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npk_ex102.htm

EXHIBIT 10.2

NATIONAL PRESTO INDUSTRIES, INC.

RESTRICTED STOCK AWARD AGREEMENT

 

This RESTRICTED STOCK AWARD AGREEMENT (the "Agreement") is made this____day of  ________, by and between National Presto Industries, Inc., a Wisconsin corporation (the "Company") and _______________________, an individual resident of Wisconsin ("Participant").

 

1. Award. The Company hereby grants to Participant a restricted stock award of ____________ shares (the "Shares") of Common Stock of the Company according to the terms and conditions set forth herein and in the National Presto Industries, Inc. Incentive Compensation Plan (the "Plan"). The Shares are Restricted Stock granted under Section 5 of the Plan. A copy of the Plan will be furnished upon request of Participant.

 

2. Vesting. Except as otherwise provided in this Agreement, the Shares shall vest in accordance with the following schedule:

On or after each of                                                          Number of Shares

the following dates                                                                    Vested        

 

3. Restrictions on Transfer. Until the Shares vest pursuant to Section 2 or Section 4 hereof, none of the Shares may be assigned, pledged, alienated, attached, sold or otherwise transferred or encumbered, and any purported assignment, pledge, alienation, attachment, sale or transfer or encumbrance shall be void and unenforceable against the Company, and no attempt to transfer the Shares, whether voluntary or involuntary, by operation of law or otherwise, shall vest the purported transferee with any interest or right in or with respect to the Shares.

 

4. Forfeiture; Early Vesting. If Participant ceases to be an employee of the Company or any Subsidiary (as defined in the Plan) prior to vesting of the Shares pursuant to Section 2 or Section 4 hereof, all of Participant's rights to all of the unvested Shares shall be immediately and irrevocably forfeited, except that (i) if Participant ceases to be an employee by reason of death prior to the vesting of Shares under Section 2 hereof, or (ii) if Participant ceases to be an employee by reason of Disability (as defined in the Plan) prior to the vesting of Shares under Section 2 hereof, or (iii) if Participant ceases to be an employee by reason of Retirement (as defined in the Plan) prior to the vesting of Shares under Section 2 hereof, all Shares granted hereunder shall vest as of such termination of employment. Further, in the event of a Change in Control (as defined in the Plan) of the Company, any Shares that are not vested shall become fully vested immediately prior to the Change in Control.  Upon forfeiture, Participant will no longer have any rights relating to the unvested Shares, including the right to vote the Shares and the right to receive dividends declared on the Shares.

 

5. Rights of a Shareholder. Except as provided herein, the Participant shall have all of the rights of a shareholder of the Company with respect to the Shares of Restricted Stock, including the right to vote the Shares and receive dividends and other distributions with respect thereto.

 

  

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6. Tax Matters.

 

(a) Participant shall be liable for any and all taxes, including withholding taxes, arising out of this Award or the vesting of Restricted Stock hereunder. The Company shall have the right to deduct from any and all payments made in connection with the Award, or to require the Participant, through payroll withholding, cash payment or otherwise, to make adequate provision for, the federal, state, local and foreign taxes, if any, required by law to be withheld by the Company with respect to the Award or the shares acquired pursuant thereto. The Company shall have no obligation to deliver shares of Common Stock issuable to the Participant upon the vesting of the Restricted Stock until the Company's tax withholding obligations have been satisfied by the Participant.

 

(b) The Company shall have the right, but not the obligation, to deduct from the shares of Common Stock issuable to the Participant upon the vesting of the Restricted Stock, or to accept from the Participant the tender of, a number of whole shares of Common Stock having a Fair Market Value equal to all or any part of the tax withholding obligations of the Company. The Fair Market Value of any shares of Common Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the minimum amount of tax required to be withheld with respect to the transaction.

 

(c) Participant acknowledges that, at his or her option, Participant (i) shall be entitled to make an election permitted under section 83(b) of the Internal Revenue Code of 1986, as amended (the "Code"), to include in gross income in the taxable year in which the Restricted Stock is granted, the Fair Market Value of such shares on the Grant Date, notwithstanding that such shares may be subject to a substantial risk of forfeiture within the meaning of the Code, or (ii) may elect to include in gross income the Fair Market Value of the Restricted Stock as of the date on which such restriction lapses. The Participant agrees to give the Company's Human Resources Department prompt written notice of any election made by such Participant under Code Section 83(b).

 

7. Miscellaneous.

 

(a) Plan Incorporation; Defined Terms.  The provisions of the Plan are incorporated into this Agreement by reference. Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Plan.

