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Unassociated Document

    PANSOFT
COMPANY LIMITED

     

    2008
STOCK INCENTIVE
PLAN

     

     

    1. Purpose
and Effective Date.

     

    (a) The
purpose of the Pansoft Company Limited 2008 Stock Incentive Plan (the “Plan”) is
to further the long term stability and financial success of Pansoft Company
Limited (the “Company”) by attracting and retaining personnel, including
employees, non-employee directors, and consultants, through the use of stock
incentives. It is believed that ownership of Company stock will stimulate the
efforts of those employees upon whose judgment, interest and efforts the Company
is and will be largely dependent for the successful conduct of its
business.

     

    (b) The
Plan was adopted by the Board of Directors of the Company on July 20, 2008 (the
“Effective Date”).

     

    2. Definitions.

     

    (a) Act.
The Securities Exchange Act of 1934, as amended.

     

    (b) Affiliate.
The meaning assigned to the term “affiliate” under Rule 12b-2 of the
Act.

     

    (c) Applicable
Withholding Taxes. The aggregate amount of federal, state and local
income and payroll taxes that the Company is required to withhold (based on the
minimum applicable statutory withholding rates) in connection with any exercise
of an Option or the award, lapse of restrictions or payment with respect to
Restricted Stock.

     

    (d) Award.
The award of an Option or Restricted Stock under the Plan.

     

    (e) Beneficiary.
The person or persons entitled to receive a benefit pursuant to an Award upon
the death of a Participant.

     

    (f) Board.
The Board of Directors of the Company.

     

    (g) Cause.
Dishonesty, fraud, misconduct, gross incompetence, gross negligence, breach of a
material fiduciary duty, material breach of an agreement with the Company,
unauthorized use or disclosure of confidential information or trade secrets, or
conviction or confession of a crime punishable by law (except minor violations),
in each case as determined by the Committee, which determination shall be
binding. Notwithstanding the foregoing, if “Cause” is defined in an employment
agreement between a Participant and the Company, “Cause” shall have the meaning
assigned to it in such agreement.

     

    (h) Change
of Control.

     

    (i) The
acquisition by any unrelated person of beneficial ownership (as that term is
used for purposes of the Act) of 50% or more of the then outstanding shares of
common stock of the Company or the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors. The term “unrelated person” means any person other than (x) the
Company and its subsidiaries, (y) an employee benefit plan or related trust
sponsored by the Company or its subsidiaries, and (z) a person who acquires
stock of the Company pursuant to an agreement with the Company that is approved
by the Board in advance of the acquisition. For purposes of this subsection, a
“person” means an individual, entity or group, as that term is used for purposes
of the Act;

     

    (ii) Any
tender or exchange offer, merger or other business combination, sale of assets
or any combination of the foregoing transactions, and the Company is not the
surviving corporation; and

     

    (iii) A
liquidation of the Company.

     

    (i) Code.
The Internal Revenue Code of 1986, as amended.  

     

    (j) Committee.
The Compensation Committee of the Board.

     

    (k) Company.
Pansoft Company Limited

     

    (l) Company
Stock. The common stock of the Company, without par value per share. In
the event of a change in the capital structure of the Company (as provided in
Section 12 below), the shares resulting from such a change shall be deemed
to be Company Stock within the meaning of the Plan.

     

     

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    (m) Consultant.
A person rendering services to the Company who is not an “employee” for purposes
of employment tax withholding under the Code.

     

    (n) Corporate
Change. A consolidation, merger, dissolution or liquidation of the
Company, or a sale or distribution of assets or stock (other than in the
ordinary course of business) of the Company; provided that, unless the Committee
determines otherwise, a Corporate Change shall only be considered to have
occurred with respect to Participants whose business unit is affected by the
Corporate Change.

     

    (o) Date
of Grant. The date as of which an Award is made by the
Committee.

     

    (p) Disability
or Disabled. As to an Incentive Stock Option, a Disability within the
meaning of Code Section 22(e)(3). As to all other Incentive Awards, the
Committee shall determine whether a Disability exists and such determination
shall be conclusive.

     

    (q) Fair
Market Value.

     

    (i) If
Company Stock is traded on a national securities exchange or the NASDAQ Stock
Market, the average of the highest and lowest registered sales prices of Company
Stock on such exchange or the NASDAQ Stock Market;

     

    (ii) If
Company Stock is traded in the over-the-counter market, the average between the
closing bid and asked prices as reported by the NASDAQ Stock Market;
or

     

    (iii) If
shares of Company Stock are not publicly traded, the Fair Market Value shall be
determined by the Committee using any reasonable method in good
faith.

     

    Fair
Market Value shall be determined as of the applicable date specified in the Plan
or, if there are no trades on such date, the value shall be determined as of the
last preceding day on which Company Stock is traded.

     

    (r) Incentive
Stock Option. An Option intended to meet the requirements of, and qualify
for favorable Federal income tax treatment under, Code
Section 422.

     

    (s) Nonstatutory
Stock Option. An Option that does not meet the requirements of Code
Section 422, or that is otherwise not intended to be an Incentive Stock
Option and is so designated.

