Document:

Exhibit 10.3

 

EXECUTION VERSION

 

 

YINTECH INVESTMENT HOLDINGS LIMITED

 

 

PRE-IPO RESTRICTED SHARE UNIT SCHEME1

 

(approved and adopted by a board resolution passed on 12 February, 2016)

 

(amended and restated as of 11 November, 2015)

 

 

1   Assumed from Win Yin Financial And Information Service Company Limited (see Explanatory Note on p. 1).

 

 

Table of Contents

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.
    	
 
    	
DEFINITIONS AND INTERPRETATION
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
PURPOSES AND OBJECTIVES OF THIS SCHEME
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
CONDITIONS
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
SIZE OF THIS SCHEME
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
DURATION AND ADMINISTRATION OF THIS SCHEME
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
GRANT OF AWARDS
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
VESTING OF AWARDS
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
8.
    	
 
    	
ACCELERATION OF VESTING
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
 
    	
LAPSE OF AWARDS
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
 
    	
CANCELLATION OF AWARDS
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
RIGHTS ATTACHED TO AWARDS AND SHARES
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.
    	
 
    	
ASSIGNMENT OF AWARDS
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
13.
    	
 
    	
REORGANIZATION OF CAPITAL STRUCTURE
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
14.
    	
 
    	
DISPUTES
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15.
    	
 
    	
ALTERATION OR AMENDMENT OF THIS SCHEME
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
16.
    	
 
    	
TERMINATION
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
17.
    	
 
    	
MISCELLANEOUS
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
18.
    	
 
    	
GOVERNING LAW
    	
 
    	
10
    

 

i

 

Explanatory Note:  In 2015, Yintech Investment Holdings Limited (“Yintech”) initiated a series of transactions constituting a reorganization (the “Reorganization”), pursuant to which a majority of the People’s Republic of China (the “PRC”) subsidiaries of Win Yin Financial And Information Service Company Limited (“Win Yin”) became the wholly owned subsidiaries of Shanghai Qian Zhong Su Investment Co., Ltd., Yintech’s wholly owned PRC subsidiary. In connection with the recently completed reorganization,  Yintech has assumed the Win Yin’s Pre-IPO Restricted Share Unit Scheme (the “Scheme”), which was amended and restated to reflect the intent of the parties to the Reorganization that the RSUs issued and outstanding under the Scheme be adjusted to relate to securities of Yintech Investment Holding Limited.  Further, on the Assumption Date and in connection with the Reorganization, Yintech assumed the Scheme and all rights, duties and obligations thereunder.

 

DEFINITIONS AND INTERPRETATION

 

1.1                               In this Scheme, save where the context otherwise requires, the following expressions have the respective meanings set opposite to them:

 

	
“Adoption Date”
    	
 
    	
means 13 January, 2015, the date on which this   Scheme is duly approved and adopted by a resolution of the Shareholders of   the Company;
    
	
 
    	
 
    	
 
    
	
“Articles”
    	
 
    	
means the memorandum and articles of association of   the Company as amended from time to time;
    
	
 
    	
 
    	
 
    
	
“Assumption Date”
    	
 
    	
means 18 November, 2015, the date on which the   Scheme was assumed by Yintech Investment Holding Limited;
    
	
 
    	
 
    	
 
    
	
“Auditors”
    	
 
    	
means the auditors for the time being of the   Company;
    
	
 
    	
 
    	
 
    
	
“Award(s)”
    	
 
    	
means award(s) of RSUs granted to a Grantee   pursuant to this Scheme;
    
	
 
    	
 
    	
 
    
	
“Board”
    	
 
    	
means the board of directors of the Company;
    
	
 
    	
 
    	
 
    
	
“Board Designee” 
    	
 
    	
means a member of the Board designated by the Board to make such   determinations as are set forth hereunder, provided that no member of the   Board shall make any such determination involving any Award held by such   Board member.
    
	
 
    	
 
    	
 
    
	
“Business Associate”
    	
 
    	
means any advisors, consultants, distributors,   contractors, contract manufacturers, agents, customers, business partners,   joint venture business partners or service providers of any member of the   Group;
    
	
 
    	
 
    	
 
    
	
“Company”
    	
 
    	
prior to the Assumption Date, means Win Yin   Financial and Information Service Company Limited, an exempted company   incorporated on November 18, 2013 and existing under the laws of Cayman   Islands with limited liability, and on and after the Assumption Date means   Yintech Investment Holdings Limited;
    
	
 
    	
 
    	
 
    
	
“Director”
    	
 
    	
means any director (including executive director,   non-executive director and independent non-executive director) of any member   of the Group from time to time;
    
	
 
    	
 
    	
 
    
	
“Eligible Person(s)”
    	
 
    	
means any Director, Employee or Business Associate   who the Board considers, in its sole discretion, has contributed or will   contribute to the Group;
    
	
 
    	
 
    	
 
    
	
“Employee”
    	
 
    	
means any employee or officer of any member of the   Group;
    

 

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“Grantee(s)”
    	
 
    	
means the Selected Person(s) who have accepted   the grant(s) of Award(s) by the Board pursuant to this Scheme;
    
	
 
    	
 
    	
 
    
	
“Group”
    	
 
    	
the Company and its Subsidiaries;
    
	
 
    	
 
    	
 
    
	
“PRC”
    	
 
    	
means the People’s Republic of China, except where   the context requires, references in this Scheme to “PRC” do not apply to   Taiwan, the Macau Special Administrative Region and the Hong Kong Special   Administrative Region;
    
	
 
    	
 
    	
 
    
	
“RSU(s)”
    	
 
    	
means restricted share unit(s), a contingent right   to receive either Share(s) or an equivalent value in cash with reference   to the market value of the Share(s) on or about the date of vesting, as   determined by the Board in its sole discretion;
    
	
 
    	
 
    	
 
    
	
“RSU Trustee”
    	
 
    	
means a professional trustee, who is an independent   third party, appointed by the Board to assist with the administration and   vesting of Awards granted pursuant to this Scheme;
    
	
 
    	
 
    	
 
    
	
“Selected Person(s)”
    	
 
    	
means Eligible Person(s) selected by the Board   to receive the Award(s) under the Scheme at its discretion;
    
	
 
    	
 
    	
 
    
	
“Scheme”
    	
 
    	
means this Pre-IPO Restricted Share Unit Scheme in   its present or any amended form;
    
	
 
    	
 
    	
 
    
	
“Shareholder”
    	
 
    	
means a holder of shares of the Company;
    
	
 
    	
 
    	
 
    
	
“Shares”
    	
 
    	
means ordinary shares of US$0.0001 each in the   capital of the Company (or of such other nominal amount as shall result from   a sub-division, consolidation, reclassification or reconstruction of the   share capital of the Company from time to time).
    