 

(b) Legends; Certificates. Participant agrees that each certificate, if any, representing unvested Shares will bear any legend required by law and a legend reading substantially as follows:

 

The securities represented by this certificate are subject to the provisions of a Restricted Stock Award Agreement dated as of _________. None of the securities represented by this certificate may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance shall be void and unenforceable against the Company, and no attempt to transfer the Shares, whether voluntary or involuntary, by operation of law or otherwise, shall vest the purported transferee with any interest or right in or with respect to the Shares.

 

Participant agrees that the Company shall hold any certificate representing unvested Shares in escrow until such time such Shares are vested.

 

  

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(c) Delivery of Title to Shares.  Subject to any governing rules or regulations, the Company shall deliver any shares of Common Stock acquired in connection with the vesting of the Restricted Stock to or for the benefit of the Participant either (a) by delivering to the Participant stock certificates for vested shares of Common Stock, (b) by delivering to the Participant evidence of book entry shares of Common Stock credited to the account of the Participant, or (c) by depositing such shares of Common Stock for the benefit of the Participant with a broker designated by the Company. The Company shall not be required to issue stock certificates for any shares of Common Stock acquired in connection with the vesting of the Restricted Stock.

 

(d) Company Policies.  Participant agrees that he or she has read and will comply with the Company's Insider Trading Policy and its Corporate Code of Conduct.

 

(e) Plan Provisions Control. In the event that any provision of the Agreement conflicts with or is inconsistent in any respect with the terms of the Plan, the terms of the Plan shall control.

 

(f) No Right to Employment. The issuance of the Shares shall not be construed as giving Participant the right to be retained in the employ of the Company or any Subsidiary, nor will it affect in any way the right of the Company or any Subsidiary to terminate such employment or position at any time, with or without cause. In addition, the Company or any Subsidiary may at any time dismiss Participant from employment, free from any liability or any claim under the Plan or the Agreement. Nothing in the Agreement shall confer on any person any legal or equitable right against the Company or any Subsidiary, directly or indirectly, or give rise to any cause of action at law or in equity against the Company or any Subsidiary. The Award granted hereunder shall not form any part of the wages or salary of Participant for purposes of severance pay or termination indemnities, irrespective of the reason for termination of employment. Under no circumstances shall any person ceasing to be an employee of the Company or any Subsidiary be entitled to any compensation for any loss of anyright or benefit under the Agreement or Plan which such employee might otherwise have enjoyed but for termination of employment, whether such compensation is claimed by way of damages for wrongful or unfair dismissal, breach of contract or otherwise. By participating in the Plan, Participant shall be deemed to have accepted all the conditions of the Plan and the Agreement and the terms and conditions of any rules and regulations adopted by the Committee (as defined in the Plan) and shall be fully bound thereby.

 

(g) Entire Agreement. This Agreement and the Plan constitute the entire understanding and agreement between Participant and the Company regarding this Award. Participant acknowledges that any other agreement, statement, understanding or promise with respect to the Award, whether oral or in writing, not contained in this Agreement or the Plan shall not be valid or binding. Any modification of or amendment to this Agreement shall be effective only if it is in writing and signed by both parties, except as otherwise provided in the Plan.

 

(h) Governing Law. The validity, construction and effect of the Plan and the Agreement, and any rules and regulations relating to the Plan and the Agreement, shall be determined in accordance with the internal laws, and not the law of conflicts, of the State of Wisconsin.

 

  

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(i) Severability. If any provision of the Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Agreement under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Agreement, such provision shall be stricken as to such jurisdiction or the Agreement, and the remainder of the Agreement shall remain in full force and effect.

 

(j) No Trust or Fund Created. Neither the Plan nor the Agreement shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and Participant or any other person.

 

(k) Headings. Headings are given to the Sections and subsections of the Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Agreement or any provision thereof.

 

IN WITNESS WHEREOF, the Company and Participant have executed this Agreement on the date set forth in the first paragraph.

 

	
National Presto Industries, Inc.:

By: ________________________________

Name: ______________________________

Title: _______________________________

	
Participant:

By: ________________________________

Name: ______________________________

Title: _______________________________

 

 

 

4Exhibit 10.1

Exhibit 10.1

The9 Limited

AMENDED 2004 STOCK OPTION PLAN

	1.	 	Purposes of the Plan

The purposes of this Plan are:

	 	(a)	 	to attract and retain the best available personnel for positions of
substantial responsibility,

	 	(b)	 	to provide additional incentive to Employees, Directors and Consultants, and

	 	(c)	 	to motivate the participating personnel, promote their dedication, and
encourage them to devote themselves to the success of the Company’s business.

Stock Purchase Rights may also be granted under the Plan.

	2.	 	Definitions

	 	 	 
	“Administrative Committee”

	 	the Board or any of its Committees as shall be
designated to administer the Plan in accordance
with Section 4 below.
	 