     

    (t) Option.
A right to purchase Company Stock granted under the Plan, at a price determined
in accordance with the Plan.

     

    (u) Participant.
Any individual who receives an Award under the Plan.

     

    (v) Restricted
Stock. Company Stock awarded upon the terms and subject to the
restrictions set forth in Section 7 below.

     

    (w) Rule
16b-3. Rule 16b-3 of the Act, including any corresponding subsequent rule
or any amendments to Rule 16b-3 enacted after the effective date of the
Plan.

     

    (x) 10%
Shareholder. A person who owns, directly or indirectly, stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company or an Affiliate. Indirect ownership of stock shall be determined in
accordance with Code Section 424(d).  

     

    3. General.
Awards of Options and Restricted Stock may be granted under the Plan. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options.

     

    4. Stock.
Subject to Section 12 of the Plan, there shall be reserved for issuance
under the Plan a total of 604,248 unissued shares of Company Stock. Shares
allocable to Options granted under the Plan that expire or otherwise terminate
unexercised and shares that are forfeited pursuant to restrictions on Restricted
Stock awarded under the Plan may again be subjected to an Award under this Plan.
For purposes of determining the number of shares that are available for Awards
under the Plan, such number shall, if permissible under Rule 16b-3, include the
number of shares surrendered by a Participant or retained by the Company
(a) in connection with the exercise of an Option or (b) in payment of
Applicable Withholding Taxes.

     

     

    
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    5. Eligibility.

     

    (a) Any
employee of, non-employee director of, or Consultant to the Company or its
affiliates, Pansoft Company Limited or Pansoft (Jinan) Co., Ltd., who, in the
judgment of the Committee, has contributed or can be expected to contribute to
the profits or growth of the Company is eligible to become a Participant. The
Committee shall have the power and complete discretion, as provided in
Section 14, to select eligible Participants and to determine for each
Participant the terms, conditions and nature of the Award and the number of
shares to be allocated as part of the Award; provided, however, that any award
made to a member of the Committee must be approved by the Board. The Committee
is expressly authorized to make an Award to a Participant conditioned on the
surrender for cancellation of an existing Award.

     

    (b) The
grant of an Award shall not obligate the Company to pay an employee any
particular amount of remuneration, to continue the employment of the employee
after the grant or to make further grants to the employee at any time
thereafter.

     

    (c)
Non-employee directors and Consultants shall not be eligible to receive the
Award of an Incentive Stock Option.

     

    (d) The
maximum number of shares with respect to which an Award may be granted in any
calendar year to any employee during such calendar year shall be 100,000 shares
of Company Stock.

     

    6. Stock
Options.

     

    (a)
Whenever the Committee deems it appropriate to grant Options, notice shall be
given to the Participant stating the number of shares for which Options are
granted, the Option price per share, whether the options are Incentive Stock
Options or Nonstatutory Stock Options, and the conditions to which the grant and
exercise of the Options are subject. This notice, when duly accepted in writing
by the Participant, shall become a stock option agreement between the Company
and the Participant.

     

    (b) The Committee
shall establish the exercise price of Options. The exercise price of an
Incentive Stock Option shall be not less than 100% of the Fair Market Value of
such shares on the Date of Grant, provided that if the Participant is a 10%
Shareholder, the exercise price of an Incentive Stock Option shall be not less
than 110% of the Fair Market Value of such shares on the Date of Grant. The
exercise price of a Nonstatutory Stock Option Award shall not be less than 100%
of the Fair Market Value of the shares of Company Stock covered by the Option on
the Date of
Grant.

     

    (c)
Options may be exercised in whole or in part at such times as may be specified
by the Committee in the Participant’s stock option agreement. The Committee may
impose such vesting conditions and other requirements as the Committee deems
appropriate, and the Committee may include such provisions regarding a Change of
Control or Corporate Change as the Committee deems
appropriate. 

     

    (d) The Committee shall
establish the term of each Option in the Participant stock option agreement. The
term of an Incentive Stock Option shall not be longer than ten years from the
Date of Grant, except that an Incentive Stock Option granted to a 10%
Shareholder may not have a term in excess of five years. No option may be
exercised after the expiration of its term or, except as set forth in the
Participant’s stock option agreement, after the termination of the Participant’s
employment. The Committee shall set forth in the Participant’s stock option
agreement when, and under what circumstances, an Option may be exercised after
termination of the Participant’s employment or period of service; provided that
no Incentive Stock Option may be exercised after (i) three months from the
Participant’s termination of employment with the Company for reasons other than
Disability or death, or (ii) one year from the Participant’s termination of
employment on account of Disability or death. The Committee may, in its sole
discretion, amend a previously granted Incentive Stock Option to provide for
more liberal exercise provisions, provided however that if the Incentive Stock
Option as amended no longer meets the requirements of Code Section 422,
and, as a result the Option no longer qualifies for favorable federal income tax
treatment under Code Section 422, the amendment shall not become effective
without the written consent of the
Participant.