	
 
    	
 
    	
 
    
	
“Subsidiary(ies)”
    	
 
    	
means any entity in which the Company has at any   time, directly or indirectly, securities or other ownership interests having   ordinary voting power to elect a majority of the board of directors or other   persons performing similar function.
    
	
 
    	
 
    	
 
    
	
“Vesting”
    	
 
    	
means, in relation to an Award, upon fulfillment of   the vesting schedule and vesting criteria (if any), a Grantee becoming   entitled to have the rights attached to the Shares pursuant to this Scheme.   The terms “vest”, “vesting”   and “vested” shall be constructed   accordingly.
    

 

1.2                               Construction of References

 

In this Scheme:

 

(i)                                     any reference to a section is a reference to a section of this Scheme;

 

(ii)                                  any reference to any statute or statutory provision shall be construed as a reference to such statute or statutory provision as respectively amended, consolidated or re-enacted from time to time, or as its operation is modified by any other statute or statutory provision (whether with or without modification) from time to time, and shall include any subsidiary legislation enacted under the relevant statute; and

 

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(iii)                               any reference to a person includes an individual, a body corporate, a partnership, other unincorporated body or association of persons and any state or state agency.

 

1.3                               Interpretation

 

In this Scheme:

 

(i)                                     words importing the plural include the singular and vice versa; and

 

(ii)                                  words importing a gender include every gender.

 

1.4                               Headings

 

The headings are inserted for convenience only and shall not limit, vary, extend or otherwise affect the construction of any provision of this Scheme.

 

2.                                      PURPOSES AND OBJECTIVES OF THIS SCHEME

 

2.1                               The specific objective of this Scheme is to reward the Grantees for their services and contribution to the success of the Group, and to provide incentives to them to further contribute to the Group.

 

2.2                               These rules serve to set out the terms and conditions upon which the incentive arrangements for the Grantees shall operate.

 

3.                                      CONDITIONS

 

3.1                               This Scheme shall be subject to the passing by the shareholder(s) of the Company of a resolution to approve the adoption of this Scheme and to authorize the Board to grant the Award(s) under this Scheme and to allot and issue, procure the transfer of, and otherwise deal with the Shares in connection with the Scheme.

 

4.                                      SIZE OF THIS SCHEME

 

4.1                               Unless otherwise duly approved by the shareholders of the Company, the Shares in aggregate underlying all Awards under this Scheme shall not exceed 12,000,000 Shares (the “RSU Limit”); provided, that subject to the approval of the shareholders of the Company, following the Assumption Date the RSU Limit shall not exceed 20,000,000 Shares.

 

4.2                               The RSU Limit may be adjusted upon the occurrence of such events and in such manner as described in Section 13.

 

5.                                      DURATION AND ADMINISTRATION OF THIS SCHEME

 

5.1                               Subject to the fulfillment of the conditions in Section 3.1 and Section 15, this Scheme shall be valid and effective for a term of 10 years commencing on the Adoption Date (the “Scheme Period”), after which period no further Awards shall be granted or accepted, but the provisions of this Scheme shall remain in full force and effect in order to give effect to the vesting of Awards granted and accepted prior to the expiration of the Scheme Period.

 

5.2                               This Scheme shall be subject to the administration of the Board in accordance with the rules of this Scheme.  The Board has the power to construe and interpret the rules of this Scheme and the terms of the Awards granted hereunder. Any decision of the Board made in accordance with the rules of this Scheme shall be final and binding, provided in each case that such decision is made in accordance with the Articles and any applicable laws.

 

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5.3                               The Board may delegate the authority to administer this Scheme to any one or more Directors.

 

5.4                               The Board will appoint the RSU Trustee to administer the granting and vesting of Awards granted to the Grantees pursuant to this Scheme. Subject to compliance with the laws of the Cayman Islands and the Articles, the Company shall provide such assistance as may be appropriate or necessary to enable the RSU Trustee to satisfy its obligations in connection with the administration and vesting of Awards granted to the Grantees pursuant to this Scheme.

 

No member of the Board shall be personally liable by reason of any contract or other instrument executed by such member or on his behalf in his capacity as a member of the Board nor for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each employee, officer or director of the Company to whom any duty or power relating to the administration or interpretation of the Scheme may be allocated or delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Board) arising out of any act or omission to act in connection with the Scheme unless arising out of such person’s own fraud or bad faith.

 

6.                                      GRANT OF AWARDS

 

6.1                               On and subject to the rules of this Scheme and all applicable laws and other regulations,

 

(i)                                     the Board may, within the Scheme Period, determine the Selected Persons to participate in this Scheme. Unless being so selected, no person shall be entitled to participate in this Scheme. The Board has full discretion to determine, from time to time, the basis of eligibility of any Selected Person for participation in this Scheme and the grant of Awards on the basis of their contribution to the development of the Group or any other factors as the Board deems appropriate.

 

(ii)                                  the Board shall, after the selection process, inform the RSU Trustee of the name(s) of the Selected Person(s), the number of Shares underlying the Award(s) to be granted to each of the Selected Person (s), the vesting schedule of the Award(s) and other terms and conditions (if any) that the Award(s) are subject to as determined by the Board.

 

(iii)                               Subject to limitations and conditions of this Scheme, the RSU Trustee (upon receipt of the notification from the Board) or the Board shall grant to each of the Selected Persons an offer of grant of Award(s) by way of a letter (the “Grant Letter”), subject to the conditions that the Board thinks fit.

