecting any
outstanding Award shall, without written consent of the Participant, affect in
any manner materially adverse to the Participant any rights or benefits of the
Participant or obligations of the Company under any Award granted under this
Plan prior to the effective date of such change. Changes, settlements and
other actions contemplated by Section 7.3 shall not be deemed to constitute
changes or amendments for purposes of this Section 7.7.

	 	7.8	 	Privileges of Share Ownership. Except as otherwise expressly authorized by the
Administrator or this Plan or in the Award Agreement, a Participant will not be
entitled to any privilege of share ownership as to any Common Shares not actually
delivered to and held of record by the Participant. No adjustment will be made for
dividends or other rights as a shareholder for which a record date is prior to such
date of delivery.
	 
	 	7.9	 	Share-Based Awards in Substitution for Awards Granted by Other Company. Awards
may be granted to Eligible Persons in substitution for or in connection with an
assumption of employee share options, share appreciation rights, restricted shares or
other share-based awards granted by other entities to persons who are or who will
become Eligible Persons in respect of the Company or one of its Affiliates, in
connection with a distribution, merger, amalgamation or other reorganization by or with
the granting entity or an affiliated entity, or the acquisition by the Company or one
of its Affiliates, directly or indirectly, of all or a substantial part of the shares
or assets of the employing entity. The Awards so granted need not comply with other
specific terms of this Plan, provided the Awards reflect only adjustments giving effect
to the assumption or substitution consistent with the conversion applicable to the
Common Shares in the transaction and any change in the issuer of the security. Any
shares that are delivered and any Awards that are granted by, or become obligations of,
the Company, as a result of the assumption by the Company of, or in substitution for,
outstanding awards previously granted by an acquired company (or previously granted by
a predecessor employer (or direct or indirect parent thereof) in the case of persons
that become employed by the Company or one of its Affiliates in connection with a
business or asset acquisition or similar transaction) shall not be counted against the
Share Limit or other limits on the number of shares available for issuance under this
Plan.
	 
	 	7.10	 	Effective Date of the Plan. This Plan is effective upon the Effective Date,
subject to approval by the shareholders of the Company within twelve months after the
date the Board approves this Plan.
	 
	 	7.11	 	Term of the Plan. Unless earlier terminated by the Board, this Plan will
terminate at the close of business on the day before the 10th anniversary of
the Effective Date. After the termination of this Plan either upon such stated
expiration date or its earlier termination by the Board, no additional Awards may

25

 

	 	 	 	be granted under this Plan, but previously granted Awards (and the authority of the
Administrator with respect thereto, including the authority to amend such Awards)
shall remain outstanding in accordance with their applicable terms and conditions
and the terms and conditions of this Plan.

	 	7.12	 	Governing Law/Severability.

	 	7.12.1	 	Choice of Law. This Plan, the Awards, all documents evidencing
Awards and all other related documents will be governed by, and construed in
accordance with, the laws of the Cayman Islands.
	 
	 	7.12.2	 	Severability. If it is determined that any provision of this Plan or
an Award Agreement is invalid and unenforceable, the remaining provisions of
this Plan and/or the Award Agreement, as applicable, will continue in effect
provided that the essential economic terms of this Plan and the Award can still
be enforced.

	 	7.13	 	Captions. Captions and headings are given to the sections and subsections of
this Plan solely as a convenience to facilitate reference. Such headings will not be
deemed in any way material or relevant to the construction or interpretation of this
Plan or any provision thereof.
	 
	 	7.14	 	Non-Exclusivity of Plan. Nothing in this Plan will limit or be deemed to limit
the authority of the Board or the Administrator to grant awards or authorize any other
compensation, with or without reference to the Common Shares, under any other plan or
authority.
	 