     

    (e) An
Incentive Stock Option, by its terms, shall be exercisable in any calendar year
only to the extent that the aggregate Fair Market Value (determined at the Date
of Grant) of Company Stock with respect to which Incentive Stock Options are
exercisable by the Participant for the first time during the calendar year does
not exceed $100,000 (the “Limitation Amount”). Incentive Stock Options granted
under the Plan and all other plans of the Company and any parent or Subsidiary
of the Company shall be aggregated for purposes of determining whether the
Limitation Amount has been exceeded. The Board may impose such conditions as it
deems appropriate on an Incentive Stock option to ensure that the foregoing
requirement is met. If Incentive Stock Options that first become exercisable in
a calendar year exceed the Limitation Amount, the excess Options will be treated
as Nonstatutory Stock Options to the extent permitted by law.

     

    (f) If a
Participant dies and if the Participant’s stock option agreement provides that
part or all of the Option may be exercised after the Participant’s death, then
such portion may be exercised by the personal representative of the
Participant’s estate during the time period specified in the stock option
agreement.

     

    (g) If a
Participant’s employment or services is terminated by the Company for Cause, the
Participant’s Options shall terminate as of the date of the
misconduct.

     

     

    
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    7. Restricted
Stock Awards.

     

    (a)
Whenever the Committee deems it appropriate to grant a Restricted Stock Award,
notice shall be given to the Participant stating the number of shares of
Restricted Stock for which the Award is granted and the terms and conditions to
which the Award is subject. This notice, when accepted in writing by the
Participant, shall become an Award agreement between the Company and the
Participant. Certificates representing the shares shall be issued in the name of
the Participant, subject to the restrictions imposed by the Plan and the
Committee. A Restricted Stock Award may be made by the Committee in its
discretion without cash consideration.

     

    (b) The
Committee may place such restrictions on the transferability and vesting of
Restricted Stock as the Committee deems appropriate, including restrictions
relating to continued employment and financial performance goals. Without
limiting the foregoing, the Committee may provide performance or Change of
Control or Corporate Change acceleration parameters under which all, or a
portion, of the Restricted Stock will vest on the Company’s achievement of
established performance objectives. Restricted Stock may not be sold, assigned,
transferred, disposed of, pledged, hypothecated or otherwise encumbered until
the restrictions on such shares shall have lapsed or shall have been removed
pursuant to subsection (c) below.

     

    (c) The
Committee may provide in a Restricted Stock Award, or subsequently, that the
restrictions will lapse if a Change of Control or Corporate Change occurs. The
Committee may at any time, in its sole discretion, accelerate the time at which
any or all restrictions will lapse or may remove restrictions on Restricted
Stock as it deems appropriate.  

     

    (d) A
Participant shall hold shares of Restricted Stock subject to the restrictions
set forth in the Award agreement and in the Plan. In other respects, the
Participant shall have all the rights of a shareholder with respect to the
shares of Restricted Stock, including, but not limited to, the right to vote
such shares and the right to receive all cash dividends and other distributions
paid thereon. Certificates representing Restricted Stock shall bear a legend
referring to the restrictions set forth in the Plan and the Participant’s Award
agreement. If stock dividends are declared on Restricted Stock, such stock
dividends or other distributions shall be subject to the same restrictions as
the underlying shares of Restricted Stock.

     

    8. Method
of Exercise of Options.

     

    (a)
Options may be exercised by giving written notice of the exercise to the
Company, stating the number of shares the Participant has elected to purchase
under the Option. Such notice shall be effective only if accompanied by the
exercise price in full in cash; provided that, if the terms of an Option so
permit, the Participant may (i) deliver Company Stock that the Participant
has owned for at least six months (valued at Fair Market Value on the date of
exercise), or (ii) exercise any applicable net exercise provision contained
therein. Unless otherwise specifically provided in the Option, any payment of
the exercise price paid by delivery of Company Stock acquired directly or
indirectly from the Company shall be paid only with shares of Company Stock that
have been held by the Participant for more than six months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes).

     

    (b)
Notwithstanding anything herein to the contrary, Awards shall always be granted
and exercised in such a manner as to conform to the provisions of Rule
16b-3.

     

    9. Applicable
Withholding Taxes. Each Participant shall agree, as a condition of
receiving an Award, to pay to the Company, or make arrangements satisfactory to
the Company regarding the payment of, all Applicable Withholding Taxes with
respect to the Award. Until the Applicable Withholding Taxes have been paid or
arrangements satisfactory to the Company have been made, no stock certificates
(or, in the case of Restricted Stock, no stock certificates free of a
restrictive legend) shall be issued to the Participant. As an alternative to
making a cash payment to the Company to satisfy Applicable Withholding Tax
obligations, the Committee may establish procedures permitting the Participant
to elect to (a) deliver shares of already owned Company Stock (subject to
such restrictions as the Committee may establish, including a requirement that
any shares of Company Stock so delivered shall have been held by the Participant
for not less than six months) or (b) have the Company retain that number of
shares of Company Stock that would satisfy all or a specified portion of the
Applicable Withholding Taxes. Any such election shall be made only in accordance
with procedures established by the Committee and in accordance with Rule
16b-3.