 

The Grant Letter shall, among other things, address the following matters:

 

(a)         the Selected Person’s name;

 

(b)         the manner of acceptance of the Award(s) specified in the Grant Letter;

 

(c)          the last date for acceptance by the Selected Person;

 

(d)         the number of Shares underlying the Award;

 

(e)          the vesting schedule and vesting criteria (if any); and

 

(f)           other terms and conditions that the Board may determine at its discretion.

 

The Grant Letter shall attach an acceptance notice (the “Acceptance Notice”).

 

(iv)                              If the Selected Person accepts the offer of grant of Award(s) by signing the Grant Letter, he is required to sign the Acceptance Notice and return it to the Company within the time period and in a manner prescribed in the Grant Letter. Upon the 

 

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receipt from the Selected Person of a duly executed Acceptance Notice, the Award(s) is granted to the Selected Person, who becomes a Grantee in this Scheme.

 

(v)                                 To the extent that the offer of grant of an Award is not accepted by the Selected Person within the time period or in a manner prescribed in the Grant Letter, it shall be deemed that such offer has been irrevocably declined and thus the grant has immediately lapsed.

 

(vi)                              The Board shall not grant any Award to any Selected Person in any of the following circumstances:

 

(a)         the requisite approvals for such grant from any applicable regulatory authorities have not been obtained;

 

(b)         the securities laws or regulations require that a prospectus or other offering documents be issued in respect of the grant of Award(s) or in respect of this Scheme, unless the Board determines otherwise;

 

(c)          the grant would result in a breach by the Group or any of its directors or senior management of any applicable laws, regulations or rules; or

 

(d)         the grant would result in breach of the RSU Limit (as set out in Section 4.1 above) or other rules of this Scheme.

 

(vii)                           the Grantee(s) shall not be required to bear or pay any price or fee for the grant of Award(s).

 

7.                                      VESTING OF AWARDS

 

7.1                               The Board has the sole discretion to determine the vesting schedule and vesting criteria (if any) for any grant of Award(s) to any Grantee, which may also be adjusted and re-determined by the Board from time to time.

 

7.2                               The RSU Trustee shall administer the vesting of Awards granted to each Grantee pursuant to the vesting schedule and vesting criteria (if any) determined by the Board.

 

7.3                               Upon fulfillment or waive of the vesting period and vesting criteria (if any) applicable to each of the Grantees, a vesting notice (the “Vesting Notice”) will be sent to the Grantee by the Board or by the RSU Trustee under the authorization and instruction by the Board confirming (a) the extent to which the vesting period and vesting criteria (if any) have been fulfilled or waived and (b) the number of Shares (and, if applicable, the cash or non-cash income, dividends or distributions and/or the sale proceeds of non-cash and non-scrip distributions in respect of these Shares) or the amount of cash the Grantee will receive.

 

7.4                               The Grantee may be required to execute, after receiving the Vesting Notice, certain documents set out in the Vesting Notice that the Board considers necessary (which may include, without limitation, a certification to the Group that he has complied with all the terms and conditions set out in this Scheme and the Grant Letter).

 

7.5                               Subject to the execution of documents (if any) by the Grantee set out in Section 7.4 above, the Board may decide at its sole discretion to:

 

(i)                                     direct and procure the RSU Trustee to transfer the Shares underlying the Award(s) (and, if applicable, the cash or non-cash income, dividends or distributions and/or the 

 

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sale proceeds of non-cash and non-scrip distributions in respect of these Shares) to the Grantee or its wholly owned entity; or

 

(ii)                                  pay, or direct and procure the RSU Trustee to pay, to the Grantee in cash an amount which is equivalent to the value of the Shares (and, if applicable, the cash or non-cash income, dividends or distributions and/or the sale proceeds of non-cash and non-scrip distributions in respect of these Shares) set out in Section 7.5(i) above.

 

Unless otherwise determined by the Board, in the event that the Grantee fails to execute the required documents (if any) within the time period set out in the Vesting Notice, the vested Shares will lapse.

 

8.                                      ACCELERATION OF VESTING

 

The Board has the sole discretion to determine, at any time, to accelerate the vesting of any Award granted to any Grantee for various considerations.

 

Rights on a Takeover

 

8.1                               In the event a general offer by way of takeover, merger or otherwise in a like manner (other than by way of scheme of arrangement pursuant to Section 8.2 below) is made to all the shareholders of the Company (or shareholders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert with the offeror) and the general offer to acquire the Shares is approved and the offer becomes or is declared unconditional in all respects prior to the vesting, the Award(s) of the Grantee will vest immediately to be extent specified in a notice given by the Company.

 

Rights on a Scheme of Arrangement

 

8.2                               In the event a general offer for Shares by way of scheme of arrangement is made by any person to all the shareholders of the Company and has been approved by the necessary number of shareholders at the requisite meetings prior to the vesting, the Award(s) of the Grantee will vest immediately to be extent specified in a notice given by the Company.

 

Rights on a Compromise or Arrangement

 

8.3                               If a compromise or arrangement between the Company and its shareholders or creditors is proposed in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies and a notice is given by the Company to its shareholders to convene a general meeting to consider and if thought fit approve such compromise or arrangement prior to the vesting, the Award(s) of the Grantee will vest immediately to be extent specified in a notice given by the Company.

 

Rights on a Voluntarily Winding-up

 

8.4                               In the event that an effective resolution is passed during the Scheme Period for voluntarily winding-up of the Company (other than for the purposes of a reconstruction, amalgamation or scheme of arrangement as set out above) prior to the vesting, the Award(s) of the Grantee will vest immediately to be extent specified in a notice given by the Company provided that all unexercised Awards must be exercised and effected by no later than one business day before the day of the proposed general meeting to be convened for the purpose of considering, and if thought fit, approving a resolution to voluntarily wind-up the Company (or to pass written resolutions of the shareholders to the same effect).