	 	7.15	 	No Restriction on Corporate Powers. The existence of this Plan, the Award
Agreements, and the Awards granted hereunder, shall not limit, affect or restrict in
any way the right or power of the Board or the shareholders of the Company to make or
authorize: (a) any adjustment, recapitalization, reorganization or other change in the
Company’s or any Affiliate’s capital structure or its business; (b) any merger,
amalgamation, consolidation or change in the ownership of the Company or any Affiliate;
(c) any issue of bonds, debentures, capital, preferred or prior preference shares ahead
of or affecting the Company’s authorized shares or the rights thereof; (d) any
dissolution or liquidation of the Company or any Affiliate; (e) any sale or transfer of
all or any part of the Company or any Affiliate’s assets or business; or (f) any other
corporate act or proceeding by the Company or any Affiliate. No Participant,
Beneficiary or any other person shall have any claim under any Award or Award Agreement
against any member of the Board or the Administrator, or the Company or any employees,
officers or agents of the Company or any Affiliate, as a result of any such action.
	 
	 	7.16	 	Other Company Compensation or Benefit Programs. Payments and other benefits
received by a Participant under an Award made pursuant to this Plan shall not be deemed
a part of a Participant’s compensation for purposes of the determination of benefits
under any other employee welfare or benefit plans or

26

 

	 	 	 	arrangements, if any, provided by the Company or any Affiliate, except where the
Administrator or the Board expressly otherwise provides or authorizes in writing.
Awards under this Plan may be made in addition to, in combination with, as
alternatives to or in payment of grants, awards or commitments under any other plans
or arrangements of the Company or any Affiliate.

	8.	 	DEFINITIONS.
	 
	 	 	“Administrator” has the meaning given to such term in Section 2.1.
	 
	 	 	“Affiliate” means (a) any entity (other than the Company) in an unbroken chain of entities
ending with the Company if, at the time of the determination, each of the entities other
than the Company owns shares possessing fifty percent (50%) or more of the total combined
voting power of all classes of shares in one of the other entities in such chain, or (b) any
entity (other than the Company) in an unbroken chain of entities beginning with the Company
if, at the time of the determination, each of the entities other than the last entity in the
unbroken chain owns shares possessing fifty percent (50%) or more of the total combined
voting power of all classes of shares in one of the other entities in such chain
	 
	 	 	“Award” means an award of any Option or Share Award, or any combination thereof, whether
alternative or cumulative, authorized by and granted under this Plan.
	 
	 	 	“Award Agreement” means any writing, approved by the Administrator, setting forth the terms
of an Award that has been duly authorized and approved. An Award Agreement shall be deemed a
Common Shares purchase agreement under the Company’s Memorandum and Articles of Association.
	 
	 	 	“Award Date” means the date upon which the Administrator took the action granting an Award
or such later date as the Administrator designates as the Award Date at the time of the
grant of the Award.
	 
	 	 	“Beneficiary” means the person, persons, trust or trusts designated by a Participant, or, in
the absence of a designation, entitled by will or the laws of descent and distribution, to
receive the benefits specified in the Award Agreement and under this Plan if the Participant
dies, and means the Participant’s executor or administrator if no other Beneficiary is
designated and able to act under the circumstances.
	 
	 	 	“Board” means the Board of Directors of the Company.
	 
	 	 	“Cause” with respect to a Participant means (unless otherwise expressly provided in the
applicable Award Agreement, or another applicable contract with the Participant that defines
such term for purposes of determining the effect that a “for cause” termination has on the
Participant’s options and/or share awards) a termination of employment or service based upon
a finding by the Company or any of its Affiliates, acting in good faith and based on its
reasonable belief at the time, that the Participant:

27

 

	 	(a)	 	has been negligent in the discharge of his or her duties to the Company or any
Affiliate, has refused to perform stated or assigned duties or is incompetent in or
(other than by reason of a disability or analogous condition) incapable of performing
those duties;
	 
	 	(b)	 	has been dishonest or committed or engaged in an act of theft, embezzlement or
fraud, a breach of confidentiality, an unauthorized disclosure or use of inside
information, customer lists, trade secrets or other confidential information;
	 
	 	(c)	 	has breached a fiduciary duty, or willfully and materially violated any other
duty, law, rule, regulation or policy of the Company or any of its Affiliates; or has
been convicted of, or plead guilty or nolo contendere to, a felony or misdemeanor
(other than minor traffic violations or similar offenses);
	 
	 	(d)	 	has materially breached any of the provisions of any agreement with the Company
or any of its Affiliates;
	 
	 	(e)	 	has engaged in unfair competition with, or otherwise acted intentionally in a
manner injurious to the reputation, business or assets of, the Company or any of its
Affiliates; or
	 
	 	(f)	 	has improperly induced a vendor or customer to break or terminate any contract
with the Company or any of its Affiliates or induced a principal for whom the Company
or any Affiliate acts as agent to terminate such agency relationship.