     

    10. Nontransferability
of Awards.

     

    (a) In
general, Awards, by their terms, shall not be transferable by the Participant
except by will or by the laws of descent and distribution or except as described
below. Options shall be exercisable, during the Participant’s lifetime, only by
the Participant or by his guardian or legal representative.

     

    (b)
Notwithstanding the provisions of (a) and subject to federal and state
securities laws, the Committee may grant Nonstatutory Stock Options that permit
a Participant to transfer the Options to one or more immediate family members,
to a trust for the benefit of immediate family members, or to a partnership,
limited liability company, or other entity the only partners, members, or
interest-holders of which are among the Participant’s immediate family members.
Consideration may not be paid for the transfer of Options. The transferee of an
Option shall be subject to all conditions applicable to the Option prior to its
transfer. The agreement granting the Option shall set forth the transfer
conditions and restrictions. The Committee may impose on any transferable Option
and on stock issued upon the exercise of an Option such limitations and
conditions as the Committee deems appropriate.

     

     

    
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    11. Termination,
Modification, Change. If not sooner terminated by the Board, this Plan
shall terminate at the close of business on the tenth anniversary of the
Effective Date. No Awards shall be made under the Plan after its termination.
The Board may terminate the Plan or may amend the Plan in such respects as it
shall deem advisable; provided that, if and to the extent required by Rule
16b-3, no change shall be made that increases the total number of shares of
Company Stock reserved for issuance pursuant to Awards granted under the Plan
(except pursuant to Section 12), expands the class of persons eligible to
receive Awards, or materially increases the benefits accruing to Participants
under the Plan, unless such change is authorized by the shareholders of the
Company. Notwithstanding the foregoing, the Board may unilaterally amend the
Plan and Awards as it deems appropriate to ensure compliance with Rule 16b-3 and
to cause Incentive Stock Options to meet the requirements of the Code and
regulations thereunder. Except as provided in the preceding sentence, a
termination or amendment of the Plan shall not, without the consent of the
Participant, adversely affect a Participant’s rights under an Award previously
granted to him.

      

    12. Change
in Capital Structure.

     

    (a) In
the event of a stock dividend, stock split or combination of shares, spin-off,
reclassification, recapitalization, merger or other change in the Company’s
capital stock (including, but not limited to, the creation or issuance to
shareholders generally of rights, options or warrants for the purchase of common
stock or preferred stock of the Company), the number and kind of shares of stock
or securities of the Company to be issued under the Plan (under outstanding
Awards and Awards to be granted in the future), the exercise price of options,
and other relevant provisions shall be appropriately adjusted by the Committee,
whose determination shall be binding on all persons. If the adjustment would
produce fractional shares with respect to any Award, the Committee may adjust
appropriately the number of shares covered by the Award so as to eliminate the
fractional shares.

     

    (b) In
the event the Company distributes to its shareholders a dividend,
or sells or causes to be sold to a person other than the Company or a
Subsidiary shares of stock in any corporation (a “Spinoff Company”) which,
immediately before the distribution or sale, was a majority owned Subsidiary of
the Company, the Committee shall have the power, in its sole discretion, to make
such adjustments as the Committee deems appropriate. The Committee may make
adjustments in the number and kind of shares or other securities to be issued
under the Plan (under outstanding Awards and Awards to be granted in the
future), the exercise price of Options, and other relevant provisions, and,
without limiting the foregoing, may substitute securities of a Spinoff Company
for securities of the Company. The Committee shall make such adjustments as it
determines to be appropriate, considering the economic effect of the
distribution or sale on the interests of the Company’s shareholders and the
Participants in the businesses operated by the Spinoff Company, and subject to
the proviso that any such adjustments or new options shall not be made or
granted, respectively, that would result in subjecting the Plan to variable plan
accounting treatment. The Committee’s determination shall be binding on all
persons. If the adjustment would produce fractional shares with respect to any
Award, the Committee may adjust appropriately the number of shares covered by
the Award so as to eliminate the fractional shares.

     

    (c) To
the extent required to avoid a charge to earnings for financial accounting
purposes, adjustments made by the Committee pursuant to this Section 12 to
outstanding Awards shall be made so that both (i) the aggregate intrinsic
value of an Award immediately after the adjustment is not greater than or less
than the Award’s aggregate intrinsic value before the adjustment and
(ii) the ratio of the exercise price per share to the market value per
share is not reduced.

     

    (d)
Notwithstanding anything in the Plan to the contrary, the Committee may take the
foregoing actions without the consent of any Participant, and the Committee’s
determination shall be conclusive and binding on all persons for all purposes.
The Committee shall make its determinations consistent with Rule 16b-3 and the
applicable provisions of the Code.