 

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9.                                      LAPSE OF AWARDS

 

9.1                               Without prejudice to other rules under this Scheme, an unvested Award will automatically lapse immediately on the date on which:

 

(i)                                     the Grantee (being an Employee or Director of any member of the Group) ceases to be an employee, an officer or a director by reason of the termination of his employment, appointment or directorship, unless the Board Designee otherwise determines in writing that such unvested Options shall not lapse and will continue to remain valid, such termination notwithstanding;

 

(ii)                                  the Grantee (being an Employee) serves as an employee, director or officer of any other companies that are not a member of the Group, and/or, whether alone or jointly with others, carried on or be concerned or interested, directly or indirectly, whether as shareholder, employee, director, investor, consultant, adviser, partner or agent in any types of business which are in competition with or in opposition to any business of any member of the Group;

 

(iii)                               the Grantee being a Business Associate is under any contract with the Group, such contract is terminated by reason of breach of contract on the part of the Business Associate or the Grantee ceases to be a Business Associate for any other reason; or

 

(iv)                              the Grantee being a Business Associate, appears either to be unable to pay or have no reasonable prospect to be able to pay debts, or has become insolvent, or has made any arrangements or composition with his or her creditors generally, or ceases or threaten to cease to carry on its business, or is wound up, or has an administrator or liquidator being appointed for the whole or any part of its undertaking or assets; or has been convicted of any criminal offence involving integrity or honesty,

 

(v)                                 unless the Board otherwise determines, and other than in the circumstances referred to in Section 9.2 , the date the Grantee ceases to be a Eligible Person as determined by the Board for any reason;

 

(vi)                              the Grantee makes any attempt or takes any action to sell, transfer, assign, charge, mortgage, encumber, hedge or create any interest in favor of any other person over or in relation to any Shares underlying the granted Awards or any interests or benefits in relation to the Awards; and

 

(vii)                           subject to Section 8.4, the Company commences winding-up.

 

9.2                               In the event that a Grantee terminates his employment or service on account of incapacitation or death, such Grantee or his personal representative(s) shall be entitled to immediate vesting for 100% of the Awards that remain unvested as of the date of such incapacitation or death.

 

10.                               CANCELLATION OF AWARDS

 

10.1                        The Board may at its sole discretion cancel any Award that has not vested or lapsed, provided that:

 

(i)                                     the Company or its appointees pay to the Grantee an amount equal to the fair value of the Award at the date of the cancellation as determined by the Board, after consultation with an independent financial adviser appointed by the Board;

 

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(ii)                                  the Company or its appointees provides to the Grantee a replacement Award of equivalent value to the Award to be cancelled; or

 

(iii)                               the Board makes any arrangement as the Grantee may agree in order to compensate him for the cancellation of the Award.

 

11.                               RIGHTS ATTACHED TO AWARDS AND SHARES

 

11.1                        A Grantee does not have any contingent interest in any Shares underlying an Award unless and until these Shares are actually transferred to the Grantee from the RSU Trustee. Furthermore, a Grantee may not exercise any voting right in respect of the Shares underlying the Award and, unless otherwise specified by the Board in its sole discretion in the Grant Letter to the Grantee, nor do they have any rights to any cash or non-cash income, dividends or distributions and/or the sale proceeds of non-cash and non-scrip distributions from any Shares underlying the Award.

 

11.2                        Any Shares transferred to a Grantee in respect of any Award shall be subject to the provisions of the Articles and will rank pari passu with the fully paid Shares in issue on the date of the transfer or, if that date falls on a day when the register of members of the Company is closed, the first day of the reopening of the register of members, and accordingly will entitle the holders to participate in all dividends or other distributions paid or made on or after the date of transfer or, if that date falls on a day when the register of members of the Company closed, the first day of the reopening of the register of members.

 

12.                               ASSIGNMENT OF AWARDS

 

12.1                        Awards granted pursuant to this Scheme shall be personal to each Grantee and shall not be assignable or transferrable, except for (i) the transmission of an Award on the death of the Grantee to his personal representatives(s) according to the terms of this Scheme, or (B) the transfer of any Award to any trustee, acting in its capacity as such trustee, of any trust of which the Grantee is a beneficiary. Subject to the above, the Grantees are prohibited from selling, transferring, assigning, charging, mortgaging, encumbering, hedging or creating any interest in favor of any other person over or in relation to any property held by the RSU Trustee on trust for the Grantees, Awards or any interest or benefits therein.

 

13.                               REORGANIZATION OF CAPITAL STRUCTURE

 

13.1                         In the event of an alteration in the capital structure of the Company whilst any RSU has not vested by way of capitalization of profits or reserves, bonus issue, rights issue, open offer, subdivision or consolidation of shares, reduction of the share capital of the Company or otherwise howsoever in accordance with legal requirements and requirements of any stock exchange (other than an issue of Shares as consideration in respect of a transaction to which the Company or any Subsidiary is a party or in connection with any share option, restricted share or other equity incentive schemes of the Group) or in the event of any distribution of the Company’s capital assets to its shareholders on a pro rata basis (whether in cash or in specie) (other than dividends paid out of the net profits attributable to its shareholders for each financial year of the Company), such corresponding alterations (if any) shall be made to the number or nominal amount and type of Shares (or other securities) subject to the RSU so far as unvested as the Auditors or an independent financial adviser approved by the Company shall certify in writing, either generally or as regard any particular Grantee, to have in their opinion, fairly and reasonably satisfied the requirement that such adjustments give a Grantee the same proportion (or rights in respect of the same proportion) of the share capital of the Company as that to which that Grantee was previously entitled. The capacity of the Auditors or the approved independent financial adviser in this section is that of experts and not of arbitrators and their certification shall, in absence of manifest error, be final and binding on 

 

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the Company and the Grantees. The costs of the Auditors or the approved independent financial adviser shall be borne by the Company.

 

13.2                        For the avoidance of doubt, following the date on which the Shares first commence trading on a Stock Exchange the events set forth in Section 13.1 shall include any dividend or other distribution (whether in the form of cash, Shares or other securities), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, issuance of Shares pursuant to the anti-dilution provisions of securities of the Company, or other similar corporate transaction or event affecting the Shares, or of changes in applicable laws, regulations or accounting principles, in each case in respect of which an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Scheme.