	 	 	A termination for Cause shall be deemed to occur (subject to reinstatement upon a contrary
final determination by the Administrator) on the date on which the Company or any Affiliate
first delivers written notice to the Participant of a finding of termination for Cause.
	 
	 	 	“Change in Control Event” means any of the following:

	 	(a)	 	Approval by shareholders of the Company (or, if no shareholder approval is
required, by the Board alone) of the complete dissolution or liquidation of the
Company, other than in the context of a Business Combination that does not constitute a
Change in Control Event under paragraph (c) below;
	 
	 	(b)	 	The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either (1) the then-outstanding Common Shares of the Company (the “Outstanding Company
Common Shares”) or (2) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that, for purposes of this
paragraph (b), the following acquisitions shall not constitute a Change in Control
Event; (A) any acquisition directly from the Company, (B) any acquisition by the
Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored
or

28

 

	 	 	 	maintained by the Company or any Affiliate or a successor, (D) any acquisition by
any entity pursuant to a Business Combination, (E) any acquisition by a Person
described in and satisfying the conditions of Rule 13d-1(b) promulgated under the
Exchange Act, or (F) any acquisition by a Person who is the beneficial owner (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the
Outstanding Company Common Shares and/or the Outstanding Company Voting Securities
on the Effective Date (or an affiliate, heir, descendant, or related party of or to
such Person);

	 	(c)	 	Consummation of a reorganization, amalgamation, merger, statutory share
exchange or consolidation or similar corporate transaction involving the Company or any
other entity a majority of whose outstanding voting shares or voting power is
beneficially owned directly or indirectly by the Company (a “Subsidiary”), a sale or
other disposition of all or substantially all of the assets of the Company, or the
acquisition of assets or shares of another entity by the Company or any of its
Subsidiaries (each, a “Business Combination”), in each case unless, following such
Business Combination, (1) all or substantially all of the individuals and entities that
were the beneficial owners of the Outstanding Company Common Shares and the Outstanding
Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding ordinary or common
shares and the combined voting power of the then-outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, an entity
that, as a result of such transaction, owns the Company or all or substantially all of
the Company’s assets directly or through one or more subsidiaries (a “Parent”)), and
(2) no Person (excluding any individual or entity described in clauses (C), (E) or (F)
of paragraph (b) above) beneficially owns (within the meaning of Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, more than 50% of, respectively, the
then-outstanding ordinary or common shares of the entity resulting from such Business
Combination or the combined voting power of the then-outstanding voting securities of
such entity, except to the extent that the ownership in excess of 50% existed prior to
the Business Combination.

	 	 	“Code” means the Internal Revenue Code of 1986 of the United States, as amended from time to
time.
	 
	 	 	“Common Shares” means the Company’s Common Shares, nominal value $0.001 per share, and such
other securities or property as may become the subject of Awards, or become subject to
Awards, pursuant to an adjustment made under Section 7.3.1 of this Plan.
	 
	 	 	“Company” means E-Commerce China Co. Ltd., an exempted company organized under the Companies
Law (2004 Revision) of the Cayman Islands, and its successors.
	 
	 	 	“Early Exercise Option” shall mean an Option eligible for exercise prior to vesting in
accordance with the provisions of Section 5.9 of this Plan. An Early Exercise Option

29

 

	 	 	may be a Nonqualified Option or an Incentive Stock Option, as designated by the
Administrator in the applicable Award Agreement.

	 	 	“Effective Date” means the date the Board approved this Plan.
	 
	 	 	“Eligible Person” has the meaning given to such term in Section 3 of this Plan.
	 