	 	 
	“Applicable Laws”

	 	the requirements relating to the administration
of stock option plans under any stock exchange
or quotation system on which the Ordinary
Shares are listed or quoted and the laws of any
country or jurisdiction which apply to the
grant of Options or Stock Purchase Rights under
the Plan.
	 
	 	 
	“Board”

	 	the Board of Directors of the Company.
	 
	 	 
	“Committee”

	 	a committee of Directors appointed by the Board.
	 
	 	 
	“Company”

	 	The9 Limited, a company incorporated under the
laws of Cayman Islands.

 

 

 

	 	 	 
	“Consultant”

	 	any person who renders or has rendered
consulting or advisory services to the Company
or any Subsidiary.
	 
	 	 
	“Director”

	 	a member of the Board.
	 
	 	 
	“Disability”

	 	any total and permanent disability which
prevents a Service Provider from performing his
duties under the relevant contract of
employment, engagement, appointment or service
(as the case may be) or otherwise from
continuing in such capacity.
	 
	 	 
	“Employee”

	 	any person employed by the Company or any
Subsidiary of the Company, including but not
limited to the directors of such Subsidiary. A
person shall not cease to be an Employee in the
case of:
	 
	 	 
	 

	 	(i)   any leave of absence approved by the
Company; or 

	 
	 	 
	 

	 	(ii)  any transfers or secondment between any
locations of the Company or between the Company
and any Subsidiary.

	 
	 	 
	“Fair Market Value”

	 	as of any date, the value of Ordinary Shares as
determined in the following manners:
	 
	 	 
	 

	 	(i)   if the Ordinary Shares are listed or
publicly traded on any established stock
exchange or a national market system, its Fair
Market Value shall be the closing sales price
for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or
system on the date of determination or on the
last market trading day prior to the date of
determination (if the date of determination is
not a market trading day), as reported in The
Wall Street Journal or such other sources as
the Administrative Committee deems reliable;

 

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	 	(ii)   if the Ordinary Shares are regularly
quoted by a principal recognized securities
dealer but selling prices are not reported, its
Fair Market Value shall be the average between
the high bid and low asked prices for the
Ordinary Shares on the date of determination or
on the last market trading day prior to the
date of determination (if the date of
determination is not a market trading day); or

	 
	 	 
	 

	 	(iii)  in the absence of an established market
for the Ordinary Shares, its Fair Market Value
shall be determined in good faith by the
Administrative Committee after consultation
with legal and accounting experts as the
Administrative Committee may deem advisable.

	 
	 	 
	“Option”

	 	a stock option granted pursuant to the Plan
which confers the holder a right to purchase a
specified amount of Ordinary Shares from the
Company on and subject to the pre-determined
terms and conditions stipulated in the Option
Agreement.
	 
	 	 
	“Option Agreement”

	 	a written or electronic agreement between the
Company and an Optionee evidencing the terms
and conditions of an individual Option grant.
The Option Agreement is subject to the terms
and conditions of the Plan.
	 
	 	 
	“Optioned Stock”

	 	the Ordinary Shares subject to an Option or a
Stock Purchase Right, as adjusted in accordance
with Section 12 below.
	 
	 	 
	“Optionee”

	 	the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
	 
	 	 
	“Ordinary Shares”

	 	the ordinary shares of the Company, par value
US$0.01 per share.
	 
	 	 
	“Plan”

	 	this 2004 Stock Option Plan.

 

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	“Restricted Stock”

	 	Ordinary Shares acquired by an Optionee upon
exercise of the Stock Purchase Right, which is
granted pursuant to Section 10 below.
	 
	 	 
	“Restricted Stock
Purchase Agreement”

	 	a written or electronic agreement between the
Company and an Optionee evidencing the terms
and conditions of an individual grant of Stock
Purchase Right. The Restricted Stock Purchase
Agreement is subject to the terms and
conditions of the Plan.
	 
	 	 
	“Securities Act”

	 	the securities exchange legislation of any
applicable jurisdiction as amended from time to
time.
	 
	 	 
	“Service Provider”

	 	an Employee, a Director or a Consultant.
	 
	 	 
	“Stock Purchase Right”

	 	a right to purchase Ordinary Shares pursuant to
Section 10 below.
	 
	 	 
	“Subsidiary”

	 	any entity in which the Company holds directly
or indirectly fifty point one percent (50.1%)
or more of the voting equity.
	 
	 	 
	“Tax Law”

	 	the relevant tax law of the applicable
jurisdiction, as amended from time to time.

Except where otherwise indicated by the context herein, references to the
masculine gender shall also include the feminine gender and the neuter and vice
versa, and references to the singular shall also include the plural and vice
versa.