     

    13. Change
of Control. In the event of a Change of Control or Corporate Change, the
Committee may take such actions with respect to Awards as the Committee deems
appropriate. These actions may include, but shall not be limited to, the
following:

     

    (a) At
the time the Award is made, provide for the acceleration of the vesting schedule
relating to the exercise or realization of the Award so that the Award may be
exercised or realized in full on or before a date initially fixed by the
Committee;

      

    (b)
Provide for the purchase or settlement of any such Award by the Company for any
amount of cash equal to the amount which could have been obtained upon the
exercise of such Award or realization of a Participant’s rights had such Award
been currently exercisable or payable;

     

    (c) Make
adjustments to Awards then outstanding as the Committee deems appropriate to
reflect such Change of Control or Corporate Change; provided, however, that to
the extent required to avoid a charge to earnings for financial accounting
purposes, such adjustments shall be made so that both (i) the aggregate
intrinsic value of an Award immediately after the adjustment is not greater than
or less than the Award’s aggregate intrinsic value before the Award and
(ii) the ratio of the exercise price per share to the market value per
share is not reduced; or

     

    (d) Cause
any such Award then outstanding to be assumed, or new rights substituted
therefore, by the acquiring or surviving legal entity in such Change of Control
or Corporate Change.

     

    
       

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    14. Administration
of the Plan.

     

    (a) The
Plan shall be administered by the Committee, who shall be appointed by the
Board. The Board may designate the Compensation Committee of the Board, or a
subcommittee of the Compensation Committee, to be the Committee for purposes of
the Plan. If and to the extent required by Rule 16b-3, all members of the
Committee shall be “Non-Employee Directors” as that term is defined in Rule
16b-3, and the Committee shall be comprised solely of two or more “outside
directors” as that term is defined for purposes of Code section 162(m). If any
member of the Committee fails to qualify as an “outside director” or (to the
extent required by Rule 16b-3) a “Non-Employee Director,” such person shall
immediately cease to be a member of the Committee and shall not take part in
future Committee deliberations. The Board of Directors may from time to time may
appoint members of the Committee and fill vacancies, however caused, in the
Committee.

     

    (b) The
Committee shall have the authority to impose such limitations or conditions upon
an Award as the Committee deems appropriate to achieve the objectives of the
Award and the Plan. Without limiting the foregoing and in addition to the powers
set forth elsewhere in the Plan, the Committee shall have the power and complete
discretion to determine (i) which eligible persons shall receive an Award
and the nature of the Award, (ii) the number of shares of Company Stock to
be covered by each Award, (iii) whether Options shall be Incentive Stock
options or Nonstatutory Stock Options, (iv) the Fair Market Value of
Company Stock, (v) the time or times when an Award shall be granted,
(vi) whether an Award shall become vested over a period of time, according
to a performance-based vesting schedule or otherwise, and when it shall be fully
vested, (vii) the terms and conditions under which restrictions imposed
upon an Award shall lapse, (viii) whether a Change of Control or Corporate
Change exists, (ix) the terms of incentive programs, performance criteria
and other factors relevant to the issuance of Incentive Stock or the lapse of
restrictions on Restricted Stock or Options, (x) when Options may be
exercised, (xi) whether to approve a Participant’s election with respect to
Applicable Withholding Taxes, (xii) conditions relating to the length of
time before disposition of Company Stock received in connection with an Award is
permitted, (xiii) notice provisions relating to the sale of Company Stock
acquired under the Plan, and (xiv) any additional requirements relating to
Awards that the Committee deems appropriate. Notwithstanding the foregoing, no
“tandem stock options” (where two stock options are issued together and the
exercise of one option affects the right to exercise the other option) may be
issued in connection with Incentive Stock Options.

     

    (c) The
Committee shall have the power to amend the terms of previously granted Awards
so long as the terms as amended are consistent with the terms of the Plan and,
where applicable, consistent with the qualification of an option as an Incentive
Stock Option. The consent of the Participant must be obtained with respect to
any amendment that would adversely affect the Participant’s rights under the
Award, except that such consent shall not be required if such amendment is for
the purpose of complying with Rule 16b-3 or any requirement of the Code
applicable to the Award.

     

    (d) The
Committee may adopt rules and regulations for carrying out the Plan. The
Committee shall have the express discretionary authority to construe and
interpret the Plan and the Award agreements, to resolve any ambiguities, to
define any terms, and to make any other determinations required by the Plan or
an Award agreement. The interpretation and construction of any provisions of the
Plan or an Award agreement by the Committee shall be final and conclusive. The
Committee may consult with counsel, who may be counsel to the Company, and shall
not incur any liability for any action taken in good faith in reliance upon the
advice of counsel.

      

    (e) A
majority of the members of the Committee shall constitute a quorum, and all
actions of the Committee shall be taken by a majority of the members present.
Any action may be taken by a written instrument signed by all of the members,
and any action so taken shall be fully effective as if it had been taken at a
meeting.

     

    15. Issuance
of Company Stock. The Company shall not be required to issue or deliver
any certificate for shares of Company Stock before (i) the admission of
such shares to listing on any stock exchange on which Company Stock may then be
listed, (ii) receipt of any required registration or other qualification of
such shares under any state or federal securities law or regulation that the
Company’s counsel shall determine is necessary or advisable, and (iii) the
Company shall have been advised by counsel that all applicable legal
requirements have been complied with. The Company may place on a certificate
representing Company Stock any legend required to reflect restrictions pursuant
to the Plan, and any legend deemed necessary by the Company’s counsel to comply
with federal or state securities laws. The Company may require a customary
written indication of a Participant’s investment intent. Until a Participant has
been issued a certificate for the shares of Company Stock acquired, the
Participant shall possess no shareholder rights with respect to the
shares.