	 	 	“Exchange Act” means the Securities Exchange Act of 1934 of the United States, as amended
from time to time.
	 
	 	 	“Fair Market Value,” for purposes of this Plan and unless otherwise determined or provided
by the Administrator in the circumstances, means as follows:

	 	(a)	 	If the Common Shares are listed or admitted to trade on the New York Stock
Exchange or other national securities exchange (the “Exchange”), the Fair Market Value
shall equal the closing price of a Common Share as reported on the composite tape for
securities on the Exchange for the date in question, or, if no sales of Common Shares
were made on the Exchange on that date, the closing price of a Common Share as reported
on said composite tape for the next preceding day on which sales of Common Shares were
made on the Exchange. The Administrator may, however, provide with respect to one or
more Awards that the Fair Market Value shall equal the last closing price of a Common
Share as reported on the composite tape for securities listed on the Exchange available
on the date in question or the average of the high and low trading prices of a Common
Share as reported on the composite tape for securities listed on the Exchange for the
date in question or the most recent trading day.
	 
	 	(b)	 	If the Common Shares are not listed or admitted to trade on the a national
securities exchange, the Fair Market Value shall equal the last price of a Common Share
as furnished by the National Association of Securities Dealers, Inc. (the “NASD”)
through the NASDAQ National Market Reporting System (the “National Market”) for the
date in question, or, if no sales of Common Shares were reported by the NASD through
the National Market on that date, the last price of a Common Share as furnished by the
NASD through the National Market for the next preceding day on which sales of Common
Shares were reported by the NASD. The Administrator may, however, provide with respect
to one or more Awards that the Fair Market Value shall equal the last closing price of
a Common Share as furnished by the NASD through the National Market available on the
date in question or the average of the high and low trading prices of a Common Share as
furnished by the NASD through the National Market for the date in question or the most
recent trading day.
	 
	 	(c)	 	If the Common Shares are not listed or admitted to trade on a national
securities exchange and is not reported on the National Market Reporting System, the
Fair Market Value shall equal the mean between the bid and asked price for a Common
Share on such date, as furnished by the NASD or a similar organization.

30

 

	 	(d)	 	If the Common Shares are not listed or admitted to trade on a national
securities exchange, are not reported on the National Market Reporting System and if
bid and asked prices for the shares are not furnished by the NASD or a similar
organization, the Fair Market Value shall be the value as reasonably determined by the
Administrator for purposes of the Award in the circumstances.

	 	 	The Administrator also may adopt a different methodology for determining Fair Market Value
with respect to one or more Awards if a different methodology is necessary or advisable to
secure any intended favorable tax, legal or other treatment for the particular Award(s) (for
example, and without limitation, the Administrator may provide that Fair Market Value for
purposes of one or more Awards will be based on an average of closing prices (or the average
of high and low daily trading prices) for a specified period preceding the relevant date).
	 
	 	 	Any determination as to Fair Market Value made pursuant to this Plan shall be determined
without regard to any restriction other than a restriction which, by its terms, will never
lapse, and shall be conclusive and binding on all persons with respect to Awards granted
under this Plan.
	 
	 	 	“Incentive Stock Option” means an Option that is designated and intended as an “incentive
stock option” within the meaning of Section 422 of the Code, the award of which contains
such provisions (including but not limited to the receipt of shareholder approval of this
Plan, if the award is made prior to such approval) and is made under such circumstances and
to such persons as may be necessary to comply with that section.
	 
	 	 	“Nonqualified Option” means an Option that is not an “incentive stock option” within the
meaning of Section 422 of the Code and includes any Option designated or intended as a
Nonqualified Option and any Option designated or intended as an Incentive Stock Option that
fails to meet the applicable legal requirements thereof.
	 
	 	 	“Option” means an option to purchase Common Shares granted under Section 5 of this Plan.
The Administrator will designate any Option granted to an employee of the Company or an
Affiliate as a Nonqualified Option or an Incentive Stock Option and may also designate any
Option as an Early Exercise Option.
	 