	3.	 	Stock Subject to the Plan

Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of
Ordinary Shares which may be subject to Option or Stock Purchase Right and sold under the
Plan is 6,449,614 Ordinary Shares. At all times during the term of the Plan and while any
Option(s) or Stock Purchase Right(s) are outstanding, the Company shall retain as
authorized and unissued stock, or as treasury stock, at least the number of Ordinary Shares
from time to time required under the provisions of the Plan for such outstanding Option(s)
and Stock Purchase Right(s), or otherwise assure itself of its ability to perform its
obligations hereunder.

 

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If an Option or Stock Purchase Right expires or terminates for any reason or becomes
unexercisable without having been exercised in full, or is surrendered, the unacquired or
unpurchased Ordinary Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated). However, Ordinary Shares
that have actually been issued under the Plan, upon exercise of either an Option or Stock
Purchase Right, shall not be reverted to the Plan and shall not become available for future
distribution under the Plan, except that if Restricted Stock are repurchased by the Company
at their original purchase price and cancelled pursuant to Section 10, the Ordinary Shares
so repurchased (which will then be authorized but unissued Ordinary Shares) shall become
available for future grant under the Plan.

	4.	 	Administration of the Plan

	 	(a)	 	Administrative Committee

The Plan shall be administered by the Board or a Committee appointed by the Board
(the “Administrative Committee”), which Administrative Committee shall be
constituted to comply with the Applicable Laws. Unless it is prohibited by the
Applicable Laws, in which event the Plan shall be administered by the Board, the
Administrative Committee, if appointed, shall comprise two directors of the Company
nominated by each of Jun ZHU and Bosma Limited.

	 	(b)	 	Powers of the Administrative Committee

Subject to the provisions of the Plan and, in the case of an Administrative
Committee, the specific duties delegated by the Board to such Administrative
Committee, and subject to the approval of any relevant authorities, the
Administrative Committee shall have, in addition to its other authority provided
herein, the authority at its sole discretion:

	 	(i)	 	to determine the Fair Market Value in the manners as set out
in the definition of Fair Market Value under Section 2 above;

	 	(ii)	 	to select from time to time the Service Providers (excluding
the Directors, Option or Stock Purchase Right grants to whom shall be
determined by the compensation committee of the Board, or before the
appointment of compensation committee, by the Board) to whom Options and Stock
Purchase Rights may be granted hereunder;

 

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	 	(iii)	 	to determine the number of Ordinary Shares to be covered by
each grant of Option or Stock Purchase Right hereunder to the Service
Providers (excluding the Directors, Option or Stock Purchase Right grants to
whom shall be determined by the compensation committee of the Board, or before
the appointment of compensation committee, by the Board);

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

	 	(v)	 	to determine the terms and conditions, of any Option or Stock
Purchase Right granted hereunder. Such terms and conditions include, but are
not limited to, the exercise price, the time or times when Option or Stock
Purchase Rights may be exercised (which may be based on performance criteria
or a pre-determined vesting period), any forfeiture restrictions, any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the Ordinary Shares
relating thereto, based in each case on such factors as the Administrative
Committee, at its sole discretion, shall determine;

	 	(vi)	 	to determine whether and under what circumstances an Option
may be settled in cash under subsection 9(e) below instead of Ordinary Shares;

	 	(vii)	 	to reduce the exercise price of any Option or Stock Purchase
Right to the then current Fair Market Value if the Fair Market Value of the
Ordinary Shares covered by such Option or Stock Purchase Right has declined
since the date the Option or Stock Purchase Right was granted;

	 	(vii)	 	to prescribe, amend and rescind rules and regulations
relating to the Plan (but not the Plan per se), including rules and
regulations relating to sub-plans established for the purpose of qualifying
for preferred tax treatment under foreign tax law;

	 	(ix)	 	to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Ordinary Shares to be issued
upon exercise of an Option or Stock Purchase Right that number of Ordinary
Shares having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Ordinary Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined or the tax liability
arises or the tax is due to be paid, or any other date as the
Administrative Committee may deem appropriate. All elections by Optionees
to have Ordinary Shares withheld for this purpose shall be made in such
form and under such conditions as the Administrative Committee may deem
necessary or advisable;

 

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	 	(x)	 	to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan; and

	 	(xi)	 	to take any other actions as the Administrative Committee
shall consider appropriate for the proper administration of the Plan.

	 	(c)	 	Effect of Administrative Committee’s Decision

All decisions, determinations and interpretations of the Administrative Committee
pursuant to the provisions of the Plan shall be final conclusive and binding on all
Optionees.

	5.	 	Eligibility

	 	(a)	 	Options and Stock Purchase Rights may be granted to Service Providers.