 

14.                               DISPUTES

 

Any dispute arising in connection with this Scheme shall be referred to the determination or interpretation of the Board who shall act as experts and not as arbitrators and whose decision shall be final and binding.

 

15.                               ALTERATION OR AMENDMENT OF THIS SCHEME

 

The terms of this Scheme may be altered, amended or waived in any respect by the Board provided that such alteration, amendment or waiver shall not affect any subsisting rights of any Grantee hereunder. Any alteration, amendment or waiver to the Scheme of a material nature shall be approved by the shareholders of the Company. The Board shall have the right to determine whether any proposed alteration, amendment or waiver is material and such determination shall be conclusive.

 

16.                               TERMINATION

 

This Scheme may be terminated at any time prior to the expiry of the Scheme Period by the Board provided that such termination shall not affect any subsisting rights of any Grantee hereunder.  For the avoidance of doubt, no further Awards shall be granted after this Scheme is terminated but in all other respects the provisions of this Scheme shall remain in full force and effect.  No further Award shall be granted after such termination; however, all Awards granted prior to such termination and not vested on the date of termination shall remain valid. In such event, the Board shall notify the RSU Trustee and all Grantees of such termination and how the Shares held by the RSU Trustee on trust and other interests or benefits in relation to the outstanding Awards shall be dealt with.

 

17.                               MISCELLANEOUS

 

17.1                        The Company shall bear the costs of establishing and administering this Scheme. For the avoidance of doubt, the Company shall not be liable for any tax, duty, expense or liability that the Grantee(s) is subject to as a result of his participation in this Scheme, including any sale, purchase, vesting or transfer of the Shares hereunder.

 

17.2                        A Grantee shall be responsible for obtaining any governmental or other official consent or complying with other form(s) of legal, regulatory or judicial requirements that may be required by any country or jurisdiction in order to permit the vesting of his Award. The Company shall not be responsible for any failure by a Grantee to obtain any such consent or for any tax or other liability to which a Grantee may become subject as a result of his participation in this Scheme or the vesting of any Award.

 

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17.3                        Any notice or other communication between any of the Board or the RSU Trustee, and the Grantee(s) shall be given by prepaid post or hand delivery to the respective address as notified from time to time.

 

17.4                        Any notice or other communication shall:

 

(i)                                     if served by the Board or the RSU Trustee by post, be deemed to have been served 24 hours after it was put in the post or, if delivered by hand, be deemed to be served when delivered; and

 

(ii)                                  if served by the Grantee(s), be deemed to have been served when it is actually received by the Board or the RSU Trustee.

 

17.5                        This Scheme shall not confer, directly or indirectly, on any person any legal or equitable rights (other than those constituting the Award(s) themselves) or give rise to any cause of action at law or in equity against the company.

 

17.6                        This Scheme shall not form part of any contract of employment or for services between any member of the Group and any Grantee, and the rights and obligations of any Grantee under the terms of his office or employment or provision of service shall not be affected by his participation in this Scheme or any right he may have to participate in it and this Scheme shall afford such Grantee no additional rights to compensation or damages in consequence of the termination of such office or employment or provision of service for any reason.

 

17.7                        The grant of an Award on a particular basis in any year does not create any right to or expectation of the grant of Awards on the same basis, or at all, in any future year.  Participation in this Scheme does not imply any right to participate, or to be considered for participation in any later operation of this Scheme. Subject to any applicable legislative requirement, any Award will not be regarded as remuneration for pension purposes or for the purposes of calculating payments on termination of employment. By accepting an Award, a Grantee shall be deemed irrevocably to have waived any entitlement, by way of compensation for loss of office or otherwise howsoever, to any sum or other benefit to compensate him for or in respect of any loss of any rights or benefits under any Award then held by him or otherwise in connection with this Scheme.

 

17.8                        The Board may, from time to time, adopt such operational rules as it considers appropriate for the purposes of giving effect to or implementing this Scheme, provided that these rules do not conflict with this Scheme or contravene any of the applicable laws, regulations or rules.

 

17.9                        Each and every provision hereof shall be treated as a separate provision and shall be severally enforceable as such and in the event of any provision or provisions being or becoming unenforceable in whole or in part. To the extent that any provision or provisions are unenforceable they shall be deemed to be deleted from these rules of this Scheme, and any such deletion shall not affect the enforceability of the rules of this Scheme as remain not so deleted.

 

17.10                 This Scheme shall operate subject to the Articles and any applicable law.

 

18.                               GOVERNING LAW

 

The rules of this Scheme shall be governed by and construed in accordance with the laws of the Cayman Islands.

 

10Exhibit 10.4

FORM OF INDEMNIFICATION AGREEMENT

 

YINTECH INVESTMENT HOLDINGS LIMITED

 

This Indemnification Agreement (this “Agreement”), made and entered into as of the      day of       , 20  , by and between Yintech Investment Holdings Limited, an exempted company with limited liability under the laws of Cayman Islands (the “Company”) and           (“Indemnitee”).

 

W I T N E S S E T H:

 

WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors or executive officers unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of the corporation.

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities.

 

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons.

 

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future.

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified.

 

WHEREAS, this Agreement is a supplement to and in furtherance of the memorandum and articles of association of the Company (as may from time to time be supplemented and amended) (the “Memorandum and Articles”) and any resolutions adopted pursuant thereto and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

WHEREAS, Indemnitee does not regard the protection available under the Memorandum and Articles and insurance as adequate in the present 

 

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circumstances, and may not be willing to serve as an officer or director of the Company without adequate protection, and the Company desires Indemnitee to serve in such capacity.  Indemnitee is willing to serve, continue to serve and take on additional service for or on behalf of the Company on the condition that he be so indemnified.