	 	 	“Participant” means an Eligible Person who has been granted and holds an Award under this
Plan.
	 
	 	 	“Personal Representative” means the person or persons who, upon the disability or
incompetence of a Participant, has acquired on behalf of the Participant, by legal
proceeding or otherwise, the power to exercise the rights or receive benefits under this
Plan by virtue of having become the legal representative of the Participant.
	 
	 	 	“Plan” means this E-Commerce China Co. Ltd. Share Incentive Plan, as it may hereafter be
amended from time to time.

31

 

	 	 	“Public Offering Date” means the date the Common Shares are first registered under the
Exchange Act and listed or quoted on a recognized national securities exchange or in the
NASDAQ National Market Quotation System.
	 
	 	 	“Restricted Shares” means Common Shares awarded to a Participant under this Plan, subject to
payment of such consideration and such conditions on vesting (which may include, among
others, the passage of time, specified performance objectives or other factors) and such
transfer and other restrictions as are established in or pursuant to this Plan and the
related Award Agreement, to the extent such remain unvested and restricted under the terms
of the applicable Award Agreement.
	 
	 	 	“Restricted Share Award” means an award of Restricted Shares.
	 
	 	 	“Securities Act” means the Securities Act of 1933 of the United States, as amended from time
to time.
	 
	 	 	“Severance Date” with respect to a particular Participant means, unless otherwise provided
in the applicable Award Agreement:

	 	(a)	 	if the Participant is an Eligible Person under clause (a) of Section 3 and the
Participant’s employment by the Company or any of its Affiliates terminates (regardless
of the reason), the last day that the Participant is actually employed by the Company
or such Affiliate (unless, immediately following such termination of employment, the
Participant is a member of the Board or, by express written agreement with the Company
or any of its Affiliates, continues to provide other services to the Company or any
Affiliate as an Eligible Person under clause (c) of Section 3, in which case the
Participant’s Severance Date shall not be the date of such termination of employment
but shall be determined in accordance with clause (b) or (c) below, as applicable, in
connection with the termination of the Participant’s other services);
	 
	 	(b)	 	if the Participant is not an Eligible Person under clause (a) of Section 3 but
is an Eligible Person under clause (b) thereof, and the Participant ceases to be a
member of the Board (regardless of the reason), the last day that the Participant is
actually a member of the Board (unless, immediately following such termination, the
Participant is an employee of the Company or any of its Affiliates or, by express
written agreement with the Company or any of its Affiliates, continues to provide other
services to the Company or any Affiliate as an Eligible Person under clause (c) of
Section 3, in which case the Participant’s Severance Date shall not be the date of such
termination but shall be determined in accordance with clause (a) above or (c) below,
as applicable, in connection with the termination of the Participant’s employment or
other services);
	 
	 	(c)	 	if the Participant is not an Eligible Person under clause (a) or clause (b) of
Section 3 but is an Eligible Person under clause (c) thereof, and the Participant
ceases to provide services to the Company or any of its Affiliates as determined in
accordance with Section 7.4.4 (regardless of the reason), the last day that the

32

 

	 	 	 	Participant actually provides services to the Company or such Affiliate as an
Eligible Person under clause (c) of Section 3 (unless, immediately following such
termination, the Participant is an employee of the Company or any of its Affiliates
or is a member of the Board, in which case the Participant’s Severance Date shall
not be the date of such termination of services but shall be determined in
accordance with clause (a) or (b) above, as applicable, in connection with the
termination of the Participant’s employment or membership on the Board).

	 	 	“Share Award” means an award of Common Shares under Section 6 of this Plan. A Share Award
may be a Restricted Share Award or an award of unrestricted Common Shares.
	 
	 	 	“Total Disability” means a “total and permanent disability” within the meaning of Section
22(e)(3) of the Code and, with respect to Awards other than Incentive Stock Options, such
other disabilities, infirmities, afflictions, or conditions as the Administrator may
include.

33

 

E-COMMERCE CHINA CO. LTD.