	 	(b)	 	Neither the Plan nor any Option or Stock Purchase Right shall confer upon any
Optionee any right with respect to continuing the Optionee’s relationship as a Service
Provider with the Company, nor shall it interfere in any way with his or her right or
the Company’s right to terminate such relationship at any time, with or without cause.

	6.	 	Term of Plan

The Plan shall become effective upon its adoption by the Board. It shall continue in
effect for a term of twenty (20) years unless sooner terminated under Section 14 below.

	7.	 	Term of Option

The term of each Option shall be stated in the Option Agreement; provided, however, that
the term shall be no more than five (5) years from the date of grant thereof.

 

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	8.	 	Option Exercise Price and Consideration

	 	(a)	 	The per share exercise price for the Ordinary Shares to be issued upon
exercise of an Option shall be such price as is determined by the Administrative
Committee.

	 	(b)	 	The terms, conditions and restrictions for the issuance of the Ordinary
Shares upon exercise of an Option, including the method of payment, shall be
determined by the Administrative Committee. The Administrative Committee may at its
sole discretion authorize or accept payment in one or more of the following manners:

	 	(i)	 	cash,

	 	(ii)	 	check payable to the order of the Company,

	 	(iii)	 	promissory note,

	 	(iv)	 	surrender to the Company of other Ordinary Shares which (x)
in the case of Ordinary Shares acquired upon exercise of an Option, have been
owned by the Optionee for more than six (6) months on the date of surrender,
and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Ordinary Shares as to which such Option shall
be exercised,

	 	(v)	 	consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan, or

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

In making its determination as to the above, the Administrative Committee shall consider
the best interest of and advantage to the Company.

	9.	 	Exercise of Option

	 	(a)	 	Procedure for Exercise; Rights as a Shareholder

Any Option granted hereunder shall be exercisable according to the terms hereof at
such times and under such conditions as determined by the Administrative Committee
and set forth in the Option Agreement. Except in the case of Options granted to
the Directors and Consultants, Options shall become exercisable at a rate of no
more than twenty-five percent (25%) per year over four (4) years from the date the
Options are granted. Unless the Administrative Committee provides otherwise,
vesting of Options granted hereunder to Directors shall be tolled during any unpaid
leave of absence. An Option may not be exercised for a fraction of an Ordinary
Share.

 

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An Option shall be deemed exercised when the Company receives:

	 	(i)	 	written or electronic notice of exercise (in accordance with
the Option Agreement) from the person entitled to exercise the Option, and

	 	(ii)	 	full payment for the Ordinary Shares with respect to which
the Option is exercised.

Full payment may consist of any consideration and method of payment authorized by
the Administrative Committee and permitted by the Option Agreement and the Plan.
After the Option is exercised, the Company shall promptly issue (or cause to be
issued) such number of Ordinary Shares as covered by such Option. Ordinary Shares
issued upon exercise of an Option shall be issued in the name of the Optionee or,
if requested by the Optionee, in the joint name of the Optionee and his or her
spouse. Until the Ordinary Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to attend general meeting of the Company, vote or receive
dividends or other distributions or any other rights as a shareholder shall exist
with respect to the Ordinary Shares, notwithstanding the exercise of the Option.
No adjustment will be made for a dividend or other right for which the record date
is prior to the date the Ordinary Shares are issued, except as provided in Section
12 below.

Exercise of an Option in any manner shall result in a decrease in the number of
Ordinary Shares thereafter available, both for purposes of the Plan and for sale
under the Option, by the number of Ordinary Shares as to which the Option is
exercised.

	 	(b)	 	Termination of Relationship as Service Provider

If an Optionee ceases to be a Service Provider (save and except due to the
Optionee’s Disability, in which event subsection 9(c) below shall apply or due to
the Optionee’s death, in which event subsection 9(d) below shall apply), such
Optionee may exercise his or her Option within such period of time as is specified
in the Option Agreement (of at least thirty (30) days but in no event later than
the expiration of the term of the Option as set forth in the Option Agreement) to
the extent that the Option is vested on the date of such cessation. In the
absence of a specified time in the Option
Agreement, the Option shall remain exercisable for three (3) months following the
Optionee’s cessation as aforesaid (but in no event later than the expiration of the
term of the Option as set forth in the Option Agreement). If, on the date of
cessation, the Optionee is not vested as to his or her entire Option, the Ordinary
Shares covered by the unvested portion of the Option shall revert to the Plan. If,
after the cessation, the Optionee does not exercise his or her Option to the
fullest extent vested within the time specified in the Option Agreement or
stipulated herein as the case may be, the Option shall lapse automatically, and the
Ordinary Shares covered by such unexercised portion of the Option shall revert to
the Plan and the Optionee shall have no claim for compensation or otherwise against
the Company whatsoever.