     

    16. Rights
Under the Plan. Title to and beneficial ownership of all benefits
described in the Plan shall at all times remain with the Company. Participation
in the Plan and the right to receive payments under the Plan shall not give a
Participant any proprietary interest in the Company or any Affiliate or any of
their assets. No trust fund shall be created in connection with the Plan, and
there shall be no required funding of amounts that may become payable under the
Plan. A Participant shall, for all purposes, be a general creditor of the
Company. The interest of a Participant in the Plan cannot be assigned,
anticipated, sold, encumbered or pledged and shall not be subject to the claims
of his creditors.

     

    17. Beneficiary.
A Participant may designate, on a form provided by the Committee, one or more
beneficiaries to receive any payments under Awards of Restricted Stock or
Incentive Stock after the Participant’s death. If a Participant makes no valid
designation, or if the designated beneficiary fails to survive the Participant
or otherwise fails to receive the benefits, the Participant’s beneficiary shall
be the first of the following persons who survives the Participant: (a) the
Participant’s surviving spouse, (b) the Participant’s surviving
descendants, per
stirpes, or (c) the personal representative of the Participant’s
estate.

     

    18. Notice.
All notices and other communications required or permitted to be given under
this Plan shall be in writing and shall be deemed to have been duly given if
delivered personally or mailed first class, postage prepaid, as follows:
(a) if to the Company—at its principal business address to the attention of
the Secretary; (b) if to any Participant—at the last address of the
Participant known to the sender at the time the notice or other communication is
sent.

     

    19. Interpretation.
The terms of this Plan and Awards granted pursuant to the Plan are subject to
all present and future regulations and rulings of the Secretary of the Treasury
relating to the qualification of Incentive Stock Options under the Code or
compliance with Code section 162(m), to the extent applicable, and they are
subject to all present and future rulings of the Securities and Exchange
Commission with respect to Rule 16b-3. If any provision of the Plan or an Award
conflicts with any such regulation or ruling, to the extent applicable, the
Committee shall cause the Plan to be amended, and shall modify the Award, so as
to comply, or if for any reason amendments cannot be made, that provision of the
Plan and/or the Award shall be void and of no effect.

     

    
6Exhibit 4.17

THIRD SUPPLEMENTAL INDENTURE

Third
Supplemental Indenture (this “Supplemental Indenture”), dated as of March
23, 2009, among Dolgen I, Inc.; Dolgen II, Inc.; Dolgen III, Inc.; DG Strategic
I, LLC; DG Strategic II, LLC; and DG Strategic III, LLC (each hereinafter
referred to as the “Guaranteeing Subsidiary”), each a Tennessee
corporation or Tennessee limited liability company, as applicable, and each a
subsidiary of Dollar General Corporation, a Tennessee Corporation (the
“Issuer”), and U.S. Bank National Association, as successor trustee (the
“Trustee”).

W I T N E S S E T H

WHEREAS,
each of Dollar General Corporation, Buck Acquisition Corp., and the Guarantors
(as defined in the Indenture referred to below) has heretofore executed and
delivered to the Trustee an indenture (the “Indenture”), dated as of July
6, 2007, providing for the issuance of an unlimited aggregate principal amount
of 10.625% Senior Notes due 2015 (the “Notes”);

WHEREAS,
the Indenture provides that under certain circumstances the Guaranteeing
Subsidiary shall execute and deliver to the Trustee a supplemental indenture
pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee
all of the Issuer’s Obligations under the Notes and the Indenture on the terms
and conditions set forth herein and under the Indenture (the
“Guarantee”); and

WHEREAS,
pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute
and deliver this Supplemental Indenture.

NOW
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties mutually
covenant and agree for the equal and ratable benefit of the Holders of the Notes
as follows:

(1)

Capitalized
Terms.  Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture.

(2)

Agreement
to Guarantee.  The Guaranteeing Subsidiary hereby agrees as
follows:

(a)

Along
with all Guarantors named in the Indenture, to jointly and severally
unconditionally guarantee to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of the Indenture, the Notes or the
obligations of the Issuer hereunder or thereunder, that:

(i)

the
principal of and interest, premium and Special Interest, if any, on the Notes
will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
on the Notes, if any, if lawful, and all other obligations of the Issuer to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and

(ii)

in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.  Failing payment when due of any
amount so 

2

guaranteed
or any performance so guaranteed for whatever reason, the Guarantors and the
Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same
immediately.  This is a guarantee of payment and not a guarantee of
collection.

(b)

The
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or the Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, the recovery of any judgment
against the Issuer, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor.

(c)

The
following is hereby waived:  diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Issuer, any right to require a proceeding first against the Issuer, protest,
notice and all demands whatsoever.

(d)

This
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes, the Indenture and this Supplemental
Indenture, and the Guaranteeing Subsidiary accepts all obligations of a
Guarantor under the Indenture.