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

ARTICLE 1
 CERTAIN DEFINITIONS

 

(a) As used in this Agreement:

 

“Change of Control” means any one of the following circumstances occurring after the date hereof: (i) there shall have occurred an event required to be reported with respect to the Company in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item or any similar schedule or form) under the Exchange Act, regardless of whether the Company is then subject to such reporting requirement; (ii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) shall have become, without prior approval of the Company’s Board by approval of at least two-thirds of the Continuing Directors, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding voting securities (provided that, for purposes of this clause (ii), the term “person” shall exclude (x) the Company, (y) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (z) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company); (iii) there occurs a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; (iv) all or substantially all the assets of the Company are sold or disposed of in a transaction or series of related transactions; (v) the approval by the stockholders of the Company of a complete liquidation of the Company; or (vi) the Continuing Directors cease for any reason to constitute at least a majority of the members of the Board.

 

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“Continuing Director” means each director on the Board on the date hereof.

 

“Corporate Status” means the status of a person who is or was a director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee or agent of the Company or of any other Enterprise.

 

“Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

“Enterprise” means the Company and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee or agent.

 

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

 

“Expenses” means all direct and indirect costs (including attorneys’ fees, retainers, court costs, transcripts, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses) reasonably incurred in connection with (i) prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise  participating in, a Proceeding or (ii) establishing or enforcing a right to indemnification under this Agreement, the Memorandum and Articles, applicable law or otherwise.  Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent.  For the avoidance of doubt, Expenses, however, shall not include any Liabilities.

 

“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporate law and neither currently is, nor in the five years previous to its selection or appointment has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements) or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

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“Liabilities” means any losses or liabilities, including any judgments, fines, penalties and amounts paid in settlement, arising out of or in connection with any Proceeding (including all interest, assessments and other charges paid or payable in connection with or in respect of any such judgments, fines, penalties or amounts paid in settlement).

 

“Proceeding” means any threatened, pending or completed action, derivative action, suit, claim, counterclaim, cross claim, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether civil (including intentional and unintentional tort claims), criminal, administrative or investigative, including any appeal therefrom, and whether instituted by or on behalf of the Company or any other party, or any inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit or other proceeding hereinabove listed in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of any Corporate Status of Indemnitee, or by reason of any action taken (or failure to act) by him or her or of any action (or failure to act) on his or her part while serving in any Corporate Status.

 

(b)                                 For the purposes of this Agreement:

 

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

 

Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director,  officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to any of the Company’s subsidiaries, affiliates, an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

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Reference to “including” shall mean “including, without limitation,” regardless of whether the words “without limitation” actually appear, references to the words “herein,” “hereof” and “hereunder” and other words of similar import shall refer to this Agreement as a whole and not to any particular paragraph, subparagraph, section, subsection or other subdivision.

 

ARTICLE 2
 SERVICES BY INDEMNITEE

 

Section 2.01.  Services By Indemnitee.  Indemnitee hereby agrees to serve or continue to serve as [for directors] a director of the Company, for so long as Indemnitee is duly elected or appointed or until Indemnitee tenders his or her resignation or is removed. [for officers] an officer of the Company until such time as Indemnitee’s employment is terminated for any reason.

 

ARTICLE 3
 INDEMNIFICATION

 

Section 3.01.  General.  (a) The Company hereby agrees to and shall indemnify Indemnitee and hold Indemnitee harmless from and against any and all Expenses and Liabilities, in either case, actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf by reason of Indemnitee’s Corporate Status, to the fullest extent permitted by applicable law.  The Company’s indemnification obligations set forth in this Section 3.01 shall apply (i) in respect of Indemnitee’s past, present and future service in any Corporate Status and (ii) regardless of whether Indemnitee is serving in any Corporate Status at the time any such Expense or Liability is incurred.

 

For purposes of this Agreement, the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to:

 

(i)                                     to the fullest extent permitted by any provision of the Companies Law (2012 Revision) (the “Companies Law”) or the corresponding provision of any successor statute, and

 

(ii)                                  to the fullest extent authorized or permitted by any amendments to or replacements of the Companies Law adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

 

(b) Witness Expenses.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a witness in any Proceeding to  which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection therewith.

 

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(c) Expenses as a Party Where Wholly or Partly Successful.  Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law, to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her in connection therewith.  If Indemnitee is not wholly successful in such Proceeding, but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall, to the fullest extent permitted by applicable law, indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with each successfully resolved claim, issue or matter.  All such indemnification against Expenses shall be offset by the amount of cash, if any, received by the Indemnitee resulting from his/her success therein.  For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

Section 3.02.  Exclusions.  Notwithstanding any provision of this Agreement and unless Indemnitee ultimately is successful on the merits with respect to any such claim, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

 

(a)                                 for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law, regardless of whether the securities are subject to the requirements of such provisions; or (ii) any reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);

 

(b)                                 except as otherwise provided in Sections 6.01(e), prior to a Change of Control, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law;

 

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(c)                                  to the extent that Indemnitee is indemnified and actually paid other than pursuant to this Agreement;

 

(d)                                 in connection with a judicial action by or in the right of the Company, in respect of any claim, issue or matter as to which the Indemnitee shall have  been adjudicated by final judgment in a court of law to be liable for intentional misconduct in the performance of his duty to the Company unless and only to the extent that any court in which such action was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnification for such Expenses as such court shall deem proper; or

 

(e)                                  for any judgment, fine or penalty which the Company is prohibited by applicable law from paying as indemnification.

 

ARTICLE 4
 ADVANCEMENT OF EXPENSES; DEFENSE OF CLAIMS

 

Section 4.01.  Advances.  Notwithstanding any provision of this Agreement to the contrary, the Company shall advance any Expenses actually and reasonably incurred by Indemnitee in connection with any Proceeding within 10 business days after the receipt by the Company of each statement in writing requesting such advance from time to time, whether prior to or after final disposition of any Proceeding.  Advances shall be unsecured and interest free.  Advances shall be made without regard to Indemnitee’s ability to repay such amounts and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.  Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements in writing to the Company to support the advances claimed.  Any excess of the advanced Expenses over the actual Expenses will be promptly repaid to the Company. To the extent Indemnitee has not requested any advanced payment of Expenses from the Company, Indemnitee shall be entitled to receive reimbursement for the Expenses incurred in connection with a Proceeding from the Company as soon as practicable after Indemnitee makes a written request to the Company for reimbursement.