 

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	 	(c)	 	Disability of Optionee

If an Optionee ceases to be a Service Provider as a result of the Optionee’s
Disability, the Optionee may exercise his or her Option within such period of time
as is specified in the Option Agreement (of at least six (6) months but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement) to the extent the Option is vested on the date of such cessation. In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee’s cessation as aforesaid
(but in no event later than the expiration of the term of such Option as set forth
in the Option Agreement). If, on the date of cessation, the Optionee is not vested
as to his or her entire Option, the Ordinary Shares covered by the unvested portion
of the Option shall revert to the Plan. If, after the cessation, the Optionee does
not exercise his or her Option to the fullest extent vested within the time
specified in the Option Agreement or stipulated herein as the case may be, the
Option shall lapse automatically, and the Ordinary Shares covered by such
unexercised portion of the Option shall revert to the Plan and the Optionee shall
have no claim for compensation or otherwise against the Company whatsoever.

	 	(d)	 	Death of Optionee

If an Optionee dies while being a Service Provider, the Option may be exercised
within such period of time as is specified in the Option Agreement (of at least six
(6) months but in no event later than the expiration of the term of such Option as
set forth in the Option Agreement) to the extent that the Option is vested on the
date of death by the Optionee’s estate or by a person who acquires the right to
exercise the Option by bequest or inheritance (collectively,
the “Optionee’s Representative”). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following the
Optionee’s death (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). If, at the time of death, the
Optionee is not vested as to the entire Option, the Ordinary Shares covered by the
unvested portion of the Option shall immediately revert to the Plan. If the Option
is not exercised by the Optionee’s Representative to the fullest extent vested
within the time specified in the Option Agreement or stipulated herein as the case
may be, the Option shall lapse automatically, and the Ordinary Shares covered by
such unexercised portion of the Option shall revert to the Plan and the Optionee’s
estate and the Optionee’s Representative shall have no claim for compensation or
otherwise against the Company whatsoever.

 

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	 	(e)	 	Buyout Provisions

The Administrative Committee may at any time offer to buy out an Option previously
granted for a payment in cash or Ordinary Shares, based on such fair and reasonable
terms and conditions as the Administrative Committee shall establish and
communicate to the Optionee at the time that such offer is made or as set forth in
the Option Agreement.

	10.	 	Stock Purchase Rights

	 	(a)	 	Rights to Purchase

Stock Purchase Rights may be issued in favour of the Optionees either alone, in
addition to, or in tandem with other awards granted under the Plan and/or cash
awards made by the Company outside of the Plan. After the Administrative Committee
determines that it will offer Stock Purchase Rights under the Plan, it shall advise
the offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Ordinary Shares that such person
shall be entitled to purchase, the price to be paid, the forfeiture restrictions,
the time limit for the exercise of the Stock Purchase Rights and the time within
which such person must accept such offer.

	 	(b)	 	Repurchase Option

Unless the Administrative Committee determines otherwise, the Restricted Stock
Purchase Agreement shall grant the Company a repurchase option exercisable upon the
voluntary or involuntary
termination of the Optionee as a Service Provider for any reason (including death
or Disability). The purchase price for Ordinary Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
Optionee and may be paid by cancellation of any indebtedness of the Optionee to the
Company. The repurchase option shall lapse at such rate as the Administrative
Committee may determine at its sole discretion. Except with respect to Ordinary
Shares purchased by the Directors and Consultants, the repurchase option shall in
no case lapse at a rate of less than 25% per year over four (4) years from the date
of purchase.

 

Page 11

 

	 	(c)	 	Other Provisions

The Restricted Stock Purchase Agreement shall contain such other terms, provisions
and conditions not inconsistent with the Plan as may be determined by the
Administrative Committee at its sole discretion.

	 	(d)	 	Rights as a Shareholder

Once the Stock Purchase Right is exercised, the purchaser shall have rights
equivalent to those of a shareholder and shall be a shareholder when his or her
purchase and personal particulars are entered upon the records of the Company or of
the duly authorized transfer agent of the Company. No adjustment shall be made for
a dividend or other right for which the record date is prior to the date the Stock
Purchase Right is exercised, except as provided in Section 12 below.

	11.	 	Non-Transferability of Options and Stock Purchase Rights

The Option and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of succession
and may be exercised, during the lifetime of the Optionee, only by the Optionee except as
provided in subsection 9(d) above.