SHARE INCENTIVE PLAN

 

 

	 	 	 	 	 	 	 	 	 
	1.	 	PURPOSE OF THE PLAN	 	 	1	 
	2.	 	ADMINISTRATION	 	 	1	 
	 
	 	2.1	 	Administrator	 	 	1	 
	 
	 	2.2	 	Plan Awards; Interpretation; Powers of Administrator	 	 	2	 
	 
	 	2.3	 	Binding Determinations	 	 	3	 
	 
	 	2.4	 	Reliance on Experts	 	 	3	 
	 
	 	2.5	 	Delegation	 	 	3	 
	3.	 	ELIGIBILITY	 	 	3	 
	4.	 	SHARES SUBJECT TO THE PLAN	 	 	4	 
	 
	 	4.1	 	Shares Available	 	 	4	 
	 
	 	4.2	 	Share Limits	 	 	4	 
	 
	 	4.3	 	Replenishment and Reissue of Unvested Awards	 	 	4	 
	 
	 	4.4	 	Reservation of Shares	 	 	5	 
	5.	 	OPTION GRANT PROGRAM	 	 	5	 
	 
	 	5.1	 	Option Grants in General	 	 	5	 
	 
	 	5.2	 	Types of Options	 	 	5	 
	 
	 	5.3	 	Option Price	 	 	6	 
	 
	 	5.4	 	Vesting; Term; Exercise Procedure	 	 	8	 
	 
	 	5.5	 	Limitations on Grant and Terms of Incentive Stock Options	 	 	9	 
	 
	 	5.6	 	Limits on 10% Holders	 	 	10	 
	 
	 	5.7	 	Effects of Termination of Employment on Options	 	 	10	 
	 
	 	5.8	 	Option Repricing/Cancellation and Regrant/Waiver of Restrictions	 	 	11	 
	 
	 	5.9	 	Early Exercise Options	 	 	11	 
	6.	 	SHARE AWARD PROGRAM	 	 	12	 
	 
	 	6.1	 	Share Awards in General	 	 	12	 
	 
	 	6.2	 	Types of Share Awards	 	 	12	 
	 
	 	6.3	 	Purchase Price	 	 	12	 
	 
	 	6.4	 	Vesting	 	 	13	 
	 
	 	6.5	 	Term	 	 	13	 
	 
	 	6.6	 	Share Certificates; Fractional Shares	 	 	13	 
	 
	 	6.7	 	Dividend and Voting Rights	 	 	13	 
	 
	 	6.8	 	Termination of Employment; Return to the Company	 	 	13	 
	 
	 	6.9	 	Waiver of Restrictions.	 	 	14	 

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	7.	 	PROVISIONS APPLICABLE TO ALL AWARDS	 	 	14	 
	 
	 	7.1	 	Rights of Eligible Persons, Participants and Beneficiaries	 	 	14	 
	 
	 	7.2	 	No Transferability; Limited Exception to Transfer Restrictions	 	 	15	 
	 
	 	7.3	 	Adjustments; Changes in Control	 	 	16	 
	 
	 	7.4	 	Termination of Employment or Services	 	 	21	 
	 
	 	7.5	 	Compliance with Laws	 	 	22	 
	 
	 	7.6	 	Tax Withholding	 	 	24	 
	 
	 	7.7	 	Plan and Award Amendments, Termination and Suspension	 	 	25	 
	 
	 	7.8	 	Privileges of Share Ownership	 	 	26	 
	 
	 	7.9	 	Share-Based Awards in Substitution for Awards Granted by Other Company	 	 	26	 
	 
	 	7.10	 	Effective Date of the Plan	 	 	26	 
	 
	 	7.11	 	Term of the Plan	 	 	26	 
	 
	 	7.12	 	Governing Law/Severability	 	 	27	 
	 
	 	7.13	 	Captions	 	 	27	 
	 
	 	7.14	 	Non-Exclusivity of Plan	 	 	27	 
	 
	 	7.15	 	No Restriction on Corporate Powers	 	 	27	 
	 
	 	7.16	 	Other Company Compensation or Benefit Programs	 	 	27	 
	8.	 	DEFINITIONS	 	 	28	 

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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}]]