 

Section 4.02.  Repayment of Advances or Other Expenses.  Indemnitee agrees that Indemnitee shall reimburse the Company for all Expenses advanced by the Company pursuant to Section 4.01, in the event and only to the extent that it shall be determined by final judgment or other final adjudication under the provisions of any applicable law (as to which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee is not entitled to be indemnified by the Company for such Expenses.

 

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Section 4.03.  Defense of Claims.  The Company will be entitled to participate in the Proceeding at its own expense. Upon the delivery of written notice by the Company to Indemnitee, the Company shall be entitled to assume the defense of any Proceeding with counsel consented to by Indemnitee (such consent not to be unreasonably withheld), except for such Proceeding brought by the Company or as to which the Indemnitee has reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee. After delivery of such notice, consent to such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees or expenses of counsel subsequently incurred by Indemnitee with respect to such Proceeding; provided that (i) Indemnitee shall have the right to employ separate counsel in respect of any Proceeding at Indemnitee’s expense and (ii) if (A) the employment of counsel by Indemnitee has  been previously authorized in writing by the Company or (B) Indemnitee shall have reasonably concluded upon the advice of counsel that there is a conflict of interest between the Company and Indemnitee in the conduct of the defense of such Proceeding, then in each such case the fees and expenses of Indemnitee’s counsel shall be at the Company’s expense. Neither party to this Agreement shall settle any Proceeding in any manner that would impose any Expense, judgment, fine, damages, penalty or limitation on Indemnitee without the other party’s written consent. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement.

 

ARTICLE 5  PROCEDURES FOR NOTIFICATION OF AND DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION

 

Section 5.01.  Notification; Request For Indemnification.  (a) As soon as reasonably practicable after receipt by Indemnitee of written notice that he is a party to or a participant (as a witness or otherwise) in any Proceeding or of any other matter in respect of which Indemnitee intends to seek indemnification or advancement of Expenses hereunder, Indemnitee shall provide to the Company written notice thereof, including the nature of and the facts underlying the Proceeding.  The omission by Indemnitee to so notify the Company will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise.

 

(b)                                 As a condition precedent to an Indemnitee’s right to obtain indemnification under this Agreement, Indemnitee shall deliver to the Company a written request for indemnification, including therewith such information as is reasonably available to Indemnitee and reasonably necessary to determine Indemnitee’s entitlement to indemnification hereunder and such information as reasonably requested by the Company.  Such request(s) may be delivered from time to time and at such time(s) as Indemnitee deems appropriate in his or her sole discretion.  Indemnitee’s entitlement to indemnification shall be determined according to Section 5.02 of this Agreement and applicable law.

 

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Section 5.02.  Determination of Entitlement.  (a) Where there has been a written request by Indemnitee for indemnification pursuant to Section 5.01(b), then as soon as is reasonably practicable (but in any event not later than 60 days) after final disposition of the relevant Proceeding, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change of Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee.  If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) business days after such determination.  Indemnitee shall reasonably cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any costs or expenses (including attorneys’ fees and disbursements) actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification).

 

(b)                                 If entitlement to indemnification is to be determined by Independent Counsel pursuant to Section 5.02(a)(ii), such Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected.  If entitlement to indemnification is to be determined by Independent Counsel pursuant to Section 5.02(a)(i)(C) (or if Indemnitee requests that such selection be made by the Board), such Independent Counsel shall be selected by the Company in which case the Company shall give written notice to Indemnitee advising him or her of the identity of the Independent Counsel so selected.  In either event, Indemnitee or the Company, as the case may be, may, within 10 business days after such written notice of selection shall have been received, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 1 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the person so selected shall act as Independent Counsel.  If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such objection

 

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is without merit.  If, within 20 days after the submission by Indemnitee of a written request for indemnification pursuant to Section 5.01(b) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 5.02(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 6.01(a) of this Agreement, the Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

(c)       The Company agrees to pay the reasonable fees and expenses of any Independent Counsel serving under this Agreement.

 

Section 5.03.  Presumptions and Burdens of Proof; Effect of Certain Proceedings.  (a) In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 5.01(b) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.  Neither the failure of any person, persons or entity to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by any person, persons or entity that  Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b)      If the person, persons or entity empowered or selected under Section 5.02 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within the sixty (60) day period referred to in Section 5.02(a), the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to

 

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entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

 

(c)       The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

 

(d)      For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is in good faith reliance on the records or books of account of any Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of such Enterprise in the course of their duties, or on the advice of legal counsel for such Enterprise or on information or records given or reports made to such Enterprise by an independent certified public accountant or by an appraiser or other expert selected by such Enterprise.  The provisions of this Section 5.03(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.

 

(e)       The knowledge and/or actions, or failure to act, of any other director, trustee, partner, managing member, fiduciary, officer, agent or employee of any Enterprise shall not be imputed to Indemnitee for purposes of determining any right to indemnification under this Agreement.

 

ARTICLE 6
 REMEDIES OF INDEMNITEE

 

Section 6.01.  Adjudication or Arbitration.  (a) In the event of any dispute between Indemnitee and the Company hereunder as to entitlement to indemnification or advancement of Expenses (including where (i) a determination is made pursuant to Section 5.02 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 4.01 of this Agreement, (iii) payment of indemnification pursuant to Section 3.01 of this Agreement is not made within ten (10) business days after a determination has been made that Indemnitee is entitled to indemnification, (iv) no determination as to entitlement to indemnification is timely made  pursuant to Section 5.02 of this Agreement and no payment of indemnification is made within ten (10) business days after entitlement is deemed to have been determined pursuant to Section 5.03(b)) or (v) a contribution payment is not made in a timely manner pursuant to Section 8.04 of this Agreement, then Indemnitee shall be entitled to an adjudication by a court of his

 

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or her entitlement to such indemnification, contribution or advancement. Alternatively, in such case, Indemnitee, at his or her option, may seek an award in arbitration to be conducted by the Hong Kong International Arbitration Centre.  The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

(b)      In the event that a determination shall have been made pursuant to Section 5.02(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 6.01 shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 6.01 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 5.02(a) of this Agreement adverse to Indemnitee for any purpose.  If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 6.01, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 4.02 until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).