	12.	 	Adjustments Upon Changes in Capitalization, Merger or Asset Sale

	 	(a)	 	(i) Changes in Capitalization

Subject to any action of the shareholders of the Company as necessitated by the
Applicable Laws, the number of Ordinary Shares covered by each outstanding Option
or Stock Purchase Right, and the number of Ordinary Shares which have been
authorized for issuance under the Plan but as to which no Options or Stock Purchase
Rights have yet been granted or which have been reverted to the Plan upon
cancellation or expiration of an Option or Stock Purchase Right, as well as the
price per Ordinary Share covered by each such outstanding Option or Stock Purchase
Right, shall be proportionately adjusted for any increase or decrease in the number
of issued Ordinary Shares effected without receipt of consideration by the Company.
The conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration”. Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
 shares of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of Ordinary Shares subject to an Option or Stock Purchase
Right.

 

Page 12

 

(ii) Adjustments for Stock Split, Stock Dividend, Etc.

If the Company shall at any time increase or decrease the number of its outstanding
Ordinary Shares, or change in any way the rights and privileges of its outstanding
Ordinary Shares, by means of the payment of a stock dividend or any other
distribution upon such Ordinary Shares, or through a stock split, subdivision,
consolidation, combination, reclassification or recapitalization involving such
Ordinary Shares, then in relation to the Ordinary Shares that are covered by the
Options or Stock Purchase Rights granted or available under the Plan and are
affected by one or more of the above events, the numbers, rights and privileges of
the following shall be increased, decreased or changed in like manner as if such
Ordinary Shares had been issued and outstanding, fully paid and non-assessable at
the time of such occurrence.

	 	(b)	 	Dissolution or Liquidation

In the event of the proposed dissolution or liquidation of the Company, the
Administrative Committee shall notify each Optionee as soon as practicable prior to
the effective date of such proposed dissolution or liquidation. The Administrative
Committee may at its sole discretion provide for an Optionee to have the right to
exercise his or her Option or Stock Purchase Right at any time until fifteen (15)
days prior to the commencement of such proposed dissolution or liquidation. In
addition, the Administrative Committee may at its sole discretion provide that any
repurchase option of the Company applicable to any Restricted Stock and/or any
right of the Company
to buy out outstanding Options under subsection 9(e) shall lapse upon dissolution
or liquidation of the Company, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated.

 

Page 13

 

	 	(c)	 	Merger or Asset Sale

In the event of a merger of the Company with or into another corporation, or the
sale of substantially all of the assets of the Company, each outstanding Option and
Stock Purchase Right shall be assumed or an equivalent option or right substituted
by the successor corporation or its holding company (meaning any entity which holds
directly or indirectly at least fifty point one percent of the voting equity of the
successor corporation) or subsidiary (meaning any entity in which the successor
corporation holds directly or indirectly fifty point one percent or more of the
voting equity). In the event that the successor corporation or its holding company
or subsidiary refuses to assume or substitute for the Option or Stock Purchase
Right, the Optionee shall fully vest in and have the right to exercise the Option
or Stock Purchase Right as to all of the Optioned Stock, including such part of the
Optioned Stock as to which it would not otherwise be vested or exercisable and the
repurchase option of the Company applicable to any Restricted Stock and/or any
right of the Company to buy out outstanding Options under subsection 9(e) shall
lapse upon consummation of such merger or sale of assets. If an Option or Stock
Purchase Right becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrative
Committee shall accordingly notify the Optionee in writing or electronically in
which event the Option or Stock Purchase Right shall be fully exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or Stock
Purchase Right shall terminate upon the expiration of such fifteen (15) day period.
For the purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the outstanding
Option or Stock Purchase Right confers the right to purchase or receive
proportionately the consideration (whether stock, cash, or other securities or
property) received by holders of Ordinary Shares in the merger or sale of assets;
provided, however, that if such consideration received in the merger or sale of
assets is not solely common stock of the successor corporation or its holding
company or subsidiary, the Administrative Committee may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right to be solely common stock of the
successor corporation or its holding company
or subsidiary equal in fair market value to the per share consideration received by
holders of Ordinary Shares in the merger or sale of assets, such fair market value
to be conclusively determined by the Administrative Committee.

 

Page 14

 

	 	(d)	 	General Adjustment Rules

If any adjustment or substitution provided for in this Section 12 shall result in
the creation of a fractional Ordinary Share under any Option, the Company shall, in
lieu of issuing such fractional Ordinary Share, pay to the Optionee a cash sum in
the amount equal to the product of such fraction multiplied by the Fair Market
Value of an Ordinary Share on the date the fractional Ordinary Share otherwise
would have been issued.

	 	(e)	 	Determination by Administrative Committee

Adjustments under this Section 12 shall be made by the Administrative Committee
whose determinations with regard thereto shall be final, conclusive and binding
upon all parties.

	13.	 	Time of Granting Options and Stock Purchase Rights

The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrative Committee makes the determination granting such Option or Stock
Purchase Right, or such other date as determined by the Administrative Committee. Notice
of the determination shall be given to each Service Provider to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of such grant.