(e)

If
any Holder or the Trustee is required by any court or otherwise to return to the
Issuer, the Guarantors (including the Guaranteeing Subsidiary), or any
custodian, trustee, liquidator or other similar official acting in relation to
either the Issuer or the Guarantors, any amount paid either to the Trustee or
such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.

(f)

The
Guaranteeing Subsidiary shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.

(g)

As
between the Guaranteeing Subsidiary, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 of the Indenture for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guaranteeing Subsidiary for the purpose of this Guarantee.

(h)

The
Guaranteeing Subsidiary shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under this Guarantee.

(i)

Pursuant
to Section 10.02 of the Indenture, after giving effect to all other contingent
and fixed liabilities that are relevant under any applicable Bankruptcy or
fraudulent conveyance laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under
Article 10 of the Indenture, this new Guarantee shall be limited to the maximum
amount permissible such that the obligations of such Guaranteeing Subsidiary
under this Guarantee will not constitute a fraudulent transfer or
conveyance.

3

(j)

This
Guarantee shall remain in full force and effect and continue to be effective
should any petition be filed by or against the Issuer for liquidation,
reorganization, should the Issuer become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of the Issuer’s assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Notes are, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee on the Notes and Guarantee, whether as a “voidable preference”,
“fraudulent transfer” or otherwise, all as though such payment or performance
had not been made.  In the event that any payment or any part thereof, is
rescinded, reduced, restored or returned, the Note shall, to the fullest extent
permitted by law, be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

(k)

In
case any provision of this Guarantee 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.

(l)

This
Guarantee shall be a general senior obligation of such Guaranteeing Subsidiary,
ranking equally in right of payment with all existing and future senior
Indebtedness of the Guaranteeing Subsidiary but, to the extent of the value of
the collateral, will be effectively senior to all of the Guaranteeing
Subsidiary’s unsecured senior Indebtedness.  The Guarantees will be senior
in right of payment to all existing and future Subordinated Indebtedness of each
Guarantor.  The Notes will be structurally subordinated to Indebtedness and
other liabilities of Subsidiaries of the Issuer that do not Guarantee the Notes,
if any.

(m)

Each
payment to be made by the Guaranteeing Subsidiary in respect of this Guarantee
shall be made without set-off, counterclaim, reduction or diminution of any kind
or nature.

(3)

Execution
and Delivery.  The Guaranteeing Subsidiary agrees that the Guarantee
shall remain in full force and effect notwithstanding the absence of the
endorsement of any notation of such Guarantee on the Notes.

(4)

Merger,
Consolidation or Sale of All or Substantially All Assets.

(a)

Except
as otherwise provided in Section 5.01(c) of the Indenture, the Guaranteeing
Subsidiary may not consolidate or merge with or into or wind up into (whether or
not the Issuer or Guaranteeing Subsidiary is the surviving corporation), or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets, in one or more related
transactions, to any Person unless:

(i)

such
Guarantor is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than such Guarantor) or to which such
sale, assignment, transfer, lease, conveyance or other disposition will have
been made is a corporation, partnership, limited partnership, limited liability
corporation or trust organized or existing under the laws of the jurisdiction of
organization of such Guarantor, as the case may be, or the laws of the United
States, any state thereof, the District of Columbia, or any territory thereof
(such Guarantor or such Person, as the case may be, being herein called the
“Successor Person”);

4

(ii)

the
Successor Person, if other than such Guarantor, expressly assumes all the
obligations of such Guarantor under the Indenture and such Guarantor’s related
Guarantee pursuant to supplemental indentures or other documents or instruments
in form reasonably satisfactory to the Trustee;

(iii)

immediately
after such transaction, no Default exists; and

(iv)

the
Issuer shall have delivered to the Trustee an Officer’s Certificate, each
stating that such consolidation, merger or transfer and such supplemental
indentures, if any, comply with the Indenture; or

(v)

the
transaction is made in compliance with Section 4.09 of the Indenture.

(b)

Subject
to certain limitations described in the Indenture, the Successor Person will
succeed to, and be substituted for, such Guarantor under the Indenture and such
Guarantor’s Guarantee.  Notwithstanding the foregoing, any Guarantor may
(i) merge into or transfer all or part of its properties and assets to
another Guarantor or the Issuer, (ii) merge with an Affiliate of the Issuer
solely for the purpose of reincorporating the Guarantor in the United States,
any state thereof, the District of Columbia or any territory thereof or (iii)
convert into a corporation, partnership, limited partnership, limited liability
corporation or trust organized or existing under the laws of the jurisdiction of
organization of such Guarantor.

(5)

Releases.