 

(c)       If a determination shall have been made pursuant to Section 5.02(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 6.01, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(d)      The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 6.01 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

 

(e)       The Company shall indemnify Indemnitee to the fullest extent permitted by law against all Expenses and, if requested by Indemnitee, shall (within ten (10) business days after the Company’s receipt of such written request) advance such Expenses to Indemnitee, which are reasonably incurred by Indemnitee in connection with any judicial proceeding or arbitration brought by Indemnitee for (i) indemnification or advances of Expenses by the Company (or otherwise for the enforcement, interpretation or defense of his or her rights) under this Agreement or any other agreement, including any other indemnification, contribution or advancement agreement, or any provision of the Memorandum and Articles now or hereafter in effect or (ii) recovery or advances under any

 

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directors’ and officers’ liability insurance policy maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, contribution, advancement or insurance recovery, as the case may be.

 

ARTICLE 7
 DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE

 

Section 7.01.  D&O Liability Insurance.  To the extent that the Company maintains a policy or policies of insurance (“D&O Liability Insurance”) providing liability insurance for directors and officers of the Company in their capacities as such (and for any capacity in which any director or officer of the Company serves any other Enterprise at the request of the Company), in respect of acts or omissions occurring while serving in such capacity, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any other director or officer under such policy or policies.

 

Section 7.02.  Evidence of Coverage.  Upon request by Indemnitee, the Company shall provide copies of all policies of D&O Liability Insurance obtained and maintained in accordance with Section 7.01 of this Agreement.  The Company shall promptly notify Indemnitee of any changes in such insurance coverage.

 

ARTICLE 8
 MISCELLANEOUS

 

Section 8.01.  Nonexclusivity of Rights.  The rights of indemnification, contribution and advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled to under applicable law, the Memorandum and Articles, any agreement, a vote of stockholders or a resolution of directors, or otherwise.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

Section 8.02.  Insurance and Subrogation.  (a) If, at the time the Company receives notice of a claim hereunder, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable

 

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as a result of such Proceeding in accordance with the terms of such policies.  The failure or refusal of any such insurer to pay any such amount shall not affect or impair the obligations of the Company under this Agreement.

 

(b)      In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(c)       The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided) hereunder if and to the extent that Indemnitee has actually received such payment under any insurance policy or other indemnity provision.

 

Section 8.03  The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, board of directors’ committee member, employee or agent of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such Enterprise.

 

Section 8.04.  Contribution.  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s). The relative fault of the Company on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 8.04 were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.

 

Section 8.05.  Amendment.  This Agreement may not be modified or amended except by a written instrument executed by or on behalf of each of the parties hereto.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit, restrict or reduce any right of Indemnitee under this

 

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Agreement in respect of any act or omission, or any event occurring, prior to such amendment, alteration or repeal.  To the extent that a change in applicable law, whether by statute or judicial decision limits rights with respect to indemnification, contribution or advancement of Expenses, it is the intent of the parties hereto that the rights with respect to indemnification, contribution or advancement of Expenses in effect prior to such change shall remain in full force and effect to the extent permitted by applicable law.

 

Section 8.06.  Waivers.  The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) by the party entitled to enforce such term only by a writing signed by the party against which such waiver is to be asserted. Unless otherwise expressly provided herein, no delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party hereto of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

 

Section 8.07.  Entire Agreement.  This Agreement and the documents referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are superseded by this Agreement, provided that this Agreement is a supplement to and in furtherance of the Memorandum and Articles and  applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

Section 8.08.  Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:  (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 8.09.  Notices.  All notices, requests, demands and other communications under this Agreement shall be in writing (which may be by facsimile transmission).  All such notices, requests and other communications

 

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shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a business day in the place of receipt.  Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.  The address for notice to a party is as shown on the signature page of this Agreement, or such other address as any party shall have given by written notice to the other party as provided above.

 

Section 8.10.  Binding Effect.  (a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

 

(b)      This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and executors, administrators, personal and legal representatives.  The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all, or a substantial part of the business or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

(c)       The indemnification, contribution and advancement of Expenses provided by, or granted pursuant to this Agreement shall continue during the period Indemnitee is an officer and/or a director of the Company or is or was serving at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding by reason of his former or current capacity at the Company or any other enterprise at the Company’s request, whether or not he is acting or serving in any such capacity at the time any Expense is incurred for which indemnification can be provided under this Agreement.  This Agreement shall inure to the benefit of the heirs, executors, administrators, legatees and assigns of such Indemnitee.

 

Section 8.11.  Governing Law.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to its conflict of laws rules.

 

Section 8.12.  Consent to Jurisdiction.  Except with respect to any arbitration commenced by Indemnitee pursuant to Section 6.01(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in any state or United States federal court

 

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located in the Borough of Manhattan, the City of New York, New York (each a “New York Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the New York Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the New York Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the New York Court has been brought in an improper or inconvenient forum.

 

Section 8.13.  Headings.  The Article and Section headings in this Agreement are for convenience of reference only, and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

 

Section 8.14.  Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

Section 8.15.  Use of Certain Terms.  As used in this Agreement, the words “herein,” “hereof,” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular paragraph, subparagraph, section, subsection, or other subdivision. Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of the date first above written.

 

 

	
 
    	
YINTECH   INVESTMENT HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
Facsimile:
    
	
 
    	
Attention:
    
	
 
    	
 
    
	
 
    	
With a   copy to:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
Facsimile:
    
	
 
    	
Attention:
    
	
 
    	
 
    
	
 
    	
INDEMNITEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
Facsimile:
    
	
 
    	
 
    
	
 
    	
With a   copy to:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
Facsimile:
    
	
 
    	
Attention:
    

 

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