	14.	 	Amendment and Termination of the Plan

	 	(a)	 	Amendment and Termination

Subject to Subsection 14(b) below, the Board may at any time amend, alter, suspend
or terminate the Plan.

	 	(b)	 	Shareholder Approval

The Board shall obtain shareholder approval of any amendment to the Plan to the
extent necessary and desirable to comply with Applicable Laws.

 

Page 15

 

	 	(c)	 	Effect of Amendment or Termination

No amendment, alteration, suspension or termination of the Plan shall impair the
rights of any Optionee, unless mutually agreed otherwise between the Optionee and
the Administrative Committee. Termination of the Plan shall not affect the
Administrative Committee’s ability to exercise the powers granted to it hereunder
with respect to Options granted under the Plan prior to the date of such
termination.

	15.	 	Conditions Upon Issuance of Shares

	 	(a)	 	Legal Compliance

Ordinary Shares shall not be issued pursuant to the exercise of an Option or Stock
Purchase Right unless the exercise of such Option or Stock Purchase Right and the
issuance and delivery of such Ordinary Shares shall comply with Applicable Laws and
shall be further subject to the approval of legal counsel for the Company with
respect to such compliance.

	 	(b)	 	Cash Payment

The payment of cash pursuant to the Plan shall be subject to all Applicable Laws.

	 	(c)	 	Investment Representations

The Company may require any person to whom an Option or a Stock Purchase Right is
granted, as a condition of exercising such Option or Stock Purchase Right or
receiving Ordinary Shares pursuant to the Plan, to give written assurances, in the
substance and form satisfactory to the Company and its legal counsel, to the effect
that such person is acquiring the Ordinary Shares subject to the Option or Stock
Purchase Right for his own account for investment and not with any present
intention of selling or otherwise distributing the same, and to such other effects
as the Company deems necessary or appropriate in order to comply with applicable
securities laws.

	 	(d)	 	Restrictions

The Administrative Committee may provide that Ordinary Shares issuable upon the
exercise of an Option or Stock Purchase Right shall, under certain conditions, be
subject to restrictions whereby the Company has a right of first refusal with
respect to such Ordinary Shares, which restrictions may survive an Optionee’s term
of employment, engagement, appointment or service with the Company.

 

Page 16

 

	16.	 	Inability to Obtain Regulatory Approval

The inability of the Company to obtain approval from any regulatory body having
jurisdiction over the Company with respect to issuance of Ordinary Shares pursuant to this
Plan shall relieve the Company of any liability in respect of the failure to issue such
Ordinary Shares as to which such requisite approval shall not have been obtained.

	17.	 	Shareholder Approval

The Plan shall be subject to approval by the shareholders of the Company within twelve (12)
months after the date the Plan is adopted by the Board. Such shareholder approval shall be
obtained in the degree and manner required under Applicable Laws.

	18.	 	Information to Optionees and Purchasers

The Company shall provide to each Optionee and to each individual who acquires Ordinary
Shares pursuant to the Plan, not less frequently than annually during the period such
Optionee or purchaser has one or more Options or Stock Purchase Rights outstanding, and, in
the case of an individual who acquires Ordinary Shares pursuant to the Plan, during the
period such individual owns such Ordinary Shares, copies of annual financial statements.
The Company shall not be required to provide such statements to key employees whose duties
in connection with the Company assure their access to equivalent information.

	19.	 	Withholding

The Company’s obligations to deliver Ordinary Shares upon the exercise of an Option or
Stock Purchase Right shall be subject to the Optionee’s satisfaction of all Applicable Laws
related to tax withholding as a result of such exercise.

 

Page 17

 

	20.	 	Non-exclusivity of the Plan

Neither the adoption of the Plan by the Board nor the submission of the Plan to
shareholders of the Company for approval shall be construed as creating any limitations on
the power or authority of the Board to adopt such other or additional incentive or other
compensation arrangements of whatever nature as the Board may deem necessary or desirable
or preclude or limit the continuation of any other plan, practice or arrangement for the
payment of compensation or fringe benefits to
employees generally, or to any class or group of employees, which the Company or any
Subsidiary now has lawfully put into effect, including, without limitation, any retirement,
pension, savings and stock purchase plan, insurance, death and disability benefits and
executive short-term incentive plans.

	21.	 	No Transfer or Assignment

The Option or Stock Purchase Right granted hereunder shall not be transferred or assigned
without the approval in writing of the Administrative Committee.

	22.	 	Governing Law

The terms and conditions of this Plan shall be governed by and construed in accordance with
the laws of the Cayman Islands.

- E N D -

 

Page 18

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