The
Guarantee of the Guaranteeing Subsidiary shall be automatically and
unconditionally released and discharged, and no further action by the
Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release
of the Guaranteeing Subsidiary’s Guarantee, upon:

(1)

(A)
 any sale, exchange or transfer (by merger or otherwise) of the Capital
Stock of such Guarantor (including any sale, exchange or transfer), after which
the applicable Guarantor is no longer a Restricted Subsidiary or all or
substantially all the assets of such Guarantor which sale, exchange or transfer
is made in compliance with the applicable provisions of this Indenture;

(B)

the
release or discharge of the guarantee by such Guarantor of the Senior Credit
Facilities or such other guarantee that resulted in the creation of such
Guarantee, except a discharge or release by or as a result of payment under such
guarantee;

(C)

the
designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted
Subsidiary in compliance with Section 4.07 of the Indenture; or

(D)

the
exercise by Issuer of its Legal Defeasance option or Covenant Defeasance option
in accordance with Article 8 of the Indenture or the Issuer’s obligations under
the Indenture being discharged in accordance with the terms of the Indenture;
and

(2)

such
Guarantor delivering to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for in this
Indenture relating to such transaction have been complied with.

(6)

No
Recourse Against Others.  No director, officer, employee, incorporator
or stockholder of the Guaranteeing Subsidiary shall have any liability for any
obligations of the Issuer or the Guarantors (including the Guaranteeing
Subsidiary) under the Notes, any Guarantees, the Indenture or 

5

this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation.  Each Holder by accepting Notes
waives and releases all such liability.  The waiver and release are part of
the consideration for issuance of the Notes.

(7)

Governing
Law.  THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(8)

Counterparts.
 The parties may sign any number of copies of this Supplemental Indenture.
 Each signed copy shall be an original, but all of them together represent
the same agreement.

(9)

Effect
of Headings.  The Section headings herein are for convenience only and
shall not affect the construction hereof.

(10)

The
Trustee.  The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Supplemental Indenture
or for or in respect of the recitals contained herein, all of which recitals are
made solely by the Guaranteeing Subsidiary.

(11)

Subrogation.
 The Guaranteeing Subsidiary shall be subrogated to all rights of Holders
of Notes against the Issuer in respect of any amounts paid by the Guaranteeing
Subsidiary pursuant to the provisions of Section 2 hereof and Section 10.01 of
the Indenture; provided that, if an Event of Default has occurred and is
continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or
receive any payments arising out of, or based upon, such right of subrogation
until all amounts then due and payable by the Issuer under the Indenture or the
Notes shall have been paid in full.

(12)

Benefits
Acknowledged.  The Guaranteeing Subsidiary’s Guarantee is subject to
the terms and conditions set forth in the Indenture.  The Guaranteeing
Subsidiary acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Indenture and this Supplemental
Indenture and that the guarantee and waivers made by it pursuant to this
Guarantee are knowingly made in contemplation of such benefits.

(13)

Successors.
 All agreements of the Guaranteeing Subsidiary in this Supplemental
Indenture shall bind its Successors, except as otherwise provided in Section
2(k) hereof or elsewhere in this Supplemental Indenture.  All agreements of
the Trustee in this Supplemental Indenture shall bind its successors.

[SIGNATURE PAGES FOLLOW]

6

IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to
be duly executed, all as of the date first above written.

				
	
 
	
DOLGEN I, INC.

	
 
	
 
	
 

	
 
	
By:
	/s/ Wade Smith

	
 
	
 
	
Name:
	
Wade Smith

	
 
	
 
	
Title:
	
Treasurer

				
	
 
	
DOLGEN II, INC.

	
 
	
 
	
 

	
 
	
By:
	/s/ Wade Smith

	
 
	
 
	
Name:
	
Wade Smith

	
 
	
 
	
Title:
	
Treasurer

				
	
 
	
DOLGEN III, INC.

	
 
	
 
	
 

	
 
	
By:
	/s/ Wade Smith

	
 
	
 
	
Name:
	
Wade Smith

	
 
	
 
	
Title:
	
Treasurer

					
	
 
	
DG STRATEGIC I, LLC

	
 
	
 
	
 

	
 
	
By:
	
Dollar General Corporation, Sole Member

	
 
	
 
	
 

	
 
	
 
	
By:
	/s/ Wade Smith

	
 
	
 
	
Name:
	
Wade Smith

	
 
	
 
	
Title:
	
Treasurer

 

					
	
 
	
DG STRATEGIC II, LLC

	
 
	
 
	
 

	
 
	
By:
	
Dollar General Corporation, Sole Member

	
 
	
 
	
 

	
 
	
 
	
By:
	/s/ Wade Smith

	
 
	
 
	
Name:
	
Wade Smith

	
 
	
 
	
Title:
	
Treasurer

					
	
 
	
DG STRATEGIC III, LLC

	
 
	
 
	
 

	
 
	
By:
	
Dollar General Corporation, Sole Member

	
 
	
 
	
 

	
 
	
 
	
By:
	/s/ Wade Smith

	
 
	
 
	
Name:
	
Wade Smith

	
 
	
 
	
Title:
	
Treasurer

7

				
	
 
	
U.S. BANK NATIONAL ASSOCIATION,

	
 
	
as Successor Trustee

	
 
	
 
	
 

	
 
	
By:
	/s/ Wally Jones

	
 
	
 
	
Name:
	
Wally Jones

	
 
	
 
	
Title:
	
Vice President

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